AgdaPkt 2018-09-10 Joint SA PFA - Laserfiche WebLink

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6.1.C. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager September 10, 2018 SUBJECT Response to Civil Grand Jury Report entitled "Soaring City Pension Costs — Time for Hard Choices" RECOMMENDATION By motion, approve the attached letter responding to the San Mateo County Civil Grand Jury Report and authorize the Mayor to sign and send the letter to the San Mateo County Civil Grand Jury BACKGROUND On July 17, 2018, the San Mateo County Civil Grand Jury ("Grand Jury") filed a report with the San Mateo County Superior Court regarding the increasing pension costs of the cities in San Mateo County. The report attempts to address what actions the cities can take to meet current and future pension obligations. The Superior Court requires the City Council to submit a response to the report's findings and recommendations no later than October 15, 2018, and the response be approved by the City Council at a public meeting. The Grand Jury report notes that public pension costs are a large component of each city's budget and steep pension cost increases represent a serious threat to public services for all the cities. In FY 2016-17, the 20 cities within the County of San Mateo spent a total of $102 million on their pension plans, representing an average of approximately 13.6 percent of their General Fund expenditures. These pension costs, on average, are projected to double by FY 2024-25. For Redwood City, pension costs are expected to double by FY 2027-28. ANALYSIS Redwood City is not alone in facing increasing pension costs and unfunded liabilities, as municipal agencies across the state of California are dealing with this challenge. The City Council has taken a forward -thinking and prudent approach to addressing the City's