Orange County City Pension Liabilities Budget Transparency Critically Needed*

Recommendation R-5: Recommendation R-5 states, "Each city using CalPERS for one or more of its pension plans should identify the names and dates of the CalPERS Annual Valuation Report(s) which call out Annual Required Contributions (ARCs) for these plans and should provide a separate expenditure line item for predicted city catch-up contributions for the city Orange County Grand Jury Budget Transparency 2014 pension systems based on these ARCs. A discussion of the risks associated with these CalPERS projections should also be provided by the City." [(F.1)(F.2)(F.8)(F.9)] City of La Palma Response to Recommendation R-5: The recommendation has not yet been implemented, but will be partially implemented in the Fiscal Year 2015-2016 Budget. It is important to note that three years of La Palma's Safety and Miscellaneous Actuarial Valuations CalPERS website available the at currently on are https://www.calpers.ca.gov/index.jsp?bc=/about/forms-pubs/calpers-reports/actuarial- reports/browse-results.xml&strCatId=2&q=la-palma-city. The City will also provide a link to said documents as part of its Employee Compensation page within 90 days of this response. The City's Comprehensive Annual Financial Report includes extensive information on the City's pension plans, as required by governmental accounting standards. Trend information for the CalPERS Annual Valuation Reports and risk information associated with projections provided by CalPERS will be implemented in the next budget cycle. However, until the City has the ability to actually pay down its unfunded pension liability, no expenditure lines will be included in its budget document.