City’s Fiscal Picture to Be Painted on Feb. 16

The city’s financial forecast — and how to prepare for the future — hopefully will be much clearer after a public meeting about financial issues on Feb. 16.
With the help of actuarial service provider Bartel Associates, the city will present the most current information regarding the city’s unfunded pension liability and its infrastructure needs. It also will use projected revenue streams to help identify the best fiscal decisions to make in the future.
“This is a tool to help the City Council strategically plan resources for the immediate and for the future,” said interim City Manager Cindy Collins.
At the forefront is the city’s commitment to the California Employees Retirement System, known also as CalPERS. To give a “snapshot” of the problem, Collins explained that CalPERS became so flush with cash in the ’90s that retirement benefits began to expand. However, unfavorable economic factors exacerbated the bloated state of retirement benefits and local governments statewide soon found themselves on the hook for money they didn’t have.
“If everyone retired right now, we would have a liability where we wouldn’t have enough money in the account,” Collins said.
Both employees and employers pay into CalPERS, which invests that money into funds that pay into retirement packages. Although she could not give a specific figure, Collins did say the city of San Marino was “certainly” not in the worst-case scenario in terms of closing the gap.
Several factors are constantly moving the goalposts on local governments’ projected commitments to CalPERs, including the number of active and retired employees and the interest rates for the investments.
“It moves daily,” Collins said. “It never can be an exact number for very long.”
Current figures show San Marino with 27 active and 62 retired police department employees, 20 active and 58 retired fire department employees, and 69 active and 66 retired miscellaneous employees.
Bartel Associates will present its actuarial report on San Marino at the Feb. 16 meeting and project the city’s future retirement obligations. It will also present options for paying down the liability based on projected interest rates.
The state government began taking steps in 2012 to reduce the overly generous retirement benefits for new and future employees, but Collins said it could be up to 20 years before the funding gap sees the positive results.
“The unfunded amount will get worse before it gets better,” she said.
Collins said he expects there to be additional meetings regarding the CalPERS commitments. This meeting also will include information on the city’s current and projected infrastructure needs and costs and an examination of major revenue sources for the next five years.
The meeting is open to the public and begins at 6 p.m. on Thursday, Feb. 16, in the Barth Community Room at the Crowell Public Library.