HOW DO WE DEAL WITH THE CITIES UNFUNDED LIABILITY AND WHAT ABOUT THE FUTURE?
Most Cities in CA are struggling with CALPERS unfunded liability.
These are the things I have approved since I got on the council to reduce unfunded liability:
Currently, CALPERS has allowed the cities to hire new employees under PEPRA in which the employees get no medical benefits in retiring which reduces CALPERS costs
I have supported policies that reduced our employees- we had 47 less employees therefore stopping any new CALPERS cost.
Instead of paying a full time employee CALPERs and retirement we hire consultants that we don’t have to pay this liability.
Our CALPERS liability was lowered with our switching out of CALPERS medical and putting aside 7.2 million dollars to cover our CALPERS and OBEP liability in a trust only for this purpose in a Trust Fund 115 used only for that purpose.
WE are paying the payment for CALPERS in one lump sum which lowers our CALPERS payments.
The Issue is to understand what our liability will be in the future and make a plan to address this by maybe some of the following:
Develop and implement a plan to pay down the city’s Unfunded Actuarial Liability (UAL): Possible methods include shorter amortization periods and pre-payment of cities UAL
We created a Pension Rate Stabilization Program (PRSP):
Establishing and funding a local Section 115 Trust Fund can help offset unanticipated spikes in employer contributions- 7.9 million in our trust fund now- put in yearly. We should add to this account yearly.
Use procedures and transparent bargaining to increase employee pension contributions: Many local agencies and their employee organizations have already entered into such agreements.
Possible methods include shorter amortization periods and pre-payment of cities liability
Budget $500,000 per year for additional payments to CALPERS and annually prepay CALPERS for employee bargaining groups and use the savings from a prepay discount — more than $250,000 per year — to make additional payments.
Increasing Economic Dev. Brings in more General Funds
In addition the council could form a Finance and Pension Advisory Committee to look at options for future reductions in pension cost and liability