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2 The City has allocated a total of $38 million toward a Section 115 Pension Trust Fund. With investment returns, the portfolio balance was approximately $56 million as of June 30, 2025. Due to the City’s ongoing fiscal challenges with a structural deficit in the General Fund, the City Council approved the use of the PARS Trust Fund for the next two years for a total of $3 million to balance the City's operating budget. The pension strategy shall augment existing City Council policies for pension cost containment. Selected strategies shall be implemented within the Finance Department’s regular budgetary and financial responsibilities. Foster & Foster is the City’s actuary for both pension and OPEB. An analysis conducted by the actuary, in terms of projected unfunded liabilities and contributions, and presented to the Council in March 2025, is attached to the RFP for your reference. The City’s policy regarding the use of pension trust funds is also attached to the RFP. Firms should understand the detailed nature of the assignment for augmenting staff in the Finance Department in this strategy development project. Analysis shall include standard methodology, be conducted in accordance with generally accepted accounting standards, and Best Practices related to financial management and reporting. As a pension funding policy is developed addressing increasing costs, wide-ranging strategies and options shall be evaluated or revisited to buy down the City’s liability. The following options—and additional strategies identified by the selected firm shall be considered to the extent feasible. PENSION STRATEGY OPTIONS 1. Modifying the Section 115 Trust structure and use 2. Adding City employee contributions toward the “Employer” contribution 3. Implementing a CalPERS “Fresh Start” amortization schedule 4. Initiating discretionary payments to CalPERS 5. Issuing Pension Obligation bonds Prior to initiating the fiscal review, the selected firm shall meet with both the Finance Director and the City Manager. The precise scope of work shall be confirmed by both parties at the meeting. Periodic meetings with Finance Department staff shall be held. Meetings with other staff, other consultants, employee group representatives, and councilmembers may also be necessary. The pension strategy options/funding policy should be finalized by the third week of February 2026. The Finance Department is planning to present the options/funding policy to the Council in March 2026. If your firm is interested in developing a pension obligation management and funding strategy for the City, please provide the following additional information: 1. A specific description of your firm’s recent experience conducting analysis of pension funding strategy for employee retirement. 2. The names and relevant experience of firm personnel who would provide services to the City. Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F