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5E Consent
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3/21/2024 5:56:02 PM
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12/26/2023 3:00:07 PM
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CM City Clerk-City Council
CM City Clerk-City Council - Document Type
Staff Report
Document Date (6)
10/16/2023
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City of San Leandro <br />City Council <br />Meeting Date: October 16, 2023 <br />Agenda Number: 5.e. <br />Agenda Section: CONSENT CALENDAR <br />File Number: 23-461 <br />File Type: Staff Report <br />Adopt a Resolution to Accept the 2022-2023 City of San Leandro Section 115 Other <br />Post-Employment Benefits (OPEB) and Pension Trust Investment Report for the Quarter Ended June <br />30, 2023 <br />SUMMARY AND RECOMMENDATION <br />Staff recommends that the City Council accept the City's Section 115 Other Post-Employment <br />Benefits (OPEB) and Pension Trust Investment Report for the quarter ended June 30, 2023. <br />DISCUSSION <br />OPEB Trust <br />In 2008-2009, the City established the Section 115 OPEB Trust with PARS. Its primary <br />purpose is accumulating resources in trust and generating investment income to fund the <br />City’s OPEB obligations in future years. The trust account was set up with an initial <br />contribution of $500,000, and the City has been proactive in funding future liabilities. Over the <br />years, the City Council has authorized various contributions into the trust. At the end of June <br />30, 2023, assets in the OPEB Trust total $19,960,000 including contributions and investment <br />earnings. The inception-to-date investment return is 5.20%. <br />Pension Trust <br />In 2021, the City Council authorized establishing a Section 115 Pension Trust with PARS. <br />The goal is setting aside funds and accumulating investment earnings to buy down the City ’s <br />unfunded CalPERS pension liabilities. At the beginning of the second quarter of 2023, assets <br />in the Pension Trust totaled $14,400,000, including both contributions (since inception of the <br />fund in 2021-2022) and investment earnings. <br />In December 2022, the City Council authorized the transfer of funds from the set -aside for <br />potential City liability for the Alameda County Fire Department ’s unfunded OPEB obligation. <br />Following mutual reaffirmation of provisions within the existing services agreement between <br />the City and ACFD stating that the City is not liable for the OPEB obligations associated with <br />ACFD employees, a total of $8,222,700 was transferred from the City ’s ACFD set-aside to the <br />Pension Trust. Going forward, the City will pay the full cost of current ACFD contract services, <br />including the amortized portion of the ACFD unfunded OPEB costs. <br />At the end of June 2023, the assets in the Pension Trust totaled $14,850,000. The 3-month <br />investment return was 3.08%, and the inception-to-date investment return is negative 3.88%. <br />The stock market has been volatile due to high inflation, fear of recession, and the Ukraine <br />war crisis. <br />Quarterly Investment Report <br />HighMark Capital has prepared a quarterly investment report for the OPEB Trust and Pension <br />Trust for the period ending June 30, 2023, summarizing the investment performance. The <br />Page 1 City of San Leandro Printed on 12/21/2023
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