In October of 2019 the California State Auditor launched a new dashboard that allows the public to compare the financial statistics of 471 cities and see which ones are at the highest risk of distress.
As explained by the State Auditor’s office, they used 10 indicators to assess each city’s ability to pay its bills in both the short and long term. Specifically, the indicators measure each city’s cash position or liquidity, debt burden, financial reserves, revenue trends, and ability to pay for employee retirement benefits.
While so many cities are facing similar financial challenges, each city has a unique mix of these challenges. From the ability to utilize general fund reserves to address funding shortfalls, to the level of funding (if any) for OPEB obligations, each city needs solutions specific to its needs. There are no one-size-fits-all solutions.
Ultimately a city needs to think of the entire lifecycle of an employee – from onboarding through retirement – and build solutions that encompass the totality of the employee/retiree engagement.
There are a number of areas where small steps can yield significant improvements for a city’s fiscal health:
Keenan’s subject matter experts – former municipality employees and officials – have been on the frontline dealing with these issues, and have developed strategies for mitigating their negative fiscal impact.
Amy B. Donovan, Esq., Keenan | Troy Butzlaff, Keenan-MidAmerica | Megan Gardner, Keenan
Presented By California Senator John Moorlach
Keenan has created the CalPERS Breakaway Study for those agencies who are looking to evaluate their CalPERS medical and PEMHCA plan versus alternative benefits options. The objective of the study is to assess, before going to market, what kind of risk the city is, without having the advantage of claim experience and then develop a baseline expectation of how competitive the market might be outside of CalPERS. If your agency is an ideal candidate, then you may be able to reduce your OPEB liability and eliminate your agencies PEMHCA cost.
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