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Retirement board reports solid returns, details $12.9 million ‘water sale’ reserve
Summary
The City of Falls Church Retirement Board told council its pension and OPEB plans produced strong returns in FY24 and that water-sale proceeds invested in the plans now total about $12.9 million, with a city reserve of roughly $3.1 million and an annual withdrawal cap of $825,000.
Connie Rydberg, chair of the City of Falls Church Retirement Board, told the City Council on Feb. 10 that the board’s pension and post-retirement benefit plans finished FY24 with above‑assumption investment returns and steady funded status.
Rydberg said the combined market value for the two pension plans was about $135 million for the basic plan and $45 million for the police plan, and that FY24 returns for the pension plans were about 12.4 percent. The city’s OPEB (other post‑employment benefits) trust is smaller — about $21 million — and returned about 14.8 percent in FY24. She said the longer term, seven‑year average annual return across plans is roughly 8.7–8.8 percent, above the board’s 6.5 percent long‑term assumption.
The report highlighted the fate of proceeds from the 2015 sale of the city’s water system. Rydberg said the city invested $9.2 million of sale proceeds into the retirement plans as an endowment; the principal has grown to about $9.8 million and the city’s reserve account stands at about $3.1 million, for a total “water sale money” balance of approximately $12.9 million. The retirement board averages endowment earnings over five years when calculating the annual amount available to the city and noted a statutory or policy maximum annual draw of $825,000; the city typically uses about $640,000 per year, Rydberg said.
Why it matters: the board’s presentation framed the plans as financially steady and emphasized that the water‑sale endowment has provided recurring value to the city since 2015. Council members asked how the reserve is treated in city financial statements and whether the reserve counts toward general fund balances.
City Manager Bryn Shields and Rydberg explained administrative treatment: the water‑sale reserve is held within the pension plan itself and therefore is not part of the city’s unassigned fund balance, but it is reflected in the city’s financial reporting that bondholders and auditors review, which can make the city’s overall fiscal picture look stronger.
Council members questioned operational details and next steps. Councilor Underhill and others asked whether the annual $825,000 cap meant the city could not spend more than that amount in a single year even if the reserve had grown; Rydberg and staff confirmed the legal limit is $825,000, and decisions about use are a council responsibility, not a retirement‑board one. Councilor Snyder asked whether the board sees “storm clouds”; Rydberg answered that the board continues to monitor regulatory and market developments and that the board recently added outside counsel and advisors to help manage regulatory change.
Ending: Council thanked Rydberg and the retirement board for stewardship and stable investment results. No formal action by council was required during the presentation; the retirement board’s report will remain part of the city’s record and inform FY26 financial planning.
