FROM: Amy McInerny, Chief Financial Officer
SUBJECT: FY 2020-21 Annual Budget
RECOMMENDATION:
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Approve the proposed SBCERA Annual Budget for the Fiscal Year Ending June 30, 2021.
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BACKGROUND:
On an annual basis, SBCERA is required to adopt an Annual Budget which covers both Administrative and Non-Administrative Expenses of the Plan for the coming fiscal year. Staff has prepared the proposed budget attached as Exhibit A. In summary, this budget is a 1.3% reduction, or $317,575, from the approved budget for FY 2019-20.
No new staff positions are requested for FY 2020-21; one position can be eliminated as it is no longer needed to support Fiscal Services.
All of the material variances from the Estimated Actual expenses for FY 2019-20 and the proposed budget for FY 2020-21 are related to the implementation of the Strategic Priorities approved by the Board in May 2019 as part of the Triennial Strategic Plan, as well as savings from staffing positions not filled until later in the fiscal year. The most notable of the strategic priorities that carry from FY 2019-20 to FY 2020-21 are the continuing projects around the Pension Gold Refresh project and completion of the renovations at 348 W. Hospitality Lane. In the case of the latter, COVID-19 has delayed construction and pushed much of the construction completion into FY 2020-21. The Pension Gold Refresh project has already been approved by the Board, with a contract awarded to Linea Solutions in February 2020. Savings associated with the elimination of the offshore platform are mostly netted out of investment costs and not incorporated into the Annual Budget.
California Government Code 31580.2 imposes a statutory limit of on Administrative Expenses based on no more than 21 basis points of the most recent Actuarial Accrued Liability. That limit, as calculated on page 15 of the proposed Annual Budget is $27,939,835. The requested Administrative Expense Budget of $12,305,550 is 9 ...
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