RESOLUTION NO. R-2022-019
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH, CALIFORNIA APPROPRIATING $1.0 MILLION FROM THE GENERAL FUND
UNASSIGNED FUND BALANCE TO PROVIDE ADDITIONAL DISCRETIONARY PAYMENTS OF $500,000 TO EACH OF THE CITY'S CALPERS MISCELLANEOUS AND SAFETY POLICE TIER 1 PLANS TO REDUCE THE CITY'S UNFUNDED
PENSION LIABILITY
WHEREAS, the City of Pismo Beach provides retirement benefits for full-time employees through the California Public Employees' Retirement System (CalPERS); and WHEREAS, during the recession in 2000 and 2001, CalPERS had losses of 7.2% and
6.1 %, respectively, in investment earnings and during the Great Recession in 2008 and 2009, CalPERS suffered losses of 5.1 % and 24.0%, respectively, of investment earnings and since then, has been struggling to recover those losses; and WHEREAS, as a result of past investment losses, increases in life span, retirement enhancements, and other factors, public agencies are now having to pay this unfunded amount, at a 6.8% interest rate, costing the City of Pismo Beach over $1.5 million per year and growing; and
WHEREAS, in order to help reduce the impact of the increasing unfunded accrued liability "" (UAL) costs, the City may contribute an additional discretionary payment of $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set -aside towards the Miscellaneous Plan Tier 1 UAL and $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set -aside toward the Safety Police Plan Tier 1 UAL for a projected combined $1,102,570 in CalPERS interest savings, averaging $105,129 of savings per year and $347,492 of the total projected savings to be realized in the first five years from FY 2023 and FY 2027 as a reduction in the City's UAL and ongoing operating costs, and an improvement of the City's retirement plans' funded status.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby appropriates $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set -aside to prepay the Safety Police Plan Tier 1 UAL and $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set -aside to prepay the Miscellaneous Plan Tier 1 UAL in FY 2022.
UPON MOTION OF Council Member Blake, seconded by Council Member Newton, the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 15t" day of March 2022, by the following vote:
AYES: 5 Blake, Newton, Guthrie, Reiss, Waage
NOES: 0
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R-2022-019
ABSENT: 0
ABSTAIN: 0
RECUSED: 0
Approve
Ed Waage, Mayor
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R-2022-019