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City Council Approves Major Payment to Public Employees' Retirement Fund

Post Date:02/11/2019 9:00 AM

The San Luis Obispo City Council reviewed the City’s 2017-18 audit and a mid-year update to the 2018-19 Financial Plan Supplement. Council approved a payment of $4.2 million to pay down California Public Employees’ Retirement System (CalPERS) unfunded liabilities, as well as $1.4 million set aside in a 115 Pension Trust fund (once established).

The payment helps to reduce the total liability, based on revised projections for the 2018-2019 fiscal year, and the trust fund will help manage possible future changes to pension obligations. In addition, the City’s fiscal forecast shows that an additional $22 million will be available for payments over the next 9 years.

The payment is a part of a broader ongoing effort within the current Major City Goal of Fiscal Responsibility and Sustainability which includes a three-year Fiscal Health Response Plan (FHRP), guided by community and employee input to address rising pension costs with a thoughtful approach to operational reductions, employee concessions, and new revenues. 

The Mid-Year Budget report for 2018-19 provides a comprehensive overview of the City’s financial condition at the mid-point of the fiscal year. Updated estimates for fiscal year 2018-19 compare favorably with budget assumptions in virtually all areas of the City’s operations. For the General Fund, revenues are expected to exceeded estimates by $1.1 million, or 1.8%. Expenditures and other uses are holding steady at budgeted levels. The City’s top three revenue sources, Sales Tax including the City’s Half-Cent Sales Tax Measure, Property Tax, and Transient Occupancy Tax (TOT), all are estimated to end the year slightly above budgeted estimates. They account for 50% of the General Fund revenue and are closely monitored through the year.

The City’s budget policies require that the City Council review the City’s budget and financial condition every six months. The mid-year review fulfills that purpose and allows for adjustments to revenue and expenditure assumptions should the need arise.