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CITY COUNCIL MEETING DATE: <br />DECEMBER 20, 2016 <br />TITLE: <br />APPROPRIATION ADJUSTMENT TO <br />CONTRIBUTE TO THE CITY'S PENSION <br />STABILITY FUND <br />(STRATEGIC PLAN NO. 4, 1) <br />(SURPLUS ALLOCATION FUNDING) <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERIC OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1" Reading <br />❑ Ordinance on 2ntl Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Approve an Appropriation Adjustment to appropriate $500,000 from Fund Balance, resulting from <br />Fiscal Year 2015-16 (General Fund), for the City's contribution to the Public Agency Retirement <br />Services account for the purpose of pre -funding pension obligations. <br />DISCUSSION <br />In 2012, the Government Accounting Standards Board (GASB) issued Statement No. 68, <br />Accounting and Financial Reporting for Pensions and to be reflected in the City's Financial <br />Statements as of June 30, 2015. Specifically, Cities are required to disclose their unfunded <br />pension obligations for their defined benefit plans (CaIPERS) within their Balance Sheet. The <br />City's unfunded pension obligations as of June 30, 2015 totaled approximately $417 million. <br />However, the City's overall net position approximated a positive $800 million after implementing <br />the unfunded pension liability as required by GASB 68. <br />On June 21, 2016, the City elected to establish a Pension Stability Reserve (Reserve) totaling <br />$500,000. The Reserve was established to offset and/or pre -fund the City's unfunded pension <br />obligations. Additionally, the funds were assigned and reflected in the City's Comprehensive <br />Annual Financial Report as of June 30, 2015. <br />During the establishment and related budget process for FY 2016-17 Budget, Staff identified <br />Assigned Programs for which the City may contribute an additional $500,000 to its Reserve. <br />Continued contribution to the Reserve allows for the City to implement its strategy in addressing <br />its unfunded pension obligations and set-aside funds in the event of continued increased in <br />CaIPERS Employer Contribution Rates. <br />20B-1 <br />