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THE CITY OF 4 a <br /> CITY COUNCIL AGENDA REPORT <br /> PL€ASANTONO <br /> June 11 , 2015 <br /> Finance <br /> TITLE: APPROVE THE APPROPRIATION OF$12.5 MILUON FROM THE RETIREE <br /> MEDICAL RESERVE FUND AND $1.7 MILLION FROM THE FY 2014/15 <br /> GENERAL FUND YEAR-END SURPLUS FOR A TOTAL OF $14.2 MILLION <br /> TO PREFUND THE CITY'S CaIPERS AND RETIREE HEALTH (OPEB) <br /> LIABILITIES <br /> SUMMARY <br /> The City of Pleasanton's total unfunded pension-related liabilities (pension and retiree <br /> health or OPEB) are estimated to be $157.8 millions as of June 30, 2015. The City <br /> amortized repayment of these liabilities to trust funds held and invested by CaIPERS over <br /> approximately 30-years at annual interest rates of 7.5% to 7.61%. The City can reduce <br /> its annual payments to CaIPERS by reducing the amount of its unfunded liability. The <br /> proposed appropriation of $14.2 million combined with approximately $3.5 million <br /> included in the FY 2015/16 and FY 2016/17 budget for a total of$16.7 million to prepay <br /> pension related liabilities will result in saving a total of $37.5 million in payments to <br /> CaIPERS over the next 30 years. <br /> RECOMMENDATIONS <br /> Approve the proposed appropriation of $12.5 million from the Retiree Medical Reserve <br /> Fund and $1,708,218 from the General Fund's FY 2014/15 estimated year-end surplus <br /> to pre-fund the City's pension-related liabilities. <br /> Approve allocating the resulting savings from the City's reduced annual payments to <br /> CaIPERS to the City's Capital Improvement Program (CIP) reserves. <br /> FINANCIAL STATEMENT <br /> The City's Retiree Medical Reserve fund balance is currently $25.7 million including an <br /> inter-fund loan receivable of $3.7 million. Appropriating $12.5 million of that will reduce <br /> the fund balance to $13.2 million. <br /> The City's FY 2014/15 estimated year-end surplus is $2.9 million. The FY 2015/16 and <br /> FY 2016/17 budgets include$1.2 million from that surplus to fund CIP projects.Thus, the <br /> proposed appropriation of $1,708,218 to pre-fund the City's pension liabilities will fully <br /> utilize the FY 2014/15 estimated General Fund year-end surplus. <br /> 'CaIPERS pension liability is estimated as of 6/30/2015 and the OPER unfimded liability is as of 6/30/13.Total <br /> liability excludes applying the City's$25.7 million Retiree Medical Reserve Fund. <br />