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Carlsbad council approves $13.7M in carry‑forwards and reviews Section 115 pension‑trust contributions
Summary
Finance staff told council FY23–24 revenues exceeded expenditures by $16.5M, producing $32.4M in carry‑forward authority; the council approved $13.7M in recommended carry‑forwards and discussed Section 115 trust contributions intended to improve the city's CalPERS funded ratio.
Finance Director Zach Korech presented the fiscal-year 2023–24 general fund results and recommended carry‑forward requests, telling the council that revenues exceeded expenditures by $16.5 million and, combined with unspent/encumbered budget amounts, produced a carry‑forward authority of $32.4 million.
Korech summarized the city’s pension funding status. He said the city’s funded ratio using CalPERS data declined to about 73.7% as of June 30, 2023, and reviewed a multi‑year strategy the council adopted last year to address the policy target (80%) by establishing a Section 115 pension trust, making a $10 million initial contribution and planning annual contributions of $7.5 million.
On carry‑forwards, Korech said staff recommended $13.7 million of spending from the available authority, leaving an estimated $18.6 million of remaining carry‑forward capacity and a projected reserve ratio of about 65% after the recommended uses. He detailed larger items, notably a $5.2 million Carlsbad Village trenching project and several non‑general‑fund requests for fleet and IT replacements.
Thomas Krause, a public commenter and candidate for City Treasurer, praised the Section 115 trust approach and urged continued contributions to the trust, arguing it should be used proactively to mitigate future CalPERS discount‑rate changes.
The council voted unanimously to adopt the recommended carry‑forward actions and related resolutions. Korech said the combined funded status, factoring in the first $11.3 million contributed to the Section 115 trust, is approximately 75% and would move closer to the policy target if the council authorized the planned $7.5 million contribution.
Council members asked clarifying questions about reserves, projected returns and how the trust contributions interact with the general fund. Staff said more detailed reporting on the trust and investment assumptions would be forthcoming.
