Council Study Session

MINUTES CITY COUNCIL STUDY SESSION CITY OF MONTEREY Wednesday, April 25, 2018 4:00 pm FEW MEMORIAL HALL OF RECORDS, 580 PACIFIC STREET MONTEREY, CALIFORNIA Councilmembers Present: Councilmembers Roberson, Albert, Barrett, Smith Absent: Haffa City Staff Interim City Manager, Interim Assistant City Manager, City Attorney, Police Present: Chief, Fire Chief, Library Director, Human Resources Director, Community Development Director, Public Works Director, Acting City Clerk, Interim Recreation and Community Services Manager, Acting Community Services Director, Acting Information Solutions Director, Interim Finance Director, Assistant Fire Chief, Assistant Police Chief, Assistant City Attorney, Human Resources Analyst, Property Manager, Conference Center General Manager, Police Lieutenant, Deputy City Attorney, Interim Monterey Sports Center Manager, Senior Engineer, Acting Parking Superintendent, General Services Superintendent, Principal Engineer, Library Manager, Associate Civil Engineer, Associate Civil Engineer, Construction Project Manager, Finance Analyst (2), Director of Sales and Events, Environmental Regulations Manager, Fire Senior Administrative Analyst, Police Senior Administrative Analyst, Public Works Senior Administrative Analyst, Recreation Administrative Analyst, City Manager Administrative Analyst, Housing Administrative Analyst, Employee Relations Manager, Information Services Program Manager, Marine Harbor Assistant, Sustainability Coordinator, Community Services Consultant, Finance Consultant CALL TO ORDER Mayor Roberson called the meeting to order at 4:05 p.m. STUDY SESSION 1. Report on the City of Monterey’s Pension Obligations (Not a Project under CEQA per Article 20, Section 15378 and Under General Rule Article 5, Section 15061) (Finance - 406-01) Action: Received Report Interim City Manager Uslar introduced the topic of the California Public Employees' Retirement System (CalPERS) unfunded liability. He briefly introduced potential components of a fiscal health response plan and suggested a timeline for further discussion and planning. Ira Summer, GovInvest Inc., presented the report on the City’s pension obligations and answered City Council’s questions. He presented City Council with pension liability and repayment scenarios using the GovInvest software. At the request of Interim Finance Director Bouchard, Mr. Summer ran further scenarios and provided estimated results of various additional repayments toward the unfunded liability. Mayor Roberson opened the floor for public comments and questions. John Goss asked whether any of the projected liability was caused by replacing Classic employees with California City Council Minutes Wednesday, April 25, 2018 Public Employees' Pension Reform Act (PEPRA) employees. Mr. Summer responded that the change doesn’t make the unfunded liability higher or lower, but is a separate calculation. With no further requests to speak, Mayor Roberson closed public comments. Mayor Roberson asked if PEPRA is sustainable with regard to avoiding unfunded liabilities in the future. Mr. Summer said that PEPRA will be closer to that ideal because agencies can no longer negotiate pension formulas, and because employee contributions are set at half of normal cost so the burden is shared. But he said that the markets will never be completely predictable or consistent, and part of the answer will be to attempt to create budget surpluses. Interim City Manager Uslar said that $12M between 2018 and 2026 is needed to pay the calculated obligations. He said that the CalPERS Side Fund/Section 115 plan will be part of the toolkit that staff will evaluate and bring to City Council for consideration. Councilmember Barrett said that he hopes to find ways to stimulate the economy and increase productivity in the private sector to create additional revenue. Councilmember Albert said that if the City can keep its expenditures flat, it may be able to pay against the unfunded balance. Councilmember Smith said that City Council should carefully listen to all ideas. He said that City employees have a huge stake in the success of the City and City Council wants to hear their ideas before moving forward with a decision. ADJOURNMENT Mayor Roberson adjourned the meeting at 5:43 p.m. Respectfully Submitted, Approved, Clementine Bonner Klein Clyde Roberson Acting City Clerk Mayor 2