Page 46 - FY 2022-23 Supporting Information

2022-23 PROPOSED BUDGET
FOUR-YEAR GENERAL FUND BUDGET OUTLOOK (OUTLOOK) FOOTNOTES

(15) City Employees’ Retirement System (LACERS) and Fire and Police Pensions (LAFPP): The contribution
rates are based on information that the systems’ actuary calculated and includes the employee compensation
adjustment assumptions above. In 2020, the board of commissioners for LACERS and LAFPP adopted economic
and demographic assumption changes, including reducing the assumed investment rate of return from 7.25
percent to 7.00 percent. The contribution rates below include the adopted assumption changes. The 2021-22
investments return of 0 percent reflects lower than anticipated returns based on unaudited returns to date.

Table 1
LACERS and LAFPP

Assumptions 2021-22 2022-23 2023-24 2024-25 2025-26 2026-76

LACERS
6/30 Investment Returns 0.00% 7.00% 7.00% 7.00% 7.00% 7.00%
th
Combined Contribution Rate 32.15% 33.16% 32.08% 30.91% 28.05% 27.69
Pensions
6/30 Investment Returns 0.00% 7.00% 7.00% 7.00% 7.00% 7.00%
th
Combined Contribution Rate 45.89% 41.84% 33.45% 30.58% 28.57% 27.27%

(16) Workers' Compensation Benefits: The projection reflects a March 2022 actuarial analysis. They reflect the
impact of both current and projected future COVID-19 claims.

(17) Health, Dental, and Other Benefits: The projection incorporates all known cost-sharing provisions adopted
into labor agreements for the civilian and sworn populations. It assumes that net enrollment will increase an
average of one percent for the civilian and sworn populations. Benefit rate increase assumptions are consistent
with historical trends.

(18) Debt Service: The debt service amounts include known future payments from the Capital Finance budget.
The final debt service payment on all MICLA Los Angeles Convention Center Bonds in the amount of $16.6 million
is in 2022-23, which represents a $34.1 million decrease from the 2021-22 Adopted Budget. In anticipation of the
potential annual debt service payments associated with the Los Angeles Convention Center Expansion Project,
the Outlook assumes a projected payment in 2022-23 of $34.1 million and $50 million annually thereafter.

(19) Resolution Authorities: The deletion line reflects the practice of annually deleting resolution authority
positions, which must be authorized each year through a Council resolution. The “Add New and Continued
Resolution Authorities” line reflects the continued or new resolution positions included in the 2022-23 Budget.

(20) One-time Costs: The deletion line reflects the practice of deleting programs and costs that are limited-term
and temporary in nature each year. The “Add One-Time Costs” line reflects the continued and new one-time costs
included in the 2022-23 Budget. The Outlook deletes funding for all one-year projects in 2023-24 and retains the
remaining balance for multiyear projects that will not become part of the General Fund base. To the extent that
there are budget decisions to continue one-time programs in future years, expenditures would be higher than the
reported projections.

(21) Comprehensive Homeless Strategy: This amount represents the reduction to the General Fund appropriation
for homelessness-related services and expenditures within the context of the City's Comprehensive Homeless
Strategy. The 2023-24 amount further deletes one-time 2022-23 expenditures. To the extent that there are budget
decisions to continue one-time programs in future years, expenditures would be higher than the reported
projections.

(22) Unappropriated Balance (UB): The significant reduction in 2022-23 reflects the deletion of one-time UB items
budgeted in 2021-22, including COVID response and new programs. To the extent that the new programs are
continued in the 2022-23 Budget, the funding for those programs and positions is included in the “Add New and
Continued Resolution Authorities” line or “Net – Other Additions and Deletions” line. The 2023-24 amount
eliminates one-time UB items included in 2022-23 and continues ongoing ones.

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