pages: CityCouncil/2009-02-03.pdf, 6
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CityCouncil | 2009-02-03 | 6 | The Interim Finance Director stated the total CalPERS earnings this year is $58.1 million; $33 million is for miscellaneous employees, and $25.1 is for public safety; a 1% increase for miscellaneous employees equals $330,000; a 1% increase for public safety equals $251,000. Mayor Johnson inquired what would be the full, future impact of the 3% at 50 and 2% at 55 formulas, to which Mr. Milligan responded that he would get information back to Council. Councilmember Gilmore stated currently, the City is paying $4.5 million for miscellaneous employees and $7.2 million for public safety; inquired whether the City is paying additional money for retirees. The Interim Finance Director responded retirees receive retirement checks from stated funds are coming from the City's CalPERS pot. The City Treasurer stated that he projects City contribution rates to go up approximately 2% for miscellaneous employees and 4% for public safety; approximately four years of elevated contribution rates are assumed; better investment returns would bring the rates down in the out years; the increase would be $1.7 million over four years. Councilmember Matarrese inquired whether CalPERS would adjust the smoothing model to make up for the fund payout stated benefits have to be paid. Mr. Milligan responded that CalPERS is not anticipating any changes to the smoothing methodology; stated the City will be paying higher rates until the market turns around. Mayor Johnson inquired how long the City might be paying higher rates. Mr. Milligan responded the big impact would be in 2011-2012; stated rates would drift up a little if the market is still down; rates would come down once the market rebounds. Councilmember Matarrese inquired what return rate is needed to sustain the system. Mr. Milligan responded 7.2% over a long period of time; generally, CalPERS has exceeded 7.2% over the previous fifteen years. Vice Mayor deHaan stated today is an extraordinary period of time. Regular Meeting Alameda City Council 6 February 3, 2009 | CityCouncil/2009-02-03.pdf |