TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
SUBJECT:Title
Establishment of a Pension Stabilization Trust Fund (Finance Director Moe).
ADOPT RESOLUTION NO. 16-0053; APPROPRIATE
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council: a) adopt Resolution No. 16-0053 establishing a Pension Rate Stabilization Trust Fund Administered by Public Agency Retirement Services (PARS) ; b) Appoint the City Manager as the City's Plan Administrator; c) Authorize the City Manager to negotiate and execute the final documents of the Trust; d) appropriate $780,000 from unreserved General Fund moneys and authorize the transfer of those funds to the Pension Rate Stabilization Trust Fund; e) authorize the transfer of $500,000 in budgeted General Funds to the Pension Rate Stabilization Trust Fund, and f) assign responsibility and authority to the Finance Subcommittee to develop an investment policy and guidelines, and direct investments in the trust.
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FISCAL IMPLICATIONS:
The recommended initial funding of the Pension Rate Stabilization Fund is $1.28 million: $500,000 from budgeted funds in FY 2016-2017, and $780,000 (to be appropriated) in transfer fee proceeds from the sale of the Marriott Hotel in FY 2015-2016.
BACKGROUND:
The City of Manhattan Beach has been a leader in proactively addressing pension issues in recent years. Examples include issuing Pension Obligation Bonds (POBs) in 2007 to payoff "side funds" in the City's CalPERS safety pension plans, saving $433,000 (the POBs were paid off in 2015); negotiating employee pickup of the employee share of the total pension contribution; and instituting employee cost sharing of the employer rate for safety employees. In 2008, the City also fully pre-funded its Other Post Employment Benefits (OPEB) liabilities for retiree medical (valued at $6.4 million at that t...
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