I'm calling the order to this hearing.

This is a public hearing of the committee of the whole of the Council of the District of Columbia.

I'm Phil Mendelson, Chairman of the Council and Chair of the Committee of the Whole.

Today is Monday, April 6, 2026.

The time is 1219 in the afternoon.

We are in room 500 of the John E.

Wilson Building.

The subject of this hearing is Bill 26-627 entitled Frequency Standardization for Contributions in Support of District Government Employee Benefits Amendment Act of 2026.

This legislation was introduced by me at the request of the Chief Financial Officer on Friday, March 13th.

And the stated purpose of this legislation is to amend the District of Columbia Comprehensive Merit Personnel Act of 1978 and the Police Officers Firefighters and Teachers Retirement Benefit Replacement Plan of 1998 to standardize and align the frequency of the district's contributions and support of benefits for employees of the district government.

The legislation proposes that the other postemployment benefits fund be paid instead of every fiscal year to on a regular pay period basis.

And it proposes that the defined contribution payment plan, also known as the Section 401A trust, to be instead of not less frequently than quarterly to read per pay period, and the legislation provides that the police officers, firefighters, and teacher retirement benefit replacement plan be changed from not more than 30 days after it is appropriated or 30 days after the beginning of the fiscal year for which it is appropriated, whichever is later, to instead read on the 15th and last day of every month.

The purpose of these changes is to smooth out the payments to these different funds so that instead of there being an a lump sum, that um it is more uh frequent and standardized.

That's why the legislation is entitled Frequency Standardization of Contributions.

The impetus behind this is to help the district with regard to cash flow purposes.

Uh since uh making, for example, an annual payment at the start of the fiscal year to the retirement funds uh doesn't recognize that the revenues that support that payment don't come in all at once at the beginning of the fiscal year.

The record in this matter will be open for two weeks.

That is, it will close at 5 p.m.

on Monday, April 20th, 2026.

So anyone who is testifying today or wishes to supplement their comments, and anyone who isn't testifying today but wishes to, um, all comments are welcome, but in order to be included in the record, they have to be filed with the committee no later than 5 p.m.

on Monday, April 20th, 2026.

Uh I'm going to break up the witnesses that we have uh to hear from uh the retirement board and then to hear from the chief financial officer.

So Daniel Hernandez, Pension Administrator from the for the District of Columbia Retirement Board, Kate Robinson, who's interim general counsel with the retirement board, and Tim Vincente, who is the actuary with Bolton Partners.

And I don't have a copy of your statement.

We have an informal statement.

We can provide you.

I have it on in uh thank you.

All right, the floor is yours.

Good afternoon, Chairman Mendelssohn, Committee of the Hall.

My name is Daniel Hernandez.

I'm the pension administrator for the District of Columbia Retirement Board.

Uh with me today, I have Leslie West, RC CFO, and Tom Vincente, our actuary from Bolton Incorporated.

Uh, we're here and pleased to provide testimony on bill on bill 26-627, the frequency standardization for contribution and the support of the district government employee benefits amendment act of 2026.

Though we do not have any any formal report, uh we have engaged with our actuary to study this further and provide additional analysis by your said date of April 20th, where we will be submitting a report.

With that, we provided you some general comments that I've just handed to you, and I'll let our actuary Tom Vicente talk a little bit about the impact of this bill on DCRB.

Thank you, Daniel.

Um the DCRB asked us basically three questions.

One was what are others doing?

How common is the current practice versus the proposed practice?

Uh what's the implication to the board and the pension plan itself?

Then finally, any other thoughts?

And finally, what?

And just any other thoughts we had on the on about the bill and the proposed changes.

So in terms of other organizations, we polled um a group called NASRA.

That's the National Association of State Retirement Administrators.

So they are a trade group for probably the 150 to 200 largest pension government pension plans in the U.S.

So they have a lot of surveys of their members' practices.

However, they do not have a survey about the timing of when individual when plans put their money in or governments put the money in.

The government finance officers association does publish what they call best practices.

However, they do not address this specific topic about the timing of when money should go in.

They just say there should be a commitment to put money into the plan.

So those two sort of national organizations didn't have anything.

So we did survey uh local employers of size in the Maryland, Virginia area, and we came up with 19 answers.

Um of those 11 use a single payment approach.

Seven of those make their payment in the first quarter of their fiscal year.

Uh the other seven use some sort of periodic approach, bi-monthly or quarterly or monthly type approaches.

So it's it's it's still more heavily toward the single approach, single payment approach, but it's not universal, certainly.

So nothing really conclusive there.

In terms of the implications for the plan itself, there's positives and negatives.

So the big negative is that when money goes into the plan, it's invested.

And the longer it's in the plan, in theory, the better the investment returns, or the more time that money has to reap investment returns.

So money going in more slowly will have less investment return over the long term.

Um we did a 10-year projection, and over those 10 years, we projected that the district, because of that loss of interest for the period of time the money is not in the proposed approach versus the current approach, there'd be about a $24 million additional contribution cumulatively over that 10-year period.

Um by 2036, the end of the 10 years, the contribution being calculated by the actuaries would be about one 1.8% higher.

So that's probably the biggest negative to it, that it does accrue these costs because the money's in the fund earning an investment returns for a longer period of time.

Uh on the other side, some of the pros for this, it was mentioned, I think, when you read the purpose of the bill, it does help the district manage its cash flow.

Um, so that's a positive.

Um, it does reduce market timing risk.

When the money all goes in at once, presumably you could be investing in a great day in the market, a really high day, and then you spend the rest of the year trying to pick up for it because there's a bad day the day after.

So by spreading the money out, that could be a positive uh over time.

Um it does also, another positive, it would help the pension fund.

So the pension fund is what we call cash flow negative right now.

That is the benefit payments exceed the contributions for the year.

So the money coming in periodically could help with avoiding to have to sell investments over the course of the year because cash will be flowing in, and that cash could then be used for benefit payments.

So those are all positives.

Um we mentioned the the higher cost over time as a negative.

Um other negatives, potential negatives that is.

You know, by spreading out over a long period of time, is there potentiality that something happens in the district and all of a sudden the money is not available in the back half of the fiscal year?

Is that a possibility?

Possibly.

Um it does add additional tracking and reconciliation responsibilities on to the DCRB and the district to try to make sure this is all going in.

So those are the pros and cons that we we had trying to keep it relatively succinct.

Um in terms of other thoughts that we had about it, um, we see a number of of different pieces of legislation that come out around pension plans when there's a change.

It's not uncommon that they'll put what they call a sunset provision in, where they'll put something in that's new, and if it doesn't work out the way it was expected, it automatically expires over a certain period of time unless it works out.

Then legislation is put in to make it permanent.

So that was a thought that we've seen others do.

Don't know if that has a is worthwhile for this or not.

Two other thoughts in the legislation as we read it, it talked about spreading the payments out, but it didn't say specifically that the payments would be 112 or 124th of the annual payment, it just said they would be spread out.

So it might be a suggestion to specify that the payments themselves be one twenty-fourth of the annual amount that's been appropriated versus just saying it's spread out.

I don't know if that's necessary or not.

Um then the last thought was around the idea that right now with the 15th and the and the and the last day of the month.

Um we would suggest that possibly the first and the 15th would be better because it allows some time within the month if there is a discrepancy of some sort, if there's some need to go back between the district and the board to try to straighten out any discrepancies, there's a little bit of time left in that month to do so, and especially important at the end of the fiscal year and trying to get all the the numbers straightened out.

Uh so relatively minor, I think, suggestions there.

That that's the end of our uh preliminary comments.

I don't know if there's any questions or discussion you want to have.

Anything additional, Mr.

Um Hernandez.

No, uh like I said, we will get you a formal report by the deadline of the 20th.

And uh as outlined that Tom gave right now will expand upon that to include uh uh financial numbers, so you can see too.

So uh looking at the outline of your um testimony or statement, Mr.

Vincenti.

The um couple of questions.

The uh the shift instead of being the 15th and the last day to be the first and the fifteenth is because that's just more specific?

I think it was it was to concern the concern was is it better if there is a discrepancy of some sort in a deposit, is it easier to fix it within the month, the calendar month versus it going into the following month?

Um that was really all that was about.

I think it was just a little extra time that in the in the month to fix any discrepancies if there are any.

What has the effect of making the payments earlier?

Yes, two weeks earlier.

The first and the fifteenth rather than the fifteenth and the last day.

Yes.

Um consider adding interest.

The uh how would we calculate that?

So that that item C there, in when we do our calculations of the contribution, we take into account the um when I do the calculation, the actuary does the calculation take into account what the assumed timing of the deposits are going to be.

So right now we we do the calculation with the assumption the deposit is in the beginning of the fiscal year.

So in our calculations, what we would typically do if we knew about that contributions were made mid-year, which essentially this spreading it out in bi-monthly payments would on average make the deposit mid-year.

When we do our calculations, we would add essentially three percent to the contribution to account for the fact that the money is going in periodically through the year.

So that's not part of the funding policy today.

Um it's something that we would not change on our own.

We would discuss that with the with the DCR DC retirement board about a possible change in the funding policy, that that calculation would include, you know, that the assumption is six and a quarter percent return on the fund on an annual basis.

So we would assume an assumption that okay, if it's going in effectively mid-year, would we add 3.125 percent on top of the calculated contribution?

But that's a discussion we have not yet had with the DCRB uh about funding policy changes.

So it's a possibility, but it's not something that's been decided.

So I'm looking at the uh costs, what you have here on costs.

So a hundred percent of the money is not available in the first month of the fiscal year.

There is less money and less time to invest over the course of the year.

Correct.

And over 10 years, you estimate that would add 24 million dollars to the district's costs?

Correct.

It says here by 2036, ADC is 1.8 percent higher than otherwise.

So ADC is the actually determined contribution.

So what we're saying is that each when we do our calculations, what we saw that this um slightly less assumed return because of the timing of the payments.

The way it works is that money is not going into the plan.

So it flows into the next year and it builds into the actual contribution.

So every year's contribution is incrementally a little bit higher than the prior years would have been, but for this change.

And so when we do the numbers side by side, each year is a little bit higher, and by the year 20 fiscal 2036, the contribution that we would be calculating would be about 1.8 percent higher than it would be calculated if the money was going in earlier.

So this is all theoretical and projected with this idea that the assumed rate of return occurs every year.

So that's not the ADC is going to be 1.8 percent higher.

It's that with this bill, the ADC will be 1.8 percent higher than it would have otherwise.

Correct.

Correct.

Now you're gonna have a final complete report in a couple of weeks.

Do you think these estimates will change?

I do not know.

Um Mr.

Fincenti, for your work on this, when did you start to work?

So we started this work last week.

And when did you see the legislation?

Uh we saw the, I think the official legislation at the beginning of last week.

What about the unofficial legislation?

We had been talking about it for several months, I believe.

Uh but Daniel had let me know this was something being discussed, and so we had several conversations about it.

Chairman Menderson, we've had uh various conversations with the CFO's office and their uh rewriting of it, and we were at that time providing that to Mr.

Vincente for his review.

This is just the formal uh study.

I'm not sure I followed all that.

So, Mr.

Hernandez, when did you see the draft legislation?

Um probably a month ago, and we went in uh conversations with Deborah Fries from the CFO's office uh when they were looking at their cost estimates for it too, and we were running that by Tom.

And when did you start talking with Bolton?

Go ahead, Tom.

Um I think I'm trying to think now.

What when so we started having conversations informally about this uh several months ago?

And the the conversation from my point of view was that yes, there will be a cost because the money is going in at a slower pace, uh which means that on a theoretical basis, there's less investment return because the money is in the investment pool for a shorter period of time.

And so that was our informal discussions was that yes, there's a cost, but it's not it's not like it's going to change things dramatically all at once.

It's a it's an incremental less investment return on the funds being deposited in a particular year.

Um those were our discussions, and I think we had some very rough numbers we we talked about over the course of that time period.

And then last week, uh Daniel said, okay, we need something more formal for the committee.

This is this is now being formally proposed, and we need something uh more official and more formal.

Um list as one of the pros of this approach reduces market timing risk.

So the idea there is that if you're putting all of the funds into the, you know, if the district contributes them at once and then the DCRB invests them all on the same day or within a very short period of time, there's a risk there that you're putting the money into the investments at a time where perhaps valuations are high.

And the next week there's uh a market down decline of some sort.

And so all the money went in at once, and so you're very tied to that particular date, which might be a good day or a bad day to invest.

If you're spreading the deposits over a long over 12 months, you're mitigating that risk that any one of those deposits is so large is is so large it's going to influence the overall returns on the fund, but also allows you to have the the benefit since you could never predict what's a good day or a bad day to invest, that you're now investing over 24 different days over the course of the year versus uh just on one day.

So that's a positive from the fund standpoint that you're spreading out that risk of it being a good or a bad day, so to speak, in the uh in the investment markets when you put the deposits in.

So that reality, which is that um spreading out the investment dates reduces the risk that there will be a bad investment.

I want to say smooths smooths the um investment returns.

Wouldn't that mitigate some of the um 1.8 percent increase in the actually determined contribution?

Well, the thought is that on any given year, that would be true, but if you are looking over a longer period of time, you wouldn't expect that one day to always be a bad day or always be a good day to do the investments over a 10-year period.

You expect that that would even out.

And if if we're using the assume 6.

That that would be the longer term return over that 10-year period.

So it would all those ups and downs or good day, bad days would balance out over the longer time period.

The investment the market time risk is more of a short-term issue.

That's the problem with the law of averages.

At the moment I don't have any other questions.

So you all are excused, but if you could stick around just in case it might be another question.

So if we could have Glenn Lee, who is the Chief Financial Officer, and Carmen Figler, who is the Deputy Chief Financial Officer.

When you are ready, and good afternoon.

Good afternoon.

It's good to be with you in the committee today.

I am pleased to testify in support of Bill 26-627, the frequency standardization for contributions in support of District Government Employee Benefits Act of 2026.

Further referred to as the bill.

I am joined today by Carmen Pigler, Deputy CFO and Treasurer, who will assist in answering any questions the committee may have.

Under current law, the district's contributions to the other post-employment benefit plan, police officers and firefighters retirement fund and teachers' retirement fund collectively known as the plans are made in one annual payment.

The bill authorizes the district instead to make smaller bi-monthly payments over the course of a year to support more effective management of the district's cash resources.

As I have discussed previously with council members, the timing of cash payments to the district for taxes and other revenue paid to the district and district spending is not synchronized.

Property taxes, one of our largest sources of revenue, are received in two installments in March and September.

Income taxes are received throughout the year, but a roughly 20 to 25 percent is received in April with final filings.

This means that more than half of the district's local revenues are collected in the latter half of the fiscal year, while slightly more than half of the district's spending occurs in the first half of the year.

Ensuring the district has sufficient cash to support its operations during the fiscal year and respond to unanticipated events is an essential part of financial management.

And since the Great Recession, the district has had enough cash resources, both in the form of set of sides like the reserves, contingency revert reserve emergency and so forth, and accumulated surpluses to offsack offset the impact of unsynchronized revenue collections and expenditures.

However, the current financial plan, as you know, expects to use the remaining accumulated prior year surpluses of 1.7 billion dollars to support spending.

These one-time resources previously provided a cushion for available cash and for cash needs.

Once they are spent, that buffer will no longer exist.

As a result, the OCFO is examining how best to meet liquidity needs in the future as accumulated surpluses are depleted and demands for financial resources continue to grow.

The bill under discussion today allows for better management of cash by matching the timing of general fund expenditures for employee benefits with the timing of the collection of district revenues throughout the year.

Rather than making a single large payment at the start of the year of approximately $300 million, as required by current law, which is significant impact on cash flow in the first quarter, contributions of $13 million will be made twice a month.

I want to emphasize that the bill will not change any of the benefits earned by D.C.

government employees and retirees.

The goal of the bill is simply to strengthen the district's cash position throughout the fiscal year.

Thank you for this opportunity to testify.

The Treasurer and I are available to answer any questions you and other members of the committee may have.

Thank you for your testimony.

So the uh bill helps with regard to cash flow analysis or cash flow.

The bill helps with regard to cash flow.

I think I've asked of this before.

Do you have a multi-year or could you provide a multi-year projection of cash flow?

Yes.

And yes.

So the first is yes, uh one of the key activities we're doing to manage our cash better is to really enhance our multi-year forecast of cash balance.

And the fact that we had a rudimentary estimating process over the years reflects the fact that we didn't need to worry about synchronizing our cash with the with the overall budget situation.

But because we're spending our accumulated surpluses, which is part of the financial plan attested by our office, that cushion doesn't exist, so we now have to demand more of ourselves to estimate fairly precisely in the future what each year the financial plan means.

So, yes, we have uh a fairly good model.

We're happy to, and then yes, we would be happy to give you a presentation on it.

Okay.

You said presentation.

What I am asking for is if you could submit as part of the record for this hearing a multi-year cash flow analysis.

Yes.

And how far out would it go?

When I say multi-year through the financial plan period.

Okay.

Uh will there be a fiscal impact for this legislation?

Good morning, Chairman Mendelson.

Carmen Pigler, Treasurer for the District of Columbia.

Yes.

Uh OCFO does plan to submit a fiscal impact statement for this bill.

And uh through our analysis so for the fifth so far, uh, we looked at the impact of this change through the financial plan.

We consider the fact that the district will also by retaining that payment and not making a one-time payment at the beginning of the year.

We also earn interest on that money.

We anticipate that being about sixteen million dollars over through 2030.

And the actuary estimated that it could cost 24 million an additional contributions over 10 years, which I think means 2036.

I can't do the math.

10 over 30, 10 years, uh 24, that's 2.4 million a year.

Um 16 million to 2030 is what per year?

Does it come out as a wash?

Yeah.

If I can to be clear, um we have estimated additional expenses during the financial plan that would be incurred by the uh by the retirement board because of the issues that they described.

There is a bit of a ramp up time relative to when those costs would flow through to our annual required contribution estimate that we would make.

And certainly for the first four years, there is a net gain in resources, not significant, but a net gain to the to the district's resources.

Over time, that is offset largely by uh slightly increased expenses as was described by the actuary.

We don't dispute that.

We we need to work together further to get the numbers really precise.

But in the short run, during the financial plan period, there is a slight gain to the general fund, and that will be part of the budget plan.

And the articulation of that will be part of the budget plan.

I understand the math you're trying to do.

I can't do it at the top of my head either, but we um we we do recognize over time the expenses to the uh required contribution will go up, largely offsetting the interest gains we have.

So the benefit then is just having the cash on hand for our liquidity purposes.

Uh currently when do you OCFO or the district deposit into OPEB?

OPEB, we typically do in April, the third week of April of each fiscal year.

And that also is a one-time payment.

And for the retirement board, that's in October?

Yes.

The legislation talks about a defined benefit plan.

That's right.

Um there's a defined contribution payment plan that's different than DCRB, and that's different than OPEB.

Yes.

That's the 401A plan.

Help me.

Do it, does everybody get 401A?

That is general uh DC employees outside of police fire and teachers that the district does not have a defined benefit for.

But we do contribute, make a contribution to a 401A plan on their behalf.

And when is that made?

That is that is made each pay period.

So each pay period the district sends to the custodian of the 401A plan, the contribution that's made on behalf of each employee.

Um the legislation speaks to changing the language to per pay period, but we're already doing that per pay period.

Yes.

Currently the language refers to quarter, but our practice is actually to do it each each year.

So there's so this may be a good thing to do in the legislation, but there's no effect to it.

Right.

Uh for the OPEB contribution.

Can you tell me how much it was in FY24, FY25, and FY26?

Um FY25 was sixty-three million nine hundred thousand FY24 was 72 million seven hundred FY26.

I'll have to get the exact number for you.

Roughly that amount.

Right.

I believe it was about sixty-four million.

And for the retirement board.

Um can you give me the same information?

FY24, 25, 26?

The FY24 contribution was 130 million, 107,000 dollars.

The FY25 contribution was 224 million, 435,000, and I believe FY26 was 213 million, but I'll get that for you also.

I don't feel like yes.

So this legislation will help with regard to cash flow.

Can you say how much for the first quarter it would be roughly the entire amount of the contribution now, which in aggregate would be about $250 million for the retirement system because we don't pay OPEP until April.

And then that diminishes, that benefit then diminishes by the amount of the monthly contribution.

So if the monthly contribution is $40 million, then for the next month the benefit is $40 million less than it was in the first month, and then so forth.

So by the time we get out to our second trough period, where we're at a very low level of cash, effectively a negative position in cash in August.

There's not a lot of benefit to this, but certainly in the first quarter of the year, there's a substantial benefit.

Payments in terms of frequency of payments have you explored.

The single issues we're looking at is uh adjusting our capital agreement with WAMATA to pay on a monthly basis the capital contributions that we have.

We would like to do that.

That would be changing it from quarterly, first day of each quarter to midway through each month.

And that can help us, especially in the second quarter of the year.

We will explore other opportunities with WAMATA as well that are not necessarily in any particular agreement.

But let's get through this process first.

The second is a discussion we'd like to have with policymakers about school funding and to see if there's opportunities there.

Now we need to do our own staff work so we can articulate to you very tactically what it means, but that's certainly a discussion that we would look forward to having with uh with the lawmakers.

Because when you say school funding, are you talking about the advance or the charters I think are paid quarterly?

Yes, they are.

With I believe the highest amount in August?

Yes.

So we have our own due diligence to do to understand that trajectory.

Um then we'll want to engage lawmakers moving forward to see if that's something that's viable.

In addition, we are evaluating how we actually pay bills.

So to be clear, we generally pay our bills as soon as the processing occurs.

There are other strategies certainly employed in the private sector as you pay comfortably two or three days before the deadline.

And that will take us time to evaluate both the processes to make changes like that as well as the implication on cash flow.

Does that really help us?

I think over the real pinch points in the year, again, pinch point being a place where we're most in a negative position in the cash world, that kind of strategy could be helpful.

That's quite a lift to change because we we process thousands of payments uh a week.

But um it's something that we want to uh evaluate.

So you mentioned WAMATA capital.

The school advances and how bills are paid.

Those are the things we're looking at to smooth out expenses, or be able to time expenses a little bit more advantageously for our cash position.

And certainly uh we'll engage our stakeholders far beyond our office as we think about these things.

Perhaps there's others, but that's that's right now what's what's on our plate, along with this bill.

Uh what impact would it have on our cash flow if the district went to collecting real property tax payments quarterly?

In the long run, it would have an advocations.

It would be very advantageous to do that in the long run.

However, as we may have discussed before, the the issue is always in the transition.

How do we get there?

And to move from the payment every other six months to one that's every month is an enormous technical as well as process challenge.

Technical, just in terms of getting our systems to be able to bill correctly, but that's really the side issue.

The most important issue is in a transition year, you have to decide whether you will have taxpayers speed up their payments, or begin paying monthly under the current schedule, which is you pay your first bill in March and then monthly thereafter.

Our initial assessments, very simple assessments are showing that that kind of transition plan, which holds harmless all of the appeals process in the transition year, will likely result in about a billion, just under a billion dollars less in revenue in that fiscal year.

And it has to do with the timing, because instead of in March receiving half and then September the other half, if instead you're only collecting one-twelft of that through the rest of the fiscal year starting in March, there's a substantial amount of revenue that's not collected in the fiscal year.

In the long run, having uh monthly collections or periodic collections helps, but we have an important transition issue to work through.

The alternative to that that we can think of now, and we we still need to do more research on that, is to have a transition year with extremely short appeals processes.

And that certainly is a very difficult decision that you would have to make judgment on, clearly.

That's a lawmaker decision.

So those are the two extremes that we're trying to evaluate.

So again, the answer to your question, in the long run, smoothing out property taxes is uh would be helpful, no doubt.

The issue is what do we do in the transition year?

I didn't follow how we lose money.

So um unless what I heard you say was the second half you only pay a quarter of your tax.

So our the vast one.

Probably 95 to 98 percent of the property tax collected in a fiscal year happens in a roughly a six-week period in March and early April and then in September.

Um starting some in August and then in September.

Um, the impact of collecting only, let's say monthly, is that your March bill, rather than being half of your bill, is only one twelfth.

Sure.

But then your September bill, rather than being half your bill, is only one twelfth.

And it's the difference between September, what you would have collected, and the monthly payment that would be an issue that we have to solve for.

And right now we we don't really understand all of the implications of that.

But in the end, just from a dollar across the table perspective, there's less money coming in in the transition year.

I I just didn't follow.

So we could do this beginning October 1st, and I pay one twelfth of my property tax on October 1st and 112th on November 1st and 112th on December 1.

Or I heard you say for the first year, I pay my first half in March.

Okay, so I pay, I pay one half in March.

And then in April I would pay not one twelfth, I would pay one sixth of what's remaining.

Your point is correct.

There's there we need to figure out the different options to try to deal with this transition issue.

And and I agree with what you are saying, but it's going to take us a while to sort out all the implications of of these transition problems.

What I provided you is two extremes.

People start paying right away in October, which inherently means this we would have to make modifications in that one year for the appeals process, or people start paying once a month in March throughout the year.

Now there's there's plenty of middle ground we have to sort out.

All I'm saying is that this is a complicated transition problem that in the long run yields a an easier platform to manage our liquidity problems, but it's a complicated transition problem.

So that leaves me to the question, how soon could these be implemented?

So let's start with OPEB.

So let's say we adopted this simultaneous with the budget this year.

So it's law in July.

How soon could you implement the OPEB changes?

We could implement it for fiscal year 2027.

And just because I am following the order, um the um define contribution payment plan that's already done.

So that's not an issue.

And for DC retirement board.

The same.

We could implement it in fiscal year 2027.

I am trying to write very quickly, and I can't read anything that I have written because I am writing so quickly.

Clearly, it's our responsibility to work with the retirement board staff to ensure that transition works.

And so I I can't speak for them as to whether October 1st would work.

We we would do everything we can to to make it work.

So if we made a change to real property tax, how soon could that be implemented?

For FY27?

No, sir.

I I can't imagine this before fiscal year 29, depending on how we resolve the transition issue.

We still need to do some look at our options for the transition year before I really want to be held to a particular date.

Well, FY29 is three years from now.

That strikes me as exceedingly long time.

Right.

But remember the property tax process is very quite lagged.

You know, you you receive your assessment a year before the bill is due and have that year, and for businesses, they their income activity from a year before that is what is used for that assessment.

So there's enormous time lags in the property tax process, as opposed to sales tax, where we can change something literally, you know, within a couple of weeks.

So we need to develop alternative strategies and then begin planning before we can commit to a particular time frame.

Um I'm not following.

So we're talking about the tax payments.

We are not talking about the assessment process.

In the transition year, you are affecting the assessment process if you include appeals and how the appeal process works as part of the assessment process.

I'm not following that.

So the bill that I got for last month was for the assessment I got last year.

That's right.

And I know RIPTAC is behind, but the um the assessments for that came out last year were resolved before the bills went out, or even if they weren't, bills still went out.

Yeah, the vast majority were the vast majority were, but they were many of them are not resolved until this literally the last couple months, right before the bills came out.

It depends on where you are with the process, depends on where RIPTAC is with their process.

So there's we have to scrub the laws that establish those processes to ensure a change in a billing date doesn't run afoul to the appeal process, and we haven't done that.

And is there any other critical issue that we're not thinking about?

So before I can give feel comfortable saying yes, by this fiscal year we can implement the change, we need to staff out different transition options.

I think at the moment I don't have any other questions.

Um you're gonna get back to us with um the multi-year projection of cash flow through the financial plan.

Thank you.

Um thank you to the retirement board representatives.

Sorry, I'm not asking you back for my questions.

Uh so that I'm gonna conclude the hearing at this point.

Um this has been a hearing on Bill 2627.

They would change the frequency of contributions by the district government to various plans, namely the other post employment benefits fund, the police officer, please uh firefighter and teacher retirement benefit uh plans.

Yeah, as well as a discussion about your property tax billings.

Um the record is open for two weeks.

That is it will close at five PM on Monday, April twentieth.

The time is one ten p.m.

and this hearing is adjourned.