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Nevada County adopts revised fund-balance policy and pension-management plan; proposes $22.7 million UAL prepayment
Summary
The Board of Supervisors approved a rewritten fund-balance reserve policy and a pension-management plan that includes a proposed $22.7 million prepayment of the county's unfunded actuarial pension liability, transfers to a Section 115 trust, and a new payroll-based contribution. The moves aim to stabilize pension costs and increase transparency.
The Nevada County Board of Supervisors on [date] approved a rewritten fund-balance reserve policy and a pension-management plan intended to reduce the county's unfunded pension obligations and provide more transparent reporting.
Erin Mettler, deputy county executive officer and chief fiscal officer, told the board the fund-balance policy had been “completely redone” and will be reviewed annually alongside the budget. Mettler said staff plans to bring additional clarifying pages this fall and to present the policies for formal adoption in June.
The pension plan the board approved calls for three principal moves: prepaying a CalPERS unfunded actuarial liability (UAL) payment of $22,700,000 before July 31; transferring $6,000,000 from existing pension assignments and general-fund balance into a Section 115 pension trust managed by PARS; and capturing 1% of active payroll during the year to contribute to that trust. The board also directed staff to apply the new fund-balance policy to allocate 25% of unassigned general-fund balances to the pension trust at fiscal year close.
Mettler said the trust will act as a “holding clearing house” that can earn a higher return and be deployed strategically once the county receives the next CalPERS actuarial report. “That action will come back to the board,” she said, noting that staff will present options for applying discretionary payments after the July actuarial update.
Board members pressed for mechanics and oversight; Mettler described regular meetings with investment managers and quarterly reports from the trust administrator. The board also directed staff to finish a public-facing pension transparency web page that will publish actuarial reports, the pension policy and future compliance reporting.
The measure passed by roll call vote. The pension plan and related budget allocations will be finalized during the county’s upcoming budget hearings, when the board will vote on the specific dollar transfers and timing.
What happens next: staff will present detailed options for using Section 115 trust funds after the July CalPERS valuation, and the county auditor-controller will calculate the fiscal-year close amount that can be assigned to the trust per the new fund-balance policy.
