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NHA ADVISORS, LLC
City of Pleasanton
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NHA ADVISORS, LLC
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Last modified
3/4/2026 3:30:37 PM
Creation date
3/4/2026 3:28:31 PM
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CONTRACTS
Description Type
Professional Services
Contract Type
New
NAME
NHA ADVISORS, LLC
Contract Record Series
704-05
Munis Contract #
2026443
Contract Expiration
6/30/2026
NOTES
CONSULTANT PROVIDING PENSION STRATEGIES.
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1/15/2026 <br />5 <br />25 <br />Section 115 Pension Trust - Overview <br />What is it? Restricted Account for pension <br />Advantages: <br />Potential Higher Investment Returns in Managed Account <br />Longer-Term Benefit: Trust funds can grow over time and pay off a large % of UAL in the future <br />Shorter-Term Benefit: Apply funds to “smooth” payment spikes in UAL and/or Normal Cost <br />Flexibility – more investment options than CalPERS and the City can decide when and how to <br />use <br />Potential shock absorber for volatility from CalPERS investment performance & assumption <br />changes <br />Disadvantages: <br />Doesn’t directly reduce UAL until funds are transferred to CalPERS <br />Requires reserves/surplus contributions to build account balance <br />Investment risk (dependent on type of investment portfolio) <br />26 <br />Section 115 Trust – City’s Objectives <br />LEVEL/LOWER ANNUAL PAYMENT: Use Trust judiciously to <br />flatten the pension curve (“mountain peak”) <br />LIQUIDITY: Maintain (don’t fully deplete) minimum trust <br />balance to protect against future unknowns <br />VOLATILITY MITIGATION: Mitigate budgeting impacts of <br />increasing/fluctuating pension costs <br />27 <br />Section 115 Pension Trust & Pension Reserve <br />City’s Section 115 Pension Trust has $28.7 million of assets as of 9/30/2024 <br />Balanced investment objective: 50% Equity / 50% Fixed Income <br />10.89% investment return for FY 2024; 5.87% investment return since inception (FY 2019) <br />Historical Contributions: Total = $19,876,600 <br />August 2018: $13,895,400 <br />April 2019: $2,989,000 <br />July 2019: $2,992,200 <br />General Fund Pension Reserve has $1.9M <br />Key Considerations for City <br />Is it time to stop growing trust? <br />Timing and size of optimal withdrawals <br />How would a discount rate change or recession change the strategy? <br />28 <br />Section 115 Trust – Customized Modeling & Analysis <br />Using a customized model that can be updated periodically <br />Model out various scenarios using CalPERS Pension Outlook Tool <br />Estimating withdrawals from the Trust to create different payment smoothing <br />strategies <br />Scenarios <br />#1 – STATUS QUO; 9.3% FY 2023-24 Returns, 6.8% Returns After, No Assumption <br />Changes <br />#2 – DISCOUNT RATE REDUCTION; CalPERS lowers discount rate from 6.8% to 6.5% <br />#3 – DEFICIT MITIGATION; Withdrawals from Trust to mitigate City’s forecasted <br />deficits <br />29 <br /> $- <br /> $2 <br /> $4 <br /> $6 <br /> $8 <br /> $10 <br /> $12 <br /> $14 <br /> $16 <br /> $18 <br />20 <br />2 <br />6 <br />20 <br />2 <br />7 <br />20 <br />2 <br />8 <br />20 <br />2 <br />9 <br />20 <br />3 <br />0 <br />20 <br />3 <br />1 <br />20 <br />3 <br />2 <br />20 <br />3 <br />3 <br />20 <br />3 <br />4 <br />20 <br />3 <br />5 <br />20 <br />3 <br />6 <br />20 <br />3 <br />7 <br />20 <br />3 <br />8 <br />20 <br />3 <br />9 <br />20 <br />4 <br />0 <br />20 <br />4 <br />1 <br />20 <br />4 <br />2 <br />20 <br />4 <br />3 <br />20 <br />4 <br />4 <br />20 <br />4 <br />5 <br />Mi <br />l <br />l <br />i <br />o <br />n <br />s <br />Scenario #1 – STATUS QUO <br />Assumptions: <br />CalPERS Discount Rate: 6.8% <br />(no change) <br />CalPERS Investment Returns: <br />9.3% in FY 2023-24; 6.8% <br />thereafter <br />Beginning Trust Balance: <br />$28.7M (as of 9/30/2024) <br />Additional Trust Contributions: <br />$0 <br />Trust Annual Investment <br />Earnings: 5.28% <br />Ending Trust Balance: $0 <br />UAL Payments <br />Net Payments <br />Smoothing Level: $12.1M <br />Withdrawals from Trust <br />30 <br /> $- <br /> $2 <br /> $4 <br /> $6 <br /> $8 <br /> $10 <br /> $12 <br /> $14 <br /> $16 <br /> $18 <br /> $20 <br />20 <br />2 <br />6 <br />20 <br />2 <br />7 <br />20 <br />2 <br />8 <br />20 <br />2 <br />9 <br />20 <br />3 <br />0 <br />20 <br />3 <br />1 <br />20 <br />3 <br />2 <br />20 <br />3 <br />3 <br />20 <br />3 <br />4 <br />20 <br />3 <br />5 <br />20 <br />3 <br />6 <br />20 <br />3 <br />7 <br />20 <br />3 <br />8 <br />20 <br />3 <br />9 <br />20 <br />4 <br />0 <br />20 <br />4 <br />1 <br />20 <br />4 <br />2 <br />20 <br />4 <br />3 <br />20 <br />4 <br />4 <br />20 <br />4 <br />5 <br />20 <br />4 <br />6 <br />Mi <br />l <br />l <br />i <br />o <br />n <br />s <br />Assumptions: <br />CalPERS Discount Rate: 6.5% <br />CalPERS Investment Returns: <br />9.3% in FY 2023-24; 6.5% <br />thereafter <br />Trust Balance: $28.7M (as of <br />9/30/2024) <br />Additional Trust Contributions: <br />$0 <br />Trust Annual Investment <br />Earnings: 5.28% <br />Ending Trust Balance: $0 <br />Scenario #2 – DISCOUNT RATE REDUCTION <br />6.5% CalPERS Discount Rate – UAL Increase from $155M to $175M <br />UAL Payments <br />Net Payments <br />Smoothing Level: $13.7M <br />Withdrawals from Trust <br />25 26 <br />27 28 <br />29 30 <br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F
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