General Fund Expenditures

Salaries: Salaries and salary-related costs are the largest single expenditure for the Town, approximately 70% of the Town’s expenditures, including Fire and Police Department compensation.

Health Benefits: The Town currently has a cafeteria benefits plan that pays the equivalent of family Kaiser and dental insurance, as well as a small life insurance policy for each employee and long-term disability premium currently in the amount of approximately $2400 per month. The Town pays a lesser amount for employees who do not elect family coverage.

Retirement: The Town is a member of the California Public Employees Retirement System (CalPERS). Classic members, those a member of CalPERS or a reciprocal retirement system prior to January 2013, are enrolled in a 2.5% at 55 plan.

In January 2013 the Public Employees’ Pension Reform Act (PEPRA) went into effect. Any person who becomes a member of the CalPERS retirement system or a reciprocal system on or after January 1, 2013 may only be offered the new pension benefit plan specified in the Reform Act. All miscellaneous PEPRA members are subject to a formula providing 2% of compensation for each year of service for an individual retiring at age 62, increasing to 2.5% for an individual retiring at age 67. Approximately two thirds of Town employees are members of the PEPRA plan.

Currently, part of the pension rate is expressed as a percentage of monthly salary. Employees pay the employee share, which is 8% for classic miscellaneous members and 8.25% for PEPRA miscellaneous members for the 2023-2024 fiscal year. The Town currently has no safety employees, as both police and fire services are provided by Joint Powers Authorities (JPAs). The employer’s PERS rate for 2023-2024 is 14.92% for classic miscellaneous members and 8% for PEPRA miscellaneous members. Of this employer amount, classic miscellaneous employees pay 5.5% or 4.5% of salary, depending on bargaining group, resulting in employees paying more than half the normal CalPERS cost.

In addition to the employee and employer contribution rates for normal CalPERS costs, employers must pay contributions toward unfunded liability. For the 2023-2024 fiscal year, the Town will not be required to make a contribution for unfunded liability due to the fact that the Town’s account is overfunded as of June 30, 2021, the most recent CalPERS actuarial valuation, due to strong investment returns in the 2020-2021 fiscal year. The Town does expect to have a payment in the 2024-2025 fiscal year once the CalPERS actuarial report recognizes investment losses in the 2021-2022 fiscal year.

In May 2021, the Town issued Pension Obligation Bonds (POBs) in order to reduce its CalPERS unfunded liability by approximately $18.8 million. The $18.8 million represented 80% of the Town’s unfunded liability at the time. At the time of issuance, the estimated total savings as a result of the POBs was approximately $12.4 million over 15 years. The savings during the 2022-2023 fiscal year was approximately $638,000. This amount will be used to prefund the Town’s retiree health care obligations. Once the 2022-2023 actuarial valuation is published, the Town expects to once again have an unfunded liability due to investment losses in the 2022-2023 fiscal year.

With the consolidation of Police services into the Central Marin Police Authority, pension costs are included in the police budget. Fire services are provided by Central Marin Fire Authority as of March 2019. The Town retained its unfunded pension liability for Fire Department employees prior to March 2019. Pension costs and liability after the transfer of employees to Central Marin Fire Authority remain the responsibility of the Town and are included in the above information regarding retirement costs.

Payroll Taxes (included in Other Benefits): The Town participates in Social Security at a rate of 7.65% of total salary for part time employees not enrolled in CalPERS and in Medicare at a rate of 1.45% of total salary for all employees.

• Building Maintenance: Janitorial, heating and air conditioning and other repairs.
• Vehicle Operations: Preventive and repair maintenance for the Town fleet of cars and trucks.
• Equipment Maintenance: Town equipment, including office equipment, copy machines, postage machine, computers, mowers.
• Memberships & Dues: Professional and technical publications and membership dues in professional organizations.
• Outside Services: Outside audits, technical consulting assistance, actuarial reports, printing services, records storage, repairs, contact maintenance services, weed abatement, plan reviews and inspections, code enforcement, tree maintenance, traffic signal maintenance, streetlight maintenance, landscaping services, contract personnel, legal services, advertising and other contract services.
• Training: Workshops, seminars and conference to keep staff current.
• Utilities: Telephone, gas, electricity, water, sewer, and heat/air.
• Building Maintenance: Janitorial, heating and air conditioning, and minor repairs.
• Supplies: Postage, copy paper, and miscellaneous supplies; costs associated with employee uniforms, boots, and protective clothing tools; supplies and services related to the technical functions of each department.

• Retiree Health Benefits: The Town expects to pay $528,000 for retiree health benefits for the 2023-2024 fiscal year. The Town will also pay $600,000 into the trust to prefund future retiree medical benefits.
• Debt Service: The Town will pay $970,555 in principal and interest for debt service associated with the pension obligation bonds mentioned above.