Council briefed on public-safety pension gap and staffing changes; staff recommends using $4.6M reserve

City staff said the recommended FY26 budget includes a proposed contribution of the entire $4.6 million pension reserve to address a new PSPRS actuarial result that left the police and fire pension systems just below a 100% funding ratio.

The nut graf: Staff said recent step-plan changes for public safety affected actuarial valuations and increased the plan’s unfunded liability. The recommended use of the $4.6 million reserve would bring police actuarial funding to roughly 100% and fire to about 99.8%, though staff cautioned actual future results depend on investment returns, salaries and retirements.

Staff also summarized personnel proposals across funds: the budget recommends adding 11 positions (police officer, two firefighters, an assistant specialty-court coordinator, irrigation technician, water service crew members and others) and reclassifying nine positions to reflect new duties or departmental restructuring. Staff said the 2% COLA would apply to pay plans and a 2% merit pool would be available to employees who earn a satisfactory performance rating.

Councilors asked how long the pension reserve might carry the plans if actuarial assumptions do not change. Staff answered that, assuming stable investment returns and no major changes in retirements or salaries, the reserve could support funding for multiple years—“maybe 5 or 10 years” under favorable conditions—but emphasized the projection is sensitive to market and actuarial changes.

Ending: Staff placed the PSPRS-reserve recommendation and position additions in the FY26 tentative budget for council consideration; council members asked staff to provide updated actuarial projections and vacancy-detail information before final adoption.