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because the employees are more willing to negotiate. She did not believe that. She felt Council should support the constituents and not support the City staff. Ms. Dennis indicated that as part of her participation in the League of Califomia Cities, a member of the Board of Directors of the Public Employees Retirement System made a presentation to the membership. PERS has been in existence since the 1930's and is a very successful retirement system. It is one of the largest in the world. The League was active in preventing the federal government from requiring public employees to pay into Social Security in addition to PERS. The Board member indicated the return on investment over the life of PERS was incredible. During the recent economic boom, PERS was able to provide benefits at no cost. Ms. McKeehan indicated PERS is still working from those excess assets, but they are diminishing. The investments are not just the stock market, but also include real estate, individual home loans, and a wide variety of other things. Ms. Dennis reiterated that the PERS system has been stable through wars, major depressions, recessions, etc. This is not the first economic downturn the system has weathered. She was confident it will continue to be successful. Ms. Ayala said if the money is not in PERS when one wants to use it, where would it come from? Ms. McKeehan said PERS evaluates annually what funds are necessary for the next twenty years. That is why the payroll percentages go up and down every year. Ms. Ayala asked if it were conceivable that the City would be asked to pay more than it was planning for and that would have to come from the General Fund. Ms. McKeehan said the City would pay that as it does any other expense from the General Fund, such as the cost of electricity, or whatever else. In her experience, she has seen the PERS rate go higher than estimated, but it has also gone down to less than one percent of payroll. Ms. Ayala agreed the economics in California have been remarkable over the last nine years, but she felt this would not occur again. Ms. McKeehan indicated she was definitely not trying to project a rosy view of the future. She expected there would be reductions of funding from the state and noted that in the City's long term budget and financial planning those things were taken into account. The City has very creative staff who can adjust to whatever changes the future may bring. Ms. McKeehan responded to a comment that the age of retirement was being changed and indicated that was not part of any proposal. Many employees work well beyond age 55. The formula is the only thing that mentions the age. P leasanton City Council 11 10/01/02 Minutes