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6.A. - Page 35 of 114 The City also notes that its "compensation and benefits package is generally below market. Over the past four years, the City has experienced a high volume of turnover due to various organizational issues, including retirements and non-competitive salaries and benefits. The high turnover rate results in `short term' General Fund savings and increased reserves, but ultimately strains staff capacity and is also a contributing cause of the high cycle of turnover. The high rate of turnover and vacancy also ultimately has tamped down the City's pension costs during the past four years."244 Additional Pavments to Ca1PERS — East Palo Alto East Palo Alto is in the initial stages of evaluating additional payments to Ca1PERS beyond its Annual Required Contribution. At present, however, the City Council's expressed interest is in pre -funding the City's unfunded pension liability with current uncommitted reserves. 245 Pension Reserve Fund — East Palo Alto East Palo Alto has not established a reserve fund for the specific purpose of helping to meet rising future pension costs. However, it does have an unassigned reserve that is projected to hold $9.5 million at the end of FY 2019 that is available for risk mitigation, including pre - funding Ca1PERS obligations.246 The City does not yet have comprehensive general fund reserve policies in place to address financial risks. Developing such an overall reserves plan is now a city council priority. At its March 5, 2019 meeting, the council approved hiring the Government Finance Officers' Association ("GFOA") and PSD Research Consulting Software to prepare analyses of financial risks to the City, which is a necessary precursor to the City developing an overall financial reserves policy.247 As part of developing overall reserves policies, the City will evaluate reserves needs to meet rising, future pension funding obligations. 248 The City plans to complete the risk studies by January 2020.249 Employee Contribution to City's Normal Cost — East Palo Alto East Palo Alto does not have cost-sharing agreements in place with its employees under which the employees pay a portion of the City's pension contribution costs. 250 Revenue Enhancement — East Palo Alto East Palo Alto's residents approved Measure HH in November 2018, which is projected to provide the City with approximately $1.67 million of additional revenues to help pay for 244 Email from East Palo Alto, dated June 7, 2019. 24' Grand Jury interview. Email from East Palo Alto, dated June 7, 2019. 246 East Palo Alto, Staff Report for March 5, 2019 City Council Meeting, p. 5. Email from East Palo Alto, dated June 7, 2019. 247 Grand Jury interview. East Palo Alto, Staff Report for March 5, 2019 City Council Meeting. 24' Grand Jury interview. 249 Ibid. East Palo Alto email, dated June 7, 2019. 250 Ibid. 2018-2019 San Mateo County Civil Grand Jury 28