Title
Staff Report for Discussion on Prioritization Unfunded Liability Liquidation (PULL) Plan
Staffreport
SUMMARY AND RECOMMENDATION
One of the City Council's highest priority goals has been 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 the City Council review and adopt a Prioritization Unfunded Liability Liquidation (PULL) Plan with a 5 year goal of allocating $5,000,000 toward reducing unfunded liabilities. In addition, it is recommended that the Council adopt the following criteria as a financial policy to assist in meeting the PULL plan goal of $5,000,000:
1. Pay 100% of the Annual Required Contribution (ARC).
2. Direct up to 50% of all annual General Fund carryover toward the PULL Plan.
3. Direct up to 50% of all General Fund land sales toward PULL Plan.
4. Review the 20% emergency contingency fund target with financial advisors and bond counsel toward a goal of 16.6% with any excess funds allocated to meet PULL Plan goal.
5. Create a separate San Leandro trust for the PULL Plan.
6. Provide an annual report to the City Council and Measure HH Oversight Committee on PULL Plan progress.
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 2015 liability is under review by the City's actuaries and will be reported sometime later this year. ...
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