CITY COUNCIL STAFF REPORT
Meeting Date: December 15, 2025
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-25 APPROVING A
CONTRIBUTION TO THE PUBLIC AGENCIES POSTEMPLOYMENT BENEFITS TRUST PROGRAM WITH PUBLIC AGENCY RETIREMENT SERVICES (PARS) SECTION 115 TRUST
SYNOPSIS
The proposed resolution approves an additional contribution into the City’s Public Agencies Post Employment Benefits Trust Program with Public Agency Retirement Services (PARS), a Section 115 Trust.
DISCUSSION
Background
On May 2, 2022, the City Council approved a Section 115 Trust with PARS with an initial contribution of $1.0 million. The City Council also approved the Pension Rate Stabilization (PRSP) Funding Policy, which includes potential contributions based on excess audited unassigned General Fund Balance.
“The City will consider making additional contributions to the Trust based on the net position of the General Fund recommended by the City Manager and Finance Manager. The amount will be based on unassigned General Fund Balance when revenues exceed costs (not including Measure K funds) in the audited financial statements. The contribution amount will be based on the annual excess audited unassigned General Fund Balance (not including Measure K). The recommended contribution amount will be based on the higher of 10% or $50,000 of the excess unassigned General Fund Balance.”
The City Council has approved additional contributions to the PARS Section 115 Trust based on the audited financial statement information. In fiscal years 2023-2024 and 2024-2025 (FY 24/25), the Council has approved $300 thousand and $400 thousand. which was in excess of the minimum required contribution (Resolution 82-23, Resolution 17-24, Resolution 81-24, and Resolution 9-25) of $157 thousand and $127 thousand, respectively.
General Fund Balance
Earlier in the agenda, the City Council received the Fiscal Year 2024/2025 (FY 24/25) audited financial statements. For financial reporting purposes, the General Fund in the Annual Comprehensive Financial Report (ACFR) includes other general ledger funds such as the Measure K Fund. The Measure K Fund is included since this is considered a general sales tax revenue even though the City Council has prioritized specific projects and programs. Below is a detail of each of those components that is reflected in the General Fund ACFR:
General Fund
Only Measure K
ACFR - General
Fund
Beginning Fund Balance - July 1, 2024 $15,681,268 $3,682,043 $19,363,311 Fiscal Year 2025 Activity:
Revenues including transfers in 32,271,922 5,614,690 37,886,612 Expenditures including transfer out (31,756,530) (6,329,852) (38,086,382) Change in Fund Balance 515,392 (715,162) (199,770)
Ending Fund Balance - June 30, 2025 $16,196,660 $2,966,881 $19,163,541 The fiscal year ending result was a net increase of $515,392 for the “General Fund Only.” Fund Balance Components
The City’s fund balance includes several components from nonspendable, restricted, assigned and unassigned. The policy was designed to only use the unassigned balances since the City Council has full discretion on how those funds are allocated. The other components have certain requirements or strings attached to them, and the City Council may require additional steps or not have authority to allocate those funds as easily. For example, the $2.1 million in the restricted component is a combination of library bond proceeds for $121 thousand and the amount in the PARS Section 115 Trust for $1.97 million. Those amounts can only be spent for those legally dedicated purposes. The $11.8 million in the assigned fund balance is a combination of the City’s Contingency Reserve Policy of $9.0 million and the balance is mainly Measure K funds assigned for the reserve of $2.5 million for debt service or future capital projects.
General Fund Balance Components FY 24/25
(ACFR PP.20) Amount
Nonspendable $75,959
Restricted $2,093,314
Assigned $11,845,670
Unassigned $5,148,598
Total $19,163,541
Unassigned Fund Balance
Based on the audited results, the unassigned General Fund Balance Only increased $499 thousand to $5.15 million (see table below). Therefore, the minimum amount of the contribution would be $50.0 thousand (higher of $50K or 10% of the increase in the unassigned fund balance) per the policy approved by City Council.
General Fund Only
FY24/25
Unassigned Fund Balance - June 30, 2025 (1) $5,148,598
Unassigned Fund Balance - June 30, 2024 (2) $4,649,165
Increase of Unassigned (1) - (2) = (3) $499,433
Prepaid General Fund Nonspendable (4) $15,959
Total General Fund Only Balance Change (3) + (4) $515,392 PRSP Policy - 10% of Unassigned Fund Balance or
$50,000
(3) *10% $49,943
As previously noted, the PRSP policy relies upon the audited financial position of the General Fund to determine the final Section 115 Trust minimum contribution according to the approved formula. The City would transfer a minimum of $50.0 thousand (higher of 10% of $499 thousand or $50K) into the PARS Section 115 Trust. On December 11, 2025, the Budget Committee reviewed this item and recommended the City Council transfer $200 thousand to the PARS Section 115 Trust and review during the PARS investment update in the following year.
FISCAL IMPACT
Adoption of the proposed resolution will result in a transfer of $200 thousand into the PARS Section 115 Trust using the audited information.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center and at the Pleasant Hill Police Department.
The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Adopt the proposed resolution approving an additional contribution into the City’s Public Agencies Post-Employment Benefits Trust Program with Public Agency Retirement Services (PARS) a Section 115 Trust.
ALTERNATIVES TO RECOMMENDED ACTION
Do not adopt the proposed resolution and provide direction to staff.
ATTACHMENT(S)
a. Proposed Resolution – approving additional contribution into the City’s Public Agencies Post-Employment Benefits Trust Program with Public Agency Retirement Services a Section 115 Trust
b. Resolution No. 30-22 - the City of Pleasant Hill Pension Rate Stabilization Program Funding Policy
Prepared by: Erick Cheung, Chief Financial Officer
Approved by: Ethan Bindernagel, City Manager