OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Columbia City Council Pre-Council Meeting Summary – July 23, 2025

Video ArchiveWednesday, July 23, 2025
BodyColumbia, Missouri
SessionVideo Archive
DateWednesday, July 23, 2025
StatusFILED
Video Record

STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE

Transcript — Verbatim
0:00

Alright, well I think we've got everybody here.

0:02

Now we're gonna go and with our hope in session of the July 21st, 2025 uh Columbia City Council's pre-council meeting.

0:10

And I think I'm kicking this over to Jim McDonald or Matthew Liu.

0:14

Please use the microphone.

0:17

Alright, so we have uh Heidi Barry from GRS.

0:21

She is uh well Mita and her are actuaries, so she'll be talking about the actual report, and then we have Mark Shigowski and David Sears from UBS, they are investment managers and sprinkle throughout here.

0:34

We do have members of the police and fire pension board, so as well.

0:39

So I think we were gonna have Heidi kick this off.

0:42

So Heidi, if you want to bring up your slides and we can get started.

0:47

Okay, great, thank you.

0:50

I'm gonna share my screen here.

0:55

Uh see.

0:59

You have to get our permission to share these.

1:01

Okay, Matthew.

1:02

Okay.

1:07

So do you have permission there?

1:09

You should have permission.

1:11

Yeah.

1:14

Yeah.

1:18

Okay.

1:20

So Mia could not be here today, so I'm going to go through the results of the September 30, 2024 actuorial valuation.

1:32

So the main, there are a couple of main reasons that we perform the valuation.

1:37

One big one is of course we want to determine what the employer contribution rate is going to be.

1:42

And the 24 valuation determines the employer contribution rate for your fiscal year ending September 30, 2026.

1:50

The other big thing that we want to keep an eye on our look at is the funding progress of the system.

1:55

And we do this obviously on an annual basis, we want to see what has happened from 2023 to 24 and so on.

2:06

So this graph here is meant to kind of illustrate how you would finance your benefit obligations, and it shows in some ways it shows the benefits of prefunding the plan, which is what uh Columbia is doing.

2:24

So this green bar here would be considered like a pay as you go system where you're just paying out benefits over time.

2:33

Eventually the system will be relatively mature and you'll um it'll level off because you'll have people retiring and then you'll have other people dying and coming off, and it will be remain relatively level.

2:47

So the employer would be paying everything under that green bar.

2:52

Now the benefits of prefunding is this little horizontal blue line that we're looking at.

2:59

In a pre-funding, we start paying contributions into the system immediately, employer and employee.

3:06

And you invest this money that is not being paid out, with the idea being that over time the employer and the employee is paying this this amount under these, and the system earns investment income that's gonna pay out the rest of those benefits.

3:23

So in spends it's it's a the investment is a big part of what is paying for those benefits.

3:31

So now when we perform an actual evaluation, we take a lot of different things into account.

3:36

So we're gonna look at the census data, a snapshot of the census data as of September 30, 2024, and similarly snapshot of the assets of that same time period.

3:48

We'll look at benefit provisions, and uh sometimes there are benefit provision changes.

3:52

There were no changes for 2024, but we pretty much have to model the benefits that the system is um expecting to pay its members.

4:03

So in order to do that, we have to make a lot of assumptions.

4:08

So we don't really know what's gonna happen in the future.

4:10

We have to make assumptions about mortality when people will die, uh, when people will retire, if people will make it to retirement, or will they quit beforehand?

4:21

Lots of different assumptions that go into the valuation.

4:25

And then finally, we need a funding method, something to develop the employer contribution rates so that the system can contribute and be able to pay out the benefits when they're new.

4:37

Alright, so now we're gonna get into the actual 24 results and data and all the stuff that went into uh developing uh evaluation results.

4:49

So we'll take a snapshot.

4:50

Um this is a snapshot of the active members that includes your job members.

5:00

So for police, there were 136 active members as of September 30, 2024, and the payroll increase pretty significantly to 11.6 million.

5:08

So that was about a 16.5% increase in the total payroll for the group.

5:14

And that will become important a little later on when we're talking about the contribution rates.

5:20

And then similarly, we have some information for the fire at the bottom.

5:24

There are 168 active members, and total payroll is 13.6, 13.7 million, and that was a 17.5% increase.

5:36

So I'll segue back to that in a little while.

5:42

For retirees and beneficiaries, we had this is a reconciliation of the data from 2023 to 24.

5:50

So we had eight new retirees or beneficiaries coming onto the system, three were removed, or a total of 203 benefit recipients receiving about 6.8 million dollars in annual benefits.

6:06

And then for fire, we had 15 new retirees and beneficiaries added to the system.

6:13

10 were removed, and uh for a total of 181 members receiving about 9.5 million, and then we'll take a look at the assets, and then we'll put all this into all come together into the results.

6:32

So for the assets, we don't use the market value of assets because the markets can be relatively volatile from year to year, so we want to try to reduce some of that volatility.

6:42

And we do that by using a four-year smoothing method.

6:46

So this page is what we use to develop those assets that we want to ultimately use to produce the results.

6:53

So we have in row a funding value at the beginning of the year of 174.4 million.

Discussion Breakdown — Share of Meeting
Pension Planning█████████████████████████████████████████████45%
Energy Management█████████████████████████████29%
Investment Management███████7%
Public Works███████7%
Public Engagement█████5%
Procurement████4%
Budget Equity Analysis██2%
Procedural1%
Summary of Proceedings

Columbia City Council Pre-Council Meeting Summary – July 23, 2025

The Columbia City Council held a pre-council meeting on July 23, 2025. The meeting included presentations on the 2024 actuarial valuation of the Police and Fire Pension System and an information session on energy savings performance contracting. Council members reviewed pension funding status, investment performance, and potential facility improvements.

Discussion Items

Actuarial Valuation Report for Police and Fire Pension (Fiscal Year Ending September 30, 2024)

  • Presentation: Heidi Barry of GRS presented the actuarial valuation, determining the employer contribution rate for fiscal year ending September 30, 2026. The valuation used a four-year smoothing method on market returns to reduce volatility.
  • Key Statistics:
    • Active members: 136 police (payroll $11.6 million, +16.5%) and 168 fire (payroll $13.7 million, +17.5%).
    • Retirees/beneficiaries: 203 police (annual benefits $6.8 million) and 181 fire ($9.5 million).
    • Market return: 22.5% ($37.6 million) vs. assumed 6.25%.
    • Funding value of assets: $189 million (market value $204 million).
    • Unfunded accrued liability: ≈$156 million, funded ratio 55% (up from 53% in 2023).
  • Employer Contribution Rates:
    • Police: total employer rate 46.57% (down from 50.72% for FY2025) – the decrease driven by payroll growth, not lower dollar contributions.
    • Fire: total employer rate 60.56% (down from 68% for FY2025).
  • Council Concerns: Council Member Jackie Sample expressed deep concern about the long-term declining funding ratio (from ~54% in 2021 to 51-55% currently) and questioned whether the plan is on track to meet obligations. She noted that a healthy fund is typically 80% funded.
  • Staff/Actuary Responses:
    • Jim McDonald explained that the funded ratio improved slightly from 2023 and that past assumption changes (e.g., lowering assumed return from 7% to 6.25%) reduced the ratio but made it more realistic.
    • Matthew Liu noted that the city has always paid the required contribution and that the plan uses a 27-year amortization schedule. He and McDonald expressed commitment not to reset the amortization period in the next experience study.
    • Net cash flow from investments is turning positive: $1.7 million withdrawn in 2023, $0.7 million in 2024, and no withdrawal projected for 2025.
  • Investment Manager Report: Mark Shigowski and David Sears of UBS presented portfolio allocation (large/small cap US stocks, international stocks, fixed income, alternatives) with an overall fee of 0.38%. Portfolio grew from $29 million (2002 inception) to $215 million. Recent years saw net cash outflows, but fiscal year-to-date positive inflows of ~$1 million. Council noted that improved investment management and realistic return assumptions contributed to better performance.

Energy Performance Contracting Information Session

  • Presentation: Eric Hempel (City staff) introduced the procurement method, and Dana Dunn of Amoresco explained energy savings performance contracting (EPC) under Missouri statute RSMO 8.231. Amoresco was selected via RFP to identify and implement facility improvements using guaranteed energy savings.
  • Current Projects:
    • Facilities: Armory, Activity and Recreation Center (ARC), and City Hall.
    • AMI (Advanced Metering Infrastructure) for Columbia Water and Light – project development agreement pending.
  • Proposed Measures:
    • Armory: Heating/cooling replacement (system 25 years old), lighting redesign, potential resiliency hub.
    • ARC: Pool HVAC replacement (25 years old), lighting redesign with daylight harvesting, roof replacement, solar and battery storage, low-E window film.
    • City Hall: Scope under development.
  • Funding: Savings from reduced energy and operations/maintenance costs would pay for improvements over up to 15 years, potentially budget neutral. Financing via tax-exempt lease, not affecting bonding limits.
  • Next Steps: Verification meetings ongoing; aim to complete facility side by December 2025 for 2026 construction. AMI project development expected to take 3-5 months after signing agreement.

Key Outcomes

  • Council received the actuarial report and investment update; no votes were taken. Council Member Sample voiced ongoing concerns about pension funding levels, but staff reiterated commitment to current amortization schedule and annual contributions.
  • Council directed staff to continue the energy performance contracting process; further council approval will be needed before implementation.
  • The next experience study for pension assumptions is planned for 2027, covering 2021–2025 experience.

Meeting Transcript

Alright, well I think we've got everybody here. Now we're gonna go and with our hope in session of the July 21st, 2025 uh Columbia City Council's pre-council meeting. And I think I'm kicking this over to Jim McDonald or Matthew Liu. Please use the microphone. Alright, so we have uh Heidi Barry from GRS. She is uh well Mita and her are actuaries, so she'll be talking about the actual report, and then we have Mark Shigowski and David Sears from UBS, they are investment managers and sprinkle throughout here. We do have members of the police and fire pension board, so as well. So I think we were gonna have Heidi kick this off. So Heidi, if you want to bring up your slides and we can get started. Okay, great, thank you. I'm gonna share my screen here. Uh see. You have to get our permission to share these. Okay, Matthew. Okay. So do you have permission there? You should have permission. Yeah. Yeah. Okay. So Mia could not be here today, so I'm going to go through the results of the September 30, 2024 actuorial valuation. So the main, there are a couple of main reasons that we perform the valuation. One big one is of course we want to determine what the employer contribution rate is going to be. And the 24 valuation determines the employer contribution rate for your fiscal year ending September 30, 2026. The other big thing that we want to keep an eye on our look at is the funding progress of the system. And we do this obviously on an annual basis, we want to see what has happened from 2023 to 24 and so on. So this graph here is meant to kind of illustrate how you would finance your benefit obligations, and it shows in some ways it shows the benefits of prefunding the plan, which is what uh Columbia is doing. So this green bar here would be considered like a pay as you go system where you're just paying out benefits over time. Eventually the system will be relatively mature and you'll um it'll level off because you'll have people retiring and then you'll have other people dying and coming off, and it will be remain relatively level. So the employer would be paying everything under that green bar. Now the benefits of prefunding is this little horizontal blue line that we're looking at. In a pre-funding, we start paying contributions into the system immediately, employer and employee. And you invest this money that is not being paid out, with the idea being that over time the employer and the employee is paying this this amount under these, and the system earns investment income that's gonna pay out the rest of those benefits. So in spends it's it's a the investment is a big part of what is paying for those benefits. So now when we perform an actual evaluation, we take a lot of different things into account. So we're gonna look at the census data, a snapshot of the census data as of September 30, 2024, and similarly snapshot of the assets of that same time period. We'll look at benefit provisions, and uh sometimes there are benefit provision changes. There were no changes for 2024, but we pretty much have to model the benefits that the system is um expecting to pay its members. So in order to do that, we have to make a lot of assumptions. So we don't really know what's gonna happen in the future. We have to make assumptions about mortality when people will die, uh, when people will retire, if people will make it to retirement, or will they quit beforehand? Lots of different assumptions that go into the valuation. And then finally, we need a funding method, something to develop the employer contribution rates so that the system can contribute and be able to pay out the benefits when they're new. Alright, so now we're gonna get into the actual 24 results and data and all the stuff that went into uh developing uh evaluation results. So we'll take a snapshot. Um this is a snapshot of the active members that includes your job members. So for police, there were 136 active members as of September 30, 2024, and the payroll increase pretty significantly to 11.6 million. So that was about a 16.5% increase in the total payroll for the group. And that will become important a little later on when we're talking about the contribution rates. And then similarly, we have some information for the fire at the bottom.

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