Title
Recommendation to Authorize the City Manager to Execute an Agreement with GovInvest for Pension, Other Post-Employment Benefits (OPEB), and Labor Costing Software, and Governmental Accounting Standards Board Statement 73 and 75 OPEB Actuarial Valuation Reports for Three Years, Plus Two One-Year Renewal Options, at $75,819 Annually for a Total Amount Not-To-Exceed $379,095. (Finance)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The City of Alameda (City), like many municipalities across California, is confronted with the considerable challenge of managing and accurately forecasting its labor and related benefit costs including pension and retiree health otherwise known as Other Post-Employment Benefits (OPEB) costs and related liabilities. These financial obligations not only impact the City's fiscal health but also its ability to effectively plan and allocate resources for the future. Recognizing the complexity and importance of transparently reporting these liabilities, it is recommended that the City Manager be authorized to execute an agreement with GovInvest for the provision of its Pension, OPEB, and Labor Costing Software, as well as Actuarial Valuation reports for City’s self-administered Police and Fire Pension plans and OPEB plan in compliance with Governmental Accounting Standards Board (GASB) Statements 73 and 75. The total cost for these services for five (5) years is not-to-exceed $379,095 ($75,819 per year).
BACKGROUND
Local agencies across the states face a significant challenge in managing their financial obligations related to pension and OPEB liabilities. These liabilities are not only substantial but also complex, requiring sophisticated management and forecasting tools to ensure accurate reporting and compliance with relevant standards, including GASB Statements 73 and 75. The City's ability to effectively manage these liabilities is crucial for its long-term fiscal health and for maintaining the trust of its residents and elected officials.
DISCUSSION
GovInvest's suite of software solutions offers a groundbreaking approach for managing and forecasting the City’s significant pension, OPEB, and labor costs. This technology is uniquely designed to handle the intricacies of public sector financial obligations, providing a level of detail and analysis unparalleled in the market. By integrating GovInvest's pension, OPEB, and labor costing modules, Alameda will possess the capability to model future financial scenarios with precision, ensuring that all potential outcomes are thoroughly considered. This strategic foresight is invaluable for the City's financial planning, allowing for adjustments in policy or strategy well before potential issues become fiscal realities.
GASB Statements 73 and 75 set forth rigorous financial reporting standards that require detailed actuarial valuation and reporting of pension and OPEB liabilities in the City’s Annual Financial Comprehensive Report (ACFR). This transparency is critical for maintaining the trust of stakeholders, including residents, elected officials, and financial institutions.
An often-overlooked aspect of financial management software is its impact on internal and external communications. GovInvest's platform enables the City to create compelling, data-driven presentations for Council meetings and public forums. These presentations can visually communicate the City's financial status, challenges, and strategies in an accessible and understandable format. The ability to clearly articulate complex financial concepts and projections to the council and the public fosters a deeper understanding of the City's fiscal health and the rationale behind specific financial decisions.
Moreover, these presentations serve as a powerful tool for building consensus among council members and engaging with the community. By presenting data in a clear and visually appealing manner, GovInvest's software helps demystify the complexities of pension and OPEB liabilities and labor costs. This transparency and clarity can lead to more informed discussions, enabling elected officials to make better decisions that align with the City's long-term financial and strategic goals. In turn, this enhanced decision-making process strengthens the City's capacity to navigate fiscal challenges, ensuring a stable and prosperous future for Alameda and its residents.
In essence, the adoption of GovInvest's comprehensive software and consulting solutions represents a pivotal step for the ongoing management of these operating liabilities. It not only equips the City with advanced tools for managing its financial obligations but also improves its ability to communicate complex financial information effectively. This combination of analytical prowess and enhanced communication capabilities positions Alameda to achieve its fiscal management objectives while maintaining transparency and fostering community trust.
ALTERNATIVES
• Authorize the Agreement as recommended.
• Modify the scope of the Agreement and/or adjust the approved Agreement authorized amount, and direct staff to find these necessary services elsewhere.
• Do not award this Agreement and give other direction to staff. Not having this Agreement may lead to delays in Pension, OPEB, and Labor Costing forecasts and/or delay in the City’s ACFR due to a lack of valuation reports for the City’s OPEB liabilities.
FINANCIAL IMPACT
Staff has sufficient budget appropriations for the current fiscal year and projected expected appropriations for the next fiscal year due to the lapse of the prior GASB 73 and GASB 75 OPEB Actuarial Valuations reports contract with Nyhart. Future years will be subject to City Council budget appropriations.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The action is consistent with the Alameda Municipal Code and supports the City Strategic Plan priority to Practice Fiscally Responsible, Equitable & Inclusive Governance. This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
The action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
The requested Pension, OPEB, and Labor Costing software, and GASB 73 and GASB 75 Actuarial Valuation reports is consistent with the City’s Climate Action and Resiliency Plan and focuses on paper use reduction. The requested software is capable of forecasting models and circumstances without the need to print supporting documentation.
RECOMMENDATION
Authorize the City Manager to execute the agreement for GovInvest for Pension, OPEB, and Labor Costing Software and GASB Statement 73 and 75 OPEB Actuarial Valuation reports for a total amount not-to-exceed amount of $379,095.
Respectfully submitted,
Margaret O’Brien, Finance Director
By,
Ross McCarthy, Controller
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibit:
1. Agreement