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San Dimas council approves midyear budget adjustments, $500,000 appropriation toward PERS liability
Summary
City staff reported midyear finances showing sales-tax corrections and strong interest revenues; council approved budget amendments including a $500,000 one-time appropriation of surplus funds to reduce the city’s unfunded PERS liability. Vote was 5-0.
The San Dimas City Council received a midyear budget update and approved budget amendments that include a $500,000 appropriation of surplus funds to reduce the city’s unfunded Public Employees’ Retirement System (PERS) liability.
Michael O’Brien, administrative services director, reviewed revenues and expenditures year-to-date, noting a projected sales-tax shortfall of about $500,000 driven partly by changes in how large online retailers attribute point-of-sale to distribution centers. He said interest income has been a stronger-than-expected revenue source this year due to higher rates and a sizable cash balance.
O’Brien outlined fund balances, carryovers and investment impacts, reporting an unassigned general-fund balance that would decrease by about $293,000 if books were closed on the presentation date and noting a recommendation to appropriate last year’s surplus toward an additional PERS contribution.
"Our unfunded liability stands at about $16,600,000," O’Brien told the council, noting PERS uses a discount rate that affects the city’s liability. He recommended appropriating $500,000 of surplus FY23-24 funds for an additional PERS payment.
Council members probed assumptions about the sales-tax projection, the share attributable to Amazon and how often PERS adjusts its discount rate. Staff said about 25% of the sales-tax delta was likely due to Amazon’s accounting change and that the discount rate can be adjusted and had been lowered in recent years, increasing liabilities.
Following the presentation and questions, a motion to approve the budget amendments, including the $500,000 appropriation, passed on a 5-0 vote.
What happens next: staff will implement the midyear appropriations and adjust accounting entries as outlined in the attached midyear report. The council asked staff to provide an updated "dollar bill" slide showing appropriation breakdowns at a future budget meeting.
Speakers quoted or paraphrased in this article are identified from the meeting transcript.
