The County of Santa Clara
California

Fiscal/Budget Item
67478

Approve Appropriation Modification No. 178 - increasing revenue and expenditures in various departments to implement the transfer of $13.1 million to CalPERS Employers Retiree Benefit Trust. (4/5 Roll Call Vote)

Information

Department:Office of the County ExecutiveSponsors:
Category:Appropriation Modification (4/5 Roll Call Vote)

Attachments

  1. F85 178

Body

FISCAL IMPLICATIONS

At the FY 2013 Mid-Year Budget Review (February 12, 2013; Agenda Item No. 12), the Board of Supervisors approved the transfer of $13.1 million from the General Fund to the CalPERS Employers Retiree Benefit Trust (CERBT).

The Request for Appropriation Modification adjusts department budgets to implement this transfer through payroll for all County departments and funds, assuring that the increased cost can be claimed to third party revenue sources as a cost of operations.

The following table summarizes the allocation of the $13.1 million to departments. Approximately 10% of the total $13.1 million is allocated to non-General Fund departments (other than SCVMC) to assure that the unfunded liability for each fund is addressed in a pro-rata fashion. This represents a subsidy of sorts for non-General Fund departments. However, these non-General Fund departments were not expecting to have to make an additional contribution to the CERBT in FY 2013 and some do not have the financial flexibility in the current fiscal year to absorb the pro-rata share of this contribution to the CERBT without this subsidy.

 

 

REASONS FOR RECOMMENDATION

Over the past decade the unfunded actuarial accrued liability (UAAL) for the Retiree Health (OPEB) employee benefit program has increased from $425 million as of 6/30/2003 to $1.8 billion as of 6/30/2012.  Faced with 10 consecutive years of debilitating deficits, the County has been unable to fully fund this employee benefit.  As finances have stabilized to some degree, the Administration and the Board have begun a process of developing policy options to address this problem. This policy discussion will be a key element of our FY 2014 budget process.

The $13.1 million approved for allocation by the Board at the Mid-Year Budget Review will be transferred to County departments and then to the Retiree Health Trust Fund through payroll charges. This process will allow departments to maximize claims to third-party revenue sources. Upon the budget allocation approval action, $13.1 million was transferred to CalPERS CERBT in mid April from the reserves available in the Retiree Health Trust Fund to take advantage of earning higher investment returns.

CHILD IMPACT

The recommended action will have no/neutral impact on children and youth.

SENIOR IMPACT

The recommended action will have no/neutral impact on seniors.

SUSTAINABILITY IMPLICATIONS

The recommended action will have no/neutral sustainability implications.

 

 

Meeting History

Jun 4, 2013 9:00 AM Video Board of Supervisors Regular Meeting
RESULT:APPROVED [UNANIMOUS]
MOVER:S. Joseph Simitian, Supervisor
SECONDER:Dave Cortese, Supervisor
AYES:Mike Wasserman, Dave Cortese, Ken Yeager, S. Joseph Simitian