1. City of East Lansing
Budget Discussion FY 16

3. Challenges Economy: City Operations:
Housing market crash and decreasing property values
Act 51 money
Long-term decrease in State Shared Revenue
City Operations:
Legacy cost increase (pension & retiree healthcare)
Streets, water, sewer infrastructure improvements are essential
Parks, recreation and facilities need significant investment over next five to ten years

5. Property Values Year Taxable Value Percent Change 2006 $886,390,650
6.1%
2007
$937,926,770
5.8%
2008
$975,983,770
4.1%
2009
$1,014,757,420
4.0%
2010
$981,486,740
-3.3%
2011
$945,134,040
-3.7%
2012
$911,082,510
-3.6%
2013
$900,289,494
-1.2%
2014
$915,991,890
1.7%

6. Parks, Recreation & Facilities
3 voter approved bonds, 1995 and 1998, but now need reinvestment.
Preliminary renovations/ reinvestment costs estimated at $ million
Playgrounds: $655,000
Neighborhood Parks: $450,000
Hannah Center: $1,115,200-$3,351,800
Softball Complex: $185,000-$285,000
Aquatic Center: $772,000-1,047,000
Natural Areas Management: $250,000

7. Steps Taken Decreased overall size of government Healthcare Task Force
Restructured pension and retirement
Department consolidation and restructuring

9. Compensation and Benefits
Employee Wage Increases
Retirement and Health Care
Eliminated healthcare at retirement for non-union new hires
Moved from defined benefit pension to defined contribution for new hires in non-union and two other unions. Other non-public safety groups followed.
Moved from defined contribution to hybrid plan for new hires in all non-public safety groups
Changed retiree healthcare and pension plan structure for new hires in public safety.
Pushed back the age of access for retiree healthcare for existing non-public safety employees
2002: 3%
2003: 3%
2004: 3%
2005: 2%
2006: 2%
2007: 2%
2008: 2%
2009: 2%
2010: 2%
2011: 0%
2012: 0%
2013: 1%
2014: 1%
*The City’s Health Care Task Force has controlled plan costs, at approximately 3.5% annually, for the past 9 years. Currently meets hard caps established by the State.

10. Pension Payments 2001-2015 Projected payments 2016-2020 273 396
TOTAL ACTIVE
TOTAL RETIRED
273
396

11. Cost Controls Share trade inspectors with Meridian Township
City IT providing services to the Court
Share Assessor with Meridian Township
Reconfigured media services contract
ALFA & LAP Respite merger

12. Positive Signs
Increased unassigned fund balance from 7.35% in FY07 to 15.8% in FY14
Completed sixth consecutive OPEB payment
$12.5 million in OPEB trust
Strong community as home to MSU
Have some time to work on major issue
Maintained well regarded services

13. What Now?
Will continue to strive for increased efficiencies and cost controls
Gained some ground with OPEB, now look to invest more in infrastructure improvements
Expect small increases in revenue sharing from state & property tax revenues
Sustained fix for legacy costs will have to come from improvement in the economy; we remain positive for our financial future

14. Questions or Comments?