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Weekly Update
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City Manager Steve Schwabauer's
Weekly Update
Friday, August 11, 2017 


Sales tax: Sales tax revenue grew 5.9 percent in the first three months of 2017 compared to the same period in 2016, a difference of $150,000. New retail outlets boosted post-holiday sales, and strong new car sales, construction materials, restaurants, hotels and higher fuel prices boosted City sales tax revenue. Some longtime retail establishments are seeing a negative trend, however, with some of the new competition.

Fire Chief: Chief Larry Rooney has provided us notice that he is resigning effective September 5, after nearly six years in his position. Chief Rooney is returning to Arizona where he has family as well as a new position with a fire agency. We wish him the best in his new endeavors. He accomplished much in his tenure, including building positive relations with local fire jurisdictions, improving our mutual aid options and building a strong mid-management team that is well-prepared for this transition, including the latest selection of Tim Ortegel as a battalion chief (along with Mike Alegre) upon the retirements of BC’s Pete Iturruran and Todd Luke in November.

Homeless help:  The City Manager rode along with Community Liaison Officer Ryan Holz this week for about three hours.  In that time Officer Holz made contact with more than 10 of Lodi’s homeless to encourage them to avail themselves of resources to address their situation.  One gentleman proved to have a significant and unavoidable medical condition and Officer Holtz was able to get him help from the federally-funded community medical center’s Brandon Michelson.  With the help of County Mental Health and AMR, the gentleman got the medical care he needed.  Given that he was newly homeless, a condition caused in part by his injury, we are hopeful the intervention will get him back on a positive path.  Officer Holtz has been able to find 18 others services from family or the military outside of Lodi.  He and Mark Armstrong have also agreed to work together to reduce shopping carts on Lodi’s streets.  As Officer Holtz gets them voluntarily surrendered, Mr. Armstrong will recover and store them and contact the stores to get them back home.  Not bad progress for the short time he has been on the job. … Another contributor is retired Police Captain Chris Piombo, who has returned to PD as a support services officer to assist Officer Holz.

PERS update:  CalPERS put out its much anticipated June 30, 2016 Annual Reports this week. This is the first report that includes a discount rate drop from 7.5 percent to 7.375 percent. Over the next two years, the rate will be reduced fully to 7 percent, with full phase-in over the next six years. Since the discount rate is PERS’ assumed earnings rate, the drop has significant negative impacts on Lodi’s funding status and PERS costs going forward. At mid-year, PERS put out guidance on how cities could calculate the impact. Staff’s five-year General Fund forecast is based on those guidelines. Now for the first time, we have PERS actual calculations of the impact to update that forecast. As anticipated, PERS costs are rising at an alarming rate. However, because PERS uses its own (higher) projections about our staffing and salary levels, the City can anticipate a small measure of relief from those variables if personnel costs can be contained.   Staff is calculating the exact impact on our forecast, however, it is clear the costs are rising slower than initially anticipated. Additionally, in this report, PERS earnings of more than 11 percent for Fiscal Year 2016/17 are not yet factored into the analysis.  This will provide some relief in the next report.  Not all the news is good of course.  The forecast will still show significant expenses in excess of revenue, with insolvency only being pushed out a bit further in the future.  As expected the discount rate drop increased our underfunded status by about $25 million across both Safety and Miscellaneous plans.  The negative equity trend continues with the City paying out about $5.5 million more in retirement benefits than the City’s total payments and interest earnings.  Finally, as previously stated, the reports do not yet factor in the full discount rate reduction to 7.0 percent. Staff will continue to keep you updated on any developments with PERS in the interest of transparency and a global solution.  We are all in this together and welcome your feedback or comments on what we can do to address this going forward.

Blues & Brews: PRCS and the Lodi Arts Foundation are teaming to present the annual Blues and Brews beer and musical festival tonight at Hutchins Street Square. The event begins at 6 p.m. and tickets are $35.

Lodi Mile: This race, on Sunday, is being held at Hutchins Street Square for the first time. The course consists of two laps around the streets surrounding the Square. Race organizers believe this is the strongest field in the event’s five-year history, with the potential to see a sub-4-minute mile.

Police calls: Officers responded to a couple of strange incidents on Thursday. Around 2 p.m., detectives saw a suspicious motorcycle driver on Cherokee Lane and an officer attempted to make contact with the driver after he parked the vehicle at a business. Security cameras caught him burying an item under bark before he ran away. After he was detained, officers found about 2 ounces of methamphetamine and almost a half-ounce of heroin. … Shortly after 6:30 p.m., an officer was waived down for a possible road rage incident between two vehicles, with one driver pointing a gun at another. It turned out that the weapon holder was a citizen trying to prevent a theft suspect from fleeing the AM/PM market at Stockton and Harney. The suspect was located and arrested for possession of a razor-studded billy club and drugs.


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