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City of San Leandro <br />Meeting Date: September 21, 2015 <br />Staff Report <br />Agenda Section:File Number:15-536 ACTION ITEMS <br />Agenda Number:10.A. <br />TO:City Council <br />FROM:Chris Zapata <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report for Discussion on Prioritization Unfunded Liability Liquidation <br />(PULL) Plan <br />SUMMARY AND RECOMMENDATION <br />One of the City Council’s highest priority goals has been to place San Leandro on a firm <br />foundation for long term fiscal sustainability. A key component in achieving this goal is to <br />arrest and diminish Unfunded Liabilities related to employee benefits. Other factors that <br />meet the goal of sustainability include stable and diversified revenue sources, cost <br />containment, and exposure/risk management. <br />It is recommended that the City Council review and adopt a Prioritization Unfunded Liability <br />Liquidation (PULL) Plan with a 5 year goal of allocating $5,000,000 toward reducing <br />unfunded liabilities. In addition, it is recommended that the Council adopt the following <br />criteria as a financial policy to assist in meeting the PULL plan goal of $5,000,000: <br />1.Pay 100% of the Annual Required Contribution (ARC). <br />2.Direct up to 50% of all annual General Fund carryover toward the PULL Plan. <br />3.Direct up to 50% of all General Fund land sales toward PULL Plan. <br />4.Review the 20% emergency contingency fund target with financial advisors and bond <br />counsel toward a goal of 16.6% with any excess funds allocated to meet PULL Plan <br />goal. <br />5.Create a separate San Leandro trust for the PULL Plan. <br />6.Provide an annual report to the City Council and Measure HH Oversight Committee on <br />PULL Plan progress. <br />BACKGROUND <br />The City Council received reports at its annual planning session in January 2013 regarding <br />the unfunded liabilities of four separate employee funds , including: miscellaneous employee <br />pensions, public safety employee pensions, City retiree health care, and Alameda County <br />Page 1 City of San Leandro Printed on 9/15/2015