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Staff Report for Resolution Authorizing Staff to Transfer $6.2M for the Purpose of Funding the City's Post-Retirement Health Care Plan Trust Administered by Public Agency Retirement Services (PARS) from the City's General Fund Unrestricted Reserves
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SUMMARY AND RECOMMENDATION
One of the City Council's highest priority goals is to place San Leandro on a firm foundation for long-term fiscal sustainability. A key component in achieving this goal is to arrest and diminish unfunded liabilities related to employee benefits. Other factors that meet the goal of sustainability include stable and diversified revenue sources, cost containment, and exposure/risk management.
It is recommended that Council direct staff to contribute $6.2 million to a Public Agency Retirement Services (PARS) trust account to reduce the unfunded liability for retiree healthcare. This account currently holds approximately $7 million, most of which has been funded since 2012.
BACKGROUND
The City Council received reports at its annual planning session in January 2013 regarding the unfunded liabilities of four separate employee funds, including: miscellaneous employee pensions, public safety employee pensions, City retiree health care, and Alameda County Fire Department retiree health care. The total amount of unfunded liabilities in 2013 was $119 million; in 2014, that liability increased to $158 million. The 2017 liability is under review by the City's actuaries and will be reported later this year. The growing annual payment requirement impacts the City's budget and diminishes funds that are available for projects and services.
This growing liability and its potential impact to public services was highlighted in Mayor Cutter's 2015 State of the City Address as a serious issue of concern. A series of meetings subsequently took place, followed by review and discussion by the Finance Committee on June 16 and July 21, 2015.
On September 21, 2015, the City Council a...
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