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R-2024-021
RESOLUTION NO. R-2024-021
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 retiree life span, retirement enhancements, and other factors, public agencies now have to pay this unfunded amount, at a 6.8% interest rate, which costs the City of Pismo Beach over $1.9 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 toward the Miscellaneous Plan Tier 1 UAL and $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set-aside towards the Safety Police Plan Tier 1 UAL for a projected combined $1,261,151 of the total projected savings to be realized in the first 10 years from FY 2025 and FY 2034 as a reduction in the City’s UAL and ongoing operating costs, $453,002 in CalPERS interest savings, averaging $72,650 of savings per year, 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 2024.
UPON MOTION OF Council Member Guthrie, seconded by Council Member Newton, the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 2nd day of April 2024, by the following vote:
AYES: 4 Guthrie, Newton, Inman, Reiss
NOES: 0
ABSENT: 1 Waage
DocuSign Envelope ID: F350AB0F-91F3-436A-9099-240EA52928C5
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R-2024-021
ABSTAIN: 0
RECUSED: 0
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Pismo Beach, California, on _______________________.
________________________
Erica Inderlied, City Clerk
DocuSign Envelope ID: F350AB0F-91F3-436A-9099-240EA52928C5 4/4/2024