AgdaPkt 2019-10-14 Joint SA PFA - Laserfiche WebLink

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6.A. - Page 108 of 114 Ian Bain, Mayor Diane Howard, Vice Mayor Alicia C. Aguirre, Council Member Janet Borgens, Council Member Shelly Masur, Council Member Giselle Hale, Council Member Redwood Diana Reddy, Council Member City I California Founded 1867 October 14, 2019 Honorable Donald J. Ayoob Presiding Judge of the Superior Court c/o Charlene Kresevich Hall of Justice 400 County Center, 2nd floor Redwood City, CA 94063-1655 1017 Middlefield Road Redwood City, CA 94063 (650) 780-7301 www.redwoodcity.org Re: Grand Jury Report: "Soaring City Pension Costs — Follow -Up on Grand Jury Report of 2017-2018" Dear Judge Ayoob: 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 October 14, 2019. As outlined in the report, Redwood City is not alone in facing increasing California Public Employees' Retirement System (CaIPERS) costs. In fact, this is a challenge for municipalities across the state. The City has made a concerted effort to provide 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 placing two revenue measures on the ballot in November 2018 (Measure DD, cannabis business tax, and Measure RR, one half -cent sales tax). The City also maintains a "Fiscal Update" webpage, and posts data and Frequently Asked Questions about our pension challenges for the public to review. In addition to the Redwood City voters passing Measure DD by 78.7 percent, and Measure RR by 67.7 in November 2018, (generating over $8.0 million in new revenue annually), the City has taken the following steps to mitigate increasing pension costs, including: • Implementing a second tier pension in 2011 • Negotiating employee cost-sharing agreements where current employees pay between 8 percent and 18 percent of salary towards their pension costs • Establishing a Section 115 Pension Trust Account, to pre -fund the City's pension obligations over time, the balance of which is currently $13 million • Maximizing fees charged to developers Developing and implementing a plan to pay down the City's unfunded actuarial liability Budgeting for additional direct payments to CaIPERS above and beyond the required annual pension contribution, in addition to budgeting annual payments towards the Section 115 pension trust 112