SPECIAL MEETING NOTICE AND AGENDA

DISCUSSION As previously discussed, the City has earned approximately 0.60% annually on its pooled cash through investments which is significantly less than the 7.5% and 7.61% interest it pays annually to reduce its pension and OPEB unfunded liabilities. Pre-paying these liabilities would therefore result in savings to the City through reduced annual payments to CaIPERS. As noted above, the combined $16.7 million allocation to reduce the City's pension and OPEB liabilities will result in annual savings of approximately $1.5 million and $37.9 million over the next 30-years. Given the City's capital project funding requirements, staff is proposing to commit those savings to the City's CIP. On June 9, 2015, CaIPERS staff advised City staff that the payment to prefund the City's pension liabilities needs to be received by CaIPERS by 5:00 p.m. June 12, 2015 in order for the City's FY 2015/16 employer pension contributions to be reduced. Otherwise, the reduction in the City's CaIPERS employer contribution would start in FY 2016/17. The estimated savings in CaIPERS employer pension contributions from the proposed appropriation in FY 2015/16 is $624,792. Thus, to ensure the City's receives these'savings in FY 2015/16, there is a City Council special meeting on June 11, 2015 to take action on this item. Sub, by: Approved Tina Olson Nelson ial o Director of Finance City Manager Page 4 of 4