BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive an Update on the Status of Santa Clara Valley Water’s Pension and Other Post-Employment Benefits Unfunded Liabilities.
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RECOMMENDATION: Recommendation
A. Receive information on the status of Santa Clara Valley Water District’s Pension and other Post-Employment Benefit unfunded liabilities; and
B. Provide direction to staff as necessary.
Body
SUMMARY:
The purpose of this agenda memo is to provide a status of Santa Clara Valley Water District’s (Valley Water) pension and Other Post-Employment Benefits (OPEB) unfunded liabilities, which are estimated at $264 million and *108.9 million, respectively, as of June 30, 2025.
Valley Water’s OPEB Trust Fund continues to perform well. The investment return for FY 25 was 12.3%, which surpassed the targeted 6%. *However, the unfunded liability increased relative to the prior year as a result of changes that were included in the actuarial valuation (which is done every 2 years). The changes included baking in significant medical premium increases over the last 2 years and higher expected future medical premium increases. The status of OPEB’s unfunded liability will be presented by Valley Water Chief Financial Officer, Darin Taylor.
The unfunded pension liability is highly dependent on the investment returns of Valley Water’s pension plan within the California Public Employees’ Retirement System (CalPERS). With the assumption of a 6.8% average annual return, Valley Water’s plan is projected to achieve a 100% funded level by FY 2036-37. Ira Summer, Retirement Program Advisor for TrueComp (formerly GovInvest Inc.), will present the status on pension unfunded liability, which will include information on CalPERS pension basics and a comparison of Valley Water’s funded status versus other comparable agencies (See attachment 2).
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
There is no financial impact related to this agenda item.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
*Original Agenda Memo
*Supplemental Agenda Memo
*Original Attachment 1: PowerPoint, CalPERS Pension
*Supplemental Attachment 1: PowerPoint, OPEB Unfunded Liability
UNCLASSIFIED MANAGER: Manager
Darin Taylor, 408-630-3068