City Council
Report
City Council Meeting: May 26, 2026
Agenda Item: 4.C
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To: Mayor and City Council
From: Oscar Santiago, Director, Finance Department
Subject: Approval of California Employers' Retiree Benefit Trust (CERBT) Authority Delegation
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding that the resolution is not a “project” subject to the California Environmental Quality Act; and
2. Adopt a resolution of the City of Santa Monica updating the delegating authority to the City Treasurer, the Assistant Finance Director, the Deputy Finance Director, the Financial Operations Manager and the Business And Revenue Operations Manager to authorize distributions from the California Employers’ Retirement Benefit Trust (CERBT) fund.
Summary
On May 12, 2015, the City Council adopted resolutions numbers 10876 and 10877, which approved using a California Public Employees’ Retirement systems (CalPERS) trust to prefund the City’s Other Post Employment Benefits (OPEB) liability by establishing a retiree benefit trust, facilitating funding and investment management, and authorizing the City Manager to execute the agreement, transfer funds, and take other actions as required by CalPERS.
At that time, the City Council approved a Declaration of Authority to Request Disbursements for the California Employers’ Retiree Benefit Trust Program (CERBT) authorizing the City Treasurer and Assistant City Treasurer to request distributions from the retiree benefit trust.
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Because the Assistant City Treasurer position has been eliminated, staff recommends adopting a resolution to update the Delegation of Authority to Request Disbursements for the CERBT. This update would replace the Assistant City Treasurer with the Assistant Finance Director, and the Deputy Finance Director as a backup in the event the City Treasurer or the Financial Operations Manager is unavailable.
Discussion
The Governmental Accounting Standards Board (GASB) issued GASBs 45 and 75, which require agencies to calculate and report the amount of OPEB, such as retiree health care costs and unfunded liability. To manage the unfunded liability, the City elected to prefund utilizing a CalPERS Employers’ Retirement Benefit Trust.
To implement the GASB reporting, the City contracts with an actuarial firm to calculate OPEB based on the present value of future benefits to be provided to current and future post-employment individuals and retirees. The City funds these ongoing expenses and lowers its existing liability through CERBT, the established OPEB trust with CalPERS.
The CERBT program offers a better yield than the City’s portfolio, which enables the City’s annual contribution to decrease over time because the interest earned on the trust assets reduces the unfunded liability. Disbursements from the trust are used to offset the annual costs incurred of retiree health benefits. The GASB allows a discount on the liability to be reported if the City prefunds its liability.
The CERBT administration recommends that three positions be authorized to request disbursements from the trust. Due to the size of the City’s annual disbursements, two signatures on the disbursement form are required. Currently, the City Treasurer and Assistant City Treasurer are listed as authorized signatories. However, the Assistant City Treasurer position has been eliminated.
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The attached resolution will amend the Delegation of Authority to reflect the appropriate positions with signing authority. Specifically, the resolution will designate the City Treasurer, the Assistant Finance Director, and the Deputy Finance Director as authorized individuals to approve disbursement requests from the trust, replacing the previous authorization of the Assistant City Treasurer.
Environmental Review
The resolution to amend delegation authority is not a “project” subject to CEQA. The form is to update signature authority for the CERBT OPEB trust. Pursuant to CEQA Section 21065, the form does not meet the definition of a “project” subject to CEQA as it will not “cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” Additionally, per Section 15378(b) of the CEQA Guidelines, a “project” does not include continuing administrative or maintenance activities, such as purchases for supplies, personnel-related actions, general policy and procedure making. Therefore, the resolution is not subject to CEQA.
Past Council Actions
Meeting Date Description
05/12/2015
(Attachment A)
Approval of Other Post Employment Benefits Trust and
Investment Services
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action to authorize this form.
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Prepared By: Randy Chow, Financial Reporting Supervisor Approved Forwarded to Council
Attachments:
A. A. 5/12/2015 Staff Report (web link)
B. B. Delegation of Authority Form
C. C. Resolution - Delegation of Authority