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9.A. - Page 13 of 17 <br />1. Making the Required Annual Contribution (minimum obligation) <br />2. Making the Required Annual Contribution Plus Making Additional Annual Payments (current <br />approach) <br />3. Making Sufficient Contributions to Fully Fund Pension Obligations within 18 Years (aspirational <br />goal) <br />Each approach has tradeoffs in terms of the annual funding required (which impacts revenue needs and <br />resources for other services), the interest to be paid associated with the approach, and the total <br />timeframe required to fully fund pension costs. This is discussed in more detail in the Budget Message. <br />The table below summarizes these three approaches for fully funding pension obligations. <br />APPROACH TO FULLY FUNDING <br />PROJECTED <br />PROJECTED TIME <br />PROJECTED DATE WHEN <br />PENSION OBLIGATIONS <br />INTEREST <br />TO FULLY FUND <br />PENSIONS WOULD BE <br />SAVINGS <br />PENSIONS <br />FULLY FUNDED <br />Option 1. Making the Required Annual <br />None <br />22 years <br />FY 2040-41 <br />Contribution <br />Option 2. Making the Required Annual <br />To be <br />21 years <br />FY 2039-40 <br />Contribution plus Making Additional <br />determined <br />Annual Payments <br />based on when <br />the City uses <br />pension trust <br />proceeds <br />Option 3. Making Sufficient <br />$38 million <br />18 years <br />FY 2036-37 <br />Contributions to Fully Fund Pension <br />Obligations within 18 Years <br />Staff will refine projections regarding use of pension trust proceeds and, after seeking input from the <br />Finance/Audit Subcommittee, will present an update to the City Council in FY 2019-20 with the mid -year <br />budget update. <br />Capital Improvement Plan (CIP) <br />The CIP is a valuable resource to achieving the City Council's strategic priorities. Each year, the CIP project <br />recommendations are presented to the City Council in the spring for adoption with the budget in June. <br />Proposed projects include infrastructure and facility upgrades, as well as major capital investments in the <br />community. Based on City Council direction, projects are prioritized and funding is then allocated for the <br />upcoming fiscal year. <br />The recommended CIP budget for FY 2019-20 includes $27.8 million in new funding requests for 54 <br />projects. Projects are funded from the Capital Outlay Fund, Transportation Fund, Special Gas Tax Fund, <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />645 <br />