City of Anaheim*

R1

Each city should post its current and at least three most recent prior year budgets on the city's web site, and these budgets should be easily located. Each city's web site should have a search engine and a single search on the word "budget" should immediately link to the current budget. (F.1) (F.4) Response: The City of Anaheim has implemented this recommendation. The City's current and prior budgets (dating back to FY 2004/05) can be found at http://www.anaheim.net/title/Finance/Financial%2FBudget+Documents/.

R2

Each city's budget information should contain not only this year/next year budget projections, but should show at least five years of projected revenues and expenditures. Projections should be at the same level of detail and use the same line item structure as information for the current budget. (F.1) (F.2) (F.3) (F.5) (F.8) (F.10) Response: The City of Anaheim has not yet implemented this recommendation but will implement this during the next budget cycle for Fiscal Year 2015/16. The City's Five-year Plan for the General Fund, which contains projected revenues and expenditures, is included in the City's budget and can be found on of the FY 2014/15 budget. The City intends to expand these projections, especially related to pension costs, for Fiscal Year 2015/16.

R3

Each city's budget should show separate line items for predicted employee and predicted employer contributions for the city pension systems. (F.8) (F.9) Orange County Superior Court October 28, 2014 Response: The City of Anaheim has implemented this recommendation and the information can be found on pages 392 and 393 of the City's Supplemental Schedules and Line Item Detail of the FY 2014/15 budget. Further, the City intends to consider improving the transparency and understanding of this information during the next budget cycle for Fiscal Year 2015/16.

R4

Each city's budget should provide trend data on the accumulation/drawdown of reserves and provide details on the city's policy for the size of its reserves and on the intended uses of such reserves. In particular any discussion of reserves should address possible use of reserves to accelerate amortization of unfunded pension liabilities. (F.7) Response: The City of Anaheim has not implemented this recommendation but will implement this during the next budget cycle for Fiscal Year 2015/16. The City's FY 2014/15 budget states the reserve policy is to strive to maintain a minimum unrestricted fund balance in the General Fund of between 7% to 10% of General Fund budgeted expenditures in order to moderate revenue losses and maintain core services during times of economic hardship. Further, the City's Five-year Plan for the General Fund, which is also included in the budget, provides the dollar value and percentage of expected reserves. The City intends to add more trend information for Fiscal Year 2015/16.

R5

Each city using CalPERS for one or more of its pension plans should identify the names and dates of the CalPERS Annual Valuation Report(s) which call out Annual Required Contributions (ARCs) for these plans and should provide a separate expenditure line item for predicted city catch-up contributions for the city pension systems based on these ARCs. A discussion of the risks associated with these CalPERS projections should also be provided by the city. (F.1) (F.2) (F.8) (F.9) Response: The City of Anaheim has not yet implemented this recommendation but will implement this recommendation during the next budget cycle to show the portion of the ARC related to normal cost and catch-up contributions. Further, the City will separately show any discretionary catch-up contributions separately from those related to the ARC.

R6

Each city which outsources fire or police services to OCFA and/or OCSD should require them to provide projections of future costs of service out at least five years into the future and require that these projected costs explicitly show the relationship of projected pension costs including amortization of unfunded liabilities. This level of pension cost information should be provided in budgeted expenditures for outsourced services. A discussion of the risks associated with these projections should also be provided by the agencies and incorporated in the city's budgets. (F.6) (F.12) Response: The City of Anaheim does not outsource fire or police services to OCFA and/or OCSD and is not required to respond to this recommendation.

R7

Each city that has CalPERS as a provider for pensions should include a provision in their agreements with CalPERS that CalPERS will post their Annual Valuation Reports online. (F.11) Response: This recommendation has been implemented. The last three years of valuation reports can be found at http://www.calpers.ca.gov/index.jsp?bc=/about/forms-pubs/calpers- Orange County Superior Court October 28, 2014 reports/actuarial-reports/browse-results.xml&strCatId=2&q=anaheim-city. Further, the City of Anaheim has placed the actuarial reports for the most recent report (June 30, 2012) along with the 6 previous reports on the City's website at http://www.anaheim.net/title/Finance/Financial%2FBudget+Documents/. The City of Anaheim would like to express its appreciation for the efforts of the Orange County Grand Jury. The City of Anaheim is committed to public disclosure and transparency in its governmental affairs. Should you have any questions or need additional information, please contact Debbie Moreno, Finance Director, at (714) 765-4651 or [email protected] Respectfully submitted, Fom Tait Mayor Cc: