Buellton City Council
May 14, 2026

WHY THE STRATEGY SHOULD EVOLVE
The City’s pension strategy should evolve as its funded status improves. When the City’s funded status was lower, direct ADPs were a straightforward way to reduce the UAL and lower future interest costs. Now that the City is projected to approach a much stronger funded position, additional direct ADPs provide less budget flexibility because funds paid to CalPERS cannot be accessed later if the City experiences market volatility, revenue weakness, emergency needs, or other fiscal stress.

A pension volatility reserve would preserve the City’s ability to respond to future shocks while still supporting long-term pension funding discipline. The reserve would not replace required CalPERS contributions. Instead, it would serve as a fiscal stabilization tool that could be used to blunt future contribution spikes, offset new UAL payment ramps, or provide liquidity during periods when pension costs and other economic pressures coincide.

PENSION VOLATILITY RESERVE CONCEPT
Staff recommends that the City begin developing a pension volatility reserve framework.

The reserve would be designed to protect the City’s ability to provide vital community services during periods of future market turbulence or economic duress. The framework should address:
• Reserve purpose: to provide budget stability and pension cost smoothing during periods of market disruption or other fiscal stress;
• Target funding level: a policy target based on the City’s pension exposure, contribution volatility, and potential future UAL payment ramps;
• Eligible uses: limited to pension cost stabilization, offsetting future UAL increases, reducing budgetary impacts of CalPERS contribution spikes, or other Councilapproved pension risk mitigation purposes; • Governance: Council authorization before use, annual reporting, and integration with the City’s budget and long-term financial planning process; and • Replenishment: guidelines for restoring the reserve after use when fiscal conditions permit.
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CalPERS Pension UAL Page 4 May 14, 2026

FISCAL IMPACT
The City of Buellton’s minimum required UAL contribution for Fiscal Year 2026-27 in the amount of $122,327 will be reflected in the FY 2026-27 budget.

There is no additional fiscal impact associated with receiving and filing this annual pension funding update. However, staff recommends that the City Council redirect the previously contemplated $175,000 ADP to a pension volatility reserve rather than making an additional direct payment to CalPERS at this time.

This approach preserves the City’s continued commitment to prudent pension funding while maintaining greater local flexibility and liquidity. The pension volatility reserve would serve as a budget stabilization tool to help protect the City’s ability to provide vital community services during future periods of market volatility, economic stress, or unexpected increases in CalPERS-required contributions.

RECOMMENDATION
Staff recommend that the City Council:

1. Receive and file the annual CalPERS pension funding update;

2. Direct staff to discontinue making further ADPs to CalPERS at this time;

3. Direct that the previously contemplated $175,000 ADP be set aside for a future pension volatility reserve rather than paid directly to CalPERS; and

4. Direct staff to return at a future City Council meeting with recommended parameters for a pension volatility reserve policy, including target funding levels, eligible uses, replenishment provisions, governance, and reporting requirements.

This recommendation preserves the City’s commitment to prudent pension funding while shifting the City’s near-term strategy from direct UAL paydown to building local liquidity and budget stability to protect vital community services during future periods of market volatility or economic stress.

ATTACHMENTS
Attachment 1 – CalPERS Actuarial Valuation Report as of June 30, 2024 Attachment 2 – Pension Funding Policy/Resolution No. 22-12 Attachment 3 – Pension Funding Update Presentation
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California Public Employees’ Retirement System
Actuarial Office
400 Q Street, Sacramento, CA 95811 | Phone: (916) 795-3000 | Fax: (916) 795-2744 888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 | www.calpers.ca.gov July 2025
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool (CalPERS ID: 7472860304) Annual Valuation Report as of June 30, 2024
Dear Employer,
Attached to this letter is Section 1 of the June 30, 2024, actuarial valuation report for the plan noted above. Provided in this report is the determination of the minimum required employer contributions for fiscal year (FY) 2026-27. In addition, the report contains important information regarding the current financial status of the plan as well as projections and risk measures to aid in planning for the future.

Because this plan is in a risk pool, the following valuation report has been separated into two sections:
• Section 1 contains specific information for the following rate plan(s) including the development of the current and projected employer contributions.
o 1722, Miscellaneous Plan
o 26369, PEPRA Miscellaneous Plan
• Section 2 contains the Miscellaneous Risk Pool information as of June 30, 2024.

Section 2 can be found on the CalPERS website (www.calpers.ca.gov). From the home page, go to “Forms & Publications” and select “View All”. In the search box, enter “Risk Pool” and from the results list download the Miscellaneous Risk Pool Actuarial Valuation Report for June 30, 2024.

Required Contributions
The table below shows the minimum required employer contributions and member contribution rates for FY 2026-27 along with an estimate of the required employer UAL contribution for FY 2027-28. The required employer contributions in this report do not reflect any cost sharing arrangement between the agency and the employees.

Fiscal Year Rate
Plan
Employer
Normal Cost
Rate
Member
Contribution
Rate
Fiscal Year
Employer Amortization of
Unfunded Accrued
Liability
2026-27 1722 13.36% 7.00% 2026-27 $122,327
26369 8.24% 8.25%
Projected
(Estimated)
2027-28 $146,000
The actual investment return for FY 2024-25 was not known at the time this report was prepared. The projected UAL payment above assumes the investment return for that year would be 6.8%. To the extent the actual investment return for FY 2024-25 differs from 6.8%, the actual UAL contribution requirement for FY 2027-28 will differ from that shown above.

For additional information on future contribution requirements,please refer to Projected Employer Contributions . This section also contains projected required contributions through FY 2031-32.

PEPRA Member Contribution Rate
The employee contribution rate for PEPRA members can change based on the results of the actuarial valuation. See Member Contribution Rates for more information.
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June 30, 2024 - CalPERS Actuarial Valuation
Miscellaneous Risk Pool in the City of Buellton of the Rate Plans All 7472860304 CalPERS ID:

Report Navigation Features
to find specific information more The valuation report has a number of features to ease navigation and allow the reader the quickly. The tables of contents are “clickable.” This is true for the main table of contents that follows the title page and e left can also be used to intermediate tables of contents at the beginning of sections. The Adobe navigation pane on th skip to specific exhibits.

There are a number of links throughout the document in blue text. Links that are internal to the document are not hown below. underlined, while underlined links will take you to the CalPERS website. Examples are s CalPERS Website Links Internal Bookmarks
Search Tool Contribution Required Employer Required Employer Contributions Public Agency PEPRA Member Contribution Rates Member Contribution Rates Pension Outlook Overview Summary of Key Valuation Results Interactive Summary of Public Agency Valuation Results Funding Policy Basis – Funded Status Public Agency Actuarial Valuation Reports mployer Contributions Projected E Report Enhancements
no are aluation, separate amortization schedules for each tier of benefits v ctuarial a Effective with the June 30, 2024, combined. We believe have been schedules, and thus multiple Section 1 reports, amortization longer necessary. Multiple term costs. - s financial health and long pension plan’ this gives the employer a clearer picture of the - Appendix A section and in Highlights and Executive Summary Further descriptions of general changes are included in the . in Section 2 Actuarial Methods and Assumptions
Questions
the Customer be directed to ther questions may O. answer questions about this report actuary is available to A CalPERS ). 7377 - 225 - 888 or ( CalPERS 888 Contact Center at
Sincerely,
ASA, MAAA, EA , David Clement
Actuary, CalPERS Senior
, ASA, MAAA ziubek D andall R
, CalPERS , Valuation Services Chief Actuary Deputy
ASA, EA, MAAA, FCA, CFA , erando T cott S
, CalPERS Chief Actuary
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254 of 316
California Public Employees’ Retirement System
Actuarial Valuation for the
Rate Plans of the City of Buellton in the
Miscellaneous Risk Pool
as of June 30, 2024
(CalPERS ID: 7472860304)
(Rate Plan IDs: 1722, 26369)
Required Contributions for Fiscal Year
July 1, 2026 — June 30, 2027
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Table of Contents
Section 1 – Employer Specific Information
Section 2 – Miscellaneous Risk Pool Actuarial Information 256 of 316
Section 1
California Public Employees’ Retirement System
Employer Specific Information
for the
Rate Plans of the
City of Buellton
in the Miscellaneous Risk Pool
(CalPERS ID: 7472860304)
(Rate Plan IDs: 1722, 26369)
257 of 316
Rate Plans belonging to the Miscellaneous Risk Pool
Table of Contents — Section 1
Actuarial Certification....................................................................................................................................................................................1 Highlights and Executive Summary ..........................................................................................................................................................2 Introduction....................................................................................................................................................................................................3 Purpose of Section 1....................................................................................................................................................................................3 Summary of Key Valuation Results ...........................................................................................................................................................4 Changes Since the Prior Year’s Valuation................................................................................................................................................5 Subsequent Events.......................................................................................................................................................................................5 Liabilities and Contributions .......................................................................................................................................................................6 Determination of Required Contributions ..................................................................................................................................................7 Required Employer Contributions ..............................................................................................................................................................8 Member Contribution Rates ........................................................................................................................................................................9 Breakdown of Entry Age Accrued Liability............................................................................................................................................. 10 Allocation of Plan’s Share of Pool’s Experience...................................................................................................................................10 Development of the Plan’s Share of Pool’s Assets .............................................................................................................................. 10 Funded Status – Funding Policy Basis................................................................................................................................................... 11 Additional Employer Contributions.......................................................................................................................................................... 12 Projected Employer Contributions........................................................................................................................................................... 13 Schedule of Amortization Bases.............................................................................................................................................................. 14 Amortization Schedule and Alternatives ................................................................................................................................................ 15 Employer Contribution History.................................................................................................................................................................17 Funding History.......................................................................................................................................................................................... 17 Risk Analysis ................................................................................................................................................................................................ 18 Future Investment Return Scenarios...................................................................................................................................................... 19 Discount Rate Sensitivity.......................................................................................................................................................................... 20 Mortality Rate Sensitivity........................................................................................................................................................................... 21 Maturity Measures ..................................................................................................................................................................................... 21 Maturity Measures History........................................................................................................................................................................22 Funded Status – Termination Basis........................................................................................................................................................ 23 Funded Status – Low-Default-Risk Basis .............................................................................................................................................. 24 Supplementary Information ......................................................................................................................................................................25 Normal Cost by Benefit Group .................................................................................................................................................................26 Summary of Valuation Data .....................................................................................................................................................................27 Status of PEPRA Transition.....................................................................................................................................................................28 Surcharge for Class 1 Benefits................................................................................................................................................................ 28 Plan's Major Benefit Options....................................................................................................................................................................29 258 of 316
2024 June 30, - Actuarial Valuation CalPERS
Miscellaneous Risk Pool in the City of Buellton the Rate Plans of All 7472860304 CalPERS ID:
1 Page Pool Miscellaneous Risk belonging to the s Rate Plan Actuarial Certification
as well as the opinion that the valuation has been performed in accordance with generally accepted actuarial principles our It is . While this report, consisting of Section 1 and by the Actuarial Standards Board applicable Standards of Practice promulgated ed are actuaries he undersign Section 2, is intended to be complete, our office is available to answer questions as needed. All of t of the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States who satisfy the with regard to pensions. American Academy of Actuaries
s Assumption Methods and Actuarial
by the CalPERS Board recommended by the Chief Actuary and adopted assumptions and methods, as opinion that the our It is of Administration, are internally consistent and reasonable for this plan. , ASA, MAAA ziubek D andall R
, CalPERS , Valuation Services Chief Actuary Deputy
ASA, EA, MAAA, FCA, CFA , Scott Terando
Chief Actuary, CalPERS
Rate Plan Results Actuarial Data and
and having relied upon the attestation above that the actuarial methods and assumptions are knowledge my To the best of , this report is complete and accurate and contains sufficient ion in Section 2 of this report reasonable as well as the informat Miscellaneous Risk in the City of Buellton the of rate plans information to disclose, fully and fairly, the funded condition of the and satisfies the actuarial valuation requirements of Government Code section 7504. This valuation and related validation Pool June based on the member and financial data as of . The valuation was work was performed by the CalPERS Actuarial Office provided by the various CalPERS databases and the benefits under this plan with CalPERS as of the date this report , 30, 2024 , while Section 2 is based Buellton City of Section 1 of this report is based on the member and financial data for was produced. . to which the plan belongs Miscellaneous Risk Pool participating in the on the corresponding information for all agencies ASA, MAAA, EA , David Clement
Actuary, CalPERS Senior
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259 of 316
Highlights and Executive Summary
• Introduction 3
• Purpose of Section 1 3
• Summary of Key Valuation Results 4
• Changes Since the Prior Year’s Valuation 5
• Subsequent Events 5
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CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 3 Introduction
This report presents the results of the June 30, 2024,actuarial valuation of the rate plans of the City of Buellton in the Miscellaneous Risk Pool of the California Public Employees’ Retirement System (CalPERS). This actuarial valuation sets the minimum required contributions for fiscal year (FY) 2026-27.

Purpose of Section 1
This Section 1 report for the rate plans of the City of Buellton in the Miscellaneous Risk Pool of CalPERS was prepared by the Actuarial Office using data as of June 30, 2024. This report contains actuarial information for the following rate plan(s). • 1722, Miscellaneous Plan
• 26369, PEPRA Miscellaneous Plan
The purpose of the valuation is to:
• Set forth the assets and accrued liabilities of these rate plans as of June 30, 2024; • Determine the minimum required employer contributions for these rate plans for FY July 1, 2026,through June 30, 2027; • Determine the required member contribution rate for FY July 1, 2026,through June 30, 2027, for employees subject to the California Public Employees' Pension Reform Act of 2013 (PEPRA); and • Provide actuarial information as of June 30, 2024, to the CalPERS Board of Administration (board) and other interested parties.

The pension funding information presented in this report should not be used in financial reports subject to Governmental Accounting Standards Board (GASB) Statement No. 68 for a Cost Sharing Employer Defined Benefit Pension Plan. A separate accounting valuation report for such purposes is available on the CalPERS website (www.calpers.ca.gov).

The measurements shown in this actuarial valuation may not be applicable for other purposes. The agency should contact a CalPERS actuary before disseminating any portion of this report for any reason that is not explicitly described above.

Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; changes in actuarial policies; changes in plan provisions or applicable law; and differences between the required contributions determined by the valuation and the actual contributions made by the agency.

Assessment and Disclosure of Risk
This report includes the following risk disclosures consistent with the guidance of the Actuarial Standards of Practice:
• A “Scenario Test,” projecting future results under different investment income returns. • A “Sensitivity Analysis,” showing the impact on current valuation results using alternative discount rates of 5.8% and

7.8%.
• A “Sensitivity Analysis,” showing the impact on current valuation results assuming rates of mortality are 10% lower or 10% higher than our current post-retirement mortality assumptions adopted in 2021. • Plan maturity measures indicating how sensitive a plan may be to the risks noted above. • The funded status on a termination basis.
• A low-default-risk obligation measure (LDROM) of benefit costs accrued as of the valuation date. 261 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 4 Summary of Key Valuation Results
Below is a brief summary of key valuation results along with page references where more detailed information can be found .

Required Employer Contributions — page 8
Fiscal Year
2025-26
Fiscal Year
2026-27
Employer Normal Cost Rates
Rate Plan 1722 13.38% 13.36%
Rate Plan 26369 8.27% 8.24%
Unfunded Accrued Liability (UAL) Contribution Amount $87,592 $122,327 Paid either as
Option 1) 12 Monthly Payments of $7,299.33 $10,193.92
Option 2) Annual Prepayment in July $84,757 $118,369
Member Contribution Rates — page 9
Fiscal Year
2025-26
Fiscal Year
2026-27
Rate Plan 1722 7.00% 7.00%
Rate Plan 26369 8.25% 8.25%
Projected Employer Contributions — page 13
Normal Cost
(% of payroll) Annual
Fiscal
Year
Rate Plan
1722
Rate Plan
26369 UAL Payment
2027-28 13.4% 8.2% $146,000
2028-29 13.4% 8.2% $170,000
2029-30 13.4% 8.2% $164,000
2030-31 13.4% 8.2% $157,000
2031-32 13.4% 8.2% $157,000
Funded Status — Funding Policy Basis — page 11
June 30, 2023 June 30, 2024
Entry Age Accrued Liability (AL) $12,558,369 $13,481,945 Market Value of Assets (MVA) 10,703,906 11,807,532
Unfunded Accrued Liability (UAL) [AL – MVA] $1,854,463 $1,674,413 Funded Ratio [MVA ÷ AL]
$12,558,369.00

85.2% 87.6%
Summary of Valuation Data — Page 27

June 30, 2023 June 30, 2024
Active Member Count 22 25
Annual Covered Payroll $1,868,589 $2,149,517
Transferred Member Count 4 4
Separated Member Count 10 10
Retired Members and Beneficiaries Count 32 33
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CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 5 Changes Since the Prior Year’s Valuation
Benefits
The standard actuarial practice at CalPERS is to recognize mandated legislative benefit changes in the first annual valuation following the effective date of the legislation. For pooled rate plans, voluntary benefit changes by plan amendment are generally included in the first valuation with a valuation date on or after the effective date of the amendment.

Please refer to the Plan’s Major Benefit Options in this report and Appendix B of the Section 2 Report for a summary of the plan provisions used in this valuation.

Board Policy
On April 16, 2024, the board took action to modify the Funding Risk Mitigation Policy to remove the automatic change to the discount rate when the investment return exceeds various thresholds. Rather than an automatic change to the discount rate, a board discussion would be placed on the calendar. The 95th percentile return in the Future Investment Return Scenarios exhibit in this report, which includes returns high enough to trigger a board discussion, does not reflect any change in the discount rate.

Actuarial Methods and Assumptions
There are no significant changes to the actuarial methods or assumptions for the June 30, 2024,actuarial valuation.

Report Enhancements
Effective with the June 30, 2024, Actuarial Valuation, separate amortization schedules for each tier of benefits are no longer necessary. Multiple amortization schedules, and thus multiple Section 1 reports, will be combined. We believe this gives the employer a clearer picture of the pension plan’s financial health and long-term costs.

Subsequent Events
This actuarial valuation report reflects fund investment return through June 30, 2024,as well as statutory changes, regulatory changes and board actions through January 2025.

CalPERS will be completing an Asset Liability Management (ALM) review process in November 2025 that will review the capital market assumptions and the CalPERS Total Fund Investment Policy and ascertain whether a change in the discount is warranted. In addition, the Actuarial Office will be presenting the findings of its Experience Study which reviews economic assumptions other than the discount rate as well as all demographic assumptions and makes recommendations to modify actuarial assumptions where appropriate. Any changes in actuarial assumptions will be reflected in the June 30, 2025, actuari al valuations.

The 2024 annual benefit limit under Internal Revenue Code (IRC) section 415(b) and annual compensation li mits under IRC section 401(a)(17) and Government Code section 7522.10 were used for this valuation and are assumed to increase 2.3% per year based on the price inflation assumption. The actual 2025 limits, determined in October 2024, are not reflected.

To the best of our knowledge, there have been no other subsequent events that could materially affect current or future certifications rendered in this report.
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Liabilities and Contributions
• Determination of Required Contributions 7
• Required Employer Contributions 8
• Member Contribution Rates 9
• Breakdown of Entry Age Accrued Liability 10
• Allocation of Plan’s Share of Pool’s Experience 10
• Development of the Plan’s Share of Pool’s Assets 10
• Funded Status – Funding Policy Basis 11
• Additional Employer Contributions 12
• Projected Employer Contributions 13
• Schedule of Amortization Bases 14
• Amortization Schedule and Alternatives 15
• Employer Contribution History 17
• Funding History 17
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CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 7 Determination of Required Contributions
Contributions to fund the plan are determined by an actuarial valuation performed each year. The valuation employs complex calculations based on a set of actuarial assumptions and methods. See Appendix A in Section 2 for information on the assumptions and methods used in this valuation. The valuation incorporates all plan experience through the valuation date and sets required contributions for the fiscal year that begins two years after the valuation date.

Contribution Components
Two components comprise required contributions:
• Normal Cost—expressed as a percentage of pensionable payroll • Unfunded Accrued Liability (UAL) Contribution — expressed as a dollar amount Normal Costrepresents the value of benefits allocated to the upcoming year for active employees. If all plan experience exactly matched the actuarial assumptions, normal cost would be sufficient to fully fund all benefits. The employer and employees each pay a share of the normal cost with contributions payable as part of the regular payroll reporting process. The contribution rate for Classic members is set by statute based on benefit formula whereas for PEPRA members it is based on 50% of the total normal cost.

When plan experience differs from the actuarial assumptions, UAL emerges. The new UAL may be positive or negative. If the total UAL is positive (i.e., accrued liability exceeds assets), the employer is required to make contributions to pay off the UAL over time. This is called the UAL Contribution component. There is an option to prepay this amount during July of each fiscal year, otherwise it is paid monthly.

In measuring the UAL each year, plan experience is split by source. Common sources of UAL include investment experience different than expected, non-investment experience different than expected, assumption changes and benefit changes. Each source of UAL (positive or negative) forms a base that is amortized, or paid off, over a specified period of time in accordan ce with the CalPERS Actuarial Amortization Policy. The UAL Contribution is the sum of the payments on all bases. See the Schedule of Amortization Bases section of this report for an inventory of existing bases and Appendix A in Section 2 for more information on the amortization policy.
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CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 8 Required Employer Contributions
The required employer contributions in this report do not reflect any cost sharing arrangement between the agency and the employees. For employee contribution rates, see Member Contribution Rates.

Fiscal Year
Required Employer Contributions 2026-27
Employer Normal Cost Rate
Classic Rate Plan 1722 13.36%
PEPRA Rate Plan 26369 8.24%
Plus
Unfunded Accrued Liability (UAL) Contribution Amount† $122,327 Paid either as
1) Monthly Payment $10,193.92
Or
2) Annual Prepayment Option‡ $118,369
The total minimum required employer contribution is the sum of the Plan’s Employer Normal Cost Rate (expressed as a percentage of payroll and paid as payroll is reported) and the Unfunded Accrued Liability (UAL) Contribution Amount (billed monthly (1) or prepaid annually (2) in dollars). †The required payment on amortization bases does not take into account any additional discretionary payment made after April 30, 2025.
‡Only the UAL portion of the employer contribution can be prepaid (which must be received in full no later than July 31).

Development of Normal Cost as a Percentage of Payroll
Fiscal Year Fiscal Year
2025-26 2026-27
Classic Rate Plan 1722
Base Total Normal Cost for Formula 18.87% 18.85%
Surcharge for Class 1 Benefits 1 1.44% 1.44%
Plan's Total Normal Cost 20.31% 20.29%
Offset Due to Employee Contributions 2(6.93%) (6.93%)
Employer Normal Cost for Rate Plan 1722 13.38% 13.36%
PEPRA Rate Plan 26369
Base Total Normal Cost for Formula 15.71% 15.68%
Surcharge for Class 1 Benefits 1 0.81% 0.81%
Plan's Total Normal Cost 16.52% 16.49%
Offset Due to Employee Contributions 2(8.25%) (8.25%)
Employer Normal Cost for Rate Plan 26369 8.27% 8.24%
1 See Surcharge for Class 1 Benefits in the supplementary information section of this report. 2 This is the expected employee contributions, taking into account individual benefit formula and any offset from the use of a modified formula, divided by projected annual payroll. For member contribution rates above the breakpoint for each benefit formula, see Member Contribution Rates.
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CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 9 Member Contribution Rates
The required member contributions in this report do not reflect any cost sharing arrangement between the agency and the employees.

Classic Members
Each member contributes toward their retirement based upon the retirement formula. The standard Classic member contribution rate above the breakpoint, if any, is as described below.

Benefit Formula
Percent Contributed
above the Breakpoint
Miscellaneous, 1.5% at age 65 2%
Miscellaneous, 2% at age 60 7%
Miscellaneous, 2% at age 55 7%
Miscellaneous, 2.5% at age 55 8%
Miscellaneous, 2.7% at age 55 8%
Miscellaneous, 3% at age 60 8%
Auxiliary organizations of the CSU system may elect reduced contribution rates for Miscellaneous members, in which case the contribution rate above the breakpoint is 6% if members are not covered by Social Security and 5% if they are.

PEPRA Members
The California Public Employees’ Pension Reform Act of 2013 (PEPRA) established new benefit formulas, final compensation period, and contribution requirements for “new” employees (generally those first hired into a CalPERS-covered position on or after January 1, 2013). In accordance with Government Code Section 7522.30(b), “new members … shall have an initial contribution rate of at least 50% of the normal cost rate.” The normal cost rate for the plan is dependent on the benefit levels, actuarial assumptions and demographics of the risk pool, particularly members’ entry age. Should the total normal cost rate of the plan change by more than 1% from the base total normal cost rate established for the plan, the new member rate shall be 50% of the new normal cost rate rounded to the nearest quarter percent.

The table below shows the determination of the PEPRA member contribution rates effective July 1, 2026, based on 50% of the total normal cost rate as of the June 30, 2024, valuation.

Basis for Current Rate Rates Effective July 1, 2026
Rate Plan
Identifier Benefit Group Name
Total
Normal
Cost
Member
Rate
Total
Normal
Cost
Change
in Normal
Cost
Adj.

Needed
Member
Rate
26369 PEPRA Miscellaneous Plan 16.25% 8.25% 16.49% 0.24% No 8.25% 267 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 10 Breakdown of Entry Age Accrued Liability
Active Members $4,341,000
Transferred Members 250,083
Separated Members 585,739
Members and Beneficiaries Receiving Payments 8,305,123
Total $13,481,945
Allocation of Plan’s Share of Pool’s Experience
It is the policy of CalPERS to ensure equity within the risk pools by allocating the pool’s experience gains/losses and assum ption changes in a manner that treats each employer equitably and maintains benefit security for the members of the System while minimizing substantial variations in employer contributions. The pool’s experience gains/losses and impact of assumption/method changes is allocated to the plan as follows:

1. Plan’s Accrued Liability $13,481,945

2. Projected UAL Balance at 6/30/2024 1,798,525

3. Other UAL Adjustments (Golden Handshake, Prior Service Purchase, etc.) 0

4. Adjusted UAL Balance at 6/30/2024 for Asset Share 1,872,050

5. Pool’s Accrued Liability1 24,701,567,178

6. Sum of Pool’s Individual Plan UAL Balances at 6/30/20241 5,686,499,631

7. Pool’s 2023-24 Investment (Gain)/Loss1(476,088,386)

8. Pool’s 2023-24 Non-Investment (Gain)/Loss1 305,188,638

9. Plan’s Share of Pool’s Investment (Gain)/Loss: [(1) - (4)] ÷ [(5) - (6)] × (7) (290,682)

10. Plan’s Share of Pool’s Non-Investment (Gain)/Loss: (1) ÷ (5) × (8) 166,570

11. Plan’s New (Gain)/Loss as of 6/30/2024:(9) + (10) (124,112)

12. Increase in Pool’s Accrued Liability due to Change in Assumptions1 0

13. Plan’s Share of Pool’s Change in Assumptions: (1) ÷ (5) × (12) 0

14. Increase in Pool’s Accrued Liability due to Funding Risk Mitigation1 0

15. Plan’s Share of Pool’s Change due to Funding Risk Mitigation: (1) ÷ (5) × (14) 0

16. Offset due to Funding Risk Mitigation 0

17. Plan’s Investment (Gain)/Loss: (9) – (16) (290,682) 1 Does not include plans that transferred to the pool on the valuation date.

Development of the Plan’s Share of Pool’s Assets

18. Plan’s UAL: (2) + (3) + (11) + (13) + (15) $1,674,413

19. Plan’s Share of Pool’s Market Value of Assets (MVA): (1) - (18) $11,807,532 For a reconciliation of the pool’s Market Value of Assets (MVA), information on the fund’s asset allocation and a history of CalPERS investment returns, see Section 2, which can be found on the CalPERS website (www.calpers.ca.gov). 268 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 11 Funded Status – Funding Policy Basis
The table below provides information on the current funded status of the plan under the funding policy. The funded status for this purpose is based on the market value of assets relative to the funding target produced by the entry age actuarial cost method and actuarial assumptions adopted by the board. The actuarial cost method allocates the total expected cost of a member’s projected benefit (Present Value of Benefits) to individual years of service (the Normal Cost). The value of the projected benefit that is not allocated to future service is referred to as the Accrued Liabi lity and is the plan’s funding target on the valuation date. The Unfunded Accrued Liability (UAL) equals the funding target minus the assets. The UAL is an absolute measure of funded status and can be viewed as employer debt. The Funded Ratio equals the assets divided by the funding target. The funded ratio is a relative measure of the funded status and allows for comparisons between plans of different sizes.

June 30, 2023 June 30, 2024

1. Present Value of Benefits $15,405,737 $16,768,258

2. Entry Age Accrued Liability 12,558,369 13,481,945

3. Market Value of Assets (MVA) 10,703,906 11,807,532

4. Unfunded Accrued Liability (UAL) [(2) – (3)] $1,854,463 $1,674,413

5. Funded Ratio [(3) ÷ (2)] 85.2% 87.6%
A funded ratio of 100% (UAL of $0) implies that the funding of the plan is on target and that future contributions equal to the normal cost of the active plan members will be sufficient to fully fund all retirement benefits if future experience matches the actuarial assumptions. A funded ratio of less than 100% (positive UAL) implies that in addition to normal costs, payments tow ard the UAL will be required. Plans with a funded ratio greater than 100% have a negative UAL (or surplus) but are required under current law to continue contributing the normal cost in most cases, preserving the surplus for future contingencies.

Calculations for the funding target reflect the expected long-term investment return of 6.8%. If it were known on the valuation date that future investment returns will average something greater/less than the expected return, calculated normal costs and accrued liabilities provided in this report would be less/greater than the results shown. Therefore, for example, if actual average future returns are less than the expected return, calculated normal costs and UAL contributions will not be sufficient to ful ly fund all retirement benefits. Under this scenario, required future normal cost contributions will need to increase from those provided in this report, and the plan will develop unfunded liabilities that will also add to required future contributions. For illustra tive purposes, funded statuses based on a 1% lower and higher average future investment return (discount rate) are as follows:
1% Lower
Average Return
Current
Assumption
1% Higher
Average Return
Discount Rate 5.8% 6.8% 7.8%

1. Entry Age Accrued Liability $15,174,285 $13,481,945 $12,078,679

2. Market Value of Assets (MVA) 11,807,532 11,807,532 11,807,532

3. Unfunded Accrued Liability (UAL) [(1) – (2)] $3,366,753 $1,674,413 $271,147

4. Funded Ratio [(2) ÷ (1)] 77.8% 87.6% 97.8%
The Risk Analysis section of the report provides additional information regarding the sensitivity of valuation results to the expected investment return and other factors. Also provided in that section are measures of funded status that are appropriate for assessing the sufficiency of plan assets to cover estimated termination liabilities. 269 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 12 Additional Employer Contributions
The CalPERS amortization policy provides a systematic methodology for paying down a plan’s unfunded accrued liability (UAL) over a reasonable period of years. The projected schedule of required payments for this plan under the amortization policy is provided in Amortization Schedule and Alternatives . Certain aspects of the policy such as 1) layered amortization bases (positive and negative) with different remaining payoff periods, and 2) the phase-in of required payments toward investment gains and losses, can result in volatility in year-to-year projected UAL payments. Provided below is information on how an Additional Discretionary Payment (ADP), together with your required UAL payment of $122,327 for FY 2026-27,may better accomplish your agency’s specific objectives with regard to either smoothing out projected future payments or achieving a greater reduction in UAL than would otherwise occur when making only the minimum required payment. Such ad ditional payments are allowed at any time and can also result in significant long-term savings.

Fiscal Year 2026-27 Employer Contribution Versus Agency Funding Objectives The interest-to-payment ratio for the FY 2026-27 minimum required UAL payment is 87%, which means the required payment of $122,327 includes $106,673 of interest cost and results in a $15,654 reduction in the UAL, as can be seen in Amortization Schedule and Alternatives (see columns labelled Current Amortization Schedule). If the interest-to-payment ratio is close to 100%, and the reduction in the UAL is small, it may indicate that required contributions will be increasing in the coming years, which would be shown in Projected Employer Contributions . Another measure that can be used to evaluate how well the FY 2026-27 required UAL payment meets the agency’s specific funding objectives is the number of years required to pay off the existing UAL if the annual payment were held constant in future years. With an annual payment of $122,327 it would take over 20 years to pay off the current UAL. A result that is longer than the agency’s target funding period suggests that the option of supplementing the minimum payment with an ADP should be weighed against the agency’s budget constraints.

Provided below are selectADP options for consideration. Making such an ADP during FY 2026-27 does not require an ADP be made in any future year, nor does it change the remaining amortization period of any portion of unfunded liability. For information on permanent changes to amortization periods, see Amortization Schedule and Alternatives . Agencies considering making an ADP should contact CalPERS for additional information.

Fiscal Year 2026-27 Employer Contributions — Illustrative Scenarios If the Annual UAL
Payment Each
Year Were…
The Current
UAL Would be
Paid Off in…
This Would
Require an ADP1
in FY 2026-27 of…
Plus the Estimated
Normal Cost of…
Estimated Total
Contribution
$122,327 Over 20 years $0 $228,255 $350,582
146,475 20 years 24,148 228,255 374,730
170,876 15 years 48,549 228,255 399,131
222,342 10 years 100,015 228,255 450,597
382,358 5 years 260,031 228,255 610,613
1 The ADP amounts are assumed to be made in the middle of the fiscal year. A payment made earlier or later in the fiscal year w ould have to be less or more than the amount show n to have the same effect on the UAL amortization.

The calculations above are based on the projected UAL as of June 30, 2026,as determined in the June 30, 2024, actuarial valuation. New unfunded liabilities can emerge in future years due to assumption or method changes, changes in plan provisions, and actuarial experience different than assumed. Making an ADP illustrated above for the indicated number of year s will not result in a plan that is exactly 100% funded in the indicated number of years. Valuation results will vary from one year to the next and can diverge significantly from projections over a period of several years.

Additional Discretionary Payment History
The following table provides a recent history of actual ADPs made to the plan through April 30, 2025.

Fiscal
Year ADP FiscalYear ADP
2019-20 $48,258 2022-23 $1,589,009
2020-21 0 2023-24 175,000
2021-22 6,125 2024-25 142,360
270 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 13 Projected Employer Contributions
The table below shows the required and projected employer contributions (before cost sharing) for the next six fiscal years. The projection assumes that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. In particular, the investment return beginning with FY 2024-25 is assumed to be 6.80% per year, net of investment and administrative expenses. Future contribution requirements may differ significantly from those shown below. The actual long-term cost of the plan will depend on the actual benefits and expenses paid and the actual investment experience of the fund.

The normal cost rates for each rate plan are assumed to remain constant.However, the employer contribution amounts will vary due to changes in payroll. The actuarial valuation does not include payroll beyond the valuation date. For the most realistic projections, the employer should apply projected payroll amounts to the rates below based on the most recent information available, such as current payroll as well as any plans to fill vacancies or add or remove positions.

Covered
Payroll
June 30, 2024
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2024-25 and Beyond) Rate Plan
Identifier
2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Normal Cost Rates (Percentage of Payroll)
1722 $796,086 13.36% 13.4% 13.4% 13.4% 13.4% 13.4%
26369 1,353,431 8.24% 8.2% 8.2% 8.2% 8.2% 8.2%
UAL Payment $122,327 $146,000 $170,000 $164,000 $157,000 $157,000 Unlike the normal cost rates, the required UAL payments are expected to vary significantly from the projections above due to experience, particularly investment experience. For projected contributions under alternate investment return scenarios, please see the Future Investment Return Scenarios exhibit.Our online pension plan projection tool, Pension Outlook, is available in the Employers section of the CalPERS website. Pension Outlook can help plan and budget pension costs under various scenarios.

For ongoing plans, investment gains and losses are amortized using an initial 5-year ramp. For more information, please see Amortization of Unfunded Actuarial Accrued Liability in Appendix A of the Section 2 Report. This method phases in the impact of the change in UAL over a 5-year period in order to reduce employer cost volatility from year to year. As a result of this methodology, dramatic changes in the required employer contributions in any one year are less likely. However, required contributions can change gradually and significantly over the next five years. In years when th ere is a large investment loss, the relatively small amortization payments during the initial ramp period could result in contributions that are less than interest on the UAL (i.e. negative amortization) while the contribution impact of the increase in the UAL is phased in. 271 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 14 Schedule of Amortization Bases
Below is the schedule of the plan’s amortization bases. Note that there is a two-year lag between the valuation date and the start of the contribution year. • The assets, liabilities and funded status of the plan are measured as of the valuation date: June 30, 2024. • The required employer contributions determined by the valuation are for the fiscal year beginning two years after the valuati on date: FY 2026-27.

This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies with their required employer contribution well in advance of the start of the fiscal year.

The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the expected payment on the UAL for the fiscal year and adjusting for interest. The expected payment on the UAL for FY 2024-25 is based on the actuarial valuation two years ago, adjusted for additional discretionary payments made on or before April 30, 2025, if necessary, and the expected payment for FY 2025-26 is based on the actuarial valuation one year ago.

Reason for Base
Date
Est.

Ramp
Level
2026-27
Ramp
Shape
Escalation
Rate
Amort.

Period
Balance
6/30/24
Expected
Payment
2024-25
Balance
6/30/25
Expected
Payment
2025-26
Balance
6/30/26
Minimum
Required
Payment
2026-27
Investment (Gain)/Loss 6/30/22 60% Up Only 0.00% 18 1,430,018 162,497 1,359,328 55,878 1,394,016 83,817 Non-Investment (Gain)/Loss 6/30/22 No Ramp 0.00% 18 14,978 1,347 14,604 1,347 14,205 1,347 Partial Fresh Start 6/30/22 60% Up Only 0.00% 18 76,619 14,480 66,865 2,749 68,571 4,123 Investment (Gain)/Loss 6/30/23 40% Up Only 0.00% 19 70,057 0 74,821 1,609 78,246 3,216 Non-Investment (Gain)/Loss 6/30/23 No Ramp 0.00% 19 206,853 0 220,919 19,866 215,411 19,866 Investment (Gain)/Loss 6/30/24 20% Up Only 0.00% 20 (290,682) 0 (310,448) 0 (331,558) (7,127) Non-Investment (Gain)/Loss 6/30/24 No Ramp 0.00% 20 166,570 0 177,897 0 189,994 17,085 Total 1,674,413 178,324 1,603,986 81,449 1,628,885 122,327 The (gain)/loss bases are the plan’s allocated share of the risk pool’s (gain)/loss for the fiscal year as disclosed in Allocation of Plan’s Share of Pool’s Experience earlier in this report. These (gain)/loss bases will be amortized in accordance with the CalPERS amortization policy in effect at the time the base was established. _______ ............................................... _____ ........................................ ________ ........................................ ________ ........................................ _______ _ -------···············································-----········································--------········································--------································· -------···············································-----········································--------········································--------································· -------···············································-----········································--------········································--------································· -------···············································-----········································--------········································--------································· _______ ............................................... _____ ........................................ ________ ........................................ ________ ........................................ _______ _ _______ ............................................... _____ ........................................ ________ ........................................ ________ ........................................ _______ _ 272 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 15 Amortization Schedule and Alternatives
The amortization schedule on the previous page(s) shows the minimum contributions required according to the CalPERS amortization policy. Each year, many agencies express a desire for a more stable pattern of payments or indicate interest in paying off the unfunded accrued liabilities more quickly than required. As such, we have provided alternative amortization schedules to help analyze the current amortization schedule and illustrate the potential savings of accelerating unfunded liability payments.

Shown on the following page are future year amortization payments based on 1) the current amortization schedule reflecting th e individual bases and remaining periods shown on the previous page, and 2) alternative “fresh start” amortization schedules using two sample periods that would both result in interest savings relative to the current amortization schedule. To initiate a fresh start, please contact a CalPERS actuary.

The current amortization schedule typically contains both positive and negative bases. Positive bases result from plan changes, assumption changes, method changes or plan experience that increase unfunded liability. Negative bases result from plan changes, assumption changes, method changes, or plan experience that decrease unfunded liability. The combination of positive and negative bases within an amortization schedule can result in unusual or problematic circumstances in future year s, such as:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period, and results in a large change in the employer contribution requirement.

In any year when one of the above scenarios occurs, the actuary will consider corrective action such as replacing the existin g unfunded liability bases with a single “fresh start” base and amortizing it over an appropriate period.

The current amortization schedule on the following page may appear to show that, based on the current amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know today whether such a scenario will in fact arise since there will be additional bases added to the amortization schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate action based on guidelines in the CalPERS Actuarial Amortization Policy. 273 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 16 Amortization Schedule and Alternatives (continued)
Alternative Schedules
Current Amortization
Schedule 15 Year Amortization 10 Year Amortization
Date Balance Payment Balance Payment Balance Payment
6/30/2026 1,628,885 122,327 1,628,885 170,876 1,628,885 222,342 6/30/2027 1,613,231 146,123 1,563,059 170,876 1,509,872 222,342 6/30/2028 1,571,921 169,919 1,492,757 170,876 1,382,766 222,342 6/30/2029 1,503,210 164,400 1,417,674 170,876 1,247,017 222,342 6/30/2030 1,435,531 157,272 1,337,486 170,876 1,102,037 222,342 6/30/2031 1,370,616 157,272 1,251,845 170,876 947,198 222,342 6/30/2032 1,301,285 157,272 1,160,380 170,876 781,830 222,342 6/30/2033 1,227,242 157,272 1,062,696 170,876 605,217 222,341 6/30/2034 1,148,165 157,273 958,369 170,876 416,595 222,341 6/30/2035 1,063,707 157,271 846,948 170,876 215,147 222,342 6/30/2036 973,509 157,271 727,950 170,876
6/30/2037 877,177 157,272 600,860 170,876
6/30/2038 774,294 157,273 465,128 170,876
6/30/2039 664,414 157,271 320,166 170,876
6/30/2040 547,063 157,271 165,347 170,876
6/30/2041 421,733 157,272
6/30/2042 287,880 157,271
6/30/2043 144,927 149,773
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
6/30/2049
Total 2,797,075 2,563,140 2,223,418
Interest Paid 1,168,190 934,255 594,533
Estimated Savings 233,935 573,657
274 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 17 Employer Contribution History
The table below provides a recent history of the employer contribution requirements for the plan, as determined by the annual actuarial valuation.Changes due to prepayments or plan amendments after the valuation report was finalized are not reflected.

Employer Normal Cost Rate
Valuation
Date
Contribution
Year
Rate Plan
1722
Rate Plan
26369
Unfunded Liability
Payment
06/30/2015 2017-18 9.599% 6.908% $98,769
06/30/2016 2018-19 10.152% 7.266% 124,635
06/30/2017 2019-20 10.868% 7.072% 154,064
06/30/2018 2020-21 11.746% 7.874% 156,312
06/30/2019 2021-22 11.60% 7.73% 184,139
06/30/2020 2022-23 11.61% 7.76% 213,762
06/30/2021 2023-24 13.26% 8.00% 198,158
06/30/2022 2024-25 13.31% 8.18% 49,844
06/30/2023 2025-26 13.38% 8.27% 87,592
06/30/2024 2026-27 13.36% 8.24% 122,327
Funding History
The table below shows the recent history of the actuarial accrued liability, share of the pool’s market value of assets, unfunded accrued liability, funded ratio and annual covered payroll.

Valuation
Date
Accrued
Liability
(AL)
Share of Pool’s
Market Value of
Assets (MVA)
Unfunded
Accrued Liability
(UAL)
Funded
Ratio
Annual
Covered
Payroll
06/30/2015 $7,692,482 $6,163,597 $1,528,885 80.1% $1,151,073 06/30/2016 8,102,234 6,026,651 2,075,583 74.4% 1,313,499 06/30/2017 8,713,781 6,660,804 2,052,977 76.4% 1,420,194 06/30/2018 9,529,959 7,131,832 2,398,127 74.8% 1,457,053 06/30/2019 10,073,223 7,589,592 2,483,631 75.3% 1,218,232 06/30/2020 10,618,772 7,939,815 2,678,957 74.8% 1,609,843 06/30/2021 11,285,067 9,560,649 1,724,418 84.7% 1,611,897 06/30/2022 12,055,617 8,828,493 3,227,124 73.2% 1,788,326 06/30/2023 12,558,369 10,703,906 1,854,463 85.2% 1,868,589 06/30/2024 13,481,945 11,807,532 1,674,413 87.6% 2,149,517 275 of 316
Risk Analysis
• Future Investment Return Scenarios 19
• Discount Rate Sensitivity 20
• Mortality Rate Sensitivity 21
• Maturity Measures 21
• Maturity Measures History 22
• Funded Status – Termination Basis 23
• Funded Status – Low-Default-Risk Basis 24
276 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 19 Future Investment Return Scenarios
Analysis using the investment return scenarios from the Asset Liability Management process completed in 2021 was performed to determine the effects of various future investment returns on required employer UAL contributions. The CalPERS Funding Risk Mitigation Policy stipulates that when the investment return exceeds the discount rate by at least 2% the board will consider adjustments to the discount rate. The projections below use a discount rate of 6.8% for all scenarios even though an annual return of 10.8% is high enough to trigger a board discussion on the discount rate. The projections also assume that all other actuarial assumptions will be realized and that no further changes in assumptions, contributions, benefits, or funding will occur.

The employer normal cost rates are not affected by Investment returns, and since no future assumption changes are being reflected, the projected employer normal cost rates for every future investment return scenario are the same as those shown earlier in this report. See Projected Employer Contributions for more information on projecting the employer normal cost.

The first table shows projected UAL contribution requirements if the fund were to earn either 3.0% or 10.8% annually. These alternate investment returns were chosen because 90% of long-term average returns are expected to fall between them over the 20-year period ending June 30, 2044.

Assumed Annual Return
FY 2024-25
through FY 2043-44
Projected Employer UAL Contributions
2027-28 2028-29 2029-30 2030-31 2031-32

3.0% (5th percentile) $157,000 $203,000 $231,000 $270,000 $328,000

10.8% (95th percentile) $135,000 $134,000 $0 $0 $0
Required UAL contributions outside of this range are also possible. In particular, whereas it is unlikely that investment returns will average less than 3.0% or greater than 10.8% over a 20-year period, the likelihood of a single investment return less than

3.0% or greater than 10.8% in any given year is much greater. The following analysis illustrates the effect of an extreme, si ngle year investment return.

The portfolio has an expected volatility (or standard deviation) of 12.0% per year. Accordingly, in any given year there is a 16% probability that the annual return will be -5.2% or less and a 2.5% probability that the annual return will be -17.2% or less. These returns represent one and two standard deviations below the expected return of 6.8%.

The following table shows the effect of one and two standard deviation investment losses in FY 2024-25 on the FY 2027-28 contribution requirements. Note that a single-year investment gain or loss decreases or increases the required UAL contribution amount incrementally for each of the next five years, not just one, due to the 5-year ramp in the amortization policy. However, the contribution requirements beyond the first year are also impacted by investment returns beyond the first yea r. Historically, significant downturns in the market are often followed by higher than average returns. Such investment gains would offset the impact of these single year negative returns in years beyond FY 2027-28.

Assumed Annual Return for
Fiscal Year 2024-25
Required Employer
UAL Contributions
Projected Employer
UAL Contributions
2026-27 2027-28
(17.2%) (2 standard deviation loss) $122,327 $215,000
(5.2%) (1 standard deviation loss) $122,327 $181,000
• Without investment gains (returns higher than 6.8%) in FY 2025-26 or later, projected contributions rates would continue to rise over the next four years due to the continued phase-in of the impact of the illustrated investment loss in FY 2024-25.
• The Pension Outlook Tool can be used to model projected contributions for these scenarios beyond FY 2027-28 as well as to model other investment return scenarios .
277 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 20 Discount Rate Sensitivity
The discount rate assumption is calculated as the sum of the assumed real rate of return and the assumed annual price inflation, currently 4.5% and 2.3%, respectively. Changing either the price inflation assumption or the real rate of return assumption will change the discount rate. The sensitivity of the valuation results to the discount rate assumption depends on which component of the discount rate is changed. Shown below are various valuation results as of June 30, 2024, assuming alternate discount rates by changing the two components independently. Results are shown using the current discount rate of

6.8% as well as alternate discount rates of 5.8% and 7.8%. The rates of 5.8% and 7.8% were selected since they illustrate the impact of a 1.0% increase or decrease to the 6.8% assumption.

Sensitivity to the Discount Rate Due to Varying the Real Rate of Return Assumption As of June 30, 2024
1% Lower
Real Return Rate
Current
Assumptions
1% Higher
Real Return Rate
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 2.3% 2.3% 2.3%
Real Rate of Return 3.5% 4.5% 5.5%
a) Total Normal Cost
Rate Plan 1722 25.54% 20.29% 16.30%
Rate Plan 26369 20.65% 16.49% 13.33%
b) Accrued Liability $15,174,285 $13,481,945 $12,078,679 c) Market Value of Assets $11,807,532 $11,807,532 $11,807,532 d) Unfunded Liability/(Surplus) [(b) - (c)] $3,366,753 $1,674,413 $271,147 e) Funded Ratio 77.8% 87.6% 97.8%
Sensitivity to the Discount Rate Due to Varying the Price Inflation Assumption As of June 30, 2024
1% Lower
Price Inflation
Current
Assumptions
1% Higher
Price Inflation
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 1.3% 2.3% 3.3%
Real Rate of Return 4.5% 4.5% 4.5%
a) Total Normal Cost
Rate Plan 1722 21.27% 20.29% 18.52%
Rate Plan 26369 17.39% 16.49% 14.99%
b) Accrued Liability $13,945,040 $13,481,945 $12,540,365 c) Market Value of Assets $11,807,532 $11,807,532 $11,807,532 d) Unfunded Liability/(Surplus) [(b) - (c)] $2,137,508 $1,674,413 $732,833 e) Funded Ratio 84.7% 87.6% 94.2%
278 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 21 Mortality Rate Sensitivity
The following table looks at the change in the June 30, 2024,plan costs and funded status under two different longevity scenarios, namely assuming rates of post-retirement mortality are 10% lower or 10% higher than our current mortality assumptions adopted in 2021. This type of analysis highlights the impact on the plan of a change in the mortality assumption.

As of June 30, 2024
10% Lower
Mortality Rates
Current
Assumptions
10% Higher
Mortality Rates
a) Total Normal Cost
Rate Plan 1722 20.63% 20.29% 19.97%
Rate Plan 26369 16.77% 16.49% 16.23%
b) Accrued Liability $13,802,081 $13,481,945 $13,189,326 c) Market Value of Assets $11,807,532 $11,807,532 $11,807,532 d) Unfunded Liability/(Surplus) [(b) - (c)] $1,994,549 $1,674,413 $1,381,794 e) Funded Ratio 85.5% 87.6% 89.5%
Maturity Measures
As pension plans mature they become more sensitive to risks .Understanding plan maturity and how it affects the ability of a pension plan sponsor to tolerate risk is important in understanding how the pension plan is impacted by investment return volatility, other economic variables and changes in longevity or other demographic assumptions.

Since it is the employer that bears the risk, it is appropriate to perform this analysis on a pension plan level considering all rate plans. The following measures include only the rate plans covered in this report. One way to look at the maturity level of CalPERS and its plans is to look at the ratio of a plan’s retiree liability to its total liability. A pension plan in its infancy will have a very low ratio of retiree liability to total liability. As the plan matures, the ratio increases. A mature plan will often have a ratio above 60%-65%.

Ratio of Retiree Accrued Liability to
Total Accrued Liability June 30, 2023 June 30, 2024

1. Retiree Accrued Liability $7,990,417 $8,305,123

2. Total Accrued Liability $12,558,369 $13,481,945

3. Ratio of Retiree AL to Total AL [(1) ÷ (2)] 64% 62%
Another measure of the maturity level of CalPERS and its plans is the ratio of actives to retirees, also called the support ratio. A pension plan in its infancy will have a very high ratio of active to retired members. As the plan matures and members retire, the ratio declines. A mature plan will often have a ratio near or below one.

To calculate the support ratio for the rate plan, retirees and beneficiaries receiving a continuance are each counted as one, even though they may have only worked a portion of their careers as an active member of this rate plan. For this reason, the suppo rt ratio, while intuitive, may be less informative than the ratio of retiree liability to total accrued liability above.

For comparison, the support ratio for all CalPERS public agency plans as of June 30, 2023, was 0.78 and was calculated consistently with how it is for the individual rate plan. Note that to calculate the support ratio for all public agen cy plans, a retiree with service from more than one CalPERS agency is counted as a retiree more than once.

Support Ratio June 30, 2023 June 30, 2024

1. Number of Actives 22 25

2. Number of Retirees 32 33

3. Support Ratio [(1) ÷ (2)] 0.69 0.76
279 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 22 Maturity Measures (continued)
The actuarial calculations supplied in this communication are based on various assumptions about long -term demographic and economic behavior. Unless these assumptions (e.g., terminations, deaths, disabilities, retirements, salary increases, investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year-to-year differences between actual experience and the assumptions are called actuarial gains and losses and serve to lower or raise required employer contributions from one year to the next. Therefore, employer contributions will inevitably fluctuate, especially due to the ups and downs of investment returns.

Asset Volatility Ratio
Shown in the table below is the asset volatility ratio (AVR), which is the ratio of market value of assets to payroll. Plans that have a higher AVR experience more volatile employer contributions (as a percentage of payroll) due to investment return. For example, a plan with an AVR of 8 may experience twice the contribution volatility due to investment return volatility than a plan with an AVR of 4. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as a plan matures.

Liability Volatility Ratio
Also shown in the table below is the liability volatility ratio (LVR), which is the ratio of accrued liability to payroll. Plans that have a higher LVR experience more volatile employer contributions (as a percentage of payroll) due to changes in liability. For example, a plan with an LVR of 8 is expected to have twice the contribution volatility of a plan with an LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions. It should be noted that this ratio indicates a longer-term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded ratio approaches 100%.

Contribution Volatility June 30, 2023 June 30, 2024

1. Market Value of Assets $10,703,906 $11,807,532

2. Payroll $1,868,589 $2,149,517

3. Asset Volatility Ratio (AVR) [(1) ÷ (2)] 5.7 5.5

4. Accrued Liability $12,558,369 $13,481,945

5. Liability Volatility Ratio (LVR) [(4) ÷ (2)] 6.7 6.3 Maturity Measures History
Valuation Date
Ratio of
Retiree Accrued Liability
to
Total Accrued Liability Support Ratio
Asset
Volatility
Ratio
Liability
Volatility
Ratio
06/30/2017 46% 1.21 4.7 6.1
06/30/2018 45% 1.15 4.9 6.5
06/30/2019 60% 0.83 6.2 8.3
06/30/2020 70% 0.79 4.9 6.6
06/30/2021 66% 0.71 5.9 7.0
06/30/2022 64% 0.76 4.9 6.7
06/30/2023 64% 0.69 5.7 6.7
06/30/2024 62% 0.76 5.5 6.3
280 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 23 Funded Status – Termination Basis
The funded status measured on a termination basis is an estimated range for the financial position of the plan had the contract with CalPERS been terminated as of June 30, 2024. The accrued liability on a termination basis (termination liability) is calculated differently from the plan’s ongoing funding liability. For the termination liability calculation, both compensation and service are frozen as of the valuation date and no future pay increases or service accruals are assumed. This measure of funded status is not appropriate for assessing the need for future employer contributions in the case of an ongoing plan, that is, for an employer that continues to provide CalPERS retirement benefits to active employees. Unlike the actuarial cost method used for ongoing plans, the termination liability is the present value of the benefits earned through the valuation date.

A more conservative investment policy and asset allocation strategy was adopted by the board for the Terminated Agency Pool.

The Terminated Agency Pool has limited funding sources since no future employer contributions will be made. Therefore, expected benefit payments are secured by risk-free assets and benefit security for members is increased while limiting the funding risk. However, this asset allocation has a lower expected rate of return than the remainder of the PERF and consequently, a lower discount rate assumption. The lower discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.

The discount rate used for actual termination valuations is a weighted average of the 10-year and 30-year Treasury yields where the weights are based on matching asset and liability durations as of the termination date. The discount rates used in the following analysis is based on 20-year Treasury bonds, which is a good proxy for most plans. The discount rate upon contract termination will depend on actual Treasuryrates on the date of termination, which varies over time, as demonstrated below.

Valuation 20-Year Valuation 20-Year
Date Treasury Rate Date Treasury Rate
06/30/2015 2.83% 06/30/2020 1.18%
06/30/2016 1.86% 06/30/2021 2.00%
06/30/2017 2.61% 06/30/2022 3.38%
06/30/2018 2.91% 06/30/2023 4.06%
06/30/2019 2.31% 06/30/2024 4.61%
As Treasury rates are variable, the table below shows a range for the termination liability using discount rates 1% below and above the 20-year Treasury rate on the valuation date. The price inflation assumption is the 20-year Treasury breakeven inflation rate, that is, the difference between the 20-year inflation indexed bond and the 20-year fixed-rate bond.

The Market Value of Assets (MVA) also varies with interest rates and will fluctuate depending on other market conditions on the date of termination. Since it is not possible to approximate how the MVA will change in different interest rate environments, the results below use the MVA as of the valuation date.

Discount Rate: 3.61%
Price Inflation: 2.45%
Discount Rate: 5.61%
Price Inflation: 2.45%

1. Termination Liability1 $19,709,653 $15,240,817

2. Market Value of Assets (MVA) 11,807,532 11,807,532

3. Unfunded Termination Liability [(1) – (2)] $7,902,121 $3,433,285

4. Funded Ratio [(2) ÷ (1)] 59.9% 77.5%
1 The termination liabilities calculated above include a 5% contingency load. The contingency load and other actuarial assumptions can be found in Appendix A of the Section 2 report.

In order to terminate, first contact our Pension Contract Services unit to initiate a Resolution of Intent to Terminate. The completed Resolution will allow a CalPERS actuary to provide a preliminary termination valuation with a more up -to-date estimate of the plan’s assets and liabilities. Before beginning this process, please consult with a CalPERS actuary. 281 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 24 Funded Status – Low-Default-Risk Basis
Actuarial Standard of Practice (ASOP) No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, requires the disclosure of a low-default-risk obligation measure (LDROM) of benefit costs accrued as of the valuation date using a discount rate based on the yields of high quality fixed income securities with cash flows that replica te expected benefit payments. Conceptually, this measure represents the level at which financial markets would value the accrued plan costs, and would be approximately equal to the cost of a portfolio of low-default-risk bonds with similar financial characteristics to accrued plan costs.

As permitted in ASOP No. 4, the Actuarial Office uses the Entry Age Actuarial Cost Method to calculate the LDROM. This methodology is in line with the measure of “benefit entitlements” calculated by the Bureau of Economic Analysis and used b y the Federal Reserve to report the indebtedness due to pensions of plan sponsors and, conversely, the household wealth due to pensions of plan members.

As shown below, the discount rate used for the LDROM is 5.35%, which is the Standard FTSE Pension Liability Index1 discount rate as of June 30, 2024.

Selected Measures on a Low-Default-Risk Basis June 30, 2024 Discount Rate 5.35%

1. Accrued Liability– Low-Default-Risk Basis (LDROM)
a) Active Members $5,548,902
b) Transferred Members 317,314
c) Separated Members 774,388
d) Members and Beneficiaries Receiving Payments 9,409,736 e) Total $16,050,340

2. Market Value of Assets (MVA) 11,807,532

3. Unfunded Accrued Liability – Low-Default-Risk Basis [(1e) – (2)] $4,242,808

4. Unfunded Accrued Liability – Funding Policy Basis 1,674,413

5. Present Value of Unearned Investment Risk Premium [(3) – (4)] $2,568,395 The difference between the unfunded liabilities on a low-default-risk basis and on the funding policy basis represents the present value of the investment risk premium that must be earned in future years to keep future contributions for currently accrued plan costs at the levels anticipated by the funding policy.

Benefit security for members of the plan relies on a combination of the assets in the plan, the investment income generated from those assets, and the ability of the plan sponsor to make necessary future contributions. If future returns fall short of 6.8%, benefit security could be at risk without higher than currently anticipated future contributions.

The funded status on a low-default-risk basis is not appropriate for assessing the sufficiency of plan assets to cover the cost of settling the plan’s benefit obligations (see Funded Status – Termination Basis), nor is it appropriate for assessing the need for future contributions (see Funded Status – Funding Policy Basis). 1 This index is based on a yield curve of hypothetical AA-rated zero-coupon corporate bonds whose maturities range from 6 months to 30 years. The index represents the single discount rate that w ould produce the same present value as discounting a standardized set of liability cash flow s for a fully open pension plan using the yield curve. The liability cash flows are reasonably consistent with the pattern of benefits expected to be paid from the entire Public Employees’ Retirement Fund for current and former plan members. A different index, hence a different discount rate, may be needed to measure the LDROM for a subset of the fund, such as a single rate plan or a group of retirees. 282 of 316
Supplementary Information
• Normal Cost by Benefit Group 26
• Summary of Valuation Data 27
• Status of PEPRA Transition 28
• Surcharge for Class 1 Benefits 28
• Plan's Major Benefit Options 29
283 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 26 Normal Cost by Benefit Group
The table below displays the Total Normal Cost broken out by benefit group as of the valuation date, June 30, 2024. The Total Normal Cost is the annual cost of service accrual for the fiscal year for active employees and can be viewed as the long-term contribution rate for the benefits contracted. Generally, the normal cost for a benefit group subject to more generous benefi t provisions will exceed the normal cost for a group with less generous benefits. Future measurements of the Total Normal Cost for each group may differ significantly from the current values due to such factors as: changes in economic and demographic assumptions, changes in plan benefits or applicable law.

Rate
Plan
Identifier Benefit Group Name
Total
Normal Cost
as of
June 30, 2024
Offset due to
Employee
Contributions
as of
June 30, 2024
Employer
Normal Cost
as of
June 30, 2024
Number
of
Actives
Payroll on
6/30/2024
1722 Miscellaneous Plan 20.29% 6.93% 13.36% 6 $796,086
26369 PEPRA Miscellaneous Plan 16.49% 8.25% 8.24% 19 1,353,431 Hypothetical Plan Totals1 17.90% 7.76% 10.14% 25 $2,149,517 1 The hypothetical employer normal cost and contribution rates for the total plan are provided for illustrative purposes only and are based on the payroll as of the valuation date. This snapshot of the cost of providing benefits can be compared from one valuation date to the next as members retire from older tiers and are replaced by members in new tiers. The employer normal cost rate for contribution purposes varies by rate plan and applies to the covered payroll of members in each respective rate plan.

Note that if a Benefit Group above has multiple bargaining units, each of which has separately contracted for different benefits such as Employer Paid Member Contributions, then the Normal Cost shown for the respective benefit level does not reflect those differences.
284 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 27 Summary of Valuation Data
The table below shows a summary of the plan’s member data upon which this valuation is based:

June 30, 2023 June 30, 2024
Active Members
Counts 22 25
Average Attained Age N/A 46.5
Average Entry Age to Rate Plan N/A 40.1
Average Years of Credited Service N/A 6.4
Average Annual Covered Pay $84,936 $85,981
Annual Covered Payroll $1,868,589 $2,149,517
Present Value of Future Payroll $16,053,360 $18,444,910 Transferred Members
Counts 4 4
Separated Members
Counts 10 10
Retired Members and Beneficiaries*
Counts 32 33
Average Annual Benefits $22,053 $22,772
Total Annual Benefits $705,682 $751,469
Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records may exist for those who have service in more than one valuation group. This does not result in double counting of liabilities. * Values include community property settlements.
285 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 28 Status of PEPRA Transition
The California Public Employees' Pension Reform Act of 2013 (PEPRA), which took effect in January 2013, changed CalPERS retirement benefits and placed compensation limits on new members joining CalPERS on or after January 1, 2013. One of the objectives of PEPRA was to improve the ability of employers to manage the costs of retirement benefits for their members.

While such changes can reduce future benefit costs in a meaningful way, the full impact on employer contributions will not occur until all active members are subject to the rules and provisions of PEPRA. The table below illustrates the status of this tra nsition as of June 30, 2024.

Classic PEPRA
PEPRA
as a Percent
of Total
Active Members
Count 6 19 76.0%
Average Attained Age 52.4 44.6
Average Entry Age 39.9 40.2
Average Years of Credited Service 12.6 4.4
Average Annual Covered Payroll $132,681 $71,233
Annual Covered Payroll $796,086 $1,353,431 63.0%
Present Value of Future Payroll $5,006,274 $13,438,636 72.9% Transferred Members
Count 3 1 25.0%
Separated Members
Count 7 3 30.0%
Retired Members and Beneficiaries Receiving Payments
Count 33 0 0.0%
Average Annual Benefit $22,772 $0
Total Annual Benefits $751,469 $0 0.0%
Accrued Liabilities
Active Members $2,813,698 $1,527,302 35.2%
Transferred Members 242,297 7,786 3.1%
Separated Members 582,038 3,701 0.6%
Retired Members and Beneficiaries 8,305,123 0 0.0%
Total $11,943,156 $1,538,789 11.4%
Surcharge for Class 1 Benefits
This plan has the following Class 1 benefit provisions which result in the surcharges indicated:

Class 1 benefit provisions
Rate Plan
1722
Rate Plan
26369
One Year Final Compensation (FAC 1) 0.64% N/A
Post-Retirement Survivor Allowance (PRSA) 0.80% 0.81%
Surcharge for Class 1 Benefits 1.44% 0.81%
286 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 29 Plan's Major Benefit Options
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is in Section 2.

Rate Plan 1722 Benefit Group
Member Category Misc Misc Misc
Demographics
Actives Yes No No
Transfers/Separated Yes No No
Receiving Yes Yes Yes
Benefit Group Key 106595 107518 112803
Benefit Provision
Benefit Formula 2% @ 55
Social Security Coverage No
Full/Modified Full
Employee Contribution Rate 7.00%
Final Average Compensation Period One Year
Sick Leave Credit Yes
Non-Industrial Disability Improved
Industrial Disability No
Pre-Retirement Death Benefits
Optional Settlement 2 Yes
1959 Survivor Benefit Level No
Special No
Alternate (firefighters) No
Post-Retirement Death Benefits
Lump Sum $2,000 $2,000 $2,000
Survivor Allowance (PRSA) Yes Yes Yes
COLA 2% 2% 2%
287 of 316
CalPERS Actuarial Valuation - June 30, 2024
All Rate Plans of the City of Buellton in the Miscellaneous Risk Pool CalPERS ID: 7472860304
Rate Plans belonging to the Miscellaneous Risk Pool Page 30 Plan's Major Benefit Options (Continued)
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal stand ard and optional plan provisions is in Section 2.

Rate Plan 26369 Benefit Group
Member Category Misc
Demographics
Actives Yes
Transfers/Separated Yes
Receiving No
Benefit Group Key 112802
Benefit Provision
Benefit Formula 2% @ 62
Social Security Coverage No
Full/Modified Full
Employee Contribution Rate 8.25%
Final Average Compensation Period Three Year
Sick Leave Credit Yes
Non-Industrial Disability Improved
Industrial Disability No
Pre-Retirement Death Benefits
Optional Settlement 2 Yes
1959 Survivor Benefit Level No
Special No
Alternate (firefighters) No
Post-Retirement Death Benefits
Lump Sum $2,000
Survivor Allowance (PRSA) Yes
COLA 2%
288 of 316
Section 2
California Public Employees’ Retirement System
Risk Pool Actuarial Valuation Information
Section 2 may be found on the
CalPERS website (www.calpers.ca.gov)
in the Forms & Publications section
289 of 316
0 RESOLUTION NO. 22-12

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF BUELLTON, CALIFORNIA, ADOPTING A

PENSION FUNDING POLICY
WHEREAS, on March 24, 2022, City staff proposed establishing a Pension Funding Policy and recommended to City Council to adopt a Resolution adopting the policy; and WHEREAS, to more proactively address· rising pension costs, the policy shall provide context and guidance during the budget process, provide a disciplined approach to financial management of these liabilities, reassure rating agencies assurance the City is committed to fiscal sustainability and provide transparency to employees and the public with regards how the plan the plans are being funded; and •
WHEREAS, effective financial· policies are desirable to strengthen the City's ability to navigate future economic challenges and provide the City with the means to respond to opportunities to attainin,g City Council goals and priorities; and WHEREAS, the goals of the Pension F·-unding P.olicy .would be to a) reduce projected pension contributions to maintain same levels of service, and b) increase the funding ratios for both the City's Classic Miscellaneous and PEPRA CalPERS Plans.

NOW, THEREFORE, THE CITY COUNCIL DOES RESOLVE AS FOLLOWS:

SECTION 1. The City Council of the City of Buellton hereby adopts the Pension Funding Policy, attached hereinto as Exhibit A and incorporated herein by reference and authorizes City staff to implement the Pension Funding Policy.

SECTION 2. The City Clerk shall certify to the adoption of this Resolution.

PASSED, APPROVED and ADOPTED this 14th day of April, 2022. , ~ • Holly Sierra
Mayor
ATTEST:

Lindalitl . City Clerk
290 of 316
Resolution No. 22-12 Page2 April 14, 2022
I, Linda Reid, City Clerk of the City of Buellton, do hereby certify that the foregoing Resolution No. 22-12 was ·duly adopted by the City Council of the City of Buellton at a regular meeting held on the 14th day of April, 2022 by the following vote of the Council:

AYES: 5
NOES: 0
ABSENT: 0
ABSTAIN: 0
Council Members Andrisek, Lewis, Sanchez, Vice Mayor King, and Mayor Sierra .
·,; ~ LindaReid
City Clerk'
,I"
291 of 316
I.

II.

EXHIBIT A
Exhibit A
TITLE: Pension Funding Policy PAGES: 3
EFFECTIVE DATE: 4/14/2022 REVISION DATE(S):

APPROVED: 04/14/2022
Purpose:

The purpose of this to ensure an adequate and appropriate approach to the monitoring and payment of the Pension (CalPERS) unfunded liabilities of the City of Buellton. These procedures and guidelines are designed to provide an approach to the payment of pension liabilities to maintain the City of Buellton's CalPERS retirement plan for current and former employees. The policy shall provide context and guidance during the budget development process, provide a disciplined approach to financial management of these liabilities, reassure rating agencies assurance the City is committed to fiscal sustainability and provides transparency to employees and the public with regards to how the plans are being funded. This policy deploys a variety of strategies with one-time funds to achieve the following objectives:

A. Reduce projected pension contributions to maintain the same levels of service.

8. Increase the funding ratio for both the City's Classic and PEPRA CalPERS Plans.

Background:

The City contributes to CalPERS. A pension is a retirement account that an employer maintains to give employees a fixed payout when they retire. PERS is a defined benefit plan. The payout usually depends on how long the employee works for the employer and the employee's salary.

The City of Buellton offers the Classic and PEPRA plans. The Classic Miscellaneous Plan are offered to employees hired before 1/1/2013 or have transferred over from another agency and were contributing to the Classic Plan. Effective 1/1/2013, the State adopted, and the City implemented the California Public Employees' Pension Reform Act (PEPRA). PEP RA changed the way CalPERS retirement benefits are applied, and places compensation limits on members. The maximum employee contribution rates are set by law.

Investment income, employee contributions and employer contributions fu nd the total pension cost, including benefits and expenses. Employer contributions are set by actuaries using an investment rate assumption (also known as the "discount rate") and other assumptions related to salary, payroll, cost of living, mortality rate, disabilities, terminations and retirements. Based on these assumptions,

292 of 316
• Exhibit A
. ' ' . . . - . .
actuaries develop an annual contribution,·thatif all assumptions were meti. the annualcontributions· would· be sufficient to fund the· promised benefifover thewotking life of the employee. The annual contributions, assuming all future aduarial assumptions are:metare ref«medto as the "Normal Cost" of the promised benefit. The "Normal Co:st"foosely represents .the· cost :of attributable to servic~s .•• .• •• . . . . ' - .•. . .•. .• . .•.. ' - . '' • ·' .• .. ' earned during the current period and are expressed as a. percentage of pensionable. payroll. . . . - . ' . - . . . .
• Whjle actua_rial "assumptions" are th~ expected results~ "experience" represents actual results. If • assumptions and exJ?erience stray from actual results, unfunded accrued liabilities (UAL) accun,ulate and amortized (paid off) over a predetermined number of years. If actual experience deviates from . . • . . ' . • assumptions: for an.extended period of time two things may_ happen, layers of_ experience gains and. • ·losses· can accumulate:to unacceptable levels and ·or the plan .actual'.'Y ma·y adjust the as~umptions to· • bettertrack actual experience. Both changes in actuarial assumptions anc;I experience gains .and ioss·es.· • can add:or subtract from the accumulated UALbalan:ce:The method and. term of the U_AL amortization • ' I ' , • • • is dictated by the CalPERS board but is subject to restructuring by the employer.

Ill. Policy:

It is the policy of the City of Buellton·thatthe payment of pension is a priority and that a proactive·· approach to funding.these liabil_ities is a prudent financial practice. ' ' . ' . ' . . '
• · Poiicy related to the payment :ofCalPERS. Pension liabilities ar·e as follows:
', ·A. · The ·city of Buellton ~ill include :in the· budget. and re~it to CalPERS, annually, the e·ntire amount of .the UAL as shown ·on the most recently dated Annual: Valuation. Report. The amount on the report dated typically 2 years prior to the beginning of the- fis.cal year. For example, Valuated Report with·a July 30, 2020 measurement date is for Fiscal Year 20_22-23 contributions.

B. The City, of BueUton shaU remit to CalPERS_ the reql:Jired _.Unfunded. Accrue_d: Liability (UAL) amounts· per the Annual-Valuation Report:issued: by Cc1IPERS each·year· and. the employer's • riorm·a1 co·st each pay period as required by CalPERS. .. . . . . . . ., .

C. The City of BueUton will pay the "Employer payment of unfunded liability":each year in one. • l~mp sum payme~t in Jul_y of each ·year :in :order to m~~imize_ the sa\iings in interest_ charged. • ' . . . . . by CalPERS, thereby, minimizing the required payrnent each year. . . :o. Annual surpluses, if any, will be ·allocated to replenish reserve requirements in accordance with Council Policy, budgetary gaps and then allocated as an additional discretionary payment (ADP) fo UAL in the amount recommended by the City Manager and Fina.nee Director·during:· the budget process or as otherwise directed by City:counciL • E. · Seeking maximum ·interest savings,.the ADP contributed to CalPERS will be applied to pay· • down the amortization ~ases with· the longest amortization period (in order of.maturity)~ F. The City will establish a Pension Stabilization Reserve. . ' ·- . . . .. a. As part of the ·annual budget process, .City Staff shall set aside· a portion of any year- . . . . end fund balance to manage incre.ases in pension contributions. on·e-timetransfers • made to.the Pension Stabilization Reserve will vary 6n a year-by-year basis: • 293 of 316
Exhibit A
IV. Transparency and Reporting:

V.

Funding of the City's pension benefit should be transparent to all parties induding City employees, retirees, recognized employee organizations, the City Council and City residents. In order to achieve this transparency, the following information should be provided:

A. Copies of the most current actuarial valuations for the City's pension plan shall be,published on the City's website within (60) days of finalization of the actuary.

B. The Finance Director shall submit a written report to City Council annually at ari open meeting that covers: 1
a. The funded status of Council imposed reserve requir~ments b. Major events that have impacted the funded status of each of the CalPERS plans c. Major events that are known to or are likely to occur that may impact the funding status of each plan
C. The City's Annual Financial Statement shall be published on the City's website. The financial statements include information on the City's pen1
sion plans and the funded status of the plans.

D. The City's annual operating budget shall incl,ude appropriations for contributions to CalPERS and the annual pension costs.

Review of Funding Policy
Funding pension liability requires a long-term plan. The city will review at a minimum biennially, coincident with preparation of the biennial budget to determine if changes to this policy are necessary to ensure adequate resources are being accumulated to fund pension benefits.

294 of 316
5/7/2026
1 Pension Funding Update
Buellton, CA
2 Agenda
Funding Update Risk Mitigation Strategy
Pension Essentials Pension Risk
1 2
CD e
•
295 of 316
5/7/2026
2 3
Pension Essentials
Defined Benefit (DB) Pension Promise
Global Markets
Invests
Returns
Employer and
Employee
Contributions
Pension
Benefit
Payments
City guarantees the benefit level not just
the contribution. Therefore, the City
guarantees the economic and actuarial
assumptions, including investment return.

IMPORTANT:
3 4
~,_CalPERS
~
[I]
l l
6 Govlnvest ,........ The Financial Forecasting Authority ffl
1M
~
296 of 316
5/7/2026
3 Assumptions Set Future Cost & Funding Expectations
5 Economic
• Inflation
• Investment Return
• Salary Growth
Demographic
• Retirement
• Disability
• Death
• Termination
Major Driver of
Plan Cost and
Affordability
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 EE & ER Contributions (Normal Cost Only) Actual Investment Earnings Target Balance (Accrued Liability) Accrued Liability (AL)
(Target funding progress
at a static point in time)
Investment
Earnings
+
Cumulative
Normal Cost
Contributions
Projected Benefit Promise:

Estimated amount necessary at
the end of active employment to
Employee Age
Illustration Only
Hypothetical Prefunding Example for Individual Employee’s Retirement Benefit
6 When benefits are “prefunded,”
investment earnings are
assumed to offset 50% -60% of
the promised benefit.
5 6
-
ffl
fflfl
tmffl
Funding a Pension Plan
Employee
Contributions
•
}
Benefits and
Expenses
297 of 316
5/7/2026
4 Actuarially Determined Contribution
7 Normal Cost
Unfunded
Actuarial
Liability (UAL)
Payment
Total Employer
Contribution
Normal Cost – the cost for current
service paid as a percent of payroll.

Increases when payroll increases,
decreases when payroll decreases
UAL Contribution – payment
toward past service. Paid as a
fixed dollar amount each year.

Assumed Cost Variance
Corrections
Funding Update
7 8
+ -
-
298 of 316
5/7/2026
5 -3.1%

35.4%

24.6%

13.8%

3.9%

15.7%

9.7%

6.5%

12.5%

14.5%

2.0%

16.3%

15.3%

20.1%

19.5% 12.5%

10.5%
-7.2% -6.1%

3.7%

16.6%

12.3%

11.8%

19.1%
-5.1%
-24.0%

13.3%

21.7%

0.1%

18.4%

18.4%

2.4%

0.6%

11.2%

8.6%

6.7%4.7%

21.3%
-6.1%

5.8%

9.3%

11.6% 12.1%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%
198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242025 2026 YTD
Plan Year Ending June 30
Investment Return Discount Rate 5 per. Mov. Avg. (Investment Return) Dot Com Crash
Great Recession
Favorable
Investment
Experience
CalPERS Historical Investment Returns*
9 Compound Annual Return
1 Year 5 Year 10 Year 20 Year 30 Year
June 30, 2025 11.6% 8.0% 7.1% 6.7% 7.6%
June 30, 2024 9.3% 6.6% 6.2% 6.7% 7.7%
* CalPERS’ Investment Office does not report
final adjusted returns.

COVID
Impact of Additional Discretionary Payments (ADPs)
Fiscal Year ADP
ADP with
Comounded
Interest
2019-20 48,258 76,484
2020-21 - -
2021-22 6,125 8,511
2022-23 1,589,009 2,067,337
2023-24 175,000 213,183
2024-25 142,360 162,379
2025-26 175,000 186,900
Total ADPs 2,135,752 2,714,793
Projected Accrued Liaility as of 6/30/26 15,145,005
Approximate Funded Status Improvement 18%
9 10
=
f j
299 of 316
5/7/2026
6 Funded Status Trend
11 Fiscal Year End (FYE) 2021 2022 2023 2024 2025 Projected 2026 Projected Accrued Liability (AL) $11,285,067 $12,055,617 $12,558,369 $13,481,945 $14,274,681 $15,145,005 Market Value of Assets (MVA) $9,560,649 $8,828,493 $10,703,906 $11,807,532 $13,070,045 $14,588,113 Unfunded Accrued Liability (UAL) $1,724,418 $3,227,124 $1,854,463 $1,674,413 $1,204,636 $556,892 Buellton Funded Status 84.72% 73.23% 85.23% 87.58% 91.56% 96.32% Statewide Funded Status 81.20% 72.00% 72.00% 75.00% 79.00% 82.00% Investment Return
Assumption 7.00% 6.80% 6.80% 6.80% 6.80% 6.80%
Actual 22.40% -7.50% 6.10% 9.50% 12.10% 12.10%
Experience Gain(Loss) 15.40% -14.30% -0.70% 2.70% 5.30% 5.30% Comparison to Santa Barbara County Cities as of 6/30/24 (Without §115 Pension Volatility Trust)
12 Funded
Ratio City Annual Payroll MVA AL UAL
Buellton 1,402,351 11,807,532 13,481,945 1,674,413 87.6% Goleta 7,016,457 29,804,454 36,258,202 6,453,748 82.2%
Guadalupe 2,034,803 17,282,151 22,929,438 5,647,287 75.4% Solvang 1,696,423 17,382,223 23,934,694 6,552,471 72.6% Lompoc 29,792,484 274,452,240 385,976,692 111,524,452 71.1% Santa Maria 54,682,945 448,532,778 644,250,156 195,717,378 69.6% Carpinteria 2,514,301 25,523,338 36,756,974 11,233,636 69.4% Santa Barbara 104,860,819 978,319,396 1,418,181,313 439,861,917 69.0% 11 12
300 of 316
5/7/2026
7 Impact on Annual Amortization Payment
13 Total Required Employer Contribution
14 13
14 SlSOK
$100K
$SOK
so
Default
Q $146.12K
2025 IR 12.1% with 3%
WG
Q $118.93K
2026 YTD IR EST 12.1 %
(current)
Q $118.93K
__ .·.::· ... ,, ," ', ', , \ ', I " I ",
~ ',,
' I '--------------------------------------, I I I
I I

I I I I
I I
I I
' I ' I , ________________________________________________ .._ ____ ..,.,., 24-25 26-27 28-29 30-31 32-33 34.35 36-37 38-39 40-41 42-43 44.45 $400K
$300K
$200K
$100K
$0
Totai Employer Required
Contnbut1on
Q $367,06K
24-25 26-27 28-29 30-31
Fiscal Year Ending June 30
Annual Amortizauon
Payment
Q $118.93K
32-33 34.35 36-37
E.mploy lllor'll
Cost
0 $2481211.
38-39
Fiscal Year Ending June 30
0 40-41 42-43 44.45
301 of 316
5/7/2026
8 Pension Risk
Expect Funding Progress Disruptions
• Investment returns are presumed to pay for 50-60% of pension costs • Underperformance in ANY one year can result in a significant change in funded status and increases in required employer contributions, even if a plan is highly funded • Ultimately UAL contribution spikes threaten service delivery 15 16
CalPERS CalPERS
investment earnings
6 Govlnvest ~ The Finondol Forecasting Authority
CalPERS
members
CalPERS Pension Buck: a 20-year Average (as of June 30, 2024) 302 of 316
5/7/2026
9 Expected Distribution of Future Investment Losses
1Yr Return Risk - Short-Term Stress Testing
Rarely
Most of the Time
Some of the Time
17 18
Expected PERF Return
Volatility Factor
Accrued Liability
Market Value of Assets
Frequency
Chance of
CL Worse
Outome Years

6.8%

12.7%
15,145,005
14,588,113 •
Severity
Market Loss
M ost of the time - Less than l StD 84.1396 15.8796 6.3 -5.9096 Some of the Time •
Rarely - Greater than 2StD
2026 YTD IR EST 12.1%
0 $0.00
$400K
$300K
S200K
SlOOK
so
25-26 30-31
'" 85.0096 15.0096 6.7 -6.3696

90.00% 10.00% 10.0 -9.48%

95.00% 5.00% 20.0 -14.09%

97.50% 2.5096 40.0 -18.09%

97.72% 2.28% 43.9 -18.60%

99.0096 1.0096 100.0 -22.7096
Market and Experience Loss based on Market Value of Assets 2027 Hypothetical -5.9%
IR
Q $211.98K
t
35·36 40·41
Fiscal Year Ending June 30
Exerience Loss % Exerience Loss $
-12.7096 $
-13.1696 $
-16.28% $
-20.89% $
-24.89% $
-25.40% $
-29.5496 s
202 l Hypolhetical
-18.6% IR (current)
Q $43727K
,omsooo
5437 2 K
45-46
(1,852,690
(1,920,190
(2,374,318)
(3,047,404)
(3,631,206)
(3,705,042)
f4'UlQ329
50-51
303 of 316
5/7/2026
10 Risk Mitigation
Observations and Recommendations
• City is making outstanding funding progress toward its pension obligation • Recommend discontinuing further direct discretionary payments to CalPERS • Expect that market volatility will periodically disrupt the course of funding progress • Recommend establishing a pension volatility reserve to provide liquidity and budget stability during periods of market disruption or other economic duress – Protects City's ability to provide vital services to the community – Reduces interest costs and negative amortization of UAL 19 20
6 Govlnvest .......... The Financial Forecasting Authority 304 of 316
5/7/2026
11 Buffer / Reserve Target Calculations
20-Yr. UAL Repayment Schedule, 5-Yr. Smoothing Ramp
(Accommodative Pmt. But Inefficient Amortization)
Default UAL Repayment Schedule
20 Yr. UAL Repayment Schedule, No Smoothing Ramp
(No Negative Amortization but Higher Payments)
Alternative UAL Repayment Schedule
Potential Reserve Framework
Questions
22 21
22 Hypothetical
MarketLOM
1 -••- 1 Initial •
Includes Negative Amortization
SYrRamo Un
Hypothetical 20Required Payment
Loss Balance Payments Number
s 3,059,127 $
s 3,267,148 $
s 3,489,314 s 75,002 l
s 3,649,078 $ 150,003 2
$ 3,742,195 $ 225,005 3
s 3,764,135 $ 300,007 4
$ 3,710,056 $ 375,009
s 3,574 ,791 $ 375,009 ' 6
s 3,430,327 $ 375,009 7
Target Protectio
Aocrued Pen~ n Reserve in S n (in
Liilbtlity(Al) Dollars Yrs)
,. $ 450,010 3Yrs.
$1,125,026 5 Yrs.
$1,875,043 7Yrs.
-
,
'
Cumulitive
Repeyment
Tot,1
s 75,002 I $ 225,005
$ 450,010
$ 750,017 ~
s 1,125,026 f s 1,500,035
s 1,875,043
Reserve es, Reserve Renie
Percentqe of Al
'·"" Min

7.4% Tanzet

12.4% Ma,
% of Accrued liability (Al)
Minimum Target Maximum
1 3.0% 5.0% 8.0%

3.0% 5.0% 10.0%

5.0% 8.0% 12.0%

5.0% 10.0% 15.0%
Hypothetical
Marke t loss
I -••-""'I Initial •
Minimum
454,350
454,350
757,250
757,250

THANK YOU
Avoids NeRative Amortization
level Dollar No Ramc, CUmulitive
Hypothetical 20 Required Payment ReP1Yment
loss Balance Payme nts Number Tot.I
s 3,059,127 $
s 3,267,148 $ Total
s 3,489,314 s 311,1n l s 313,nl
}J s 3,175,542 s 111,1n 2 $ 627,544
s 2,s61,m s 311,1n 3 s 941,316
$ 2,547,ffl $ 111,m 4 $ 1,255,087
$ 2,234,228 $ 313,m ' $ 1,568,859
s 1,920,456 s 111,m 6 s 1,882,630
$ 1,606,685 $ 313,772 7 $ 2,196,402
Target Protectio
Aa:rued Pension Reserve in S n (in Reserveu , Reservt' Renee l iilbility(Al) Dolla rs Yrs) Percentq:e of Al
,. $ 941,315 3Yrs. '·"' Min
$1,568,858 5 Yrs. 10.4% Tar1ret
$2,196,401 7Yrs. 14.5% Mn
Dollars
Target Mu
s 757,250 1,211,600
s 757,250 1,514,501
s 1,211,600 1,817,40 1
s 1,514,501 2,271,751
I
•
305 of 316

CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 14
To: The Honorable Mayor and City Council
From: Shannel Zamora, Finance Director
Date: May 14, 2026
Subject: Resolution No. 26-10 – “Establishing an Annual Cost-of-Living Adjustment (COLA) for All Regular Full-Time Employees Based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Los Angeles–Long Beach–Anaheim, CA Area”

BACKGROUND
Every year as part of the budget process, staff presents to City Council a proposed Costof-Living Adjustment (COLA) for regular full-time staff members to ensure salaries remain competitive and aligned with inflation. The proposed COLA is typically based on factors such as the Consumer Price Index (CPI), historic internal data, and external market survey data.

The CPI for Urban Wage Earners and Clerical Works (CPI-W) is a widely accepted measure of inflation that reflects changes in the cost of living experienced by working households. The CPI-W for the Los Angeles-Long Beach-Anaheim region provides a localized and relevant benchmark for economic conditions affecting City employees in Santa Barbara County.

The CPI is published by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS).

The City of Buellton uses the “annual” average to formulate the proposed COLA. CPI measures changes in the weighted average price of a basket of consumer goods and services, including housing, transportation, food, and medical care. The BLS reported a 12-month CPI increase of 3.2 percent for the Los Angeles–Long Beach–Anaheim area for the period January 2025 through December 2025 (Attachment 1).

The 30-year historic average annual CPI is 2.60 percent while the average COLA for City of Buellton employees is 2.42 percent (Attachment 2). A survey of fourteen cities in Santa Barbara and San Luis Obispo counties was also conducted (Attachment 3). The overall average COLA increase among surveyed cities was 3.54 percent. Santa Barbara County cities averaged 4.86 percent, while San Luis Obispo County cities averaged 3.21 percent.

These results provide regional context for the proposed COLA framework. Surveyed cities have generally reported COLA increases above long-term CPI and, in several cases, supplemented COLA with separate market equity adjustments to address compensation competitiveness and internal salary alignment. Many of these agencies use CPI as a 306 of 316
Resolution No. 26-10 Page 2 May 14, 2026
baseline inflation indicator while relying on union negotiations or separate compensation studies to address market positioning. In contrast, the City of Buellton does not operate under a unionized compensation structure and relies solely on the annual COLA process.

The proposed COLA resolution is intended to make sure employees’ wages keep up with inflation while establishing a consistent and transparent methodology for annual compensation adjustments. By linking wage adjustments to a recognized inflation index, the City ensures that compensation keeps pace with economic conditions rather than weakening in real value over time.

The COLA resolution establishes a consistent methodology for annual compensation adjustments by linking wage increases to CPI-W. This approach ensures that employee compensation maintains purchasing power over time and reduces subjectivity in annual budget decisions. The resolution incorporates a defined adjustment range, including a floor of 0% and a cap of 5%, which balances employee needs with fiscal responsibility. This structure protects the City from excessive cost increases during periods of high inflation while ensuring stability during periods of low or negative inflation. Establishing these parameters allows the City to better anticipate personnel costs and integrate them into longterm financial planning.

The automatic adjustment mechanism eliminates the need for annual Council action, improving administrative efficiency and ensuring timely implementation. It also provides predictability for both employees and the City’s budgeting process.

Maintaining competitive compensation remains essential to attracting and retaining qualified employees. In a high-cost region such as Santa Barbara County, failure to regularly adjust wages can contribute to wage compression and increased turnover. The proposed policy supports workforce stability and continuity of services by aligning compensation with regional economic conditions.

Upon adoption, staff will calculate the annual COLA based on CPI-W data, prepare and publish updated salary schedules, and implement adjustments in accordance with the resolution and fiscal year schedule.

The City Manager is a full-time employee of the City and is eligible for this COLA as well.

On July 27, 2023, City Council approved an amendment to the City Manager’s contract to reflect that the COLA granted to the rest of the City staff – within a specified percentage range - will also be granted to the City Manager without separate action of the City Council.

FISCAL IMPACT
The fiscal impact of the proposed COLA will very annually based on CPI-W.

If a 3.2 percent COLA, the overall increase to salary and benefits is approximately $103,816. The increase to the General Fund is $73,946, Wastewater Fund is $16,350 and Water Fund portion is $13,520.
307 of 316
Resolution No. 26-10 Page 3 May 14, 2026
Staff estimates that available General Fund and Water Fund revenue exists to fund the proposed COLA in the next fiscal year. The Finance Department will incorporate projected COLA increases into the annual budget and long-range financial forecast.

RECOMMENDATION
That the City Council consider adoption of Resolution No. 26-10 “Establishing an Annual Cost-of-Living Adjustment (COLA) for All Regular Full-Time Employees Based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Los Angeles–Long Beach–Anaheim, CA Area”, with adjustments Applied Annually Within a Range of 0% to 5%.

ATTACHMENTS
Resolution No. 26-10
Attachment 1 – Consumer Price Index (CPI) - Urban Wage Earners and Clerical Workers; 12-Month Percent Change (Annual)
Attachment 2 – History of Cost-of-Living Adjustments
Attachment 3 – Cost of Living (COLA) Survey
Attachment 4 – Proposed FY 2026-27 Salary Schedule
308 of 316
RESOLUTION NO. 26-10

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF BUELLTON, CALIFORNIA, ESTABLISHING AN

ANNUAL COST-OF-LIVING ADJUSTMENT FOR ALL

REGULAR FULL-TIME EMPLOYEES BASED ON THE

CONSUMER PRICE INDEX FOR URBAN WAGE

EARNERS AND CLERICAL WORKERS (CPI-W) FOR THE

LOS ANGELES-LONG-BEACH-ANAHEIM, CA AREA
WHEREAS, Section 2.08.060 of the Buellton Municipal Code authorizes the City Manager to prepare and submit a proposed annual salary plan to the City Council for its approval; and
WHEREAS, the City Council seeks to maintain fair and competitive compensation for its workforce while ensuring fiscal responsibility; and WHEREAS, the City Council values the work performed by its regular full-time employees; and
WHEREAS, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the U.S. Bureau of Labor Statistics, is a widely recognized measure of inflation; and
WHEREAS, the CPI-W for the Los Angeles–Long Beach–Anaheim, CA metropolitan area provides a regionally appropriate measure of changes in the cost-of-living affecting employees in this jurisdiction; and
WHEREAS, The annual percentage change in CPI-W for this region for calendar year 2025 was 3.2%, demonstrating a measurable increase in the cost of living; and WHEREAS, establishing an automatic, formula-based adjustment promotes transparency, consistency, and long-term budget predictability; and WHEREAS, based on financial information provided by the Finance Director, the City Council has determined that it is financially prudent to provide for an increase in salaries of regular full-time employees.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BUELLTON DOES RESOLVE, DETERMINE, FIND, AND ORDER AS FOLLOWS:

SECTION 1. The City Council hereby finds that the above recitations are true and correct and, accordingly, are incorporated as a material part of this Resolution.

SECTION 2. ANNUAL COST-OF-LIVING ADJUSTMENT (COLA). Beginning July 1, 2026, and each year thereafter, the compensation of all regular full-time employees shall be adjusted by a COLA based on the annual percentage change in the CPI-W for the Los Angeles-Long Beach-Anaheim, CA metropolitan area as published by the U.S. Bureau of Labor Statistics (BLS).
309 of 316
Resolution No. 26-10 Page 2 May 14, 2026
SECTION 3. ADJUSTMENT RANGE.

The COLA shall be applied as follows:
 If the annual percentage change in CPI-W is greater than 0% but less than or equal to 5%, the adjustment shall equal the actual percentage change;  If the annual percentage change in CPI-W is less than 0%, the adjustment shall be 0%.  If the annual percentage change in CPI W is greater than 5%, the adjustment shall be limited to 5%.

SECTION 4. AUTOMATIC ADJUSTMENT. The COLA shall be automatically applied each fiscal year, without further action required by the City Council, based on the most recently published CPI-W data. Should a modification from the COLA as calculated in Section 2 and Section 3 above be necessary or prudent for the City, the City Manager may bring a separate item to the City Council to override the automatic adjustment or the Mayor or a majority of the City Council may request such an item.

SECTION 5. RELATIONSHIP TO ANNUAL BUDGET. The calculated COLA shall be incorporated into the City’s proposed annual salary plan and submitted to the City Council as part of the annual budget process for approval, consistent with the City’s municipal code.

SECTION 5. EFFECTIVE DATE OF ADJUSTMENT. This Resolution shall take effect upon adoption The COLA shall be implemented beginning July 1 of each fiscal year and shall apply to base salaries effective at the beginning of the first full pay period on or after July 1.

SECTION 6. APPLICATION OF ADJUSTMENT. The COLA shall be applied to the base salaries of all regular full-time employees.

SECTION 7. IMPLEMENTATION. The City Manager or designee is authorized and directed to calculate the applicable COLA annually, publish adjusted compensation schedules, and implement the adjustment in a timely manner consistent with the fiscal year.

SECTION 8. The City Clerk shall certify to the adoption of this Resolution.

PASSED, APPROVED and ADOPTED this 14th day of May 2026.

_________________________________
David Silva
Mayor
ATTEST:
__________________________________
Linda Reid
City Clerk
310 of 316
Databases, Tables & Calculators by Subject
Special Notices 1/14/2026
Change Output Options: From: 2015 To: 2025
include graphs include annual averages
Data extracted on: February 3, 2026 (1:58:17 PM)
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) 12-Month Percent Change
Series Id: CWURS49ASA0
Not Seasonally Adjusted
Series Title: All items in Los Angeles-Long Beach-Anaheim, CA, urban wage earners and clerical workers, not seasonally adjusted Area: Los Angeles-Long Beach-Anaheim, CA
Item: All items
Base Period: 1982-84=100
Download:

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual HALF1 HALF2 2015 -0.7 -0.4 0.2 0.0 0.9 0.4 1.2 1.0 0.4 0.7 1.4 1.9 0.6 0.1 1.1 2016 3.3 2.3 1.3 1.6 0.6 1.1 0.3 0.6 1.5 1.9 1.5 1.7 1.5 1.7 1.3 2017 1.7 2.5 2.4 2.5 2.4 2.2 2.5 2.9 3.2 3.0 3.7 3.7 2.7 2.3 3.2 2018 3.7 3.7 3.9 4.1 4.3 4.2 4.0 4.1 3.9 4.3 3.8 3.3 3.9 4.0 3.9 2019 2.9 2.6 2.7 3.6 3.4 3.3 3.3 2.9 3.2 3.6 3.5 3.2 3.2 3.1 3.3 2020 3.5 3.5 2.2 0.6 0.6 1.3 1.9 2.2 1.4 0.6 1.0 1.5 1.7 1.9 1.4 2021 1.1 1.4 2.7 4.2 4.5 4.7 4.5 4.5 4.8 5.6 6.4 6.9 4.3 3.1 5.4 2022 7.6 7.3 8.7 8.1 8.2 8.9 7.9 7.6 7.8 7.6 5.9 4.6 7.5 8.1 6.9 2023 5.4 4.7 2.8 3.0 2.4 1.6 2.0 2.7 2.6 1.8 2.2 3.0 2.8 3.3 2.4 2024 2.0 3.0 3.9 3.9 3.7 2.9 3.1 2.6 2.6 2.7 3.1 3.4 3.1 3.2 2.9 2025 3.5 3.4 3.1 2.9 3.1 3.3 3.2 3.3 3.5 (X) 3.7 3.1 3.2 3.2 3.4 X : Data unavailable due to the 2025 lapse in appropriations U.S. BUREAU OF LABOR STATISTICS
U.S. BUREAU OF LABOR STATISTICS Office of Publications and Special Studies Suitland Federal Center Floor 7 4600 Silver Hill Road Washington, DC 20212-0002 Telephone: 202-691-5200 Telecommunications Relay Service: 7-1-1 www.bls.gov Contact Us 2/3/26, 10:58 AM Bureau of Labor Statistics Data
https://data.bls.gov/pdq/SurveyOutputServlet 1/1

3.2 ~ ------
• ----
□□ I
L!4 L!4 More Formattin~ O~tions.+

7.5 0i=====,,===;===;======;====;===;=====;====;===;==~ 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Year
, :tlsx
I I
311 of 316
12 month
CPI Change COLA Effective
"Annual" Year Granted Date

3.10% 1992 - 7/1/1992

3.40% 1993 - 7/1/1993

2.00% 1994 2.00% 7/1/1994

1.40% 1995 - 7/1/1995

0.90% 1996 3.00% 7/1/1996

2.20% 1997 2.50% 7/1/1997

1.20% 1998 1.50% 7/1/1998

2.00% 1999 1.50% 7/1/1999

2.30% 2000 2.50% 7/1/2000

3.80% 2001 2.50% 7/1/2001

2.70% 2002 1.24% 7/1/2002

3.50% 2003 3.50% 7/1/2003

1.80% 2004 1.80% 7/1/2004

3.70% 2005 3.70% 7/1/2005

5.40% 2006 5.40% 7/1/2006

3.20% 2007 3.00% 7/1/2007

3.90% 2008 3.50% 7/1/2008
-0.01% 2009 - 7/1/2009

1.80% 2010 - 7/1/2010

1.80% 2011 2.00% 7/1/2011

2.10% 2012 2.10% 7/1/2012

2.00% 2013 2.00% 7/1/2013

1.1% 2014 2.00% 7/1/2014

1.3% 2015 2.00% 7/1/2015

0.6% 2016 2.00% 7/1/2016

1.5% 2017 1.50% 7/1/2017

2.70% 2018 2.70% 7/1/2018

3.90% 2019 3.50% 7/1/2019

3.20% 2020 3.20% 7/1/2020

1.70% 2021 2.00% 7/1/2021

4.30% 2022 4.30% 7/1/2022

7.50% 2022 5.60% 7/1/2023

2.80% 2023 3.94% 7/1/2024

3.10% 2024 5.00% 7/1/2025

3.20% 2025 3.20% 7/1/2026

2.60% Average 2.42% Average
Assuming 3.2% in 2026
City of Buellton
History of
Cost of Living Adjustments Granted
\\fileserver\Users\Finance Director\Accounting\Payroll\Salary Ranges\2026-27 COLA\CPI History 2026 4/30/2026
312 of 316
City of Buellton
COLA survey
March 2026
FY 2026-27 Bargaining Unit Notes

CITY COUNTY COLA
Five Cities Fire Authority (FCFA) IAFF Local 4403 Multi-Year Agreement (7/1/23-6/30/27), market equity adjustments Y1 Police (POA) Multi-Year Agreement (7/1/23-6/30/27), market equity adjustments Y1 SEIU Multi-Year Agreement (7/1/23-6/30/26)
Atascadero San Luis Obispo 3.00% SEIU, Police, Fire, Executive Management MOU 3-Year Agreement (7/1/24-6/30/27) SEIU and Management and Misc. Personnel
COLA based on CPI, Los Angeles-Long Beach-Anaheim, with a minimum increase of 2.5% and a maximum increase of 5%.

Multi-Year Agreement (7/1/22-6/30/27)
Goleta Santa Barbara 3.00%
MOU and All Executive Management employees, except City Manager
Effective date 1/1/27
A 3% base increase, with up to an additional 1% if the Sept. 2026 CPI‑U rise exceeds 3%, for a maximum total increase of 4%.

3.00% Police Management and Confidential Employees Group Multi-Year Agreement (7/1/24-6/30/27)

3.00% Police Officers' Association Multi-Year Agreement (7/1/24-6/30/27)

3.00% Service Employees (SEIU 620) Multi-Year Agreement (7/1/24-6/30/27)

3.00% Management and Confidential Multi-Year Agreement (7/1/24-6/30/27)

3.00% Executive Management Multi-Year Agreement (7/1/24-6/30/27)

8.00% Fire Muli-Year Agreement (5/14/2024-6/30/27)

5.00% SEIU Multi-Year Agreement (7/1/25-6/30/27)

3.00% Police (POA) Muli-Year Agreement (9/28/2024-6/30/27) Management, Supervisory, & Confidential Employees MOU 3-Year Agreement (7/1/24-6/30/27) Unrepresented Employees MOU 3-Year Agreement (7/1/24-6/30/27) International Brotherhood of Electrical Line Workers (IBEW) MOU 3-Year Agreement (7/1/24-6/30/27) LPOA (Police Sworn & Non-Sworn) MOU 3-Year Agreement (7/1/24-6/30/27) IAFF (Fire Safety) MOU 3-Year Agreement (7/1/24-6/30/27) Morro Bay San Luis Obispo 5.00% Represented and Unrepresented groups MOU 3-Year Agreement (7/1/2024-6/30/2027), Market Equity Adjustment

2.00% Police
MOU 3-Year Agreement (beginning 1/1/2026) Y1: No COLA, just market equity adjustments. Y2-Y3: 2% COLA

0.00% Fire
MOU 3-Year Agreement (beginning 1/1/2026) Y1-3: No COLA. % CalPERS Cost Share Reduction for each year. (5% total over 3 years)

2.00%
MOU 3-Year Agreement (beginning 1/1/2026) Y1: No COLA, just market equity adjustments. Y2-Y3: 2% COLA

3.00% SEIU Service Employees MOU 3-Year Agreement (effective 7/1/2025), also includes equity adjustments

3.00%
Non-represented full-time employees. Also includes equity adjustments MOU 3-Year Agreement (effective 7/1/2025), also includes equity adjustments

3.00% Fire
MOU 3-Year Agreement (7/1/24-6/30/27), also includes Market Equity Adjustments

3.00% City Employee's Association MOU 3-Year Agreement (7/1/25-6/30/28)

3.00% Police Officers' Association MOU 3-Year Agreement (7/1/2024-6/30/2027), Market Equity Adjustment

3.00% Police Staff Officers' Association MOU 3-Year Agreement (7/1/2023-6/30/2027), Market Equity Adjustment

3.00% Management MOU 3-Year Agreement (7/1/2025-6/30/2028)

3.00% Confidential MOU 3-Year Agreement (7/1/2025-6/30/2028)

4.00% General Employees MOU 3-Year Agreement (7/1/2024-6/30/2027)

3.00% Supervisory Employees Multi-Year Agreement (2022-2026)

4.50% Police Employees Multi-Year Agreement (9/20/2025-6/30/2027)

2.00% Police Managers Effective 1/1/2026 through 6/30/2027

5.00% Fire Employees Effective 7/12/2025-6/30/2027

5.00% Fire Managers Multi Year Agreement (2025-2027)

4.00% AFSCME Multi-Year Agreement (1/1/2024-12/31/2026)

4.00% Unrepresented Employees Multi Year Agreement (7/1/2024-6/30/2026) Effective 1/1, Non-Represented Management/Confidential
Employee
Executive Managers
Solvang Santa Barbara 5.00% Teamsters MOU 3-Year Agreement (2023-2026) Survey Question: What is the percentage increase in salaries for the most recent COLA ? Source: Various Cities in Santa Barbara and San Luis Obispo Counties # of Cities Surveyed: 14
# of Responses: 14
Santa Barbara Co. Average: 4.86%
San Luis Obispo Co. Average: 3.21%
Total Average for 14 Cities: 3.54%
Santa Maria Santa Barbara 5.00%
Santa Barbara
San Luis Obispo
San Luis Obispo
Santa Barbara
Santa Barbara
San Luis Obispo
San Luis Obispo
San Luis Obispo
Lompoc 4.00%
Paso Robles
Pismo Beach
San Luis Obispo
Santa Barbara Santa Barbara
Arroyo Grande 3.50%
Carpinteria 5.00%
Grover Beach
Guadalupe
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Effective July 1, 2026 New Classification/Position in 2025-26 New Classification/Position in 2023-24
New Classification/Position in 2022-23
City of Buellton
Monthly Salary Ranges with 3.2% COLA
Position Step 1 Step 2 Step 3 Step 4 Step 5
Maintenance & Utility FieldWorker I 5,570 5,848 6,141 6,449 6,771 Facilities Foreman/Utility Fieldworker 5,570 5,848 6,141 6,449 6,771 Recreation Coordinator 5,570 5,848 6,141 6,449 6,771
Recreation Center Coordinator 5,715 6,001 6,301 6,616 6,947 Accounting Technician (Tier II) 5,730 6,017 6,317 6,633 6,964 Journeyman Maintenance & Utility FieldWorker 5,834 6,126 6,432 6,754 7,091 Administrative Assistant/Deputy City Clerk 6,127 6,433 6,755 7,093 7,448 Planning Staff/Code Enforcement 6,127 6,433 6,755 7,093 7,448 Assistant Planner 6,994 7,343 7,710 8,097 8,501
Revenue Specialist 7,169 7,528 7,904 8,299 8,714
Accounting Specialist 7,169 7,528 7,904 8,299 8,714
Facilities Supervisor/Utility Fieldworker 7,169 7,528 7,904 8,299 8,714 Administrative Analyst 7,542 7,919 8,315 8,731 9,167
Recreation Supervisor 7,542 7,919 8,315 8,731 9,167
Lead Maintenance & Utility FieldWorker 7,919 8,315 8,731 9,167 9,626 Associate Planner 8,246 8,659 9,091 9,546 10,023
Chief Plant Operator - WWTP 8,659 9,091 9,546 10,023 10,524 City Clerk/HR Director 12,774 13,413 14,083 14,789 15,527 Finance Director 12,774 13,413 14,083 14,789 15,527
Public Works Director 12,774 13,413 14,083 14,789 15,527 Planning Director 12,774 13,413 14,083 14,789 15,527
City Manager Contract: Monthly
City Manager (Scott Wolfe) 21,246
Part-Time Hourly Positions:

Part-Time Recreation Center Assistant $18.00-$21.00/Hour/DOE Summer Camp Counselor $18.00-$21.000/Hour/DOE
\\fileserver\Users\Finance Director\Accounting\Payroll\Salary Ranges\Salary Schedule_Master 4/24/2026
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CITY OF BUELLTON
City Council Agenda Staff Report
City Manager Review: SW
Council Agenda Item No.: 16
To: The Honorable Mayor and City Council
From: Scott Wolfe, City Manager
Meeting Date: May 14, 2026

Subject: CONFERENCE WITH LEGAL COUNSEL — ANTICIPATED
LITIGATION Significant Exposure to Litigation Pursuant to Section 54956.9(d)(2) and (e)(3): (1 case) Pursuant to Subsection (e)(3), the Written Communication Received by the City is the Notice of Commencement of Action, Dated May 6, 2026, from Attorney Christopher R. Guillen of Brownstein Hyatt Farber Schreck, LLC.
________________________________________________________________________

BACKGROUND
Pursuant to Government Code Section 54956.9, the written communication relied upon for closed session discussion due to anticipated litigation must be provided for public review.

In this instance, the reason for anticipation of litigation is a Notice of Commencement of Action dated May 6, 2026. A copy of this Notice is attached to this report.

ATTACHMENTS
Attachment 1 - Notice of Commencement of Action, Dated May 6, 2026 315 of 316
Bro,,,nstein
May 6, 2026

VIA FEDEX
City of Buellton
107 West Highway 246
Buellton, CA 93427
Attention: City Clerk
City of Buellton, City Council
107 West Highway 246
Buellton, CA 93427
Attention: City Clerk
Scott Wolfe, City Manager
107 West Highway 246
Buellton, CA 93427
Attention: City Clerk
RE: Notice of Commencement of Action
Brownstein Hyatt Farber Schreck, LLP
805.963.7000 main
1020 State Street
Santa Barbara, California 93101
Christopher R. Guillen
Attorney At Law
805.882.1452 direct
[email protected]
D~llW~~
MAY O 7 2026 IJ
City of Buellton
Approval of Ordinance No. 26-03 and determination that Petitioners have lost their vested right to continue a residential use at their property located at 590 Avenue of Flags, Buellton, California 93427 and more commonly known as the Farmhouse Motel To Whom It May Concern:

Please take notice pursuant to Public Resources Code section 21167.5, that Kerry S. Moriarty and the Glenn A. and Peggy M. Wilson Revocable Trust ("Petitioners") intend to file a writ petition and complaint in Santa Barbara Superior Court against the City of Buellton, the City of Buellton City Council, and the City of Buellton City Manager Scott Wolfe in his official capacity (collectively, "Buellton"), challenging Buellton's approval of Ordinance No. 26-03 and determination that Petitioners have lost their vested right to continue a residential use at their property located at 590 Avenue of Flags, Buellton, California 93427 and more commonly known as the Farmhouse Motel.

This action will be brought under the California Environmental Quality Act (Public Resources Code, § 21000 et seq.), as well as other applicable laws.

Sine?~
Ch~~h~~-R. Guillen
51291946.1 www.bhfs.com
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