Ripon Council addresses $1.35M CalPERS unfunded liability and budget challenges

The City Council of Ripon, California, convened on June 10, 2025, to discuss pressing fiscal matters impacting the city’s budget and long-term financial health. The meeting highlighted significant expenses related to employee retirement plans, health and welfare costs, and general fund revenue projections.

The council began by addressing the fiscal impact of retirement expenses, which are projected to be just under $170,000. Notably, Ripon’s retirement structure is distinct; only sworn police officers are enrolled in the California Public Employees' Retirement System (CalPERS), while other city employees participate in a government version of a 401(k) plan. This arrangement eliminates unfunded liabilities for the majority of employees, a contrast to many municipalities facing significant retirement funding challenges.

The discussion revealed that the city currently pays over $800,000 annually for the CalPERS benefits of seven Tier 1 police officers, with costs expected to rise to $1.35 million in the coming years. The council acknowledged that these rising costs could equate to the funding of approximately five police officers, thereby limiting service provision to the community.

To mitigate these financial pressures, the city has established a 115 trust fund aimed at generating higher returns on retirement investments. Currently, the trust holds over $2 million against an unfunded liability of about $7 million. The council plans to review the status of the CalPERS liabilities and the 115 trust annually, discussing potential transfers to bolster the trust's balance.

Health and welfare expenses were also a focal point, with a 15% increase noted in 2024, followed by projected increases of 7% in subsequent years. Employees are contributing approximately $135,000 towards these costs in 2025.

The meeting further detailed the city’s general fund revenue, projected at just under $18.5 million, primarily sourced from taxes. Sales tax, property tax, and motor vehicle in lieu taxes constitute about 60% of this revenue. However, sales tax revenue has seen a decline, dropping by about $190,000 from the previous year, largely due to fluctuations in fuel sales.

In conclusion, the council's discussions underscored the ongoing financial challenges faced by the city, particularly regarding retirement liabilities and health costs. The establishment of the 115 trust represents a proactive step towards addressing these issues, although the council recognizes that solutions will require long-term planning and continued dialogue. Future meetings will focus on assessing the effectiveness of these strategies and ensuring the city’s financial stability.