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9.A. - Page 16 of 21 million from other City funds, as some employees are budgeted in other funds, primarily the water and wastewater utilities. Subsequent contributions of $550,000 of FY 2017-18 operating balance in March 2019, $1.1 million of annual budgeted funds in June 2019, and $10.0 million of FY 2018-19 operating balance in December 2019 were made. The FY 2019-20 budgeted amount of $1.1 million will be contributed to the pension trust account before the end of June 2020. As of the end of April 2020, the investment balance of the trust account was $22.3 million. The Ten -Year General Fund Forecast includes General Fund contributions towards the City's pension liability beyond the required annual payment, including additional direct annual payments to CalPERS of $400,000, and annual contributions of $500,000 to the City's Section 115 pension trust account through FY 2022-23. Trust proceeds, including investment earnings, will be used in future years to help pay for increased annual pension costs. Increasing the funds invested in the trust, and maintaining those funds over a longer timeframe, will provide greater resources to pay the City's pension costs in the future. As was noted by staff in the April 6, 2020 staff report, the City can anticipate increased pension contribution requirements as a result of anticipated investment losses by CalPERS forthe year ending June 30, 2020 due to COVID-19. CalPERS assumes 7 percent annual investment returns in determining the City's annual required pension contributions. However, CaIPERS is currently reporting a rate of return of 0.0 percent for the current year-to-date. The City's annual required contributions will not be impacted by this potential 7.0 percent reduction until FY 2022-23. Staff has estimated scenarios utilizing the CaIPERS pension outlook tool to assist in forecasting the potential magnitude on the amount of future required contribution amounts. Three scenarios are presented below. None of these scenarios were used in developing the Ten -Year General Fund Forecast or in the FY 2020-21 Recommended Budget. Staff will provide an update to the City Council in the fall, with modifications to the Ten -Year General Fund Forecast being proposed either in October or in February 2021, after CALPERS year-end investment returns and future City pension contributions are known. Effect on Total Effect on Annual Contribution Contributions Effect on Funding Rate of Return Amounts (over 20 years) Ratio Increases ranging from Decrease from 0% $840,000to $4.2 million $75.8 million 65.5% to 61.2% annually Increases ranging from $1.3 Decrease from -4% million to $6.6 million $119.2 million 65.5% to 58.7% annually Increases ranging from $1.4 Decrease from -5% million to $7.2 million $130.0 million 65.5% to 58.1% annually Page 16 of 20 . �JL City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 705