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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: 0 CLERK OF COUNCIL USE ONLY: JUNE 5.2018_ TITLE: APPROVE PRE -PAYMENT FOR THE CITY'S ANNUAL UNFUNDED ACTUARIAL LIABILITY TO CALIFORNIA PUBLIC RETIREMENT SYSTEM SAFETY PLAN FOR FY 2018-19 (STRATEGIC PLAN NO. 4, 2D) CI ANAGER RECOMMENDED ACTION APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 151 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Approve the pre -payment for the City's annual Unfunded Actuarial Liability to California Public Employees Retirement System (CaIPERS) — Safety Plan for fiscal year 2018-19 in the amount of $18,690,264. Due to rising pension obligations, municipalities are tasked with identifying cost-effective mechanisms in addressing retirement costs. An element identified was pre -paying the City's annual Unfunded Actuarial Liability (UAL) obligations. The UAL amount is traditionally paid on a monthly basis (12 payments) during the fiscal year. After discussion and confirmation between City Staff and its CaIPERS Actuary the following UAL amount(s) is owed for FY 2018-19: FY 2018-19 (Safety Plan)*** $19,367,208 $18,690,264 *amount owed by the City if paid over twelve monthly payments "amount is due by 7MI18 per July 2017 CaIPERS Actuarial Valuation Report (Safety Plan) "Safety Plan consists of unfunded actuarial obligations related to both the Police and Fire Department CaIPERS staff has confirmed if the City submits the pre -payment in the amount of $18,690,264 by July 31, 2018, the UAL obligation for FY 2018-19 will be met and would result in a savings of $676,944. Specifically, the savings will be allocated in the proposed FY 2018-19 budget as follows: • Police Department Retirement Costs - $259,023 • Fire Department Retirement Costs - $240,977 • Investment Income (offset) - $176,944 75A-3-1