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City of San Leandro <br />Meeting Date: July 18, 2017 <br />Staff Report <br />Agenda Section:File Number:17-433 DISCUSSION ITEMS <br />Agenda Number:2.C <br />TO:Finance Committee <br />FROM:Chris Zapata <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:Not Applicable <br />TITLE:Staff Report for CalPERS Pre-Payment Option for Unfunded Liability <br />SUMMARY AND RECOMMENDATIONS <br />CalPERS is offering a pre-payment option for the unfunded liability portion of the Annual <br />Required Contribution (ARC) related to the City’s Miscellaneous, Safety and PEPRA <br />employee pensions. The total upfront payment amount is $ 8,263,205. The upfront payment <br />option will save the City $ 304,270 in avoided interest costs, which accrue interest at a 7.1% <br />interest rate if paid monthly. The wire transfer is due to CalPERS on or before 7/31. Set forth <br />below is a summary of the savings for each of the City’s three pension plans - Miscellaneous, <br />Safety and PEPRA. <br />BACKGROUND <br />The City’s Adopted Biennial Budget for FY 17-18 allocates $15,304,309 for the City’s <br />contribution to CalPERS, which is presented in Section 9 of the Adopted Biennial Budget. <br />This is the third year that the City has been offered the pre-payment option. We have <br />exercised the option in each of the past two years. <br />Analysis <br />CalPERS Prepayment Option <br />7/31/2017 <br /> Misc Safety PEPRA Total <br />Pay over 12 months $4,854,660 $3,711,880 $935 $8,567,475 <br />Pre-Pay Full Year $4,682,248 $3,580,055 $902 $8,263,205 <br />Upfront Discount $172,412 $131,825 $33 $304,270 <br />% Savings 3.6% <br />Page 1 City of San Leandro Printed on 7/13/2017 <br />242