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6.A. - Page 28 of 114 surpluses to help pay future pension costs (see section below entitled "Pension Reserve Fund — Colma") and future OPEB ("other post -employment benefits") costs.175,176 The Town notes that this measure "will handicap the Town in meeting its future unfunded liabilities."177 Additional Payments to Ca1PERS - Colma On October 24, 2018, Colma decided to make an additional payment to Ca1PERS of $1.05 million more than its Annual Required Contribution. 178 This amount was paid to Ca1PERS in February 2019179 and represented an additional 68.6 percent payment on top of the Annual Required Contribution of $1.53 million for FY 2018-19.180 Pension Reserve Fund - Colma On October 24, 2018, Colma also decided to transfer $1 million into its Section 115 Trust for pensions in FY 2018-19 and, from FY 2019-20 through at least FY 2042-43, to make annual contributions to the trust of the additional dollar amounts that Colma would be required to pay if Ca1PERS discount rate was set at 6 percent (or 6.5 percent if the City Council determined that the payment tied to 6 percent was not feasible) rather than the current 7 percent discount rate. 181 As explained in the prior report at pages 6-8, higher discount rates result in lower payment obligations to Ca1PERS and lower discount rates result in higher payment obligations. 171 Ibid., p. 182. As of June 30, 2018, the Town had an unfunded liability under its OPEB plan of $14.04 million (substantially larger than its unfunded pension liability of $10.2 million). (Staff Report for City Council Meeting on October 10, 2018 re: Unfunded Liabilities Study and Strategic Plan, p. 1.) The Town contributed $1.7 million to its OPEB trust in FY 2018-19 and has budgeted contributing another $1.61 million to the trust in FY 2019-20. (FY 2019- 20 Operating and Capital Budget, p. 18.) The Town's plan has been to continue making annual contributions to its OPEB trust through FY 2040-41, with the goal of reaching an 80 percent funded level for the OPEB plan. (Staff Report for City Council Meeting on October 10, 2018 re: Unfunded Liabilities Study and Strategic Plan, p. 3.) At present, the OPEB plan's funded percentage is only 14 percent. (FY 2019-20 Operating and Capital Budget, p. 18.) 176 In the OPEB context "pay as you go" means paying only the minimum amount required to pay benefits that come due each year to current retirees "and funds necessary for future liability are not accumulated. That is, contributions made are for current retirees only, causing the majority of retiree health benefits liability to be considered unfunded." (GASBhelp website at https://gasb45help.com/(S(owachimsfyshowi4yphO2l l2))/tenn.aspx?t=94. ) The phrase has essentially the same meaning in the pension plan context. (See, e.g., Heinen, Winfried. Why Time is Running Out for Pay As You Go -Based Pension Systems, hgp://www.genre.com/knowledge/blog/why-time-is-running-out-for-pay-as- you-go-based-pension-systems-en.html. (Last accessed June 11, 2019.)) 177 FY 2019-20 Operating and Capital Budget, p. 182. 171 Grand Jury interview. Colma, Staff Report for City Council Meeting on October 24, 2018 re: Unfunded Liabilities Funding Strategy, p. 1. 179 Colma, Fiscal Year 2019-20 Operating and Capital Budget., p. 12. "' Colma, Staff Report for City Council Meeting on September 26, 2018 re: Unfunded Liabilities Study, Attachment B. 111 Grand Jury interview. Colma, Unfunded Liabilities Funding Strategy, October 24, 2018, pp. 3-4. 2018-2019 San Mateo County Civil Grand Jury 21 32