1 October 26, 2022
To: Mayor Ezzy Ashcraft and Members of the Alameda City Council From: Margaret O’Brien, Finance Director
Re: Questions and Corrections re: November 1, 2022 Regular Agenda Item 7-G (Adoption of Resolution to Adopt the Revised Pension Rate Stabilization Program (PRSP) and Other Post- Employment Benefits (OPEB) Funding Policy)
Since the publication of the staff report for the above mentioned item, staff received the following questions/comments for which responses and corrections are provided below.
Question 1: The second sentence of the background section does not appear to match the table.
Staff Response: There are errors in the table shown in the Background section that summarizes actual CalPERS advance payments and pension and OPEB trust contributions since the PRSP and OPEB Funding Policy was initially adopted in October 2017. The corrected table has been reproduced below under “Actual Contributions.” Question 2: If staff used the proposed formula, could the same table in the backgrou nd section be prepared so that Council can see if the proposed formula would produce more or less pension payments from 2016 to 2022 and what impact would that have on reserves today? Staff Response: Please refer to the “Contributions per 2017 Policy” and “Contributions per Revised 2022 Policy” table below. Under the existing and proposed policy language there would be little impact to today’s reserves. By asking Council to approve this new policy, staff is seeking to clarify the language in the policy to ensure consistent interpretation of the policy going forward.
Question 3: Could the 3 column headings be further explained? Staff Response: The table headings are defined as follows:
CalPERS Advance Payment: a discretionary payment made by the City to CalPERS in order to increase plan assets and thus reduce net pension liability. Pension Trust Contributions : payments made to a Public Agency Retirement Services (PARS) trust account that can only be used for allowable pension expenses. PARS Section 115 Trust: payments made to a PARS trust account that can only be used for allowable other post-employment benefits (OPEB) expenses.
2 Actual Contributions
Fiscal
Year
CalPERS Advance
Payment
Pension Trust
Contributions
PARS Section
115 Trust
Contributions
Total
2016-17 $ - $ - $ 250,000 $ 250,000 2017-18 10,695,052 3,565,017 3,000,000 17,260,069 2018-19 6,142,000 2,047,172 500,000 8,689,172 2019-20 - - 250,000 250,000 2020-21 5,000,000 4,000,000 250,000 9,250,000 2021-22 5,755,000 1,919,000 250,000 7,924,000 Total $ 27,592,052 $ 11,531,189 $ 4,500,000 $ 43,623,241
Contributions per 2017 Policy
Fiscal
Year
CalPERS
Advance
Payment
Pension Trust
Contributions
PARS Section
115 Trust
Contributions
Total Difference
from Actual
2016-17 $ 250,000 $ 250,000 $ 500,000 $ 250,000 2017-18 $ 3,718,000 1,239,000 3,000,000 7,957,000 (9,303,069) 2018-19 - - 500,000 500,000 (8,189,172) 2019-20 500 200 250,000 250,700 700
2020-21 5,038,000 1,679,000 250,000 6,967,000 (2,283,000) 2021-22 6,911,000 2,304,000 250,000 9,465,000 1,541,000 Total $ 15,667,500 $ 5,472,200 $ 4,500,000 $ 25,639,700 $ (17,983,541)
Contributions per Revised 2022 Policy
Fiscal
Year
CalPERS
Advance
Payment
Pension Trust
Contributions
PARS Section
115 Trust
Contributions
Total Difference
from Actual
2016-17
$ 250,000 $ 250,000 $ - 2017-18 $ 1,333,607 $ 444,536 3,000,000 4,778,143 (12,481,926) 2018-19 293,656 97,886 500,000 891,542 (7,797,630) 2019-20 91,041 30,347 250,000 371,388 121,388 2020-21 6,675,232 2,225,077 250,000 9,150,309 (99,691) 2021-22 7,260,873 2,420,290 250,000 9,931,163 2,007,163 Total $ 15,654,409 $ 5,218,136 $ 4,500,000 $ 25,372,545 $(18,250,696)