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Title:
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REPORT - APPROVAL OF SECTION 115 TRUST AGREEMENTS AND APPROPRIATION OF INITIAL FUNDING
BACKGROUND: In September 2021, the staff presented pension funding strategies to the City Council at a study session. One such strategy is to establish an Internal Revenue Code Section 115 Trust (Trust), which is an actively managed fund, outside the City’s investment portfolio, that may only be used to pay pension obligations. The City would use this Trust initially to reduce the current unfunded accrued liability (UAL) associated with its CalPERS pensions.
Staff proposes an initial deposit to the Trust of $10,000,000 from the fiscal stability funds assigned in the General Fund reserves, and $4,400,000 from Santa Rosa Water (SRW) enterprise funds reserves to pre-fund pension obligations. Annual contributions to the Trust from the General Fund and SRW will begin after the City’s existing Pension Obligation Bonds are paid off in 2024. By redirecting budget the debt service payments to Trust cont...
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Code sections:
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15061(b)(3) - General Rule Exemption, 15378 - Not a Project
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