exceeded those assumptions which means that the money being paid out is greater than what they expected so on a june two thousand and nine we were underfunded by about four hundred four thousand dollars excuse me because of that in two thousand and ten the city council approved moving monies from our self insurance fund where we had some additional funds that were for police and fire set aside and we've shifted those monies into the retirement plan and so for for a short period of time we became underfunded but more recently because of better investment returns and because there were some pensioners who passed away sooner than would that were expected or assumed that we are now in a position where we're fully funded were virtually bleep  they were like ninety nine percent or so so now that we are in a fully funded position and it looks like we might be for a little while at least that's what the pension commission believes they are they've asked me to bring to the council a recommendation to increase the monthly pension benefits by ten percent currently there and you'll see this but there are four pensioners remaining and we of those for two of them are the original retirees so then they have surviving spouses so that it went if and when they go the surviving spouses will average of one hundred and forty nine dollars per for each pensioner they're getting different amounts but not by much between the range of one four hundred to one six hundred dollars per pensioner so you know if by doing this it would change our funded status from ninety nine point eight percent  point seven percent so we would be theoretically were actually underfunded by about ten percent the commission's rationale is that it has been at least twenty years and we believe it's been probably closer to thirty years that there have been any kind of cpi increase to these pension they believe that even at ninety point seven percent that we relatively speaking particularly that they are still in a pretty strong position  defense the fiscal impacts of such an increase is that there aren't any immediate impacts it just means that actually that is we measure it today we would become underfunded by fifty six thousand nine twenty one long term the general fund as i mentioned earlier may have to cover that difference if and that the commission understands this but you know what this means is that the general fund if everything goes exactly what they assumed all the investment returns come in like they assume and in the end people live exactly as long as they expect them to live they would end up being a short pensioners and two of them would have surviving spouses that there is a lot of volatility in the funded status because as we saw recently we were we were underfunded but then because of one or two people died in advance of what people  had an imager impact on our funded status there the point is that any remaining short bar surplus will accrue to the general fund and it i know for a fact i could tell you that there's no way that we're gonna do the actuaries are exactly right in terms of how long people are gonna live on what we're gonna earn so there is going to be some either surplus or some shortfall at the end of the plan one way to know that we just don't know what it is it depends on mostly how long people are gonna live relative to the assumptions that were made so from our perspective you know i would just because we don't know what's going to happen these are actual evaluations and they have mortality tables that sort of work generally work at least in large groups but i you know i would treat this ultimately as a request from before for funding from the general fund because we don't know otherwise we can't assume that we know what's going to happen more than an actuary would assume so i think we should just treat this as a request in the general fund long term that we would may have to come up with fifty six thousand dollars to make up this additional cpi increase for the ten percent increase in their pension pension benefits so at this point we're just bringing a recommendation from the commission to committee and an ultimately council we're going to present this next week to the pool council but we're looking for a recommendation from the finance committee okay thank you questions from committee members mister hart yes did the commission talk about future cpi increases you know i think this is history looking back historically and attempting to kind of address you know the past and the very very long time for any kind of adjustment at all but as a policy did they have any kind of discussion about what what about happens next year can we remember hard no they didn't they really didn't talk long term they just felt like it's been on such a long time that to do some kind of an increase i think they're recognized though that actually it would be hard to sort of assume we're going to be giving out annual increases because it would just put us further into a deficit if you will but i will say that my guess is if in three years from now we find that we are over and then yes please and i'm not sure hundred percent sure but i think at that point that they had an option to either shift over to pers or to stay with the existing plan and so some decided wanted to stay okay the other question is how how is it that the the board that's overseeing this pension never thought about cpi increases over a period of two or three decades right it's a term i think the answer is because from ninety two all the way up to two thousand and nine it's been a progression it's been the the funded status has progressively because progressively gotten worse i don't know that we are ever in a position where we were had a surplus just over time people live longer than expected and that that under funded status grew during that period of time but i don't know it's possible that fifteen years ago we had a surplus and maybe they didn't consider it i don't know my guess is that we just were progressively been moving toward a more and more greater unfunded status okay thank you all right i would entertain a motion on this i would move the staff recommendation but the comment that this seems like a a fairness has been absent from this group for a little while that doesn't sound i mean obviously i've been very concerned about our pension system from from the other side but that this is a situation where these folks  besides living longer than they expected perhaps there was there's more inflation than was expected during those earlier years and that was not built in as a concept so much as it now everybody fears it more  course now we're in a more of a deflationary environment but that that was not part of the conversation in the s and s as it is now so anyway i certainly move staff recommendation just to clarify this is not a staff recommendation this is really good recommendation from the commission and i think that also the business about ag the actuarial zuv for people who are in their s and s is just is obviously not a i mean that's just so unknown that we we don't know where that's gonna land i'll second the motion and just do you know precisely the ages therefore people do you not not each individually what is the range of ages they're the youngest there's one person who's sort of an outlier he is seventy three years old  but he's but the other three are in their late s or early s okay and amazingly that there's when they look at their expected their life expectancy it's still a number of years i mean even people in their late nineties are expected to motion passes thank you and then again this will be a full report to council next tuesday the second item matt for environmental services manager will cover thank you mister for afternoon committee members board for the processing and revenue sharing of commingled recyclables that are collected in dumpster containers we're going to go over a couple things a little bit of background about where recyclables in the city go how we collect them talk a little bit about the proposed terms of the contract give our analysis of the agreement and then again to repeat the the staff recommendation to council so by way of background  our recycling system is robust in the city and what we're talking about is the bloob end so whether it's a cart a can or a dumpster in the city we've all seen those we're talking about the blue colored containers where customers of all types whether they be residential or commercial take paper plastic bottles cans newspaper and specifically put those into that container and in for the purposes of the agreement we use a defined term called recycl material and that's just again talking about the source separated paper plastic metal cardboard and glass primarily that we pick up from customers so what happens to the city's recyclable material it's all collected by marburg marburg's are single hauler and they're collecting these blue containers whether they be card scans or dumpsters from all customer types and this is more of a general material flow all of that material in any city and is on the south coast it all goes to a recycling facility where it's separated into the individual commodity types of paper plastic cardboard they're then bailed separately and then sold on the open market across the world so for carts and cans our carts and can material and the blue carts and cans actually is transferred at the county transfer station by the county and driven down to ventura to gold coast recycling we've had a long standing agreement with the county and it's went to about two thousand and five where they do the trucking on behalf of the city they transfer the material and then we actually receive a portion of the revenue that's generated from the sale of those commodities it comes back to the separates that material ships it to market sells it and historically marv org has kept the revenue and that's one of the things we're trying to change through this agreement is that they'll continue to provide that service to the city but the city will shar the proceeds of the sale of that material so graphically specific to us it's just a little matrix peak as we said the carts and cans are collected by marv ward process by gold coast recycling and the city does share in the revenue from the sales of that material the dumpsters however we do not and we have not historically so the agreement that we have drafted w on this after the execution of the franchise agreement that's something that we talked about what this always ad hoc committee that's something we would quickly follow up on but we intentionally separated this contract from the franchise agreement primarily because of the volatility in the commodity markets the franchise agreement is very stable we negotiated terms with marv oregon very stable premise that we wouldn't really change and based on their revenues and things over the next ten  years and we intentionally kept this out so as the markets rise and fall or primarily fall they wouldn't come back to the city and ask for rate increases so the scope of work for this is that marburg will continue to process separate and market recyclable material collected from the blue dumpsters in the city they'll provide the facility to labor the transportation and maintain the permits they will then remit a portion of that that revenue from the sales back to the city and just a note the physical collection of the material and all the trucks and drivers that's all governed by the franchise agreement this agreement starts at the moment that that truck crosses the threshold into the david love the franchise agreement however there is a early termination provision that's at the request of the city and that's if the city were to join into a regional waste management initiative similar to the resource recovery project  then we'll be able to redirect this material to really the more appropriate facility this is a good short term measure but ultimately the resource recovery project would be more appropriate the payment terms marburg will be paying the city a flat rate of thirty dollars and forty four cents per ton and it's on all source separated recyclables collected in dumpsters and it ties neatly back to the monthly report to they they submit to the city so we'll simply take that number multiply it by thirty forty four and that's our predictable payment there is an annual cpi adjustment and then marburg will also be the reporting agent to state agencies like cal recycle on the city's behalf for our for our diversion performance thousand and thirteen had we been under this agreement we would have netted a median rate of twenty nine eighty nine so it's right in the ballpark i then checked with the county and under a very similar agreement between the county and mar board they're getting paid twenty six forty four a ton so it's slightly better than what the county is getting in terms of the estimated revenues we are predicting which is already budgeted to net seventy five thousand dollars for the first sorry for the last six months of fiscal year fourteen as well as fiscal year fifteen we budgeted fifty thousand and one hundred thousand dollars respectively and our tonnage is have just risen a little bit since we made those initial budgetary predictions we stable our carts and cans we ride the market we collect cards and cans we ship in the market and whatever the market is willing to pay we fetch we pay the county for their their service fees and we met the rest it's been very volatile on the good years we've netted upwards of forty to fifty to a ton and on the bad years we've actually paved three hundred and nineteen a ton to dispose of the material because the markets just dropped out so for this for this agreement it is nice to have a stable element in our diversion portfolio that we can count on and as i said there's potential for revenue growth from volume as we as we through marburg shift more of that commingled material to the blue can as the volumes rise so while the payments to the city and lastly it is a is a sound short term solution you know if we were to do this for the long term we would put out an rfp and do a full due diligence procedure like we you know like we would with any other contract we were looking for a short term measure that would bridge the gap between receiving no payments now and the eventual if approved construction of the resource recovery project where we'll set up some sort of term for revenue sharing with with that vendor so the staff recommendation is we're requesting the the committee to recommend to council authorizing the finance director to execute a contract with marburg industries for processing of recyclable material as you've seen and we'll be taking that to the council next week on they in my experience they are they are very good at finding markets for one they have very good relationships with brokers and they they do go through the volatility like everybody but but they're finding markets for all kinds of materials it's this material it's all the material coming out of their cd facility they're a fairly large volume player and that opens the that opens the gates for access to other markets that that smaller facilities wouldn't have so partly is that they're good at it the other main reason is that these terms are a lot better than the city pulling six thousand tons of material out of a relatively small recycling center you know they we have the ability to redirect our material to gold coast for example if we wanted to that would cost marburg a lot of money you know probably a million dollars a year and so they have an incentive to to continue to be our service provider because it's necessary for the economy of scale the rest of their operation yeah okay and is there some connection between warburg's ability to do this  i you know i mean it seems like the county's operation which where we ended up paying three dollars a ton is that they certainly there's a volume there that's that's not the difference between marburg and the county operation was was marburg in a similar environment when we were paying three dollars they certainly were three dollars was two thousand and eight two thousand and nine when the global market cleaner the bales the higher the the revenue that's fetched at market i don't know if you've heard about something called china's green fence where they're now inspecting twenty percent of all the loads coming in vendors that can clean up their bales and make it through the customs inspections in china you know make a lot of money when i went out and looked at marburg's facility one of the things that's beneficial to them is that it's small and they use a lot of manual labor to hand pick material on a very slow line you know other highly automated materials the belt speeds could be twenty miles an hour this is a very manageable two miles an hour where they're hand picking and keeping paper and cardboard and things pristine so that's another reason why i believe they they perform well at market they're generating a higher quality product and getting a higher price for it as a result and that's their model and that's why they're comfortable with the price point and so it is sustainable going forward ok well thank you helps answer my questions i would speculate this mister chair is that that the crash just it's like the stock market where yeah you want to look at the range of the stock market in the last five years it was from you know six thousand  sixteen well it wasn't that six zero for very long and that that so it's a part i bet that that cheap recyclable was was for a very short period of time and you know nothing was sustainable at that time another thing i remember hearing about marburg at that time was for example they were there warehousing some of the at that time even some of the metals where we're going into a places and down in in in the ventura county area where they just their rat holing that stuff for a time when they could get some real money for it when at the time it would otherwise it just would have flowed through it at the low cost aspect so that's the nimble part that that you were asking about there this is a good operator that's trying to maximize their value there so we get to share in that a little bit and i would say congratulations to the free market system at work even if it is a regulated utility okay so do we have a motion for a recommendation to city council on this i'll move the staff recommendation all those in favor