(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 contributions, the City will benefit from
annual contributions to build up Trust balances without increasing the
budget.
The City’s strategy relative to the Trust is to use it as a long-term
investment vehicle to address the City’s CalPERS UAL. The initial
funding goal will be to accumulate a balance in the trust equal to the
General Fund’s highest scheduled annual UAL payment; then to use
the Trust in combination with CalPERS valuation reports to achieve
100% funded status; and finally to utilize the Trust as a pension
stabilization fund by using the accumulated funds to offset future
higher-than-usual normal cost or UAL payments.
RECOMMENDATION: It is recommended by the Finance Department
that the Council, by resolution: 1) approve the execution of the Adoption
Agreement for the Post-Employment Benefits Trust (Adoption
Agreement) between the City and PFM Asset Management LLC
(PFMAM) incorporating and adopting the Trust Agreement as well as
approving the Trust Administrative Services Agreement and Investment
Policy Statements included as exhibits to the Adoption Agreement; 2)
authorize the City Manager, Assistant City Manager and the Chief
Financial Officer as officers with authority to execute necessary
documents and agreements to carry out the trust services on behalf of
the City including, but not limited to the Adoption Agreement and Trust
Administrative Services Agreement; and 3) approve an initial deposit of
$10,000,000 from the General Fund reserves assigned for fiscal
stability, and $4,400,000 from Santa Rosa Water enterprise fund
reserves to the Section 115 Trust for the purpose of pre-funding
pension obligations.
Attachment 5 - Fir Ridge Location Map 
