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

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6.1.C. - Page 4 Diane Howard, Vice Mayor Alicia C. Aguirre, Council Member Janet Borgens, Council Member Jeffrey Gee, Council Member Shelly Masur, Council Member Redwood John D. Seybert, Council Member Citylcaiaornia Fau0d0d IN 67 September 11, 2018 Honorable V. Raymond Swope Judge of the Superior Court c/o Charlene Kresevich Hall of Justice 400 County Center, 2nd floor Redwood City, CA 94063-1655 Re: Grand Jury Report: Soaring City Pension Costs—Time for Hard Choices Dear Judge Swope: 1017 Middlefield Road Redwood City, CA 94063 (650) 780-7301 Fax (650) 780-7225 On behalf of the City Council of Redwood City, I am responding to the above referenced report. The City Council approved this response at its meeting of September 10, 2018. As outlined in the report, Redwood City is not alone in facing increasing California Public Employees' Retirement System (CaIPERS) pension costs. In fact, this is a challenge for municipalities across the state. The City Council of Redwood City has taken a forward -thinking and prudent approach to addressing the City's fiscal challenges by adopting a Financial Sustainability Plan as part of the FY 2017-18 Adopted Budget. This plan includes reducing operating costs by approximately $6 million and increasing revenue by approximately $6 million in order to balance the City's budget over the next five years and pay down long-term financial obligations. The City has reduced operating costs by $3.7 million in the current FY 2018-19 adopted budget, and additional reductions of $2.3 million will occur in FY 2019-20. In addition, the City Council has voted to place two revenue measures on the November 2018 ballot in an effort to increase revenues. The revenue measures include a half -cent sales tax increase and a cannabis excise tax. The City has provided a great deal of public disclosure about our pension challenges and our use of key strategies. We have provided a significant amount of information to the public during the mid -year budget update and budget adoption, as well as during the approval of a Section 115 pension trust account, and when the City Council approved the upcoming two revenue measures. The City also maintains a "Fiscal Update" webpage, and has posted data and Frequently Asked Questions about our pension challenge for the public to review. In addition to implementing the Financial Sustainability Plan, the City has taken the following steps to mitigate increasing pension costs, including: • Implemented a second tier pension in 2011 • Negotiated employee cost-sharing agreements where current employees pay between 8 percent and 18 percent of salary towards their pension costs 1