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6.1.C. - Page 45 City's proposed FY 2018-19 budget recommends contributing another $3.4 million to the Section 115 trust, 153 which would bring total funds in the trust to $8.1 million. The City's five- year forecast projects ongoing annual contributions to the Section 115 trust in the amounts of $2.7 million in FY 2019-20, $2.1 million in FY 2020-21, $1.5 million in FY 2021-22 and $1.21 million in FY 202-23.154 If the additional FY 2018-19 contribution of $3.4 million is made, the $8.1 million total Section 115 trust amount would represent 29 percent of Burlingame's projected total general fund reserves of $28.19 million at the end of FY 2017-2018, of which $9.15 million will be unassigned 155 and approximately 19 months' worth of its $5.3 million in pension costs in FY 2016-2017. The City of Brisbane also reports having recently established a Section 115 trust to help pay any unexpected increases in pension payment obligations. The City's financial plan calls for it to put aside funding for additional payments into the 115 trust. 156 (4) Neizotiate Cost -Sharing Arranizements with Emvlovees. The Cities can reduce their pension costs through cost-sharing agreements with employees under which employees agree to pay a portion of the Cities' Normal Costs. For example, the City of Menlo Park has negotiated cost-sharing agreements with non -sworn employees under which those employees will pay an additional amount equal to 50 percent of the City's future pension cost increases and agreements with sworn employees under which they will pay a portion of the City's pension costs equal to 3 percent of total payroll. 157 Redwood City has also negotiated cost- sharing agreements with employees under which those employees pay a portion of the City's Normal Costs,158 as have Atherton, 159 Burlingame, 160 Hillsborough, 161 and Millbrae. 162 (5) Pension Obligation Bonds (POBs). Another option is to accelerate repayment of Unfunded Liabilities with the proceeds of pension obligation bonds issued by the City. Where the interest rate being charged by Ca1PERS on Unfunded Liabilities is higher than the interest rate on the bonds, this can result in savings for a City. For example, in FY 2003-2004, Daly City issued $36.2 million in pension obligation bonds and applied the proceeds to reduce its Unfunded Liabilities. At the time, Ca1PERS was charging annual interest of 8.25 percent on Unfunded Liabilities and the interest on the bonds was only 5.973 percent. According to Daly City, the difference between the interest rate charged by 153 Burlingame, Letter from City of Burlingame to Grand Jury, dated June 7, 2018. 154 Burlingame, Email from City of Burlingame to Grand Jury, dated June 9, 2018. See also, Augustine, Staff Report March 14, 2018, p. 48 for information on the portion of these payments that will be made out of the general fund. 155 City of Burlingame, Fiscal Year 2017-18 Adopted Budget, p. xiii. 156 Brisbane, Letter from City of Brisbane to Grand Jury, dated June 11, 2018. The City's letter does not disclose the amount(s) contributed into its Section 115 Trust. 15. City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48. 154 Redwood City Report - FY 2017-18 Mid -Year Budget Study Session, p. 10. 159Town of Atherton, Fiscal Year 2017/18 Operating & Capital Improvement Budget, p. 4, <htto://www. ci. atherton.ca.us/ArchiveCenterNiewFile/Item/25 3 5>. "I City of Burlingame, Fiscal Year 2017-18 Adopted Budget, p. xviii. 161 Interviews by Grand Jury. 162 City of Millbrae, Letter from City of Millbrae to Grand Jury, dated June 11, 2018. 2017-2018 San Mateo County Civil Grand Jury 31