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6.A. - Page 60 of 114 costs.477 Staff has estimated that, by paying CalPERS an extra $1.6 million per year over the next 18 years, the City would receive net savings of approximately $6 to $27 million. 478 If the City made additional annual payments averaging $5.56 million over 15 years, the City's estimated net savings would be approximately $100 million. 479 At its June 10, 2019 meeting, the City Council approved making an additional payment of $0.6 million to CalPERS beyond the City's Annual Required Contribution out of the FY 2018-19 operating balance .480 In addition, staff's ten-year general fund forecast included in the new FY2019-20 budget includes additional payments of CalPERS of $0.5 million per year through FY 2028-29.481 Staff's recommendation to the City Council in June 2019 is that, on a going forward basis, the City apply 80 percent of all general fund surpluses to pension funding (a combination of additional payments to CalPERS and transfers to the Section 115 Trust) as long as surpluses last.482 Surpluses of $5.23 million and $3.93 million are projected for FY 2019- 20 and FY 2020-21.483 Putting 80 percent of those into pension funding would result in an additional $4.19 million for pensions in FY 2019-20 and another $3.15 million in FY 2020- 21. These general fund surpluses are projected to turn into a deficit of $0.945 million in FY 2021-22 and thereafter to grow each year through FY 2028-29484 if new revenues are not found, expense reductions made, or a combination of the two. Accordingly, staff considers FY 2019-20 and FY 2020-21 to be the City's best window for making substantial progress toward funding future pension cost increases. 485 Pension Reserve Fund — Redwood City In January 2018, Redwood City transferred $10.5 million into a Section 115 pension trust in order to pre -fund future pension payment obligations. 486 In late calendar 2018 the City decided to put another $0.55 million into the Section 115 trust in FY 2018-19.487 At its June 10, 2019 meeting, the City Council approved contributing an additional $3 million to the Section 115 pension trust out of the FY 2018-19 general fund operating balance, which would bring total contributions to date approximately $14.05 million. 488 477 Grand Jury interview. Redwood City, Staff Memorandum, March 21, 2019, re: Discussion Topics and Staff Recommendations for Meeting on March 25, 2019, pp. 2-5. Redwood City, Recommended Budget Fiscal Year 2019- 2020, pp. 27-28. 478 mid., p. 27. 479 Redwood City, Staff Memorandum, March 21, 2019, re: Discussion Topics and Staff Recommendations for Meeting on March 25, 2019, pp. 4-5. "I Email from Redwood City, dated June 18, 2019. "' Redwood City, Recommended Budget Fiscal Year 2019-2020, p. 26. 482 Grand Jury interview. ass Redwood City, Recommended Budget Fiscal Year 2019-2020, p. 176. 484 mid. 481 Grand Jury interview. 486 Redwood City, Fiscal Year 2018-2019 Adopted Budget, p. 15. 487 Grand Jury interview. 488 Emails from Redwood City, dated June 18 and June 19, 2019. 2018-2019 San Mateo County Civil Grand Jury 53