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City of San Leandro <br />Meeting Date: June 7, 2021 <br />Staff Report <br />Agenda Section:File Number:21-359 ACTION ITEMS <br />Agenda Number:10.B. <br />TO:City Council <br />FROM:Fran Robustelli <br />City Manager <br />BY:Susan Hsieh <br />Finance Director <br />FINANCE REVIEW:Not Applicable <br />TITLE:Staff Report for a City of San Leandro City Council Resolution Approving and <br />Authorizing the City Manager to Execute all Documents and Take All Actions to <br />Establish a Section 115 Pension Trust with the Public Agency Retirement <br />Services (PARS) <br />SUMMARY AND RECOMMENDATION <br />Staff recommends that the City Council approve and authorize the City Manager to Execute All <br />Documents and Take All Actions to Establish a Section 115 Pension Trust with PARS. <br />Staff also recommends that the City Council approve the Investment Guidelines Document <br />selecting an active Moderate Investment Strategy for the plan, authorize staff to transfer $750,000 <br />to PARS to set up the trust account, and appropriate the $750,000 annual OPEB (Other <br />Post-Employment Benefits) allocation from the Fiscal Year 2020-2021 budget to the Fiscal Year <br />2021-2022 budget. <br />Two resolutions are attached to this staff report. <br />BACKGROUND <br />At the April 12, 2021 Council meeting, the City Council directed staff to establish a Section 115 <br />Pension Trust (Trust) to buy down the City’s unfunded pension liability and stabilize costs in the <br />long run. The Council directed staff to work with the Finance Committee (Committee) to finalize <br />the selection of a service provider and develop an investment policy for the Trust. <br />Following the April meeting, PARS submitted a formal proposal to the City. For discussion <br />purposes, PARS’ investment manager HighMark provided a draft Investment Guidelines <br />Document to the City Council Finance Committee with a Moderately Conservative strategy. <br />To recap, a Section 115 Trust offers the following benefits: <br />·Generate investment income to pay for future pension contributions; <br />·Flexibility to tailor the investment strategy to meet the City’s objectives and risk tolerance; <br />·Potential to improve the City’s bond rating; and <br />Page 1 City of San Leandro Printed on 6/4/2021 <br />181