Fiscal Year 2013-2015 Special Budget Meeting

HONORABLE MAYOR AND CITY COUNCIL Subject: CalPERS New Rate Increases Due to Amortization and Smoothing Policy Changes Adopted by CalPERS on April 17, 2013 Date: June 7, 2013 Page 2 Current and New Rates from CalPERS and Projected Costs In the previous information memorandum dated April 5, 2013, it was projected that the City's retirement contributions to CalPERS costs will increase by 20.5% in FY 2013-14 and 5.25 % in FY 2014-15 respectively. Based on updated budget data, as presented in the FY 2013-15 proposed policy budget, the cost will increase by 19.5% in FY 2013-14 and an additional 8.6% is projected to increase in FY 2014-15, respectively. The table below provides the detail of the City's employer contribution rates and projected armual costs based on the FY 2013-15 Proposed Policy Budget and CalPERS' new smoothing and amortization policy changes, as well as historical rates and costs. Table 1 M I S C E L L A N E O U S FIRE POLICE Annual Cost Rate Annual Cost Rate'^* Annual Cost Rate'^' Total Annual Cost Cumulative % Change* 2006-2007 38,013,933.26 17.480 13,799,911.54 27.280 27,415,317.53 27.280 79,229,162.33 2007-2008 42,934,740.16 19.200 14,357,867.10 26.660 30,244,078.80 26.660 87,536,686.06 2008-2009 41,909,512.12 19.550 14,799,733.04 27.090 35,228,553.86 27.090 91,937,799.02 2009-2010 28,609,780.59 19.590 14,450,896.34 27.448 34,554,042.38 27.448 77,614,719.31 2010-2011 23,436,093.61 19.890 14,175,460.08 27.682 30,221,552.26 27.682 67,833,105.95 2011-2012 31,440,003.39 23.604 13,113,234.90 28.561 21,058,342.21 28.561 65,611,580.50 2012-2013*" 33,044,376.00 25.115 12,465,077.00 26.479'"' 21,784,707.00 30.479"'' 67,294,160.00 2013-2014''"*" 41,076,011.00 27.300 15,960,302.00 28.857 23,397,368.00 32.857 80,433,681.00 2014-2015""*'* 43,525,191.00 29.100 18,128,464.00 30.410 25,717,197.00 34.410 87,370,852.00 2015-2016'" 47,508,102.00 31.200 19,380,749.00 32.510 28,563,822.00 36.510 95,452,673.00 9.25% 2016-2017*'* 50,705,762.00 33.300 20,632,658.00 34.610 30,206,770.00 38.610 101,545,191.00 16.22% 2017-2018*" 53,903,426.00 35.400 21,884,568.00 36.710 31,849,718.00 40.710 107,637,709.00 23.20% 2018-2019'" 57.101,084.00 37.500 23,136,477.00 38.810 33,492,666.00 42.810 113,730,227.00 30.17% 2019-2020'" 60,298,745.00 39.600 24,388,386.00 40.910 35,135,614.00 44.910 119,822,745.00 37.14% Projections Covered Payroll is based on FY 2014-2015. *'*Net of Port's payment (^proximately 0-489%) **'Police rate change from 29.064% to 30.479% on 8/31/12 Fire rate changed frora29,064% to 26,479% on 8/31/12 '^'Computed on baseline payroll, projected as of April 12,2013 '^Projections based on CalPERS new policy change date April 26,2013 circular letter Note: total may not add up due to rounding * Represents % changed due to PERS new policy on amortization and smoothing methods efTeciive FY 2015-16 For questions please contact Katano Kasaine, Treasurer, at (510) 238-2989.