01 - Laserfiche WebLink

presented the FY 2017/18 Mid-year Budget Report for Water Operations and Maintenance Fund, Sewer Operations and Maintenance Fund, and next steps. Councilmember Narum referenced the Water Enterprise Fund and asked whether there is a target ending balance. Director of Finance Olson reported it is 35% of the expenses. Vice Mayor Olson opened the public hearing. Seeing and hearing no one wishing to address Council, Vice Mayor Olson closed the public hearing. Councilmember Brown expressed her appreciation to staff for their work. MOTION: It was m/s by Pentin/Narum to adopt and waive full reading of Resolution No. 18-1004 accepting the Mid-year FY 2017/18 operating budget and amending the FY 2017/18 operating budget accordingly. Motion passed by the following vote: Ayes: Councilmembers Brown, Narum, Pentin, Vice Mayor Olson Noes: None Absent: Mayor Thorne 10. Moved from the Consent Calendar(Item No. 10)—Adopt a resolution approving adoption of the Public Agencies Post-Employment Benefits Trust administered by Public Agency Retirement Services (PARS) Section 115 Director of Finance Tina Olson provided the staff report addressing the City's Pension Unfunded Liabilities, details of a Section 115 Pension Trust Fund, Section 115 Fund Administration, reasons why staff proposes PARS including better returns on investments and better fees than PFM, Other Fees relative to Mutual and Index Fund Management, and noted PARS has more experience than the other RFP respondents. She addressed PARS Investment Portfolios, and Section 115 Fund Policy Objectives and next steps. Councilmember Brown thanked staff for bringing the item forward and asked why the City does not pay $21 million to CaIPERS, now, as they are returning 6% to 7% which is not far from the five-year plan. Director of Finance Olson reported that is one option but expressed concern regarding CaIPERS's frequent changes in investments which are out of the City's control. She added payments will still grow, although not as much, and the City would have to cut services to make those payments. Staff will look at cash projections over the next ten years and Director of Finance Olson felt the City can accommodate the increase in payments, put more money into the fund and when the payment hits, the City will have money to draw on to make additional PERS payments without having to cut services. Councilmember Brown noted CaIPERS varies their amount of return estimates but noted the conservative 20% equity, 80% fixed for PARS is only 3.73% on a five-year which is less than if the City invested into CaIPERS. Director of Finance Olson reported CaIPERS does not invest in that level of conservative investments. She added the City will pick which levels of investments in which to participate and will return to Council with that information. At any point in time the City can withdraw from the fund up to two years towards the pension without penalties, as there is not maturity. Councilmember Narum pointed out if the City keeps the funds in a Section 115 Fund, the City will have more control. Councilmember Brown commented positively on having the flexibility to use the funds for something else, if necessary. City Council Minutes Page 3 of 7 March 6,2018