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1/15/2026
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<br />Scenario #3 – DEFICIT MITIGATION
<br />Withdrawals from Trust to Mitigate City’s Forecasted Deficits (Moderate Recession)
<br />Assumptions:
<br />Assumes net operating results
<br />from City’s Moderate Recession
<br />financial forecast
<br />FY 2026-27 Recession: 18-month
<br />downturn; 3-year recovery
<br />-2% Property Tax; -6.25% Sales
<br />Tax & TOT; -5% Other Revenues
<br />Assumes Trust offsets 100% of
<br />deficits through FY 2034 and a
<br />portion of the deficit in FY
<br />2035, before exhausted
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<br />Comparison of Trust Deposits and Withdrawals
<br />Scenario #1 (Status Quo)Scenario #2 (Discount Rate Reduction)Scenario #3 (Deficit Mitigation)
<br />Fiscal Year Deposits to Trust Withdrawals from Trust Deposits to Trust Withdrawals from Trust Deposits to Trust Withdrawals from Trust
<br />2026 $0 $1,317,707 $0 $0 $0 $3,100,000
<br />2027 $0 $2,124,510 $0 $2,306,566 $0 $6,800,000
<br />2028 $0 $2,724,510 $0 $2,896,566 $0 $8,900,000
<br />2029 $0 $4,164,510 $0 $4,306,566 $0 $7,800,000
<br />2030 $0 $4,344,510 $0 $4,496,566 $0 $3,500,000
<br />2031 $0 $4,484,510 $0 $4,636,566 $0 $0
<br />2032 $0 $4,454,510 $0 $4,606,566 $0 $0
<br />2033 $0 $4,334,510 $0 $4,486,566 $0 $0
<br />2034 $0 $3,734,510 $0 $3,886,566 $0 $3,500,000
<br />2035 $0 $3,384,510 $0 $3,546,566 $0 $723,598
<br />2036 $0 $2,784,510 $0 $2,956,566 $0 $0
<br />2037 $0 $1,704,510 $0 $1,886,566 $0 $0
<br />2038 $0 $0 $0 $0 $0 $0
<br />2039 $0 $0 $0 $0 $0 $0
<br />2040 $0 $0 $0 $0 $0 $0
<br />2041 $0 $0 $0 $0 $0 $0
<br />2042 $0 $0 $0 $0 $0 $0
<br />2043 $0 $0 $0 $0 $0 $0
<br />2044 $0 $0 $0 $0 $0 $0
<br />Total $0 $39,557,314 $0 $40,012,229 $0 $34,323,598
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<br />QUESTIONS
<br />KEY TAKEAWAYS
<br />The trust is intended to be used.
<br />Pension costs are projected to increase through 2033;
<br />decrease beginning in 2034.
<br />City’s healthy Section 115 Trust balance and reserve can
<br />be leveraged over the next 10-12 years.
<br />Staff recommends adopting a policy for the use of
<br />pension resources.
<br />PROPOSED POLICY KEY PROVISIONS
<br />Only using the
<br />Pension Resources
<br />during deficit years to
<br />maintain service levels
<br />Balance use of the
<br />Pension Resources
<br />with other reserves
<br />Avoid relying on one-
<br />time funds for
<br />ongoing expenses
<br />General Fund
<br />surpluses may be
<br />deposited into the
<br />trust
<br />Continue pre-paying
<br />pension liabilities
<br />when feasible to
<br />achieve cost savings
<br />Take steps to ensure
<br />that the Pension
<br />Resources last until at
<br />least FY 2034
<br />RECOMMENDED ACTION
<br />Provide Feedback
<br />Accept the report and
<br />adopt a Resolution
<br />establishing the
<br />Pension Trust and
<br />Reserve Use Policy
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<br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F
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