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8.A. - Page 16 of 72 <br />At the City Council's direction staff are seeking community input on potential regulations for storefront <br />retail cannabis sales. The City Council will consider such regulations later this fiscal year. Based on typical <br />cannabis retailers in California, staff estimates that allowing storefront cannabis sales could generate <br />between $300,000 to $1 million in additional annual revenue for the City. <br />Expenditure Projections <br />Rising employee -related costs, due primarily to escalating payments to fully fund benefits for already <br />retired employees, are the most significant contributor to rising expenditures. The Preliminary Ten -Year <br />Forecast does not include increases to ongoing staff. This section provides information about the City's <br />status and strategy for addressing pension costs and other employee -related costs. <br />Pension Liabilities <br />As shown below, pension benefits are funded by a combination of employer contributions, employee <br />contributions, and investment earnings on those contributions. <br />Based on data over the past 20 years ending June 30, 2019, for every dollar CalPERS pays in pensions: <br />• 58 cents comes from investment earnings <br />• 29 cents from employer contributions <br />13 cents from employee contributions <br />Essentially, 71 cents out of every public employee pension dollar is funded by CaIPERS' investment <br />earnings and employee contributions, with employers making up the difference. In the fiscal year ended <br />June 2019, CalPERS paid out nearly $24.2 billion in pension benefits. <br />When there is a gap between the assets available to fund benefits, and the assets needed to fund benefits, <br />the City must make up the difference. Currently, about 20 percent of the City's General Fund goes towards <br />paying for pension benefits; this amount will grow to 24 percent over the next five years, as required City <br />pension contributions ramp up to fully fund benefits for already -retired, as well as current employees. <br />Page 16 of 26 <br />J AL . <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />251 <br />