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City of San Leandro <br />Meeting Date: March 6, 2017 <br />Staff Report <br />Agenda Section:File Number:17-093 CONSENT CALENDAR <br />Agenda Number:8.K. <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 Resolution Authorizing Staff to Transfer $6.2M for the <br />Purpose of Funding the City’s Post-Retirement Health Care Plan Trust <br />Administered by Public Agency Retirement Services (PARS) from the City's <br />General Fund Unrestricted Reserves <br />SUMMARY AND RECOMMENDATION <br /> <br />One of the City Council’s highest priority goals is to place San Leandro on a firm foundation <br />for long-term fiscal sustainability. A key component in achieving this goal is to arrest and <br />diminish unfunded liabilities related to employee benefits. Other factors that meet the goal <br />of sustainability include stable and diversified revenue sources, cost containment, and <br />exposure/risk management. <br /> <br />It is recommended that Council direct staff to contribute $6.2 million to a Public Agency <br />Retirement Services (PARS) trust account to reduce the unfunded liability for retiree <br />healthcare. This account currently holds approximately $7 million, most of which has been <br />funded since 2012. <br /> <br />BACKGROUND <br /> <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 />Fire Department retiree health care. The total amount of unfunded liabilities in 2013 was <br />$119 million; in 2014, that liability increased to $158 million. The 2017 liability is under <br />review by the City’s actuaries and will be reported later this year. The growing annual <br />payment requirement impacts the City’s budget and diminishes funds that are available for <br />projects and services. <br /> <br />This growing liability and its potential impact to public services was highlighted in Mayor <br />Page 1 City of San Leandro Printed on 2/28/2017 <br />171