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CITY OF
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z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
March 12, 2019
Agenda Item No. 13
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Dan Matusiewicz, Finance Director
PHONE: 949-644-3123
TITLE: Ongoing Management of Unfunded Pension Liability
ABSTRACT:
Each year, staff analyzes the most recent California Public Employees' Retirement
System (CaIPERS) pension actuarial valuations and evaluates opportunities to more
efficiently amortize the City's unfunded accrued liability (UAL) compared to the default
minimum contribution schedules proposed by CaIPERS.
Staff evaluated the merits of following the CaIPERS minimum default payment schedule
as compared to three optional payment schedules as depicted in Appendix A. The
payment options were reviewed in detail at Finance Committee held on November 29,
2018. Finance Committee unanimously recommended Option 3A. This option
contemplates the consolidation of various individual gain/loss bases being amortized
between 19 and 30 years into a new "2018 Partial Fresh Start base" with an initial
repayment term of 20 years as illustrated in Appendix B. Excluded from the proposed
"2018 Partial Fresh Start base" is the "2013 Fresh Start base" that is already being
amortized over a 15 -year period.
Option 3A further contemplates a level dollar payment of $35 million annually for 14 years
followed by a final payment of $22.8 million in the fifteenth year (see proposed payment
schedule in Appendix C). Under this option, the City is not committed to continue
additional discretionary payments (ADPs) into the future. However, if ADPs are
continued, the 2018 partial fresh start base can be paid -off in approximately 3.5 years.
Option 3A represents a savings of $45 million over the default schedule realized over
15 years as demonstrated in Appendix A.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
13-1
Ongoing Management of Unfunded Pension Liability
March 12, 2019
Page 2
b) Authorize the City Manager and Finance Director to instruct CalPERS actuary to
consolidate unfunded liability amortization bases from fiscal years (FY) 2014 to 2018
into a new "2018 partial fresh -start" base not to exceed a 20 -year repayment term.
FUNDING REQUIREMENTS:
There is no immediate fiscal impact related to this item. The minimum required payment
to CalPERS for FY 2018/19 and 2019/20 remain the same. The minimum payment
increases $1.7 million in FY 2020/21 but then would decrease below the current default
repayment schedule in all years thereafter. The new partial fresh -start base will likely be
paid off in 3.5 years with the current level of additional discretionary payments (ADPs),
avoiding approximately $45 million in interest over 15 years.
DISCUSSION:
The City's pension obligations are and will continue to be one of the City's largest financial
concerns for decades to come so it is important that it receives appropriate and regular
attention. The City's current unfunded accrued pension liability (UAL) is significant at
$320 million. The funded status is improving slowly, despite successive reductions in the
assumed investment earnings rate (discount rate) to 7%, but the overall plan funded
status of 66% is significantly less than optimal. The silver lining is that City Council has
been proactive and aggressive in addressing the ongoing pension crisis. By proactively
managing the repayment of the unfunded pension liability and influencing CalPERS
policies, the City is well positioned to weather the pension challenges known today.
The most recent actuarial report presents the results of the June 30, 2017, CalPERS
valuation of both the Miscellaneous and the Public Safety Plans for the City of Newport
Beach and sets the required contribution amounts and rates for Fiscal Year 2019/20.
After adding in ADPs and deducting negotiated employee contributions, Fiscal Year (FY)
2019/20 pension costs are estimated as follows:
Normal Cost Rate Expected Normal Cost Change
2018/19 1 2019/20 2018/19 1 2019/20 Dollars I Percent
Misc 16.2% 16.9%
7,205,087
7,712,921
507,834
7.0%
Safety 27.4% 28.1%
9,082,071
9,694,972
612,901
6.7%
Total Expected Normal Cost
16,287,158
17,407,893
1,120,735
6.9%
Amortization of UAL Change
2018/19 1 2019/20 Dollars I Percent
Minimum Payment of on UAL 25,698,507 26,469,557 771,050 3.0%
Additional Discretionary Payment (ADP) 8,801,493 8,530,443 (271,050) -3.1%
Total Planned UAL Payment 34,500,000 35,000,000 500,000 1.4%
Total Expected Pension Cost
Change
2018/19 1 2019/20
Dollars
Percent
Total Expected PERS Contribution
50,787,158
52,407,893
1,620,735
3.2%
Less: Expected Employee Contributions
10,324,540
11,017,800
693,260
6.7%
Net Employer Cost "Projected"
40,462,618
41,390,093
927,475
2.3%
13-2
Ongoing Management of Unfunded Pension Liability
March 12, 2019
Page 3
While most cities continue to face steep year -over -year increases in their required
pension contribution, the City's net pension cost is only increasing 2.3% since the City
had previously anticipated and ramped -up pension contribution levels in the years since
the 2008 recession.
Net of investment returns, annual contributions, benefit payments and changes in
actuarial assumptions, the City's unfunded pension liability decreased $1.8 million from
$321.5 million to $319.7 million. The modest decrease in the City's UAL is significant
because this is occurring when most other local agencies' UALs are increasing due to the
lower discount rate assumption (See countywide comparison in Appendix F). The
components of the City's plan assets, liabilities and fund status of City plans are displayed
in the following table:
Accrued Liability
Less: Market Value of Assets
Unfunded Accrued Liability (UAL)
Funded Status
2017 1
2016
Miscellaneous Safety
Total I
Total
396,834,941 542,668,920 939,503,861 887,481,877
278,869,980 340,964,919 619,834,899 566,016,065
117,964,961 201,704,001 319,668,962 321,465,812
70.3% 62.8% 66.0% 63.8%
According to CalPERS projections and illustrated in Appendix E, the funded status of the
City Safety and Miscellaneous employee pension plans are projected to improve to 73%
and 79% respectively by FY 2023 if actuarial assumptions are met. Periodic market
volatility is to be expected. However, consistently earning less that the assumed discount
rate of 7% would significantly disrupt the projected funding progress.
While the City's combined plan funded ratio is slightly lower than the county -wide average
of 70%, Newport Beach has one of the most aggressive repayment plans in the County
which will result in an improved funded status over time. The actuarial valuations in their
entirety for our miscellaneous and safety plans can be found at
www.newportbeachca.gov/pensions under "CaIPERS Valuations."
Funding Goals
Staff has and will continue to pursue the UAL pension funding goals indicated below.
These goals form the basis of recommended action.
• Consistent with the Government Finance Officers' Association (GFOA) and the
California Actuarial Advisory Panel (CAAP), the staff believes it is financially
advantageous to repay or amortize unfunded pension liabilities over a period of
not -to -exceed 20 years, but a term closer to 15 years is preferred.
• Maintain prudent funded status levels or develop an aggressive repayment plan to
ensure that funds are available in the long -run to meet City obligations.
• Preserve financial flexibility to meet or maintain City service obligations while
funding post -employment benefit obligations.
• A short amortization period dramatically reduces taxpayer interest costs and better
matches the average remaining work -life of plan participants.
13-3
Ongoing Management of Unfunded Pension Liability
March 12, 2019
Page 4
• Manage amortization bases effectively to avoid negative amortization and repay
unfunded liabilities in the most efficient manner possible, with an overall goal of
reducing the interest costs to taxpayers.
• There is a high cost of waiting for actuarial valuation results, which lag the
contribution year by at least two years. Therefore, all known pending loss bases
are considered when developing a payment plan recommendation. This minimizes
negative amortization and interest cost to taxpayers.
• Staff also believes that a level -dollar repayment schedule improves the likelihood
that funds will be available to meet future repayment schedules. A level -dollar
payment plan becomes a decreasing percentage of the annual budget over time,
whereas an increasing dollar payment plan moves in commensurate manner with
rising budgets.
Why is it Important to Manage Amortization Bases of the Unfunded Liability?
The unfunded liability balance is made up of a series of gain/loss bases each with their
own methodology and term. It is important to proactively consolidate bases because:
1. Some bases contain a significant amount of negative amortization. Left as
such, they are inefficient and are costly to our taxpayers.
2. Several bases are credit bases extending credits out 30 plus years. As
illustrated in the default column of Appendix A (Summary of Payment Options)
the payment schedule goes negative in years 19-31 where $31.3 million in
credits will be underutilized starting in payment year 2038. This is because
CalPERS does not write "credit" checks back to the City in the years when
amortized credits exceed required contributions. Currently, there is an
opportunity to bring the $31.3 million in underutilized credits forward to offset
costs in the nearer term.
3. Each ADP payment must be applied against a specific base; therefore, it is
administratively more efficient when bases are consolidated into a single base
that can be identified for reduction/elimination.
The City's efforts to accelerate the amortization of the City's unfunded pension liability
has resulted in the most efficient repayment schedule in the County. County -wide
CalPERS agencies are scheduled to pay approximately 200% of the principal UAL
balance. Through a combination of previous "Fresh Starts" and previous "Additional
Discretionary Payments" (ADPs) the City's default repayment schedule has led to a lower
(AE) ratio of 167% of principal UAL balance which would result in approximately
$100 million of interest savings compared to the average county -wide repayment
schedule of 200% of principal.
Using a hypothetical UAL balance of $300 million, the comparative savings between a
200% AE ratio schedule and a 166.6% AE ratio schedule is illustrated as follows:
County -wide City Default
AE Ratio I AE Ratio
Hypothetical Unfunded Pension Liability $ 300,000,000 $ 300,000,000
AE Ratio 200% 166.6%
Total Principal & Interest Payments 600,000,000 499,800,000
Interest savings relative to County -wide average $ 100,200,000
13-4
Ongoing Management of Unfunded Pension Liability
March 12, 2019
Page 5
See countywide payment efficiency ratios in Appendix F.
Finance Committee Recommendation
After evaluating the City's current default repayment schedule and the three optional
repayment schedules presented in Appendix A, Finance Committee's recommendation is
to pursue Option 3A.
Option 3A accomplishes the following funding goals:
1. Amortizes the UAL over a level -dollar payment plan over 15 years as opposed to
the lengthier, and consequently costlier, term options.
2. Continues an aggressive funding plan to improve the plan's funded status and
further increases repayment efficiency of the unfunded pension liability.
3. Preserves financial flexibility to continue ADPs or not.
4. Consolidates the number of amortization bases that range between 19-30 years
down to a default 20 -year repayment schedule. If ADPs are continued, this
20 -year base would be reduced to 3.5 years. See Appendix E then D to see how
the ADPs would reduce the term of the 2018 Fresh Start Base from 20 years to
3.5 years.
5. Starts paying on projected loss base that will be included in the 2018 actuarial
valuation thereby avoiding one year's worth of negative amortization.
Option 3A represents a savings of $45 million over the default schedule realized over
15 years. By carefully managing our bases over several years, the payment efficiencies
gained will save Newport Beach taxpayers between $100 and $126 million relative to the
countywide repayment schedule. In the example below, we illustrate the comparative
savings of having efficient repayment schedules compared to the countywide average of
200% on a hypothetical unfunded pension liability of $300 million.
Hypothetical Unfunded Pension Liability $
County -wide
City Default
City Payment Option 3A
AE Ratio
AE Ratio
AE Ratio
AE Ratio
Hypothetical Unfunded Pension Liability $
300,000,000 $
300,000,000 $
300,000,000
AE Ratio
200%
166.6%
157.7%
Total Principal & Interest Payments
600,000,000
499,800,000
473,100,000
Interest savings relative to countywide average
$
100,200,000 $
126,900,000
Consistent with Council Policy F-5, General Fund Surplus utilization, should there be
additional surplus available that is not otherwise allocated to long-term obligations, City
Council should further consider increasing the ADP contribution to hasten the pay -down
of the 2018 partial fresh -start base.
13-5
Ongoing Management of Unfunded Pension Liability
March 12, 2019
Page 6
Risks
Further Chanaes to the Discount Rate Assumption
It is possible that Risk Mitigation policies, currently in place, or future reviews of capital
market assumptions, may influence the CaIPERS board to reduce the discount rate
assumption further. This will increase normal costs on a go -forward basis as well as
create some level of new unfunded liability. Given staff is already prepared for the
reduction to 7% staff believes there is ample time and resources to plan for further
reduction in discount rates.
Market Volatili
Recessions and market volatility are unavoidable and are to be expected. The pension
plan will experience market turbulence in the future. Staff has recently analyzed the risk
of revenue decline due to likely recessionary scenarios and the secondary impact of low
investment returns on the plan. Considering the risk of market volatility on a mature
pension plan, Finance Committee deliberately recommended to leave contingency
reserve levels higher than might otherwise be necessary, approximating 25% of operating
expenditures. This policy currently equates to a General Fund contingency reserve in
excess of $50 million. Given the two-year lag between actual results and a five-year
direct smoothing policy (five-year phase in for contribution rates), staff believes the City
has ample time and flexibility to withstand temporary volatility without impacting service
levels.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Appendix A — Summary of Payment Options
Appendix B — Proposed Consolidation of Amortization Bases
Appendix C — Option 3A — Partial Fresh Start with ADP
Appendix D — Option 3B — Partial Fresh Start without ADP
Appendix E — Funded Status and Trend Projection
Appendix F — County -Wide Comparison of Pension Funding Progress
13-6
APPENDIX A
13-7
$ 26,469,557 $
35,022,218
$
34,713,090
$ 26,469,557
$ 8,530,443
$ 35,000,000
$ 26,469,557
$ 27,561,712 $
34,458,224
$
34,147,012
$ 29,306,494
$ 5,693,506
$ 35,000,000
$ 29,981,598
$ 30,065,625 $
34,458,224
$
34,147,012
$ 29,645,174
$ 5,354,826
$ 35,000,000
$ 30,806,092
$ 32,234,127 $
34,458,224
$
34,147,012
$ 30,003,361
$ 4,996,639
$ 35,000,000
$ 31,653,260
$ 33,696,917 $
34,458,224
$
34,147,012
$ 30,326,744
$ 4,673,256
$ 35,000,000
$ 32,523,725
i
$ 35,136,470 $
34,458,224
$
34,147,012
$ 30,564,692
$ 4,435,308
$ 35,000,000
$ 33,418,127
$ 36,102,723 $
34,458,224
$
34,147,012
$ 30,788,488
$ 4,211,512
$ 35,000,000
$ 34,337,126
$ 37,095,548 $
34,458,224
$
34,147,012
$ 30,988,822
$ 4,011,178
$ 35,000,000
$ 35,281,396
$ 38,115,676 $
34,458,224
$
34,147,012
$ 31,150,874
$ 3,849,126
$ 35,000,000
$ 36,251,635
$ 39,163,857 $
34,458,224
$
34,147,012
$ 31,249,714
$ 3,750,286
$ 35,000,000
$ 37,248,555
$ 40,240,863 $
34,458,224
$
34,147,012
$ 31,240,183
$ 3,759,817
$ 35,000,000
$ 38,272,890
$ 41,347,486 $
34,458,224
$
34,147,012
$ 31,031,591
$ 3,968,409
$ 35,000,000
$ 39,325,395
$ 42,484,542 $
34,458,224
$
34,147,012
$ 30,411,823
$ 4,588,177
$ 35,000,000
$ 40,406,843
$ 43,652,86734,147,012
$ 28,743,737
$ 6,256,263
$ 35,000,000
$ 41,518,031
$ 44,853,321 $
34,458,224
$
34,147,012
$ 22,839,988
$ -
$ 22,839,988
$ 42,659,777
$ 4,444,209 $
-
$
1,906,027
$ -
$
$ -
$ 2,650,665
$ 3,521,472 $
$
1,906,027
$
$
$
$ 2,723,558
$ 1,632,422 $
$
1,906,027
$
$
$
$ 2,798,456
$ (363,189)
$
1,906,027
$
$
$
$ 2,875,413
$ (2,469,794) $
$
1,906,027
$
$
$
$ 2,954,487
$ (4,164,792) $
$
-
$
$
$
$ -
$ (5,296,082) $
$
$
$
$
$
$
$
$
$
$
$ (5,441,724) 1
$ (3,723,617) $
$ (2,706,415) $
$31.25
Million
$
$
$
$
$
$
$
$
$
$
$ (2,444,828) $
Unused
$
$
$
$
$
$ (1,556,781) $
$
$
$
$
$
-
$ (353,140) $
$
$
$
$
$
(1,221,211) $
$
$
$
$
$
�-.
i-•
$ (1,221,095) $
$
$
$
$
$
(287,364) $
$
$
$
$
$
$
426,211,164
$ 364,822,975
$ 57,500,385
$ 422,323,359
$ 436,084,773
NPV@3%• $ 445,220,316 $ 424,264,842
NPV@4%
$ 415,729,645 $
399,008,679
$
400,312,223
$ 343,084,264
$ 54,602,935
$ 397,687,199
$ 407,188,179
Efficiency
172%
159%
161%
NA
NA
158%
167%
13-7
6/30/2013
Fresh Start Base
15
304,262,134
500,960,084
165% 161%
6/30/2014 (Gain)
Investment Return 18.6%
27
(76,596,032)
(175,892,383)
230%
6/30/2015 Loss
Investment Return 2.4%
28
31,847,317
76,537,056
240%
Loss
Discount Rate Change 7.5 %to 7.375%
19
16,814,230
30,846,769
183%
30/2016 Loss
Investment Return .6%
29
31,111,035
78,779,656
253%
130/2016
30/2017 Loss
Discount Rate Change 7.375% to 7.25%
20
19,880,007
38,694,483
195%
30/17 (Gain)
Investment Return 11.2%
30
(22,066,767)
(59,307,662)
269%
Net Other (2-9) Bases
Prior to 6/30/18
Mixed
989,790
(10,342,080)
N/A
6/30/2018 Loss
Discount Rate Change 7.25% to 7.0%
20
28,888,079
60,201,260
208%
6/30/2018 Gain
Investment Return 8.6%
30
(8,953,515)
(25,752,005)
288%
Net 2018 (8 &9) (Gain) Loss Bases
19,934,564
34,449,256
Proposed 2018 Partial Fresh Start J
20
` 20,924,354
40,535,310
194% 112%
APPENDIX C
Option 3A - Partial Fresh Start With ADP
Total Payments
Net Savings
5 443,9Z1,961 5 45,451,7ZZ
Partial Fresh Start - All Other Bases
Level % of Pay With ADP
Original 2013 Fresh Start
Level % of Pay With ADP
is
Yr I
Val Yr I
PmtYrl
Balance
Required Pmt.
ADP
�I $
$ 20,924,353
$ (1,264,887)
$ 8,530,443
$ 14,873,508
$ 1,137,943
$ 5,693,506
$ 8,848,148
$ 701,988
1
2017
2020
$ 304,262,134
$ 27,734,444
2
2018
2021
$ 296,871,751
$ 28,168,551
3
2019
2022
$ 288,514,998
$ 28,943,186
4
2020
2023
$ 278,771,983
$ 29,739,124
$ 1,948,390
5
2021
2024
$ 265,508,203
$ 30,326,744
$ 4,673,256
6
2022
2025
$ 247,889,495
$ 30,564,692
$ 4,435,308
7
2023
2026
$ 229,037,479
$ 30,788,488
$ 4,211,512
8
2024
2027
$ 208,865,821
$ 30,988,822
$ 4,011,178
9
2025
2028
$ 187,282,146
$ 31,150,874
$ 3,849,126
10
2026
2029
$ 164,187,615
$ 31,249,714
$ 3,750,286
11
2027
2030
$ 139,476,467
$ 31,240,183
$ 3,759,817
12
2028
2031
$ 113,035,538
$ 31,031,591
$ 3,968,409
13
2029
2032
$ 84,743,744
$ 30,411,823
$ 4,588,177
14
2030
2033
$ 54,471,525
$ 28,743,737
$ 6,256,263
15
2031
2034
$ 22,080,250
$ 22,839,988
16
2032
2035
$ -
17
2033
2036
$
18
2034
2037
$
19
2035
2038
$
20
2036
2039
$
21
2037
2040
22
2038
2041
23
2039
2042
24
2040
2043
25
2041
2044
26
2042
2045
27
2043
2046
28
2044
2047
29
2045
2048
30
2046
2049
31
2047
2050
Total Payments
Net Savings
5 443,9Z1,961 5 45,451,7ZZ
Partial Fresh Start - All Other Bases
Level % of Pay With ADP
20
Balance
Payment
ADP
$ 20,924,353
$ (1,264,887)
$ 8,530,443
$ 14,873,508
$ 1,137,943
$ 5,693,506
$ 8,848,148
$ 701,988
$ 5,354,826
$ 3,202,301
$ 264,237
$ 3,048,249
5 839,Z81 5 ZZ,6Z7,OZ4
Option 3A Total
Balance Payment
$ 325,186,486 $ 35,000,000
$ 311,745,259 $ 35,000,000
$ 297,363,146 $ 35,000,000
$ 281,974,284 $ 35,000,000
$ 265,508,203 $ 35,000,000
$ 247,889,495 $ 35,000,000
$ 229,037,479 $ 35,000,000
$ 208,865,821 $ 35,000,000
$ 187,282,146 $ 35,000,000
$ 164,187,615 $ 35,000,000
$ 139,476,467 $ 35,000,000
$ 113,035,538 $ 35,000,000
$ 84,743,744 $ 35,000,000
$ 54,471,525 $ 35,000,000
$ 22,080,250 $ 22,839,988
$ 512,839,988
Amortization Efficiency (AE) Ratio 158%
13-9
APPENDIX D
Option 36 - Partial Fresh Start Without ADP
Partial Fresh Start - All Other Bases
Level % of Pay Without ADP
Original 2013 Fresh Start
Level % of Pay Without ADP
15
Yr I
Val Yr I
PmtYrl
Balance
Required Pmt.
ADP
$
$ 20,924,353
$ (1,264,887)
$ 23,697,467
$ 1,813,047
$ 23,480,859
$ 1,862,906
1
2017
2020
$ 304,262,134
$ 27,734,444
2
2018
2021
$ 296,871,751
$ 28,168,551
3
2019
2022
$ 288,514,998
$ 28,943,186
4
2020
2023
$ 278,771,983
$ 29,739,124
5
2021
2024
$ 267,523,633
$ 30,556,950
6
2022
2025
$ 254,641,933
$ 31,397,266
7
2023
2026
$ 239,989,284
$ 32,260,691
8
2024
2027
$ 223,417,816
$ 33,147,860
9
2025
2028
$ 204,768,651
$ 34,059,426
10
2026
2029
$ 183,871,112
$ 34,996,060
11
2027
2030
$ 160,541,884
$ 35,958,452
12
2028
2031
$ 134,584,105
$ 36,947,309
13
2029
2032
$ 105,786,398
$ 37,963,360
14
2030
2033
$ 73,921,841
$ 39,007,352
15
2031
2034
$ 38,746,851
$ 40,080,055
16
2032
2035
$ -
17
2033
2036
18
2034
2037
19
2035
2038
20
2036
2039
21
2037
2040
22
2038
2041
23
2039
2042
24
2040
2043
25
2041
2044
26
2042
2045
27
2043
2046
28
2044
2047
29
2045
2048
30
2046
2049
31
2047
2050
1
1
Partial Fresh Start - All Other Bases
Level % of Pay Without ADP
20
Balance
Payment
ADP
$
$
$ 20,924,353
$ (1,264,887)
$ 23,697,467
$ 1,813,047
$ 23,480,859
$ 1,862,906
$ 23,197,514
$ 1,914,136
$ 22,841,342
$ 1,966,775
$ 22,405,788
$ 2,020,861
$ 21,883,798
$ 2,076,435
$ 21,267,783
$ 2,133,537
$ 20,549,580
$ 2,192,209
$ 19,720,412
$ 2,252,495
$ 18,770,841
$ 2,314,439
$ 17,690,727
$ 2,378,086
$ 16,469,167
$ 2,443,483
$ 15,094,450
$ 2,510,679
$ 13,553,995
$ 2,579,722
$ 11,834,289
$ 2,650,665
$ 9,920,820
$ 2,723,558
$ 7,798,008
$ 2,798,456
$ 5,449,123
$ 2,875,413
$ 2,856,211
$ 2,954,487
Option 3B Total
Balance Payment
$ 325,186,486 $ 26,469,557
$ 320,569,218 $ 29,981,598
$ 311,995,857 $ 30,806,092
$ 301,969,497 $ 31,653,260
$ 290,364,975 $ 32,523,725
$ 277,047,721 $ 33,418,127
$ 261,873,082 $ 34,337,126
$ 244,685,599 $ 35,281,396
$ 225,318,230 $ 36,251,635
$ 203,591,524 $ 37,248,555
$ 179,312,726 $ 38,272,890
$ 152,274,831 $ 39,325,395
$ 122,255,565 $ 40,406,843
$ 89,016,291 $ 41,518,031
$ 52,300,846 $ 42,659,777
$ 11,834,289 $ 2,650,665
$ 9,920,820 $ 2,723,558
$ 7,798,008 $ 2,798,456
$ 5,449,123 $ 2,875,413
$ 2,856,211 $ 2,954,487
Total Payments $ 500,960,084 $ - $ 43,196,503 $ - $ 544,156,586
Net Savings Amortization Efficiency (AE) Ratio 167%
13-10
APPENDIX E
Funded Status Trend and Projection
90.0%
80.0%
71.7%
70.0% 1% YO6% 67.9 70.3%_
0
60.0% •7% 65.6% •5 ° o
62.8% 64.3/
60.8%
50.0%
40.0%
30.0%
20.0%
10.0%
79.8%
-----------------•
--------------r
73.1%
CalPERS Projection
Assuming 7.0% Annual Return
and no further ADPs
0.0%
2013 2014 2015 2016 2017 2018 2019 2020
Miscellaneous Safety
2021 2022 2023 2024
13-11
APPENDIX F
Agency
AL
Valuation
UAL
FS
Rollforward2017
2019
UAL Total Pmts
aymen
Efficiency
Ratio
City of Anaheim Total
2,534,550,976
741,068,980
70.8%
♦ 765,071,137
1,514,945,993
198%
City of Brea Total
384,756,109
121,252,581
68.5%
♦ 125,739,198
257,714,835
205%
City of Buena Park Total
135,767,673
39,221,940
71.1%
♦ 40,454,441
78,190,765
193%
City of Costa Mesa Total
561,805,186
212,923,672
62.1%
♦ 218,582,780
448,749,985
205%
City of Cypress" Total
77,989,853
18,663,147
76.1%
♦ 19,428,798
38,181,448
197%
City of Fullerton Total
759,201,771
234,893,103
69.1%
♦ 245,308,269
513,852,707
209%
City of Garden Grove Total
810,370,322
268,412,094
66.9%
♦ 277,299,537
568,946,411
205%
City of Huntington Beach Total
1,267,782,797
403,394,647
68.2%
♦ 415,378,946
840,702,143
202%
City of Irvine Total
648,190,242
154,634,662
76.1%
j 143,436,013
265,164,006
185%
City of La Habra Total
109,736,831
26,498,700
75.9%
♦ 27,862,230
56,060,884
201%
City of Laguna Beach Total
110,341,091
27,243,435
75.3%
26,964,768
50,220,994
186%
City of Mission Viejo Total
82,812,124
19,596,811
76.3%
♦ 19,947,678
35,963,154
180%
City of Newport Beach Total
939,503,861
319,668,962
66.0%
j 305,994,956
509,864,150
167%
City of Orange Total
851,746,500
256,020,262
69.9%
♦ 265,870,894
548,323,701
206%
City of Santa Ana Total
1,955,454,608
613,781,439
68.6%
♦ 635,622,920
1,280,054,051
201%
City of Tustin Total
112,720,267
26,806,151
76.2%
♦ 28,340,198
56,922,580
201%
City of Westminster Total
127,883,624
39,342,203
69.2%
♦ 40,431,030
79,306,054
196%
City of Yorba Linda Total
69,845,408
21,183,584
69.7%
♦ 21,466,831
43,314,830
202%
Irvine Ranch Water District Total
260,190,689
62,900,429
75.8%
♦ 63,953,833
111,870,935
175%
Santa Margarita Water District Total
94,619,320
29,770,735
68.5%
♦ 30,545,326
59,643,437
195%
Grand Total
11,895,269,252
3,637,277,537
69.47/6
3,717,699,783
7,357,993,063
198%
NOTES:
AL Accrued Liability
UAL Unfunded Accrued Liability
FS Funded Status
Payment Efficiency Ratio - A measure of how much interest is scheduled to be paid above principal balance
i UAL Rollforward from 2017 to 2019 is decreasing
♦ UAL Rollforward from 2017 to 2019 is increasing
13-12