Laserfiche WebLink
City of San Leandro <br />City Council <br />Meeting Date: November 21, 2022 <br />Agenda Number: 10.d. <br />Agenda Section: CONSENT CALENDAR <br />File Number: 22-658 <br />File Type: Staff Report <br />Adopt a Resolution to Establish an OPEB and Pension Funding Policy and Transferring $8,222,725 In <br />Set Aside Funds to the Pension Trust <br /> <br />COUNCIL PRIORITY <br />·Fiscal Sustainability and Transparency <br />SUMMARY AND RECOMMENDATION <br /> <br />Staff recommends the City Council approve a resolution adopting an Other Post-Employment <br />Benefits (OPEB) and Pension Funding Policy and transferring approximately $8,222,725 that has <br />been assigned to address Alameda County Fire Department’s (ACFD) unfunded OPEB liability <br />to the City’s Pension Trust. If enacted, this transfer would bolster the City Council’s prior policy <br />direction to address unfunded pension liabilities associated with legacy City of San Leandro Fire <br />Department employees, as well as past and current City employees. <br /> <br />BACKGROUND <br /> <br />A primary City Council priority is placing San Leandro on a firm foundation for long term fiscal <br />sustainability. One component for achieving this goal is reducing the City’s unfunded liabilities <br />related to employee benefits (i.e. retiree health care and retirement pensions). An unfunded <br />liability is the monetary difference between the estimated future costs of future benefits and the <br />assets set aside to pay those benefits. The City currently has unfunded pension liabilities for both <br />legacy employees who previously worked for the City’s former Fire Department that existed prior <br />to fire services being transitioned to the Alameda County Fire Department, as well as past and <br />current city employees. <br /> <br />City unfunded liabilities fall into two categories-Other Post-Employment Benefits (OPEB) and <br />pensions. OPEB refers to health benefits for employees who have retired from the City. The City <br />provides its employees with a retiree health care plan that is relatively modest in scope with strict <br />not-to-exceed monthly contribution caps, which has fortunately limited its associated long-term <br />financial liability. Pension refers to the City employees’ pension plan that is administered by the <br />California Public Employees Retirement System (CalPERS). As of June 30, 2022, the <br />respective unfunded liability amounts are approximately $4,523,749 for OPEB and $141,216,723 <br />for pension. <br /> <br />In September 2015, the City Council adopted the Prioritizing Unfunded Liability Liquidation <br />(PULL) plan, which affirmed a 5-year goal of setting aside an additional $5,000,000 toward <br />reducing unfunded liabilities. The PULL Plan calls for the City to direct up to 50 percent of all <br />Page 1 City of San Leandro Printed on 11/17/2022