SO YOU COULD BE SEEN AND HEARD. WE'RE READY TO GO.
[00:00:03]
ALL RIGHT. WELL, GOOD MORNING ALL. THIS IS A MEETING OF THE BOARD.[Roll Call]
FINANCE COMMITTEE OF THE BOARD OF DIRECTORS OF THE EAST BAY REGIONAL PARK DISTRICT.WE'RE MEETING ON WEDNESDAY, APRIL 9TH, AND WE'RE BEGINNING AT 11 A.M..
IMAGINE THAT. WE DON'T HAVE ANYONE REMOTE TODAY.
SO I'M GOING TO ASK JULIE, OUR RECORDING CLERK, TO TAKE THE ROLL CALL OF THE COMMITTEE.
THANK YOU. CHAIR. COFFEY JULIE PADMORE, RECORDING CLERK.
TAKING ROLL. DIRECTOR WAESPI HERE. DIRECTOR. MERCURIO HERE.
CHAIR. COFFEY HERE. PARK DISTRICT. STAFF COORDINATORS IN THIS MEETING INCLUDE.
DEBORAH SPAULDING, ASSISTANT GENERAL MANAGER HERE.
LYNNE BOURGAULT, GENERAL COUNSEL HERE. TODAY'S MEETING IS BEING HELD PURSUANT TO THE BROWN ACT.
STAFF IS PROVIDING LIVE AUDIO AND VIDEO STREAMING.
MEMBERS OF THE PUBLIC WISHING TO MAKE A PUBLIC COMMENT MAY DO SO BY PROVIDING A COMMENT IN PERSON, JOINING LIVE VIA ZOOM WITH THE LINK PROVIDED ON THE AGENDA LOCATED ON THE DISTRICT WEBSITE.
IF THERE ARE NO QUESTIONS ABOUT THE MEETING PROCEDURES, WE WILL BEGIN OKAY.
THE NEXT ITEM IS APPROVAL OF MINUTES. WE DON'T HAVE ANY MINUTES BEFORE US.
SO WE'LL MOVE TO ITEM THREE WHICH IS PUBLIC COMMENTS ON ITEMS NOT ON OUR AGENDA.
DO WE HAVE ANY REQUESTS FOR SAME. CHAIR COFFEY WE DO NOT.
NO PUBLIC COMMENTS ON ITEMS? NOT ON THE AGENDA.
THANK YOU. AND I DON'T SEE ANYONE IN THE ROOM.
THERE ARE NO MEMBERS OF THE PUBLIC IN THE ROOM.
[Action Items]
SO ITEM FOUR ACTION ITEMS. FIRST ITEM IS RECOMMENDATION TO THE BOARD OF DIRECTORS TO ACCEPT THE UPDATE ON THE PARK DISTRICT AND CALPERS RETIREMENT PLANS. DEBORAH. ALL RIGHT.GOOD MORNING, DEB SPAULDING, AGM OF FINANCE AND MANAGEMENT SERVICES.
GIVE ME A SECOND WHILE I PULL UP THE PRESENTATION THAT WILL BE GOING OVER TODAY.
I'M GOING TO BE TURNING THIS OVER TO MARK SCHULTE, WHO'S HERE FROM VIA ACTUARIAL SOLUTIONS.
MARK'S OUR ACTUARY, AND HE'LL BE PRESENTING IN DETAIL ABOUT OUR CALPERS RETIREMENT PLANS.
BUT BEFORE HE BEGINS, JUST GIVE YOU A QUICK WALK THROUGH OF OUR RETIREMENT PLAN.
THEY WERE COMMONLY KNOWN AS THE TRANSAMERICA PLANS.
AND IT BECAME CLEAR IN THE LATE 1990S THAT THIS WASN'T THE MOST EFFICIENT WAY TO OPERATE.
AND SO WE TRANSITIONED NEW EMPLOYEES TO CALPERS.
SO THOSE PLANS HAVE BEEN CLOSED SINCE 2000 AND 2001.
IT MEANS THAT OUR CONTRIBUTIONS WILL BE GREATLY REDUCED IN THE FUTURE.
AND THEN WE HAVE OUR CALPERS PLANS, WHICH MARK IS GOING TO TALK THROUGH IN DETAIL.
AND THERE ARE SIX PLANS IN TOTAL FOR GENERAL AND SWORN EMPLOYEES.
AND WHICH PLAN YOU'RE IN DEPENDS ON WHEN YOU WERE HIRED AT THE PARK DISTRICT.
SO MARK WILL TALK ABOUT THE FUNDED STATUS OF THOSE PLANS, AND I'LL TURN IT OVER TO HIM.
AND ALL OF THE ACTUARIAL REPORTS ARE IN YOUR PACKET.
GOOD MORNING ONCE AGAIN, MARK SCHULTE FROM VIA ACTUARIAL SOLUTIONS, WHERE THE ACTUARIES FOR THE DISTRICT'S PENSION PLANS, THE TRANSAMERICA PLANS, YOUR RETIREE HEALTH CARE PLANS.
AND EVERY COUPLE OF YEARS OR SO, WE COME IN AND GIVE AN UPDATE ON YOUR CALPERS PLAN.
SO REALLY GLAD TO BE HERE TODAY. LET'S FLIP THROUGH.
WE'RE JUST GOING TO SPEND A FEW MINUTES ON SOME ACTUARIAL BACKGROUND, JUST BECAUSE THERE'S A LOT OF TERMINOLOGY THAT ENDS UP BEING PART OF THE CONVERSATION, I WANT TO MAKE SURE EVERYONE HAS KIND OF THE SAME CONCEPTS IN PLACE.
WE WILL GIVE SOME UPDATES ON THE EAST BAY CALPERS PLANS AND HOW THEY'RE DOING THEIR FUNDED STATUS, TALK A BIT ABOUT CALPERS CONTRIBUTIONS, AND THEN PROVIDE SOME ADDITIONAL CALPERS UPDATES ON THEIR RISK MITIGATION POLICIES, WAYS THAT THEY'RE TRYING TO STRENGTHEN THEIR PENSION SYSTEM.
SO AS DEB MENTIONED, THERE ARE SIX DIFFERENT PENSION PLANS THAT EAST BAY PARK DISTRICT EMPLOYEES PARTICIPATE IN DEPENDING ON WHEN YOU WERE HIRED AND TYPE OF EMPLOYMENT. THE LARGEST IS THE MISCELLANEOUS PLAN THAT CONTAINS BOTH CLASSIC AND PEPRA.
AND IF YOU'RE NOT FAMILIAR, PEPRA IS A PENSION REFORM LAW FROM 2013 THAT JUST HAS LOWER BENEFIT LEVELS CAPS ON THE COMPENSATION, JUST MORE SAFEGUARDS ESSENTIALLY ON THE PENSION SYSTEM ITSELF SO THAT THE BENEFITS ARE AT A SLIGHTLY LOWER LEVEL.
[00:05:02]
AND THEN THE SAFETY MEMBERS ARE IN ONE OF FIVE OTHER PLANS THAT RANGE FROM A CLASSIC PLAN.SO THE JULY 1ST, 2023 VALUATION WAS JUST PUBLISHED LATE LAST SUMMER, AND THAT WILL HAVE CONTRIBUTION RATES FOR THE 25 TO 26 PERIOD. SO ESSENTIALLY ALMOST TWO YEARS IN THE FUTURE WHEN THEY PROJECT THESE CONTRIBUTIONS.
IT WON'T REFLECT THE RECENT INVESTMENT VOLATILITY.
AND WE'LL TALK A LITTLE BIT ABOUT SOME PENSION REFINANCING THAT THE DISTRICT WENT THROUGH.
BUT DEPENDING ON WHERE THE MARKETS END UP BETWEEN NOW AND JULY 1ST OF THIS YEAR, A COUPLE YEARS DOWN THE ROAD, THERE MAY BE SOME ADJUSTMENTS COMING. SO WE'LL START OFF JUST A COUPLE MORE CONCEPTS HERE.
I LIKE TO THINK OF IT AS WHAT'S THE VALUE OF BENEFITS EACH ACTIVE EMPLOYEE ARE EARNING THIS YEAR FOR THEIR ADDITIONAL YEAR OF SERVICE WITH THE DISTRICT, AND THEN THE ACCUMULATION OF PAST SERVICE LIABILITY IS YOUR ACTUARIAL ACCRUED LIABILITY.
WHAT HAPPENS THEN IS CALPERS COMPARES THAT TO YOUR ASSETS EACH YEAR.
AND IF THERE'S ANY DEFICIENCY IT'S CALLED YOUR UNFUNDED LIABILITY OR YOUR.
YOU. SO I HAVE AN EXAMPLE HERE FOR THE MISCELLANEOUS PLAN.
AS OF JULY 1ST 23, THE ACCRUED LIABILITY WAS ABOUT 477 MILLION.
THERE WAS ABOUT 333 MILLION IN ASSETS, SO ABOUT $143 MILLION OF UNFUNDED LIABILITY AMOUNT.
AND THEN THE NORMAL COST WAS ABOUT 12.2 MILLION.
THIS AMOUNT ESSENTIALLY REVALUED EVERY VALUATION CYCLE SO THAT IT MOVES AROUND.
JUST A FEW MORE CONCEPTS HERE. CALPERS HAS THIS ILLUSTRATION.
THEY CALL IT THE CALPERS PENSION BOOK. AND IT'S SUPPOSED TO REPRESENT THE VALUE THAT IS POTENTIALLY ACCUMULATED BY INVESTING IN EQUITIES, BONDS, THINGS LIKE THAT. ESSENTIALLY HOW MUCH THE INVESTMENT RETURNS ARE EXPECTED TO PAY FOR EACH DOLLAR THAT'S EVENTUALLY PAID OUT TO A RETIREE.
AND SO WE HAVE THIS INVERSE RELATIONSHIP. IF THE FUND OF ASSETS HAS HIGHER INVESTMENT RETURNS THAN YOUR CONTRIBUTIONS GO DOWN TO PROVIDE THAT SAME LEVEL, THEIR INVESTMENT RETURNS GO DOWN OR YOUR ASSUMPTION GOES DOWN.
THEN YOU HAVE TO CONTRIBUTE MORE MONEY UPFRONT TO PAY FOR THE SAME LEVEL OF BENEFITS.
SO THERE'S THIS THIS INVERSE RELATIONSHIP. AND THIS WILL BECOME IMPORTANT AS WE TALK ABOUT SOME OF THE INITIATIVES CALPERS HAS TAKEN TO DE-RISK SOME OF THEIR INVESTMENTS AND LOWER THEIR INVESTMENT RETURN ASSUMPTION OVER THE PAST SEVERAL YEARS. BUT THE MAIN POINT I REALLY DO LIKE TO GET ACROSS HERE IS THAT INVESTMENT RETURNS ARE REALLY THE THE BIGGEST DRIVER OF OF COST VOLATILITY. DEMOGRAPHICS THOSE THINGS LIKE THAT THEY THEY CHANGE THE CONTRIBUTION RATES A LITTLE BIT.
BUT IT'S ALMOST ALWAYS THE INVESTMENT RETURNS THAT ARE GOING TO DRIVE CONTRIBUTION CHANGES.
I TOUCHED ON PEPPER A LITTLE BIT. I JUST WANT TO POINT OUT THERE ARE COST SHARING CHANGES SO THAT NORMAL COST, THE BENEFITS THAT ARE EARNED EACH YEAR. PEPPER ESSENTIALLY SPLITS THAT 5050 BETWEEN EMPLOYEES AND EMPLOYERS.
THAT'S KIND OF SEEN AS THE IDEAL RELATIONSHIP IN A PENSION PLAN IS THE CONTRIBUTIONS, AT LEAST AS THEY'RE EARNED, SHOULD BE SPLIT HALF AND HALF BETWEEN EMPLOYER AND EMPLOYEES.
AND THEN THE EMPLOYER PICKS UP THE TAB FOR ANY UNFUNDED LIABILITY THAT OCCURS IN THE FUTURE.
THE BENEFIT LEVELS WERE REDUCED. GENERALLY IT'S A 2% MULTIPLIER AT AGE 62 IS KIND OF THE MAXIMUM AMOUNT THAT PEPPER ALLOWS, AND THEN LIMITS ON THE COMPENSATION THAT CAN BE INCLUDED.
SO WE'LL SKIP AHEAD HERE TO THE PLANS AGAIN. AND I ALREADY MENTIONED THE UNFUNDED LIABILITY AS OF JUNE 30TH 23, ABOUT 143 MILLION FOR THE CLASSIC OR FOR THE MISCELLANEOUS PLAN AND THEN COMBINED FOR THE FIVE SAFETY PLANS, ANOTHER $35.5 MILLION. AND WHAT WE HAVE HERE IS JUST A CHART SHOWING THE GROWTH IN THE NUMBER OF MEMBERS IN THE MISCELLANEOUS PLAN.
[00:10:09]
AND AS DEB MENTIONED, YOU KNOW, THIS REALLY STARTED OUT IN 2000.AND THE DARK GREEN BAR, IT WAS ALL ACTIVE EMPLOYEES.
BUT OVER JUST THE PAST 22 YEARS OR SO, IT'S GROWN SUBSTANTIALLY.
SO THAT'S A BIG GROWTH. AND THESE PLANS TEND TO GET RELATIVELY MATURE.
THIS ONE IS STILL A PRETTY YOUNG PLAN. YOU HAVE MORE ACTIVE EMPLOYEES THAN RETIREES, BUT AT SOME POINT IN THE FUTURE, THAT'LL FLIP OVER DEPENDING ON TURNOVER RATES.
THE NEXT SLIDE IS SIMILAR. IT SHOWS THE GROWTH IN THE UNFUNDED LIABILITY FOR THE PLAN.
SO THE TOP LINE IS LIABILITY. IT'S A RED LINE.
AND FOR MOST PENSION PLANS THAT LIABILITY LINES GROW VERY SMOOTHLY OVER TIME.
THERE'S NOT A LOT OF BIG BUMPS, UPS AND DOWNS.
BUT THE DOTTED BLUE LINE IS THE PLAN ASSETS. AND AS I MENTIONED BEFORE, THE INVESTMENT VOLATILITY IS REALLY WHAT DRIVES THE SHADED REGION, WHICH IS THE UNFUNDED LIABILITY. SO THE DIFFERENCE BETWEEN THE TOP LINE THE LIABILITY AND THE BLUE LINE THE ASSETS IS THE UNFUNDED AMOUNT, AND THAT IS WHAT REALLY IS GOING TO AFFECT HOW QUICKLY YOU CAN DECREASE THE UNFUNDED LIABILITY IN YOUR PLAN, THE INVESTMENT RETURNS. AND THE OTHER PART IS CONTRIBUTIONS.
THEY'VE KIND OF GOTTEN TO THIS RATE WHERE I THINK THE EAST BAY PLANS ARE ROUGHLY 70, 75% FUNDED, AND IT'S DIFFICULT TO SORT OF MAKE THE NEXT STEP WITHOUT SOME ADDITIONAL CONTRIBUTIONS TO GET BEYOND THAT.
WHEN YOU CAN GET PAST THAT 80% FUNDED STATUS THRESHOLD, THEN IT CAN BE JUST A LITTLE BIT EASIER BECAUSE YOU HAVE ENOUGH MONEY IN THE BANK, ESSENTIALLY, THAT THE INVESTMENT RETURNS ON IT CAN PROVIDE A MEANINGFUL INCOME VERSUS IF YOU HAVE A SEVERELY UNDERFUNDED PLAN, SAY THE PLAN ONLY HAD $0.10 FOR EVERY DOLLAR.
BUT AS YOU KIND OF KEEP MAKING PROGRESS. YOU'LL SEE IT.
IT'LL ACCELERATE. SO THERE WAS A BIG DECREASE IN THE UNFUNDED LIABILITY IN 2021.
AT THE END, I SHOULD BE 630, PROBABLY 21. AND THEN OF COURSE, 2022 WAS NOT A GREAT YEAR.
SO WE KIND OF HAD A BACKSLIDE. BUT THE PAST TWO YEARS HAVE BEEN PRETTY DECENT.
CALPERS INVESTMENT RETURNS WERE ABOVE THE EXPECTATION LAST YEAR, AS WE'LL SEE IN THE NEXT SLIDE.
BUT THIS CURRENT YEAR REMAINS TO BE SEEN. ANY QUESTIONS ON THIS CHART? OTHERWISE, I'LL KEEP MOVING THROUGH THE INFORMATION.
THIS IS INVESTMENT RETURNS FROM CALPERS AND IT'S A PRETTY EXTENSIVE HISTORY.
AND WHAT WE LIKE TO FOCUS ON HERE IS THERE'S KIND OF A THICK BLACK DOTTED LINE RIGHT AROUND 7%.
AND THAT THAT HAD BEEN THE ASSUMPTION FOR SEVERAL YEARS.
SO IN 2023, THE INVESTMENT RETURN WAS 5.8%. SO THAT'S GOOD.
YOU KNOW IT'S A POSITIVE RETURN, BUT IT'S BELOW THE TARGET THRESHOLD OF 6.8%.
SO IT SHOWS UP AS A VERY SMALL ESSENTIALLY NEGATIVE RETURN.
BUT WE LIKE TO SHOW THEM RELATIVE TO THE ACTUAL ASSUMED RETURNS.
SO YOU CAN SEE ABOVE THE LINE IS GOOD, BELOW THE LINE IS BAD.
AND IT CAN TAKE A LONG TIME TO RECOUP WHEN YOU HAVE A BAD YEAR.
SO HERE WE SEE 2022. THAT WAS SUBSTANTIALLY BELOW THE EXPECTATION.
2023 WAS JUST A LITTLE BIT BELOW AND THEN 2024 WAS A LITTLE ABOVE.
BUT IT TAKES TIME TO TO PAY OFF THOSE INVESTMENT LOSSES.
QUESTIONS. OKAY. SO WE HAVE SIMILAR INFORMATION FOR THE SAFETY PLANS AGAIN.
THEY ARE MUCH SMALLER IN SIZE THAN THE MISCELLANEOUS PLAN.
BUT AGAIN WE'VE HAD THIS MORE STEADY POPULATION I'D SAY FOR THE SAFETY PLANS THAN THE MISCELLANEOUS.
[00:15:03]
WE HAVE LESS HISTORY THAT WAS AVAILABLE TO PUT TOGETHER THESE CHARTS.BUT THERE THERE'S ACTUALLY MORE RETIREES THAN ACTIVE EMPLOYEES.
SO I'D SAY THE SAFETY PLANS ARE JUST A LITTLE MORE MATURE THAN THE MISCELLANEOUS PLANS ON A POPULATION BASIS, BUT ON A FUNDED STATUS, IT'S ALMOST THE EXACT SAME PATTERN.
WE HAVE A GROWTH IN LIABILITY THAT'S REALLY PRETTY SMOOTH.
THOSE LINES JUST GO UP JUST BECAUSE BENEFITS ARE ESSENTIALLY GUARANTEED.
THE LIABILITY LINE DOESN'T MOVE MUCH OTHER THAN TO GO UP OVER TIME.
BUT THE INVESTMENT LINE IS WHAT WHAT VARIES. AND BECAUSE THERE ARE THE FUNDED STATUS FOR THE SAFETY PLANS, IT'S JUST A LITTLE BIT HIGHER THAN THE THE MISCELLANEOUS PLANS BECAUSE THERE'S MORE PEPPER MEMBERS ESSENTIALLY, THERE'S PROPORTIONALLY MORE PEPPER MEMBERS IN THE, IN THE SAFETY PLAN.
SO BECAUSE THEIR COSTS ARE A LITTLE BIT LOWER, THERE'S THEY HAVE A LITTLE BIT HIGHER FUNDED STATUS.
OKAY. SO WE WILL TURN TO THE CALPERS CONTRIBUTION INFORMATION.
AND JUST TO RECAP, AS I MENTIONED EARLIER, THE CONTRIBUTIONS THAT THE DISTRICT PAYS TO CALPERS EACH YEAR CONSIST OF TWO MAIN PIECES THE NORMAL COST, THE BENEFITS THAT ARE EARNED EACH YEAR, PLUS SOME SORT OF PAYMENT TOWARDS THE UNFUNDED LIABILITY.
AND THIS IS REALLY A KEY PRINCIPLE TO PENSION FUNDING.
I ALWAYS THINK OF IT AS IF YOU'VE GOT A HOLE, THE FIRST THING YOU DO IS STOP MAKING THE HOLE DEEPER.
YOU KNOW YOU'VE GOT TO PAY FOR YOUR CURRENT COSTS THAT YEAR, SO YOU'RE NOT MAKING THE HOLE DEEPER, AND THEN YOU START SHOVELING IN A LITTLE BIT, YOU KNOW, START PAYING OFF THAT UNFUNDED LIABILITY.
SOMETIMES IT JUST TAKES A WHILE FOR THOSE TO TO BEAR FRUITION.
AND NOTE IN THE TITLE, I CALL IT THE OLD AMORTIZATION SCHEDULE.
SO THE AMORTIZATION SCHEDULE IS ESSENTIALLY, HOW ARE WE PAYING DOWN THAT OLD UNFUNDED LIABILITY AND HOW CALPERS DOES IT, AS EACH YEAR WHEN THERE'S A DEVIATION FROM WHAT THEY EXPECT, THEY SET UP A PAYMENT PLAN FOR THAT NEW LIABILITY.
AND YOU GET ALL THESE LAYERS OF OF PAYMENTS THAT ARE ACCUMULATED OVER TIME.
AND THEN THE BLUE PART IS JUST THE NORMAL COST CONTRIBUTION THAT'S GOING IN.
SO ALL THINGS BEING EQUAL, THIS IS WHAT WE PROJECT THAT THE DISTRICT'S CALPERS CONTRIBUTIONS WOULD LOOK LIKE UNDER THE THE PAYMENT PLAN THAT WAS IN EXISTENCE AT JULY 1ST, 2023. SO THERE'S SOME SPIKES AS WE GET TOWARDS 25 AND 26 DROP DOWN.
AND THE OTHER THING YOU CAN DO IS FRESH START YOUR PAYMENT PLAN.
SO INSTEAD OF HAVING ALL THESE LEGACY ESSENTIALLY LAYERS FOR EACH OF THE LIABILITIES, YOU TAKE IT ALL AND YOU JUST SMUSH IT ALL TOGETHER AND AMORTIZE IT AS ONE PAYMENT. AND THERE ARE LOTS OF RULES ABOUT HOW THIS WORKS, BUT ESSENTIALLY THE IDEA IS TO SAVE ON THE INTEREST YOU'RE PAYING ON YOUR DEBT, THAT YOU'RE REFINANCING YOUR YOUR PENSION DEBT.
THEY SET UP WHAT WAS KNOWN AS THE PENSION STABILIZATION TRUST, ALSO KNOWN AS A 115 TRUST, AND YOU HAD ADDITIONAL FUNDS THAT WERE PUT INTO THIS TRUST.
AND THE IDEA IS AS YOUR CALPERS RATES CHANGE, YOU CAN DRAW FUNDS FROM HERE JUST SO THAT YOUR NET OUTLAY FOR PENSION CONTRIBUTIONS REMAINS RELATIVELY LEVEL. SORT OF LIKE JUST AN ADDITIONAL FUND WHERE YOU STORE PENSION ASSETS TO HELP SMOOTH OUT YOUR CONTRIBUTIONS.
WELL, WHAT WAS DONE LAST YEAR BECAUSE THE FUND HAD BEEN DRAWN DOWN A BIT.
ESSENTIALLY THE REMAINING ASSETS WERE ALL CONTRIBUTED TO CALPERS.
SO ABOUT $6.8 MILLION WAS CONTRIBUTED AS AN ADDITIONAL DISCRETIONARY PAYMENT, AND THE ENTIRE UNFUNDED LIABILITY WAS AMORTIZED OVER A 14 YEAR PERIOD. AND I THINK THE BIGGEST EMPHASIS ON WHY TO DO THIS IS WHEN YOU HAVE MONEY IN A STABILIZATION TRUST, IT IS INVESTED AND IT CAN POTENTIALLY EARN SOME INVESTMENT EARNINGS.
BUT CALPERS IS REALLY GOOD AT WHAT THEY DO AND THEY DO IT FOR A REALLY LOW COST.
SO ESSENTIALLY THE SOONER YOU CAN GET THEM YOUR MONEY, THEY CAN PUT IT TO WORK FOR YOU.
[00:20:05]
SO THERE'S A LOT GOING ON IN THIS CHART. IT'S VERY SIMILAR TO THE LAST ONE.AND ESSENTIALLY THE RED AREA IS YOUR NEW AMORTIZATION PATTERN.
AND YOU CAN SEE THAT STARTING IN 2025, IT'S MUCH MORE STABLE.
THAT'S JUST HOW PENSION PLANS WORK. BUT I THINK THIS REALLY HELPS TO PUT THE DISTRICT IN A BETTER POSITION GOING FORWARD, GIVEN THAT YOU HAD THESE EXCESS FUNDS AVAILABLE.
IT CUTS OUT SOME OF THE PEAKS OF THE OLD AMORTIZATION POLICY AND JUST SHORTENS EVERYTHING UP, SHORTENS UP THE PAYMENT PLAN, ESSENTIALLY. AND THERE'S A VERY INTERESTING TOOL THAT THAT CALPERS HAS.
AND I BELIEVE DEB WORKED WITH CALPERS ACTUARY.
AND THEY'LL TALK WITH YOU ABOUT, OKAY, WHEN SHOULD WE MAKE THIS CONTRIBUTION.
HOW LONG SHOULD WE REFINANCE THIS PATTERN FOR? AND THEY'LL HELP YOU WORK KIND OF AN OPTIMAL SOLUTION.
SO IT'S VERY SUBSTANTIAL COST SAVINGS FOR THE REFINANCE AND PUTTING IN THE ADDITIONAL CONTRIBUTIONS.
I SHOULD SAY, ANY QUESTIONS ON ON THE REFINANCING BEFORE I GO ANY FARTHER? OKAY. WELL, THE LAST PART OF MY PRESENTATION IS JUST A REAL HIGH LEVEL UPDATE ON SOME OTHER CALPERS ITEMS. THIS DATES BACK TO 2013. I THINK THE LAST TIME I WAS HERE TALKING ABOUT CALPERS PLANS WAS IN 2022.
THEY'RE ALWAYS REFINING THEIR DEMOGRAPHIC ASSUMPTIONS.
THEY ADJUSTED THEIR INVESTMENT RETURN ASSUMPTION.
BUT TWO THINGS THAT HAVE CHANGED RECENTLY IS LAST YEAR THE CALPERS RISK MITIGATION POLICY, WHAT THEY DO. A KEY ASPECT OF IT IS WHEN THEIR INVESTMENT RETURNS EXCEED THE ASSUMPTION BY AT LEAST 2%, THEY TAKE SOME OF THOSE EXCESS EARNINGS, AND THEY USE IT TO ESSENTIALLY FUND A REDUCTION IN THE INVESTMENT RETURN GOING FORWARD.
SO THEY WANT TO REDUCE THEIR ASSUMPTION FOR SOME MORE CONSERVATISM.
AND THEY CAN DO THAT WHEN THEY'RE IN A POSITION OF STRENGTH, ESSENTIALLY, WHEN THEY'VE HAD A REALLY GOOD INVESTMENT YEAR. AND THAT'S SUPPOSED TO BE AUTOMATIC. AND LAST YEAR THEY CHANGED THAT. SO IT'S NOT AUTOMATIC NOW.
IT ACTUALLY HAS TO GO THROUGH AN APPROVAL PROCESS.
GIVEN THAT WE KNOW THERE MAY BE SOME INVESTMENT LOSSES THAT WILL SHOW UP AT THE NEXT VALUATION.
THEN THE GOAL IS TO REDUCE THE FUTURE INVESTMENT RETURN ASSUMPTION BY ABOUT FIVE BASIS POINTS.
SO 5/10 OF A PERCENT. AND THEN ONWARDS AND UPWARDS ALL THE WAY UP TO IF YOU HAVE A, IF YOU EXCEED THE ASSUMPTION BY 17%, THERE'D BE A QUARTER POINT PERCENT REDUCTION.
AGAIN, THESE NOW NEED TO BE APPROVED NOT ARE NOT AUTOMATIC.
I DON'T THINK WE NEED TO WORRY ABOUT MANY OF THESE FOR FISCAL YEAR END 2025 AT THIS POINT.
BUT IT IS INTERESTING THAT THEY ARE REALLY AHEAD OF THE GAME, I'D SAY, OF ALMOST ANY OTHER PENSION SYSTEM IN THE COUNTRY AS FAR AS LOOKING AT PENSION RISKS VERSUS JUST INVESTING TO SORT OF GET AS MUCH RETURN AS POSSIBLE AND REGARDLESS OF THE VOLATILITY.
NOW, IS THAT A MEETING WITH A SPONSOR OF A STATEWIDE PENSION PLAN A FEW WEEKS AGO, AND THEIR INVESTMENTS ARE HELD AT THE STATE LEVEL AS WELL IN THEIR STATE BOARD OF INVESTMENT REPRESENTATIVE WAS THERE, AND THEY HAVE A VERY HEAVY EQUITY EXPOSURE.
AND SHE'S LIKE, YOU KNOW, WE DID GREAT IN THE THE THIS COMMISSION HAD ASKED HER TO COMPARE TO OTHER PENSION SYSTEMS. AND SHE'S LIKE, WE EARNED 11.5% DURING FISCAL YEAR END 24 AND CALPERS ONLY HAD 9%.
[00:25:04]
BUT THE ONLY REASON WE OUTPERFORM CALPERS THAT YEAR WAS BECAUSE WE HAD SUCH HEAVY EQUITY EXPOSURE.AND NOW WITH THE WAY THE MARKETS ARE, WE DON'T KNOW WHAT WE'RE GOING TO LOOK LIKE.
BUT ARE WE GOING TO REALLY BE AS GOOD AS CALPERS? PROBABLY NOT. YOU KNOW, JUST BECAUSE THEY HAVE TAKEN A MORE BALANCED APPROACH TO IT.
SO I THINK THIS YEAR WILL ACTUALLY BE A GREAT EXAMPLE OF HOW WELL HAVE THEY CHANGED THEIR INVESTMENTS AS FAR AS MITIGATING RISK WHEN YOU HAVE A DOWN YEAR? AS I MENTIONED THIS IS A COMPARISON OF THE NORMAL COST CONTRIBUTION RATES. AND I'LL JUST FOCUS ON THE MISCELLANEOUS PLAN FOR NOW.
SO THE THE GREEN IS THE MEMBER CONTRIBUTIONS, THE BLUE IS THE EMPLOYER.
AND VERSUS A CLASSIC MEMBER, THE CONTRIBUTION AMOUNT ISN'T SPLIT QUITE AS EVENLY.
AND THAT IS SOMETHING THAT I THINK IN THE FIRST FEW YEARS OF PEPPER, PEOPLE ARE THINKING, OH, WHY AREN'T OUR CONTRIBUTIONS GOING DOWN? WELL, IT'S ALL RELATIVE TO WHAT THEY WOULD HAVE BEEN. AND I THINK NOW WE CAN REALLY SEE THE BENDING OF THAT COST CURVE.
A LITTLE BIT OF INFORMATION ON SENSITIVITY TO THIS INVESTMENT RETURN ASSUMPTION.
SO I WON'T GO OVER THIS TOO MUCH. BUT ESSENTIALLY THE CURRENT ASSUMPTIONS, THE ONES THAT ARE IN THE BOX HAVE OUR BASELINE AMOUNT, WHERE THE UNFUNDED LIABILITY IS ABOUT $143 MILLION FOR THE MISCELLANEOUS PLAN.
AND WHAT CALPERS DOES IS THEY PROVIDE INFORMATION ON SENSITIVITY.
SO IF THAT ASSUMPTION WAS EVER REDUCED BY A FULL 100 BASIS POINTS DOWN TO 5.8%, THAT WOULD BE EXPECTED TO INCREASE THE UNFUNDED LIABILITY FROM 143 MILLION TO ABOUT $206 MILLION. SO THERE WE CAN SEE THIS RELATIONSHIP AS YOU DECREASE YOUR INVESTMENT RETURNS, ESSENTIALLY YOUR LIABILITY GOES UP. YOU GOT TO PUT MORE MONEY IN OR TO PAY FOR THE SAME BENEFITS.
THERE'S ALSO A THEORETICAL TERMINATION LIABILITY.
I'VE ONLY MAYBE SEEN THIS IN PLAY ONCE OR TWICE IN MY CAREER, WHERE AN AGENCY, FOR WHATEVER REASON, IS NO LONGER IN CALPERS. ESSENTIALLY, YOU PAY AT A VERY CONSERVATIVE RATE BECAUSE THEY KNOW ONCE YOU LEAVE, YOU'RE NEVER GOING TO PUT ANY MORE MONEY IN. SO WHATEVER MONEY THEY HAVE ON HAND WHEN YOU LEAVE THE CALPERS SYSTEM HAS TO BE ENOUGH TO ALMOST GUARANTEE ALL THE BENEFITS.
THIS IS LIKE 1.5% DISCOUNT RATE OR A 2% DISCOUNT RATE.
BUT WITH THE WAY INTEREST RATES HAVE GONE UP, IT'S CHANGED A BIT.
SO REALLY, JUST INFORMATIONAL PURPOSES ILLUSTRATE THE RELATIONSHIP BETWEEN THE SORT OF THE PINK SHADED AREAS, UNFUNDED LIABILITY AND CHANGES IN THE DISCOUNT RATE.
IT TAKES A LOT OF TIME AND EFFORT, ESPECIALLY AS CALPERS IS TRYING TO DE-RISK THE PLAN.
AND NOW WHO KNOWS WHAT FISCAL YEAR END 2025 IS GOING TO LOOK LIKE FOR CALPERS.
BUT PROGRESS IS BEING MADE. AND AS I MENTIONED BEFORE, I THINK THIS YEAR IS REALLY GOING TO BE INTERESTING TO SEE HOW WELL THEIR CHANGES TO THEIR INVESTMENT PROCESS PERSPECTIVES HAVE PAID OFF AS FAR AS REDUCING THE VOLATILITY OF THEIR RETURNS AND THE CONTRIBUTIONS FOR AGENCY MEMBERS.
SO THAT'S A LOT OF INFORMATION. I WANT TO SEE IF YOU HAVE ANY QUESTIONS.
IF YOU FEEL LIKE YOU UNDERSTAND SORT OF THE PULSE OF CALPERS PLANS, HOW THEY'RE DOING RIGHT NOW.
AN EXTREMELY GENERAL QUESTION. DON'T EVEN KNOW IF YOU CAN IF YOU HAVE THIS AT YOUR FINGERTIPS.
BUT WHAT IS THE AVERAGE RETIREMENT AGE HERE AT THE DISTRICT? I DO NOT HAVE THAT ON MY FINGERTIPS. IT NEVER OCCURRED TO ME UNTIL I'M LOOKING AT THOSE GRAPHS AND SEEING HOW IT HOW IT CHANGES OVER TIME, BUT THAT'S SORT OF A YOU KNOW, THE YOUNGER IT IS, THE MORE LIABILITY, YOU KNOW, THE MORE LOAD THAT WE HAVE TO CARRY. SO I'M JUST KIND OF CURIOUS ABOUT THAT.
[00:30:03]
RETIRED. GOOD QUESTION. YEAH. OKAY. THANK YOU.YEAH. THANK YOU. JUST ANECDOTALLY JOHN, I DON'T KNOW.
YOU KNOW, WHEN I CAME IN HERE, I WAS A CLASSIC EMPLOYEE, AND, YOU KNOW, IT WAS GREAT.
YOU GET 2.5% OR 2.5 MULTIPLIER AT 55. AND EVERYBODY SAID, WE'RE OUT OF HERE.
BUT YOU GET TO BE 55 AND YOU'RE YOU'RE THEORETICALLY YOUR CAREER IS PRETTY COOL.
YOU'RE STILL PRETTY YOUNG. AND I THINK PEOPLE STAY LONGER, IN MY OPINION.
BUT WHO KNOWS? ANYWAY, THANK YOU FOR THIS PRESENTATION.
SO I'M GLAD YOU'RE DOING THIS WORK. YOU SUGGEST THAT THE PARK DISTRICT IS RIGHT AROUND 70% FUNDED? YES. FOR THE MISCELLANEOUS PLAN. CORRECT. SO 70 TO 75 IS IS THE AVERAGE YOU WERE SAYING FOR OTHER AGENCIES? YEAH. I HEARD SOMEWHERE I DON'T KNOW WHERE, I CAN'T REMEMBER, BUT THERE'S NO REASON TO GO TO 100.
YOU JUST DON'T NEED TO DO THAT AS A BUSINESS PLAN.
70 TO 75 IS PROBABLY YOUR RIGHT IN THE SWEET SPOT.
AND THAT IS I HATE TO SAY IT, THAT IS AN OLD PENSION FUNDING MYTH.
AND WHAT I'VE USED TO BE TOLD IS 80% FUNDED. YOU'RE GOOD ONCE YOU'RE THERE.
AND THIS ISSUE BRIEFS CALLED THE 80% FUNDING MYTH.
AND YOU WANT TO BE AT 100%. I MEAN, THAT THAT IS THE GOAL.
IF YOU'RE NOT AT 100%, YOU WILL ALWAYS HAVE CONTRIBUTIONS THAT ARE IN EXCESS OF THE NORMAL COST, BECAUSE YOU'LL ALWAYS BE PAYING DOWN UNFUNDED LIABILITY IN PERPETUITY.
AND YOU JUST NEVER KNOW WHEN YOU ARE GOING TO HAVE A SHOCK TO THE SYSTEM.
SO I'D SAY 70%. YOU'RE IN GOOD COMPANY IN CALIFORNIA.
YOU KNOW, IT'S A RELATIVELY SOLID FUNDED RATIO, BUT CALPERS IS REALLY PUSHING TO GET PEOPLE TO 100%.
IT JUST TAKES TIME TO DO THAT. A COUPLE DECADES TO GET THERE.
AND BUILDING A CUSHION I'D SAY IS EVEN BETTER.
LIKE TO GET TO 110%. OKAY. SO SO HOW MANY PEOPLE IN YOUR EXPERIENCE OR I'M SURE YOU HAVE OTHER CLIENTS OR OTHER AGENCIES AROUND US THAT ARE ALL CALPERS, ARE PEOPLE CLOSE TO THAT? NO. NO. I'D SAY MOST CALPERS AGENCIES ARE IN THE 70S.
YOU KNOW, THAT'S JUST WHERE THEY ARE BECAUSE MOST JUST PAY THE REQUIRED CONTRIBUTIONS.
ONE OF THE KEY THINGS THERE IS NOT DOING BENEFIT IMPROVEMENTS TOO SOON.
AND THAT'S USUALLY WHERE WE SEE PEOPLE GO WRONG, IT'S LIKE, OH, WE WENT FROM 80 TO 90.
NOW WE'RE GOING TO IMPROVE BENEFITS OR WHATEVER IT MIGHT BE.
AND IT JUST IT'S LIKE ONE STEP FORWARD AND TWO STEPS BACK.
SO I'D SAY YOU'RE IN GOOD COMPANY FOR CALPERS AGENCIES NATIONWIDE.
THERE'S THERE'S A LOT OF PLANS THAT ARE REALLY IMPROVING THEIR FUNDED STATUS.
IT'S THE ONES YOU HEAR IN THE NEWS. OH GOSH, I DON'T KNOW IF IT'S NEW JERSEY ONES THAT ARE SOME OF THE ILLINOIS PLANS, 50% FUNDED SOMETHING LIKE THAT. THOSE ARE KIND OF CRITICALLY FUNDED, ESPECIALLY AS YOU HAVE MORE RETIREES.
THAT MEANS THERE'S A LOT MORE CASH GOING OUT THE DOOR.
AND TREND WISE, THAT WOULD BE THE WAY WITH YOUR GRAPH THERE.
YEAH. SO THAT'S WHAT I WAS SAYING, THAT THE ADDITIONAL PAYMENT YOU MADE THIS YEAR WAS GREAT.
YOU KNOW, IT'S 100% CERTAIN THAT YOU'RE GOING TO HAVE TO PAY THESE RETIREMENT BENEFITS.
AND THOUGH IT'S MAYBE NOT THE MOST GLAMOROUS PLACE TO PUT MONEY, IT REALLY DOES A GREAT JOB OF SAVING COSTS DOWN THE ROAD BY REDUCING THAT INTEREST PAYMENT. AND WHEN WE REFER TO I DON'T KNOW IF DEBORAH WOULD ANSWER THIS QUESTION OR DEB.
IS THAT CORRECT? OH, IS THAT ONE OF THE ACTUARIAL REPORTS?
[00:35:04]
PAGE 78. YES, THIS IS THE TRANSAMERICA PLAN. THAT IS CORRECT. YEAH. WOW. YEAH. AND THAT GETS BACK TO YOUR POINT ABOUT SOMEBODY WHO RETIRES AT 55 OR 60. THEY'RE GOING TO RECEIVE A PENSION PAYMENT FOR DECADES.I MEAN, THAT'S REALLY WHERE A LOT OF COST COMES FROM.
THE TRANSAMERICA PLANS ARE ESSENTIALLY ALMOST ONLY RETIREES AT THIS POINT.
I THINK THERE'S A COUPLE OF FOLKS THAT HAVEN'T STARTED THEIR BENEFIT, BUT THEY'RE ALMOST ONLY RETIREES. SO THOSE CONTRIBUTIONS, THERE'S NOTHING COMING OUT OF ANYBODY'S PAYCHECK AT THIS POINT. IT ALL COMES STRAIGHT FROM THE DISTRICT TO PAY THAT OFF.
ALL RIGHT. WELL, THANK YOU VERY MUCH. OKAY. AM I MISTAKEN? DEB OR MARK? I RECALL SEVERAL YEARS AGO WE WERE APPROACHING 80%.
OH, YEAH. YEAH, I THINK THAT WAS. PROBABLY THIS ONE.
PROBABLY 21. 22. IT WAS IT WAS ABOUT 80%. YEAH.
ALMOST FOR ONE YEAR. 22 WAS A REALLY TOUGH INVESTMENT YEAR FOR MOST PEOPLE.
ALL RIGHT. THAT'S WHY THAT 80% FIGURE WAS STILL IN MY MEMORY.
SO THAT WAS AN ABERRATION, CORRECT? THAT YEAR? YEAH. SO NOW WE'RE ON A 14 YEAR PLAN TO GET IT TOWARD 100.
IS THAT WHAT I HEARD? I MEAN, YES, WE ARE ON A A LONG SAGA.
MAYBE IT'LL BE 14 YEARS. WE DON'T KNOW. BUT I GUESS SO TALKING.
SO IN AUGUST OF THIS YEAR, WE WILL GET THE GO BACK TO ONE OF THE EARLIER SLIDES WHERE YOU THIS ONE.
SO IT TAKES A LONG TIME FOR US TO GET OUR VALUATIONS.
SO JULY, THE JULY 1ST, 2024 VALUATION REPORT.
WE'RE GOING TO GET THIS AUGUST. AND I HOPE IT'S GOING TO SHOW THAT WE'VE GOTTEN A BETTER FUNDED STATUS BECAUSE WE MADE THAT ADP AND BECAUSE WE DID THAT FRESH START. AND BUT THEN OF COURSE, THERE'S THE WHO KNOWS HOW THE INVESTMENTS WILL TURN OUT FOR THIS YEAR. SO THERE'S JUST LOTS OF CONTRIBUTING FACTORS. SO IT'S IT'S EVERY YEAR IS A NEW ADVENTURE.
WHY DOES IT TAKE A YEAR. THEY HAVE A LOT OF ACTUARIAL REPORTS TO PREPARE.
MANY MANY HUNDREDS OF THEM. YEAH. IT IT JUST TAKES CALPERS A LONG TIME TO GET THE REPORTS DONE.
SO THAT'S ALMOST A LITTLE UNFORTUNATE BECAUSE THE QUICKER YOU CAN RESPOND WHEN THERE'S A DOWNTURN AND PUT MONEY IN, THE BETTER. BUT IF IT DOESN'T SHOW UP FOR TWO YEARS DOWN THE ROAD, A LOT CAN HAPPEN IN THOSE INTERVENING.
DON'T WE HAVE A GOOD FEEL FOR WHAT'S HAPPENING, THOUGH? OVER TIME? I REALIZE, YOU KNOW, WE'RE TALKING ABOUT THE LAST SEVERAL WEEKS AND AND WE DON'T KNOW WHAT THE NEXT SEVERAL WEEKS ARE GOING TO HAPPEN. BUT BY THE END OF THE YEAR, DON'T WE HAVE A GOOD FEEL FOR HOW CALPERS IS GOING TO DO? YEAH. AND ACTUALLY, ONE THING THAT THAT IS NOW AVAILABLE, I MENTIONED THIS CALPERS PENSION OUTLOOK TOOL.
AND THEY PRELOAD ALL YOUR MOST RECENT ACTUARIAL RESULTS IN THERE.
SO NO MATTER WHAT YOU'RE GOING TO DO WITH THAT INFORMATION, IT JUST STRIKES ME AS PRUDENT. YEAH, YEAH, IT'S A VERY POWERFUL TOOL. I MEAN, IT'S A VERY GLAMOROUS SPREADSHEET, ESSENTIALLY, BUT IT'S GOT A LOT OF INFORMATION PACKED INTO IT.
THE PENSION STABILIZATION FUND IS EMPTY NOW. WE'VE WE'VE CONTRIBUTED ALL INTO THE CALPERS SYSTEM.
YEAH, THERE'S ABOUT 84,000 REMAINING IN IT THAT WE'RE GOING TO DRAW DOWN THIS YEAR.
AND THEN IT WILL BE EMPTY. AND IS THE DECISION TO DO THAT BASED ON HOW WELL CALPERS IS DOING WITH THEIR INVESTMENT FUNDS, AS OPPOSED TO HOW THAT FUND DID. SO YEAH, THE DECISION TO TAKE ALL THOSE FUNDS AND PUT THEM TO CALPERS.
THERE WERE A BUNCH OF FACTORS. ONE IS CALPERS IS IS MORE EFFICIENT AT INVESTING.
SO PARS YOU KNOW, THEY IT WAS NICE HAVING THAT SET ASIDE.
BUT THEY DO CHARGE A HIGHER FEE FOR MANAGING THOSE FUNDS FOR US.
[00:40:01]
AND IT'S JUST ONE MORE FUN TO HAVE TO MANAGE.AND WE HAD. TO FLIP AHEAD TO A DIFFERENT SLIDE.
WE HAD SET ASIDE THOSE FUNDS TO ADDRESS THIS SITUATION.
SEE THIS BIG? YES. AND SO WE'VE NOW PASSED THAT SITUATION.
WE'VE GOTTEN PAST THE PEAK. AND SO WE STILL HAD SOME FUNDS LEFT OVER.
AND SO WE WE COULD HAVE HELD ON TO THEM FOR, YOU KNOW, A RAINY DAY.
BUT LOOKING AT THE POSSIBILITY OF GETTING THE $18 MILLION IN SAVINGS FROM INTEREST THAT WE WOULDN'T HAVE TO PAY, SEEMED LIKE, YOU KNOW, A BIRD IN THE HAND IS WORTH TWO IN THE BUSH.
WELL, FOR ALL THOSE YEARS WHEN INTEREST RATES WERE CLOSE TO ZERO AND OUR REGULAR INVESTMENTS ON OUR SURPLUSES WERE NOT EARNING SIGNIFICANT RETURNS AT ALL. IT MADE SENSE TO ME THAT WE USED THAT PENSION STABILIZATION FUND BECAUSE THE INVESTMENT PORTFOLIO, SO TO SPEAK, WAS LESS CONSERVATIVE THAN THAT OF OUR SURPLUS FUNDS.
SO YOU WERE PUTTING SURPLUS INTO A FUND THAT COULD EARN MORE YES, THAN BECAUSE GENERALLY, YOU CAN INVEST A LITTLE MORE LIBERALLY WITH RETIREMENT FUNDS THAN YOU CAN WITH PUBLIC AGENCY SURPLUS.
SO THAT ALL MADE SENSE TO ME. AND IF THAT ECONOMICS DOESN'T APPLY CURRENTLY BECAUSE OF THE COST OF THAT FUND OR WHATEVER, OR WE'RE GETTING A BETTER RETURN ON US ON OUR SURPLUS INVESTMENTS.
SO I SEE. THAT'S JUST WHAT GOES INTO THE CALCULATION.
I'M JUST I'M TALKING OUT LOUD JUST TO SEE IF MY MEMORY IS RIGHT.
YEAH. OKAY. ANY OTHER. THANK YOU FOR THE PRESENTATION.
VERY USEFUL. SCHOOL. GOOD FOR US TO KNOW. GREAT.
THANK YOU. SOUNDS GENERALLY GOOD. YES. YOU'RE ON THE RIGHT PATH.
YEAH. AS I MENTIONED, I THINK, MARK, IF YOU COULD SPEAK INTO THE MIC, AS I MENTIONED THE STEPS THAT YOU'VE TAKEN WITH THAT PENSION STABILIZATION FUND ACTUALLY USE IT. I THINK WE'RE THE PRUDENT PATH TO TAKE.
YOU WANT IT TO BE THERE SO YOU CAN DRAW UPON IT. AND NOW IT'S JUST IN WITH THE GENERAL CALPERS FUND, AND THEY'RE DOING WHAT THEY DO BEST WITH IT. OKAY.
MAKES SENSE. THANK YOU. THANK YOU. DEB. YEAH.
AND THEN WE DO NEED A RECOMMENDATION ON THIS.
ANY PUBLIC COMMENT? WE'RE LOOKING AT ZOOM IN THE ROOM.
THAT'S CORRECT. WE'RE LOOKING AT ZOOM IN THE ROOM. WE HAVE NO MEMBERS OF THE PUBLIC IN THE ZOOM ROOM OR IN THE BOARD BOARDROOM, SO THAT MEANS NO PUBLIC COMMENTS FOR THIS ITEM.
THANK YOU. MEADOW ACCOUNTS. APOLOGIES. MEADOWS BEHIND THE PILLAR.
SO YES. WELCOME, MEADOW. YOUR PUBLIC. THANK YOU FOR ATTENDING.
ALL RIGHT. WELL, IS THERE A MOTION ON THE RECOMMENDATION TO THE FULL BOARD TO ACCEPT THE UPDATE? SO MOVED. SECOND, IT'S BEEN MOVED AND SECONDED ITEM FOR A ALL IN FAVOR SAY AYE.
AYE. ANY OPPOSED. ANY ABSTENTIONS. SO 3 TO 0 SUPPORTING THE RECOMMENDATION TO THE FULL BOARD.
MOVING TO ITEM FIVE INFORMATIONAL ITEMS. PRELIMINARY UNAUDITED.
[Informational Items]
GENERAL FUND AND OTHER GOVERNMENT FUNDS. FINANCIAL REPORTS FOR FOURTH QUARTER 24.DEB. ALL RIGHT. I AM VERY HAPPY TO. WELCOME TO THE PODIUM KAREN SEACAT, WHO'S OUR NEW ASSISTANT FINANCE OFFICER. SHE'S BEEN AT THE PARK DISTRICT FOR APPROXIMATELY FIVE MONTHS.
THANK YOU. AND SO SHE'S GOING TO SHE'S VERY BRAVELY, GAMELY AGREED TO DO THIS PRESENTATION.
SO I'M GOING TO TURN IT OVER TO KAREN. THANK YOU. WOULD YOU REPEAT IT'S KAREN.
KAREN? YES. AND WHAT IS HER POSITION? OH, ASSISTANT FINANCE OFFICER.
ASSISTANT FINANCE OFFICER. WELCOME. THANK YOU.
COLIN. SORRY, I'M TOO SMALL. I NEED THAT STEP.
THANK YOU. GOOD MORNING, KAREN SEACAT, ASSISTANT FINANCE OFFICER OF FINANCE AND MANAGEMENT SERVICES.
[00:45:01]
THIS IS THE YEAR END LOOK BACK IN 2024 AND THESE NUMBERS ARE STILL UNAUDITED.SO JUST A CAVEAT THAT IT MAY STILL BE SUBJECT TO CHANGE.
SO WE PLAN TO PRESENT THE AUDITED FINANCIAL REPORTS TO YOU IN THE NEXT COUPLE OF MONTHS.
SO HERE IS THE HIGH LEVEL SUMMARY OF THE GENERAL FUNDS REVENUES AND EXPENDITURES.
THE BUDGETED AMOUNT REFLECTED HERE IS THE AMENDED BUDGET AND NOT THE ADOPTED BUDGET.
AND SO THIS ALREADY INCORPORATED ANY BUDGET ADJUSTMENTS THROUGHOUT THE YEAR.
SO OUR AMENDED BUDGET FOR 20, FOR 2024 FOR REVENUES IS AT 214.5 MILLION.
AND WE CAME AT 221 229.3 MILLION, WHICH IS 6.9% ABOVE BUDGET.
ON THE EXPENDITURE SIDE, WE HAVE BUDGETED 250.8 MILLION AND WE LANDED AT 247 MILLION, WHICH IS AT 98.5% OF THE BUDGET. SO THIS WAS A GRAPH THAT WAS REQUESTED IN PRIOR YEARS TO GIVE A VISUAL REPRESENTATION OF THE DISTRICT'S PROPERTY TAX RECEIPTS.
SO AS YOU CAN SEE HERE, WE RECEIVED REVENUES ABOVE BUDGET IN THE LAST THREE QUARTERS OF THE YEAR.
SO THIS CATEGORY IS JUST DIFFICULT TO PROJECT BECAUSE PAYMENTS ARE BASED ON INDIVIDUAL AGREEMENTS WITH THE WITH EACH REDEVELOPMENT THAT WE THAT WERE ENTERED INTO AS PART OF THE DISSOLUTION OF THE DA'S. ACE. SO LOOKING MORE INTO THE DETAILS OF THE REVENUES AND EXPENDITURES. SO FOR THE REVENUES MENTIONED EARLIER, THE LARGEST SOURCE FOR THE PARK DISTRICT IS THE PROPERTY TAXES.
WE BUDGETED TO BRING IN 196.1 MILLION, AND WE ENDED UP RECEIVING 200.8 MILLION, WHICH IS 2.4% ABOVE BUDGET. SO THE INCREASE HAS BEEN STEADY AND CONSISTENT FROM YEAR TO YEAR.
SO MOVING DOWN, WE HAVE THE PROPERTY USAGE, WHICH CAME IN 23.5% ABOVE BUDGET.
AND THIS IS DUE TO THE RATE INCREASE FOR GRAZING LEASES.
AND THEN NEXT WE HAVE THE INVESTMENT EARNINGS AND OTHERS.
BUT IN 2024, WE'RE LUCKY TO POST A SOLID $9.6 MILLION OF REALIZED GAINS FROM THESE INVESTMENTS.
AND THEN LASTLY, WE HAVE THE TRANSFER IN, WHICH IS ALWAYS THE SAME AMOUNT AS THE BUDGETED.
SO COMPARED TO 2023 WE ACTUALLY INCURRED A ROUGHLY 23 MILLION MORE.
AND AS MENTIONED EARLIER, THIS HAD INCLUDED THE ONE TIME ADDITIONAL DISCRETIONARY PAYMENT TO CALPERS TO OF 6.8 MILLION TO PAY DOWN OUR NET PENSION LIABILITY. IN ADDITION TO THAT, WE ALSO HAD COLA OF 3% IN APRIL AND 2% IN NOVEMBER FOR AFSCME REPRESENTED EMPLOYEES. AND ACCORDINGLY, WE ALSO HAD THE 3% INCREASE IN OCTOBER OF 2023 AND 1% IN FEBRUARY FOR OUR PA MEMBERS. SO IN ADDITION TO THAT, WE ALSO HAVE THE COST OF MEDICAL PREMIUMS GO UP BY ROUGHLY 10%, WITH MOST OF OUR DISTRICT EMPLOYEES BEING ENROLLED IN THE KAISER MEDICAL PLAN.
THAT COST HAS INCREASED ABOUT 2 MILLION FROM PRIOR YEAR.
SO MOVING ALONG, WE HAVE THE SUPPLIES AND SERVICES WHICH WERE SLIGHTLY BELOW BUDGET, BUT WE IF WE FACTOR IN THE ENCUMBRANCES, THE TOTAL EXPENDITURES WILL BE ROUGHLY CLOSER TO THE BUDGETED AMOUNTS.
SO ENCUMBRANCES ARE THE REMAINING AMOUNTS ON THE PURCHASE ORDERS THAT WE HAVE YET TO RECEIVE THE GOODS AND SERVICES FROM OUR CONTRACTED VENDORS, AND WE CARRY THESE FUNDS TO THE NEW YEAR AND PAY THESE VENDORS ONCE WE RECEIVE THE GOODS AND SERVICES.
AND THEN ALL THE OTHER EXPENSES INTERFUND CHARGES, WHICH IS WHICH ARE THE ISF CHARGES.
AND THEN THE TRANSFER OUTS ARE ALL THE SAME AS THE BUDGETED AMOUNTS.
[00:50:02]
SORRY. ATTACHMENT A ON PAGE 352 OF YOUR PACKET, WE ACTUALLY HAVE A BREAKDOWN OF THE EXPENDITURES BY DIVISION.SO HERE ON THIS GRAPH WE HAVE THE PARK DISTRICT'S TOTAL REVENUES IN THE PAST FIVE YEARS.
AND IT'S BEEN GROWING STEADILY. BUT AS YOU COULD SEE WHEN COMPARED TO OUR LARGEST SOURCE OF REVENUE, WHICH IS THE PROPERTY TAXES IN 2024, FOR THE INCREASE IS NOT AS STEEP AS THE PREVIOUS YEARS.
ON THE CONTRARY, THE TOTAL EXPENDITURES IN THE PAST FIVE YEARS HAS BEEN STEEPLY GOING UP DUE TO INFLATION, HIGHER COST OF GOODS AND SERVICES IN GENERAL.
WE ALSO HAD STARTED BIG PROJECTS IN 2024 TO NAME A FEW.
WE HAD THE RFP FOR A NEW ERP SYSTEM, AND WE ALSO STARTED WORKING ON THE DISTRICT'S MASTER PLAN.
COMPARED TO THE SALARIES AND BENEFITS, WHICH IS OUR LARGEST EXPENDITURE.
THE INCREASE WAS ALSO STEEP THIS YEAR DUE TO THE COLA AND THE ONE TIME PAYMENT TO CALPERS, AS DISCUSSED EARLIER. AND THEN WE DO HAVE OTHER GOVERNMENTAL FUNDS.
BUT JUST TO GO OVER THAT, WE HAVE THE SPECIAL REVENUE FUNDS, WHICH INCLUDES THE MEASURE F FUNDS ZONE OF BENEFIT MEASURE WW LOCAL GRANTS. SO THIS YEAR WE HAVE A SIGNIFICANT INCREASE IN OUR REVENUE.
AND THEN FOR THE PROJECT FUNDS, WE ALWAYS HAVE THIS VARIANCE, JUST PRIMARILY DUE TO THE TIMING OF WHEN WE RECEIVE THE GRANTS VERSUS WHEN THEY WERE BUDGETED. AND SIMILARLY FOR THE EXPENDITURES WHERE WE APPROPRIATE THESE FUNDS.
BUT THEN IT JUST TAKES A WHILE FOR THESE FUNDS TO BE USED.
AND THIS YEAR WE ALSO ISSUED PROMISSORY NOTES.
SO THAT'S BEING ADDED TO THESE FUNDS AS WELL.
AND THEN LASTLY WE HAVE THE ISF WHICH INCLUDES THE WORKERS COMP, GENERAL LIABILITY, EMPLOYEE BENEFITS, MAJOR INFRASTRUCTURE RENOVATION REPLACEMENT FUND AND THE EQUIPMENT REPLACEMENT FUND.
SO AS MENTIONED EARLIER, THIS REPORT IS JUST INFORMATIONAL ONLY FOR NOW.
AND WE INTEND TO BRING THE AUDITED ACT FOR TO THE FINANCE COMMITTEE SOMETIME IN JUNE.
THAT'S IT. OKAY. THANK YOU KAREN. THANK YOU. QUESTIONS FROM THE COMMITTEE.
JOHN. DENNIS. OH, GREAT. SO, DEB, DESPITE OUR BEST EFFORTS, WE STILL HAVE A SIGNIFICANT FUND BALANCE. I KNOW AND I'M REFERRING, OF COURSE, TO.
WE USED TO PRETTY MUCH AUTOMATICALLY CREATE A FUND BALANCE IN TERMS OF HOW WE BUDGETED FOR EMPLOYMENT OR VACANCIES AND SUCH, AND THERE WAS AN EFFORT MADE TO DO MORE ACCURATE BUDGETING SO THAT WE WOULDN'T AUTOMATICALLY HAVE A SIGNIFICANT FUND BALANCE. SO HOW IS THAT REFLECTED HERE? IT'S JUST THE NATURE OF PROPERTY TAXES. WE ACTUALLY SO WE DID A LOT.
SORRY. WE KNOW WHAT HAPPENED. SORRY. I'M TRYING TO PULL UP BECAUSE IT WAS AT THE END.
SORRY. IT'S NOT A BAD PROBLEM, OBVIOUSLY, BUT I DID WANT TO POINT OUT.
SO WE ACTUALLY DID. SO OUR BUDGET FOR SALARY AND BENEFITS WAS 141.4 MILLION.
AND THAT'S BECAUSE WE HAD THE MOU APPROVED, BUT WE HADN'T BUDGETED FOR THAT INCREASE.
SO IT'S AN UNUSUAL CIRCUMSTANCE, BUT WE ARE WE'RE WE'LL SEE HOW WE LAND.
[00:55:04]
IF WE'LL HIT THAT 32% RESERVE. THAT'S WHAT THE WE HAVE A POLICY THAT SAYS WE'RE GOING TO HAVE A UNASSIGNED RESERVE OF 32% OF ANNUAL REVENUES.AND THAT'S GOING TO MAKE A DIFFERENCE. WE'RE SUPPOSED TO HAVE IT BY APRIL 30TH.
AND THEN A FEW OTHER THINGS THAT WE'RE WAITING TO, TO RECORD, AND THEN WE'LL KNOW HOW WE'RE DOING WITH THE FUND BALANCE. BUT IT'S NOT IT'S NOT GOING TO BE THAT SAME PICTURE OF HAVING A LOT OF SURPLUSES WE'VE HAD IN THE PAST.
SHUCKS. I KNOW. SORRY. BUT THAT'S WHAT WE WANTED.
WE WANTED TO TO NOT HAVE THAT ANYMORE. SO. HAVE WE BEEN TAPPING RESERVES FOR THE BUILDING ACROSS THE STREET? YES. SO. CORRECT. SO LAST YEAR, WHEN WE ISSUED OUR PROMISSORY NOTES RIGHT BEFORE WE DID THAT, WE TOOK SO, SO WE HAVE OUR UNASSIGNED FUND BALANCE.
AND THEN WE ALSO HAD A SEPARATE FUND BALANCE THAT WAS SET ASIDE FOR WORKERS COMP AND THEN ALSO FOR FIRST QUARTER EXPENSES. AND WE TOOK THOSE AND WE SET THEM PUT THEM TOWARDS THE COST OF THE BUILDING SO THAT THAT ALSO SHRANK OUR RESERVES.
SO THERE'S DIFFERENT BUCKETS OF RESERVES. AND I KNOW YOU HAD ASKED TO HAVE A REPORT ON OUR DIFFERENT FUND BALANCES, SO WE'RE PLANNING TO BRING THAT IDEALLY IN JUNE.
IF WE CAN GET ALL OF OUR BOOKS CLOSED IN TIME, THAT'D BE TERRIFIC.
OKAY. THANK YOU. YOU'RE WELCOME. ANY PUBLIC COMMENT? YES, CHAIR. COFFEY. WE HAVE ONE PUBLIC COMMENT BY MEADOW DARCY WITH AFSCME.
OH, BOY. GOOD AFTERNOON. BOARD DIRECTORS AND STAFF.
MY NAME IS MEADOW DARCY AND I AM REPRESENTING AFSCME LOCAL 2428.
I JUST WANTED TO MAKE A COUPLE OF COMMENTS ON THE REPORT.
FIRST, I JUST WANTED TO LET YOU ALL KNOW THAT THERE WAS NO, THERE WAS SUPPLEMENTAL INFORMATION, I GUESS THAT WAS POSTED TO THE WEBSITE, BUT IT WAS NOT PRINTED OUT HERE. SO THERE WAS A FEW THINGS THAT WERE REFERENCED TO THAT I COULDN'T FOLLOW ALONG BECAUSE IT WASN'T HERE.
SO MALU CAME DOWN AND GRACIOUSLY TOLD ME THAT IT IS ON THE WEBSITE.
BUT I ALSO JUST WANT TO MAKE SURE IT'S HERE FOR THE PUBLIC SO THAT THEY CAN FOLLOW ALONG.
AND I'VE MENTIONED THIS BEFORE. JUST WANT TO POINT OUT THE STAFF VACANCIES.
IT IS SOMETHING THAT WE'RE SEEING A LOT OF THIS I KNOW IS FOR THE END, THE PERIOD ENDING DECEMBER 31ST, 2024. WE HAVE SEEN QUITE A FEW MORE STAFF VACANCIES COMING UP, AND WE HAVE SEEN A LOT MORE CONTRACTING OUT OF OF OUR WORK.
AND SO WE REALLY WANT TO JUST PUSH FORWARD THAT MESSAGE OF MAKING SURE THAT WE'RE STAFFED APPROPRIATELY AND THAT PEOPLE THAT DO COME HERE WANT TO STAY HERE AND HAVE, YOU KNOW A GOOD LEVEL OF BENEFITS IN ORDER TO STAY.
THERE WAS ALSO ON NUMBER TEN, I THINK IT SAYS FIRE AND LIFEGUARD EXPENDITURES FOR SALARY AND BENEFITS ARE 17.1% OVER BUDGET DUE TO SEASONAL OVERTIME. AND I WAS HOPING MAYBE THERE COULD BE AN ANSWER TO THIS QUESTION.
WHEN THIS REPORT CAME OUT LAST YEAR, I DID ASK THIS QUESTION BECAUSE IT SEEMS STRANGE TO ME THAT FIRE AND LIFEGUARD ONLY HAS ONE SEASONAL OCCUPATION AND THAT IS LIFEGUARD. AND SO IT CONCERNED ME THAT IT WAS 17.1% OVER FOR LIFEGUARDS.
SO WHEN I ASKED THE QUESTION AT THAT TIME, THE ANSWER WAS THAT IT WAS ACTUALLY DUE TO ALMOST ALL CLASSIFICATIONS HAD EXCESSIVE OVERTIME. HOWEVER LIFEGUARD WAS IN THAT LIST, BUT THERE WAS 12345678, NINE OTHER CLASSIFICATIONS THAT CONTRIBUTED TO THAT. AND SO I JUST WANT TO MAKE SURE THAT WE'RE NOT SAYING THAT THIS IS DUE TO A SEASONAL OCCUPATION, BECAUSE THOSE ARE ALL FULL TIME OCCUPATIONS. AND IF THERE IS ADDITIONAL OVERTIME GOING FOR THOSE CLASSIFICATIONS, I THINK IT'S IMPORTANT TO HAVE THAT INFORMATION VERY SPECIFIC SO THAT WE CAN ADDRESS THAT ISSUE.
BUT AGAIN, THOSE ARE NOT SEASONAL POSITIONS. SO WE JUST WANT TO MAKE SURE THAT THAT'S CLARIFIED.
AND SO I GUESS MY QUESTION WOULD BE CAN WE CLARIFY THAT? BUT ALSO CAN WE CLARIFY THAT FOR THIS TIME PERIOD AS WELL? IS THAT ONLY DUE TO LIFEGUARDS OR IS THAT DUE TO OTHER OCCUPATIONS AND THAT'S IT.
THANK YOU. OH, SORRY. I DID HAVE ONE MORE. SURE I DID HAVE ONE MORE.
[01:00:03]
SERVICES HAD AN INCREASE IN PATRON USE AND MORE HOT DAYS IN YEARS PAST.THERE WAS AN INCREASE IN SEASONAL STAFF WANTING TO WORK LESS HOURS.
SO JUST WANTED TO BRING THAT UP THAT WE DO HAVE A LOT OF YOUNG PEOPLE THAT, DUE TO THE LIMITATION ON HOURS, ARE HAVING TO SEEK ALTERNATE EMPLOYMENT. SO WE ARE HOPING TO IMPROVE THAT AND MAKE MORE PERMANENT OCCUPATIONS FOR THEM.
THAT'S IT. THANKS FOR LETTING ME GO OVER. THANK YOU MADAM.
ANY OTHER REQUESTS FOR PUBLIC COMMENT? NO FURTHER PUBLIC COMMENT.
ALL RIGHT. THANK YOU. WELL, THAT WAS AN INFORMATIONAL ITEM.
WE'LL MOVE TO ITEM FIVE. B JOB ORDER CONTRACTING QUARTERLY UPDATE REM.
GOOD AFTERNOON, FINANCE COMMITTEE BOARD MEMBERS.
I'M REM BATES, VISION LEAD OF DESIGN AND CONSTRUCTION, AND I AM HERE TO PROVIDE A UPDATE ON JOB ORDER CONTRACTING PER OUR JOB ORDER CONTRACTING POLICY. SO IF YOU BEAR WITH ME WHILE I.
SHARE THE SCREEN. I WILL THANK YOU FOR THE ASSIST.
JUMP RIGHT TO IT. SO I WAS HERE IN JANUARY. I DON'T HAVE A BIG, BIG UPDATE IN TERMS OF JOB ORDERS THAT WE'VE COMPLETED IN THAT TIME.
SO LET ME JUST FIGURE OUT HOW TO ADVANCE THE SLIDE.
AS I SAID, I'M REN BATES, DIVISION LEAD. THIS IS AN UPDATE ON OUR CURRENT CONTRACTS.
WE USE JOB ORDER CONTRACTING FOR ALL METHODS OF RENOVATION, REFURBISHMENT AND CLEANUP KIND OF WORK.
BARREL UNDERGROUND STORAGE. TANK CLEANUP WAS ONE OF THE PROJECTS WE'VE USED THIS ON.
YOU'RE ALL FAMILIAR WITH THIS, SO WE'RE AT THE END OF OUR CURRENT ROUND OF CONTRACTS.
THEY WERE AUTHORIZED IN JANUARY 2023, SO WE'RE TWO YEARS BEYOND THAT.
WHAT WE FOUND IS IN PRACTICAL, THESE ANNUAL TERM CONTRACTS ACTUALLY LAST FOR ABOUT 18 MONTHS TO TWO YEARS BASED ON ADMINISTRATION AND JUST HOW WE CLOSE THOSE CONTRACTS OUT. SO THAT'S WHERE WE ARE. IN TERMS OF UPDATE TO THE BOARD THE COMPLETED PROJECT LIST IS A LITTLE BIT LONGER THAN WHEN I WAS HERE LAST, AND THAT'S FOR PROJECTS THAT WE'VE COMPLETED.
SO AT TO DATE, WE'VE COMPLETED 31 JOB ORDERS WHICH TOTAL ABOUT A LITTLE OVER $11 MILLION.
THE GORDIAN GROUP IS A CONSULTANT THAT HELPS US DELIVER THESE PROJECTS.
THEY PERFORM ADMINISTRATIVE TASKS WITH US IN TERMS OF HELPING TO DELIVER OR COST THESE JOB ORDERS.
THEY ALSO PROVIDE US SERVICES TO TO GENERATE THE CONSTRUCTION TASK CATALOG, WHICH IS A TASK WHICH IS A CATALOG WITH PREVAILING WAGE, LOCAL PREVAILING WAGE AND MATERIAL PRICES THAT'S GENERATED AT THE BEGINNING OF EACH CONTRACT.
AND THAT'S WHAT WE USED FOR DEVELOPING UNIT COSTS OR USES UNIT COSTS TO DO THESE JOB ORDERS.
SO WE HAVE A FEW OUTSTANDING AND WE ACTUALLY HAVE A COUPLE THAT ARE BEING PRICED UNDER THIS. BUT FOR ALL INTENTS AND PURPOSES, WE HAVE COMPLETED THIS ROUND OF CONTRACTS WITH THE OUTSTANDING COUPLE OF JOB ORDERS TO WRAP UP.
WE BID EIGHT CONTRACTS AT $2 MILLION MAX. SO WE'VE ROUGHLY COMPLETED OR UTILIZED ABOUT 75%, WHICH I THINK IS WAS A GOOD USAGE. I THINK SOME OF THAT IS REFLECTED IN WE HAVEN'T WE DIDN'T UTILIZE ALL OF IT BECAUSE SOME OF THE CONTRACTORS THAT WE WORK WITH, WE DON'T SEE EYE TO EYE WITH ABOUT PRICING. AND SO WE'VE LEFT SOME OF THOSE.
AND AGAIN THIS IS WHY WE BID NUMER SEVERAL OF EACH LICENSE A B AND PAVING.
SO I THINK THAT'S PRETTY GOOD. AND AGAIN, I GUESS WHAT I'LL HIGHLIGHT IN TERMS OF THAT IS JUST BY DOING THIS AND BY HAVING JOB ORDER CONTRACTS, A LOT OF THESE WOULD HAVE BEEN SOMETHING THAT WOULD REQUIRE US TO COME TO THE BOARD FOR APPROVAL FOR EACH ONE OF THESE JOB ORDERS, BASED ON THE DOLLAR AMOUNT, WE'D PROBABLY HAVE TO GO OUT TO BID FOR SOME LOTS OF THESE BECAUSE OF THE DOLLAR AMOUNT AGAIN.
SO THIS JUST REDUCES SOME OF THE ADMINISTRATIVE TIME AND AND COST THAT WE WOULD HAVE TO NORMALLY ENGAGE WITH TO, TO DELIVER THESE PROJECTS OR JOB ORDERS, AS THE CASE MAY BE.
SO YOU'VE SEEN ALL THESE SLIDES BEFORE, BUT I'LL QUICKLY RUN THROUGH SOME OF THEM.
THE PANOLA SHORES TRAIL REPAIR. THE NEXT IS REPAVING THE WILDCAT CREEK TRAIL IN POINT PANOLA,
[01:05:06]
LAFAYETTE RIDGE STAGING AREA. I THINK I'M KIND OF COME TO THE END OF USING THESE OVER THE LAST COUPLE OF MONTHS. YOU GUYS HAVE SEEN ALL THESE, SO I'LL JUST QUICKLY GO THROUGH THEM.BIG BREAK STAGE STRUCTURE. SO AS I SAID, THIS IS INFORMATIONAL.
AND BASED ON COMMENTS WE HEARD OR I HEARD AT THIS MEETING AND VETTING THAT OUT, WE WE DID THREE GENERAL AS WE DID THREE BS, AND WE ACTUALLY ADDED AN ADDITIONAL PAVING THIS ROUND.
SO WE'RE BIDDING THREE PAVING AND WE PUT THOSE OUT IN FEBRUARY.
SO AGAIN, I WILL HAVE MORE FOR YOU ON TUESDAY.
AND I WILL GO THROUGH MY RIGMAROLE SPIEL AT THAT POINT FOR OUR NEW BOARD MEMBERS.
SO YOU'LL GET TO HEAR THAT AGAIN. BUT IF THERE ARE QUESTIONS RIGHT NOW REGARDING THE UPDATE AND OR WHERE WE AT, I AM HAPPY TO HEAR THOSE AND ANSWER AS BEST I CAN.
ALL RIGHT. THANK YOU. REN. QUESTIONS FROM THE COMMITTEE.
JOHN? YEAH I DO. I THIS IS A HYBRID OF A QUESTION AND A COMMENT, I THINK.
I JUST WANT TO VERIFY KIND OF PUT OUT THERE THAT THIS SYSTEM OF, OF OF DOING PROJECTS ENABLES US TO DO THEM FASTER, RIGHT? I MEAN, WE, YOU KNOW, FROM THE TIME WE START THINKING ABOUT A THING TILL THE TIME IT'S FINISHED, IT SEEMS LIKE THIS, BASED ON WHAT YOU SAID, YOU KNOW, AND WHAT I SEEMS INTUITIVE TO ME THAT IT THAT IT ENABLES US TO DO MORE WORK IN A YEAR THAN WE WOULD HAVE WITHOUT THIS SYSTEM. I WOULD SAY THAT'S PROBABLY TRUE.
THE OTHER THING I'LL AMEND IS THAT THIS IS JUST FOR RESTORATION AND REFURBISHMENT REPLACEMENT TYPE WORK. SO IT'S NOT FOR BRAND NEW DESIGN WORK, SO WE CAN'T DO ANYTHING WITH THAT. SO BUT YES, TO ANSWER YOUR QUESTION, A PART OF OF THE OF THE OF A PHASE OF THE OF A PROJECT? YES, I WOULD SAY YES. IT'S HARD TO COMPARE APPLES TO APPLES BECAUSE WE CAN'T DO IT BOTH WAYS AND THEN SAY WHICH ONE WAS QUICKER OR NOT, BUT I WOULD. I WOULD PAUSE IT AND AGREE WITH YOUR STATEMENT THAT YES, WE CAN MOVE THROUGH AND GET PROJECTS DONE QUICKER.
LIKE FOR INSTANCE, WHAT I SHOWED IN TERMS OF DELIVERING THAT $11 MILLION WORTH OF WORK OVER THE LAST TWO YEARS, I DON'T THINK WE WOULD BE ABLE TO DO THAT IF WE'D HAD TO GO OUT TO BID FOR EACH ONE OF THOSE, COME TO THE BOARD FOR AUTHORIZATION, ENTER INTO AGREEMENT ON ALL OF THOSE.
I WOULD SAY YES. ADMINISTRATIVELY, THIS SHORTENS SOME TIMELINE ON THAT.
AND I THINK IT'S IMPORTANT TO TO STATE THAT AS I DID AS WE HAVE, BECAUSE AT LEAST SOME OF THE BOARD IS INTERESTED IN IN MOVING THINGS ALONG. LET'S JUST SAY, YOU KNOW, GETTING GETTING MORE PROJECTS DONE IN A SHORTER PERIOD OF TIME.
AND SO THIS IS ONE WAY. THERE ARE OTHER WAYS, BUT THIS IS ONE WAY TO ACHIEVE THAT.
I WOULD AGREE, I THINK I WOULD AMEND THAT STATEMENT TO SAY THAT I DON'T KNOW, BASED ON OUR CURRENT STAFFING AND FUNDING THAT I THINK WE'RE KIND OF AT A AT WHERE WE'RE AT OUR LIMIT FOR WE'VE GROWN THIS PROGRAM OVER THE LAST FIVE, SIX, SEVEN YEARS, AND I THINK WE'RE WHERE WE'RE AT IS KIND OF AT CAPACITY OF WHAT WE CAN DELIVER ON AN ANNUAL BASIS WITH CURRENT STAFF AND FUNDING.
AND I THINK ONE THING WE DIDN'T ADD IS WE GET CONTRACTORS THAT LIKE TO DO WORK FOR US THAT FIT OUR, OUR TEMPLATE AND WE LIKE THEM. AND WE DON'T HAVE TO GO THROUGH THAT UNCERTAINTY OF THROWING IT OUT THERE FOR THE LOWEST RESPONSIBLE BIDDER OR WHATEVER THEY CALL IT, RESPONSIVE, RESPONSIBLE BIDDER IS THERE.
I KNOW THAT THESE ARE FIXED PRICES, AND WHEN YOU GUYS DRAW PLANS, YOU SEND THEM TO EITHER YOU SEND THEM TO GOORJIAN OR AND THEY SEND THEM GET PULL, PULL THE CONTRACTOR AND NEGOTIATE THESE COSTS.
IS THERE ANY CREEP INVOLVED? I JUST I KNOW I'M A BROKEN RECORD ON THIS.
I JUST WANT HALF $1 MILLION TO PUT A ROOF ON TO REPAIR THE ROOF ON THIS JOINT.
THAT THAT INCLUDED A BUNCH OF PHOTOVOLTAIC WORK AS WELL.
SO, I MEAN, THERE ARE SPECIFICS, BUT WE I'M NOT SURE COMPLETE YOUR QUESTION.
I'M NOT SURE I UNDERSTAND THE QUESTION. IS THERE ANY CREEP THAT GOES ALONG WITH THAT? IS BOY, WE'RE SO COMFORTABLE WITH THIS. CAN WE DO THE PRICES KEEP INFLATING WHEN THEY NEED TO BE?
[01:10:02]
I MEAN, OR IF YOU HAVE A SET OF PLANS DRAWN AND YOU GIVE ONE TO THE GOORJIAN GOORJIAN GROUP AND THE GOORJIAN GROUP.GOORJIAN THEY THEY HAVE THEIR FIXED PRICES. DO WE EVER TRY, LIKE, DO A SORT OF LITTLE AUDIT AND SAY, GIVE IT TO ANOTHER CONTRACTOR THAT HAS NOTHING TO DO WITH THIS AND SEE WHAT THEY CHARGE FOR IT? SO I THINK, TO ANSWER YOUR QUESTION, WE HAVE DONE AUDIT.
I THINK THAT'S NOT SOMETHING WE HAVE DONE, BUT WE HAVE PERFORMED TWO AUDITS IN THE YEAR.
IN THE TIME THAT WE'VE DONE THE PROGRAM, HAVE BEEN UTILIZING JOB ORDER CONTRACTING.
BOTH OF THOSE HAVE FOUND THAT PRICES ARE MARKET VALUE.
THEY'VE TAKEN IT UPON THEMSELVES TO SAY, HEY, THIS PRICE DOESN'T REALLY FIT WITH WHAT I WANT.
THEY'VE PADDED NUMBERS. WE'VE SAID NO IN OUR REVIEW.
THIS DOESN'T MATCH WITH WHAT WE EXPECT THIS TO BE.
SO I THINK IN TERMS OF THAT, YOU'VE HIGHLIGHTED DIRECTOR WAESPI ALSO, THOUGH, IN WHAT WE DON'T KNOW IS THAT MOVING FORWARD, HOW TARIFFS ARE GOING TO IMPACT PRICES, BECAUSE OUR PRICING IN OUR TASK CATALOG WAS GENERATED IN MARCH OF THIS YEAR.
AND SO THERE'S BEEN THINGS THAT HAVE HAPPENED IN THE INTERVENING TIME.
I THINK IN TERMS OF THAT AND THERE ARE THERE IS A IS A WHEN IT'S FAIR AND VALID AND IT MAKES SENSE.
THERE IS A IS A LINE ITEM FOR ADJUSTMENTS IN TERMS OF LIKE IF A COST IS EXORBITANT, LIKE FOR INSTANCE, IF A TARIFFS NOW ON METAL CAUSED SOMETHING THAT IN A BOOK IS WAS A COST IN THE BEGINNING OF THE YEAR AND NOW IS IS 30% HIGHER BECAUSE OF TARIFFS, I THINK THERE WOULD BE A WAY FOR US TO REVIEW THAT.
AND THEN THERE IS IN THE PROPOSALS, AND THIS IS PROBABLY GETTING INTO THE WEEDS A LITTLE BIT.
BUT TO ASSURE YOU THAT WE LOOK AT THESE THINGS AND WE TRY TO PRECLUDE ANY UNFAIR ADVANCEMENT.
AND SO AGAIN, I'M I'M PROBABLY THINKING FORWARD AHEAD.
AND I SHOULDN'T EVEN BE SPEAKING AND SPECULATING ABOUT HOW WE'RE GOING TO DEAL WITH THESE THINGS THAT WE'RE NOT SURE HOW THEY'RE GOING TO RESULT AND CLOSE OUT. BUT I WOULD SAY TO ANSWER YOUR QUESTION, WE DON'T WORK WITH THE CONTRACTORS THAT DON'T ABIDE BY THE BY THE THE COSTS THAT ARE IN THE CATALOG.
AND WE WE STICK TO THAT. AND THAT'S HOW WE, HOW WE RUN THE PROGRAM.
THANK YOU. YEP. AND OF NOTE, WE'VE NOTED IN THE PAST THERE IS ALWAYS A CONCERN ABOUT HOW MUCH OF THIS WE CAN DO FASTER BY KEEPING IT IN-HOUSE, FOR INSTANCE.
IN PARTICULAR PAVING, I'M HOPING AND JUST ASSUMING THAT YOU FOLKS ARE PRETTY MUCH CONSTANTLY ASSESSING WHAT WE'RE DOING IN TERMS OF OUTSOURCING PAVING AS OPPOSED TO WHAT WE CAN DO IN-HOUSE THROUGH HIRING.
THAT SEEMS TO BE ONE WAY TO ADDRESS DIRECTOR MERCURIO CONCERN ABOUT THE TIMING.
YOU KNOW, THE SHORES TRAIL REPAIR WAS YEARS. AND I'M JUST WONDERING HOW MUCH OF THAT WAS MAYBE ENGINEERING AS OPPOSED TO THE PAVING CONTRACTOR. I'M ASSUMING A LOT OF THAT DELAY WAS ENGINEERING WITH THAT PROJECT.
IS THAT CORRECT? SO PINNELL SHORES HAD NUMEROUS.
IT'S INTERESTING YOU SAY THAT BECAUSE I FOUND THAT THAT ONE WENT A LOT FASTER THAN I ANTICIPATED, BECAUSE WE HAD THE RAILROAD ON BOTH SIDES OF THE TRAIL. AND SO WE HAD TO DEAL WITH THE RAILROAD IN TERMS OF WHERE IT WENT THROUGH.
AND TO THAT END WE HAD AN AGREEMENT WITH THE RAILROAD, BUT BECAUSE OF THE NEW IMPROVEMENTS OR FIX THAT WE HAD TO DO, WE HAD TO REENGAGE WITH THEM ABOUT THE MAINTENANCE AND THE ONGOING.
SO WE HAD TO RE ENGAGE ON AN AGREEMENT. SO I THINK TO ANSWER YOUR QUESTION IT WAS A SITUATION OF LAND OWNERSHIP RIGHTS, I DON'T THINK I MEAN, PART OF IT WAS OUR TEAM WENT OUT AND ENGINEERED IT AS BEST WE COULD IN TERMS OF TIMELINESS.
WELL, YOU KNOW, I'M SOMEONE WHO WAS WALKING IN THAT UP THAT BRIDGE ALL THE TIME.
YOU KNOW, IT'S ONE OF MY STANDARD AFTERNOON WALKS.
SO IT'S USED TYPICALLY ONLY WORK THAT WE COULD CONTRACT OUT ANYWAYS. AND THAT'S PART OF THE POLICY FOR JOB ORDER CONTRACTING. SO WE DON'T TYPICALLY TRY TO DO WORK THAT WOULD BE DONE IN-HOUSE WITHOUT IT MAKING THE MEETING THE REQUIREMENTS FOR EXTERNAL CONTRACTING ANYWAY.
[01:15:04]
OKAY. GOT IT. THAT'S HELPFUL. YES. OKAY. ANY PUBLIC COMMENT ON THIS ITEM? UNLESS THERE'S MORE FROM THE BOARD. YES, CHAIR.COFFEY. WE HAVE A PUBLIC COMMENT FROM MEADOW.
DARCY. AFSCME 2428. ALL RIGHT. THANK YOU. REN.
WELCOME AGAIN. DARCY. AFSCME. MEADOW DARCY FROM AFSCME LOCAL 2428.
AGAIN. THANK YOU FOR ASKING SOME OF THE QUESTIONS THAT I WAS GOING TO ASK.
I APPRECIATE THAT. SO I DID WANT TO TALK A LITTLE BIT ABOUT JOCK.
BEEN ASKING A LOT. AND WE TALKED ABOUT A PAVING ANALYSIS REPORT THAT WAS GOING TO BE GENERATED.
APPARENTLY THERE'S MISINFORMATION. I DON'T KNOW, BUT APPARENTLY THERE WAS NO REPORT DONE.
SO WE'RE NOT REALLY SURE WHERE THAT WENT. BUT THEY DID SAY THAT THERE WAS A PRESENTATION AT AN OPERATIONS BOARD MEETING IN OCTOBER OF 2023 AND THAT PART OF THAT DISCUSSION WAS ADDING A SECOND, LIKE, ROADS AND TRAILS CREW TO DO MORE OF THE PAVING WORK THAT IS, YOU KNOW, REPEATEDLY CONTRACTED OUT. SO NOT SURE WHERE THAT WENT.
BUT I WANTED TO SAY THAT, LIKE, I THINK THAT REN DOES A GREAT JOB IN, IN, IN MANAGING JOC.
I THINK HR DOES A GOOD JOB OF HIRING PEOPLE THAT THEY NEED.
WHAT I DO THINK IS MISSING AND WHAT I KEEP BRINGING UP IS THAT THAT COORDINATION BECAUSE I, YOU KNOW, I DON'T THINK, YOU KNOW, REN IS SPECIFICALLY SAYING, LET'S TAKE A LOOK AT ROADS AND TRAILS STAFFING AND MAKE SURE THAT, YOU KNOW, YOU KNOW, THAT'S JUST NOT PART OF HIS ROLE. AND SO I THINK THAT'S BEEN OUR ASK IS, YOU KNOW, THERE ISN'T REALLY SOMEBODY TAKING A STEP BACK AND SAYING, HOLD ON. I MEAN, I'M LOOKING AT THE SEAL AND STRIPE, THE PARKING LOTS HERE AT PERALTA OAKS.
THAT IS SO VERY CLEARLY WITHIN ROADS AND TRAILS SCOPE.
COULD BE DONE RELATIVELY QUICKLY. AND AND YET WE'RE CONTRACTING IT OUT.
AND SO I DON'T KNOW IF THE PERSON CONTRACTING IT OUT IS PUTTING A WORK REQUEST IN.
AND THEN WHEN THE WORK REQUEST GOES IN WE DON'T HAVE STAFFING.
AND I THINK JUST TAKING A STEP BACK AND SAYING, YOU KNOW, IF WE ARE REPEATEDLY DOING THESE THINGS, YOU KNOW, MAYBE WE DO NEED TO LOOK AT ADDING MORE STAFF. THERE WILL ALWAYS BE A PLACE FOR CONTRACTING OUT.
YES. AFSCME SAID THAT THERE WILL ALWAYS BE A PLACE FOR CONTRACTING OUT WORK.
WE JUST WANT TO MAKE SURE THAT THAT THE WORK THAT IS CONTRACTED OUT IS, IS ALSO DONE WITH THE SAME EVALUATION OF LOOKING AT STAFF, LOOKING AT THE PROJECT, LOOKING AT THE TIMELINES AND LOOKING AT ALL THOSE FACTORS. AND I THINK EVERYBODY'S DOING THE BEST THEY CAN AT LOOKING AT AS MANY FACTORS AS THEY CAN, BUT THE FACTORS ARE NOT ALWAYS IN THEIR WHEELHOUSE.
SO THE PERSON THAT'S CONTRACTING THE WORK OUT IS LIKE, I JUST NEED TO GET IT DONE.
YOU KNOW, I CAN'T HELP THAT SO-AND-SO DIDN'T ADD POSITIONS IN THEIR BUDGET.
I CAN'T HELP THAT. MAYBE HR IS UNDERSTAFFED AND CAN'T LIKE, THEY'RE LIKE, I CAN'T DO THAT.
I JUST GOT TO GET IT DONE. AND THAT'S GREAT. EVERYBODY'S DOING THEIR JOB, BUT MAYBE WE NEED ANOTHER JOB IN THERE OF JUST LOOKING AT TRYING TO FIGURE OUT, YOU KNOW, WHERE SOMEBODY CAN, YOU KNOW, TAKE A LOOK AT THAT.
SO THANK YOU. DID YOU FOLKS DO A PUBLIC RECORDS REQUEST FOR A PAVING? WE DID. WE DID AN RFI IN AND I THINK BACK IN MARCH OF LAST YEAR, IT WAS REPORTED TO US THAT THERE WAS NO REPORT.
SO OKAY. YEAH, WE NEED TO CHECK INTO THAT BECAUSE I WAS TOLD THERE WAS ONE.
I KNOW, I YEAH, I WAS TOLD BY MULTIPLE PEOPLE THERE WAS A WRITTEN REPORT, BUT I WAS I HAVE THE GYM OWNER TOLD ME, BUT YEAH, MAYBE I'LL FORWARD IT BACK AND ASK THEM TO TO ANSWER THAT QUESTION AGAIN, I GUESS. SO WE'LL LOOK INTO THAT TOO.
THANK YOU. THANK YOU. ANY OTHER NO FURTHER PUBLIC COMMENTS.
THANK YOU. ANYTHING FURTHER FROM THE BOARD? ALL RIGHT.
THANK YOU. REN. THAT'S IT FOR ACTION ON INFORMATION ITEMS. ANY ANNOUNCEMENTS, DEB? NO ANNOUNCEMENTS. DENNIS OR JOHN, I HAVE NONE.
ALL RIGHT, SO WE WILL STAND ADJOURNED. GOOD MEETING.
THANK YOU VERY MUCH FOR ALL THE PREPARATION.
* This transcript was compiled from uncorrected Closed Captioning.