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REQUEST FOR PROPOSALS FOR PENSION FUNDING STRATEGY FOR EMPLOYEE RETIREMENT Page 8 6. COST PROPOSAL Preliminary Scope of Work Based on the comprehensive scope above and noting the City’s desired expedited schedule for completion of the Pension Obligation Management and Funding Strategy Project, NHA estimates a fixed fee cost between $27,500 and $35,000. If the City is interested in partnering with NHA for this project, we look forward to ironing out the scope at our initial meeting, as well as refining the all-inclusive fee estimate above. NHA would dedicate all the resources of our Pension Group to this project given the expedited timeline. Initial Due Diligence •Meetings with staff, other stakeholders (as needed) •Discuss various project goals and objectives •Discuss large General Fund considerations like long-term forecast, capital needs, labor negotiations, etc. •Confirm scope, timing of deliverables, etc. Document and Information Gathering and Review •Review 5-10 years worth of CalPERS reports •Review Foster and Foster actuarial studies, memos and other work product •Evaluate impacts of recent Asset Liability Management Study and 12.1% Returns •Discuss any questions with City’s actuaries (F&F and CalPERS) to ensure accuracy •Obtain real-time data from CalPERS actuary (if possible) that incorporate un-released FYE 2025 actuarial data Establish Baseline/Dynamic Models •Miscellaneous, Police Safety, Pleasanton-Livermore Fire •Identify General Fund allocable share of pension costs Initial Evaluation of Cost Management Strategies & Scenario Modeling for Staff •ADPs –compare short, long and mix of amortization base ADPs; Miscellaneous vs. Safety impacts •Section 115 Trust -build proprietary smoothing model; optimize deposit/withdrawal strategy using various “smoothing techniques” that meld with City’s resources/constraints •Fresh Start –analyze various terms (beyond those presented in CalPERS actuarial reports) and “longest available” for optimal payment smoothing •POBs –include discussion, structuring/sizing considerations and pros/cons, and risk but most importantly, discuss the precise market conditions that would make this option viable in the future (i.e., lower interest rates, stock market downturn, etc.). Also include information related to recent legal cases that might eliminate the need for “court validation.” •Hybrid (mix of above based on results) Narrow and Refine Cost Management Strategies •Per strategic discussions with staff and feedback (if desired) from other stakeholders Pension Policy Review and Enhancement •Develop recommendations for policy enhancements based on results of above Finalize Pension Funding Strategy •Intial comprehensive draft for staff with potential subsequent tailored ones for labor, electeds and other stakeholders Execution Assistance •NHA (if needed) can serve as extension of staff to help execute upon desired strategies Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F