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The Pleasanton City Council is set to receive a presentation from staff Tuesday regarding the city’s efforts to manage its pension obligations before subsequently voting on a pension funding policy that aims to help the city uphold financially sound management practices and more effectively control increasing pension costs.
According to the March 17 staff report, the council will also review the different strategies and options for how to effectively use the city’s Section 115 Trust Fund — a supplemental fund the city established to address its unfunded retiree medical and pension liabilities — which would be included in the new pension funding policy that goes into effect the same day, if approved.
“While considering the use of pension trust funds (one-time resources) to balance the budget, the city should take a balanced approach that accounts for significant needs in other areas — particularly the $44 million annual infrastructure funding gap identified in the Asset Management Plan,” the staff report states.
“To maintain essential city services, the city should adopt a holistic approach to support programs and fund serviceable community assets, such as the library, public safety buildings, streets and roadways, and parks and trails,” staff further stated. “Establishing a clear vision and implementing a long-term financial strategy will strengthen the city’s ability to sustain core services and critical infrastructure while containing costs over time.”
According to staff, the city currently participates in various pension plans that are administered by the California Public Employees Retirement System. Over the years, staff said the city has been proactive in implementing different strategies to pay down those pension liabilities and stabilize pension costs in the future.
“The City’s pension expenses have substantially increased since the Great Recession (around 2007), primarily due to CalPERS investment losses and various changes in CalPERS policies related to calculating pension liabilities,” staff noted.
According to the staff report, recent projections show that the city’s CalPERS contributions are expected to peak in the 2030-31 fiscal year. Current pension costs for fiscal years 2025-26 and 2026-27 are budgeted at $29 million and $31 million, respectively.
The city has also allocated $38 million to the Section 115 fund, which currently has a balance of $60 million.
Ahead of Tuesday’s presentation, the city worked with its municipal financial advisory firm to prepare the different materials that the council will be reviewing. Those materials include CalPERS costs, pension cost containment strategies and the different options the city can take to use the Section 115 fund as part of the new funding policy.
“The policy establishes a clear plan and methodology for funding current and future pension costs/liabilities,” staff noted in the council report. “It also promotes long-term fiscal sustainability and demonstrates prudent financial management practices.”
The different options for the 115 trust fund range from withdrawing all funds from the trust over an 18-year period to withdrawing money from the trust until a certain threshold. According to staff, if the council does wish to use the pension trust funds to help balance the city’s budget, the best option would be to take out $4.4 million every year for the next 12 years, which is projected to leave about $44.3 million in the trust at the end of the withdrawal period.
“This recommendation is also consistent with the city’s actuary’s guidance provided to the Council in March 2025 regarding minimum use of pension trust funds,” according to staff. “Maintaining an adequate balance in the trust will help the city to cover future pension costs and provide a buffer for unexpected spikes in pension contributions due to CalPERS investment losses or changes in actuarial assumptions.”
The City Council meeting is scheduled to begin at 7 p.m. Tuesday (March 17). The full agenda can be accessed here.
In other business:
* Prior to Tuesday’s regularly scheduled meeting, the council will be meeting during a special workshop where staff will present a report on the implementation of the city’s ONE Pleasanton five-year strategic plan and go over the new strategic plan dashboard, which staff say will serve as the city’s new formal quarterly reporting tool.
Staff will then look for direction from the council regarding which priority projects from the plan to focus on during the upcoming fiscal year.
“The workshop marks an important evolution in the Strategic Plan process from initial priority-setting to ongoing, measurable accountability,” staff stated in Tuesday’s workshop report.
The special City Council workshop is scheduled to begin at 4:30 p.m. The full agenda report for the workshop can be accessed here. The workshop will not be videorecorded.
* During the regular council meeting, the dais will vote on adopting an “Early Project Review Policy”.
If approved, this new policy would establish a “clear, consistent pathway for early City Council consideration and direction on projects requiring legislative approval, prior to the applicant and City committing substantial resources to preparing and processing such applications.”
This resolution comes a little more than a month after the council showed early support for the new early project review process during the Feb. 3 council meeting.
“The City has received an increasing volume of inquiries over recent months from property owners and developers seeking discretionary legislative actions, such as General Plan amendments and rezoning, to enable land-use changes,” according to staff. “On Feb. 3, 2026, the City Council considered whether to develop a structured approach for evaluation of such requests, and after discussion, directed staff to return with a policy framework for adoption.”
The new policy also includes a proposed amendment to the master fee schedule to adopt a fee for processing early project review applications.
* During the consent calendar portion of the meeting, the council will be voting on approving the city’s 2025 Housing Element annual progress report, which goes over the city’s status on meeting its state-mandated Regional Housing Needs Allocation (RHNA) target of over nearly 6,000 new housing units by 2031.
Consent calendar items are considered routine in nature and are typically approved by a single vote with little to no discussion.
* Also during consent, the council will be looking to adopt a resolution that would authorize an RHNA transfer agreement to shift 18 above-moderate-income units from Alameda County to the Pleasanton’s RHNA obligation, following the annexation of the Merritt property in February.
The property will be redeveloped into a 111-lot residential project consisting of 92 age-qualified single-family detached homes and 18 affordable duet-style homes.
* Another item the council will vote on during consent will be a $50,000 budget amendment to reimburse the Union Pacific Railroad for the time its staff has spent reviewing crossings as part of the city’s efforts to develop a railroad quiet zone, a process that the city started in January.
