At its last council meeting of 2025, the Tulare City Council unanimously approved updates to the City’s Budget Policies and Practices, including the establishment of an irrevocable Supplemental Pension Reserve Trust, an Other Post-Employment Benefits (OPEB) Reserve, and an increase to the City’s Workers’ Compensation Reserve.
“These policy changes represent another important step in safeguarding Tulare’s financial future,” said Mayor Patrick Isherwood. “By proactively planning for employee benefit obligations and unforeseen costs, we are ensuring our community remains on solid fiscal footing.”
The newly created pension and OPEB reserves are designed to prefund the City’s unfunded accrued liabilities, providing flexibility to manage spikes in General Fund annual contributions. Across California, the growth of governmental pension and retiree health plan obligations has outpaced asset growth, driven by investment market volatility and longer retiree lifespans. Tulare’s new reserves will help mitigate these pressures while maintaining responsible budgeting practices.
“The Supplemental Pension Trust and OPEB Reserve give us the tools to smooth contributions over time and reduce financial strain on the City’s primary operating fund,” said Chief Financial Officer Mark Roberts. “This proactive approach strengthens our ability to meet long-term obligations while continuing to invest in essential community services.”
The City also increased its Workers’ Compensation Reserve to ensure sufficient funding for unanticipated claims. The revised policy sets the reserve target at an amount equal to the estimated claims payable plus a five-year rolling average of claims paid, with an initial balance of $4 million.
These updates are part of Tulare’s broader strategy to manage City finances responsibly. The City already maintains a General Fund Economic Contingency Reserve, designed to help the City respond to financial emergencies arising from national disasters, economic downturns, or unexpected expenses. With a current balance of $15.4 million, this reserve provides a safety net, ensuring that essential city services can continue uninterrupted in the event of unexpected financial challenges.
Together, these updates reflect Tulare’s proactive, forward-looking approach to safeguarding taxpayer dollars and maintaining the City’s long-term financial stability. For more information, visit www.tulare.ca.gov/government/departments/finance/city-budget.