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

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6.1.C. - Page 16 Cities. In one scenario, the savings could exceed $125 million each for the Cities of San Mateo and Redwood City. In the course of its investigation, the Grand Jury learned that none of the Cities have adopted long-term financial plans to address their rising pension costs. Some Cities informed the Grand Jury that, while rising pension costs are important, they must be balanced against "other priorities" for new spending. While the Grand Jury understands the desire on the part of the Cities to expand their services in these times of growth and increasing property tax revenues, it is difficult to think of a more important issue for them to address than the looming pension crisis. Currently, the region enjoys unprecedented economic conditions, resulting in higher tax revenues and budget surpluses for many Cities. The Grand Jury asks: If the Cities do not address Unfunded Liabilities now, when will they ever be able to? The Grand Jury has compiled data regarding pension costs of each of the Cities, which are set forth in Appendix A of this report, as well as aggregate information for all of the Cities. This report also provides a general overview of public pension obligations, the major variables that drive pension cost and Unfunded Liability calculations, including how these variables can understate Unfunded Liabilities. This report describes the options available to the Cities to address the looming budgetary crises they face from rising pension costs. The Grand Jury recommends that the Cities make addressing pension costs a higher priority and that they engage residents in a discussion about the hard choices that their local governments will have to make. The Grand Jury also recommends that each City develop a financial plan to address rising pension costs. The Grand Jury does not recommend specific policies or implementation measures for the Cities to adopt, but the Grand Jury does identify a number of options for them to consider. GLOSSARY • A2encv: Any city, county, or other public entity employer that offers a pension plan to its employees through Ca1PERS. Each of the Cities is, accordingly, an "Agency" for purposes of this report. • Amortization Cost: Payments by the Cities to Ca1PERS, to pay down their Unfunded Liability. It includes payments of (a) principal needed to pay off (amortize) the Unfunded Liability over a period of years, plus (b) interest charged by Ca1PERS on that liability. • Amortization Period: The number of years over which an Unfunded Liability is to be paid off. • Benefits or Benefits obligations: Amounts to be paid out of a pension plan's assets to Members or their beneficiaries. 2017-2018 San Mateo County Civil Grand Jury 2