RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF EAST PALO ALTO
COMMITTING FUND BALANCE TO PREFUND CALPERS FUTURE CONTRIBUTIONS
IN THE AMOUNT OF THREE MILLION DOLLARS
WHEREAS, the City participates in the California Public Employees’ Retirement System (CalPERS), a defined benefit pension plan.; and
WHEREAS, in recent years, studies by the CalPERS Board highlighted the serious issues related to the long-term sustainability of the pension fund.; and WHEREAS, in January 2018, the League of California Cities noted, “Several factors have contributed to un-sustainability of the CalPERS system-and as a result, the contributions paid by all public employers to CalPERS are dramatically increasing.”; and WHEREAS, the pension contribution increases are a factor contributing to the City’s projected structural General Fund deficit gap and the City Council strategic priorities aimed at resiliency measures to address the City’s General Fund projected structural deficit include adopting a CalPERS Funding Plan (Goal 1.4); and
WHEREAS, the City Council expressed interest in CalPERS prefunding options presented in a special study session held on March 23, 2021; and
WHEREAS, a Reserve Management Policy adopted in September 2021 states the strategic intent regarding financial decision-making and management of the General Fund reserve balances (1) promotes improved long-term strategic decisions; (2) clarifies and institutionalizes good financial practices; and, (3) manages risks to the City’s financial condition.
WHEREAS, in accordance with the Governmental Accounting Standards Board (GASB) 54 and the Reserve Management Policy, the City Council as the highest level of decision-making authority can impose and remove amounts that are used for specific purposes determine by a formal action; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EAST
PALO ALTO THAT,
1) In accordance with GASB 54, the City Council commits $3,000,000 of the General Fund Balance to prefund CalPERS future contributions as indicated by the Committed Fund classification ; and
2) Upon consideration of the information presented, the City Council desires to appropriate the funds in the form of direct payments to CalPERS as described in Exhibit A and incorporated by this reference.
BE IT FURTHER RESOLVED THAT the funds so committed cannot be used for any purpose other than as directed above, unless the City Council adopts another resolution to remove or change the constraint.
PASSED AND ADOPTED this 15th day of March 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:
James Colins, Interim City Clerk Valerie J. Armento, Interim City Attorney Exhibit A
Payment plan: FY21-22 FY22-23 FY23-24 FY24-25 Total commitment ADP CalPERS
direct payment $ 1,500,000 $ 500,000 $ 500,000 $ 500,000 $ 3,000,000