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Pre‑budget briefing: Mission Viejo reports strong reserves but pension funding slipped
Summary
Consultant Erwin Bornstein told the council the city closed FY 2023–24 with $39.7 million in general‑fund reserves, while pension funding (CalPERS) fell to about 83.4% funded; staff recommended extending several maintenance contracts with a projected $620,000 annual increase rather than rebid amid volatile market bids.
The City Council received a two‑hour pre‑budget briefing on Jan. 28 from consultant Erwin Bornstein and staff. Bornstein said the city ended fiscal 2023–24 with $39,700,000 in general fund reserves — about 51% of ongoing general fund revenue — and reiterated top council priorities: public safety and infrastructure maintenance. He reported the public safety budget at $30.5 million (roughly 33% of operating costs) and infrastructure maintenance at $24.2 million (about 26.7%).
Bornstein and Assistant City Manager Jerry Hill explained that the retiree healthcare (OPEB) plan is roughly 99% funded but the CalPERS pension funded status had declined to about 83.4%, noting investment returns between 2021 and 2023 drove much of the change. Staff recommended extending several routine maintenance contracts for two‑year terms using proposed increases (staff estimates showed a total annual increase of about $620,000 across those contracts) rather than rebidding amid large, uncertain bid spikes seen in nearby cities. The council accepted the report and authorized staff to proceed with the recommended contract extension process and to return with individual contract details.
