Laserfiche WebLink
REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JUNE 6, 2018 <br />TITLE: <br />APPROVE PRE -PAYMENT FOR THE CITY'S <br />ANNUAL UNFUNDED ACTUARIAL <br />LIABILITY TO CALIFORNIA PUBLIC <br />RETIREMENT SYSTEM — SAFETY PLAN <br />FOR FY 2018-19 <br />(STRATEGIC PLAN NO. 4,2D) <br />Cl"ANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />E] As Recommended <br />EI As Amended <br />[] Ordinance on 1 sl Reading <br />El Ordinance on 2nd Reading <br />[I Implementing Resolution <br />E] Set Public Hearing For <br />CONTINUED TO JUN 19 2016 <br />FILE NUMBER <br />Approve the pre -payment for the City's annual Unfunded Actuarial Liability to California Public <br />Employees Retirement System (CalPERS) — Safety Plan for fiscal year 2018-19 in the amount of <br />$18,690,264. <br />DISCUSSION <br />Due to rising pension obligations, municipalities are tasked with identifying cost-effective <br />mechanisms in addressing retirement costs. An element identified was pre -paying the City's <br />annual Unfunded Actuarial Liability (UAL) obligations. The UAL amount is traditionally paid on a <br />monthly basis (12 payments) during the fiscal year. After discussion and confirmation between <br />City Staff and its CalPERS Actuary the following UAL amount(s) is owed for FY 2018-19: <br />Unfunded Actuarial Liability Annual Amount* Pre -Payment Amount" Savings <br />FY 2018-19 (Safety Plan)*** $19,367,208 $18,690,264 $676,944 <br />* amount owed by the City if paid over twelve monthly payments <br />"amount is due by 713 1/18 per July 2017 CaIPERS Actuarial Valuation Report (Safety Plan) <br />'Safety Plan consists of unfunded actuarial obligations related to both the Police and Fire Department <br />CalPERS staff has confirmed if the City submits the pre -payment in the amount of $18,690,264 <br />by July 31, 2018, the UAL obligation for FY 2018-19 will be met and would result in a savings of <br />$676,944. Specifically, the savings will be allocated in the proposed FY 2018-19 budget as <br />follows: <br />• Police Department Retirement Costs - $259,023 <br />• Fire Department Retirement Costs - $240,977 <br />• Investment Income (offset) - $176,944 <br />75A-3-1 <br />