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Page 4 of 6 <br />and outflows, taking into consideration anticipated construction costs for large capital projects <br />and unexpected events. <br /> <br /> <br /> <br />Section 115 Trust Fund <br />In September 2018, the City Council approved the investment of $28.0 million of various <br />reserves into a Section 115 Trust Fund to help smooth the pension liabilities which are <br />expected to grow in the long run. The investment is made into two separate portfolios, the first <br />for $6.7 million into a Conservative portfolio which is available to pay the annual unfunded <br />liabilities if necessary, and the second for $21.3 million into a long-term Capital Growth <br />portfolio. <br /> <br />In February 2020, the City Council authorized Finance staff to deposit to, and withdraw from, <br />the Conservative portfolio an additional amount up to the total annual required CalPERS <br />payment. In March and September 2020, two additional $5.0 million contributions were <br />deposited into the Conservative portfolio for a total of $16.7 million deposited into the <br />Conservative portfolio. <br /> <br />As presented in the chart below, the Conservative portfolio balance was $20.2 million at the <br />end of September 30, 2024, an increase of $0.7 million from the prior quarter. The <br />Conservative portfolio investment return for the quarter ended September 30, 2024, was 3.63 <br />percent, and the five-year annualized return was 3.99 percent. <br /> <br />Page 98 of 658