HomeMy WebLinkAbout2011-10-11 CC Item No. 08REPORT TO CITY COUNCIL
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: ROBERT A. BRADY
CITY MANAGER
DATE: OCTOBER 11, 2011
SUBJECT: AMENDMENT TO CALPERS CONTRACT FOR DIFFERENT LEVEL OF
BENEFITS
Background
The City Council on July 26, 2011 approved a new Memorandum of Understanding
(MOU) with the United Public Employees of California, LIUNA Local 777 and a related
side agreement with the non-union represented employees for the period of July 1,
2011 to June 30, 2013. The MOU and the side agreement included the following
regarding retirement benefits for full-time employees hired after July 1, 2011:
Full-time Employees hired after July 1, 2011
Employees will participate in the 2% @ 60, three (3) year
average, formula provided by CALPERS.
To implement these changes, an amendment must be made to the contract with
CALPERS.
Discussion
The City would need to issue a resolution to declare its intention to approve an
amendment to the contract between the Board of Administration of the California Public
Employees' Retirement System (CALPERS) and the City Council of the City of Lake
Elsinore regarding the proposed CALPERS Section 20475 (Different Level of Benefits)
change in retirement benefits for full-time employees hired after July 1, 2011.
If this resolution is adopted at the October 11, 2011 City council meeting, a final
ordinance may be adopted at the November 8, 2011 City Council meeting pursuant to
Government Code Section 20471.
AGENDA ITEM NO. 8
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Fiscal Impact
The specific cost of implementing CALPERS Section 20475, (Different Level of
Benefits) will not be known until new full-time employees are hired after July 1, 2011.
The employer contribution rate will be 7.733% of reportable earnings for local
miscellaneous members entering membership in CALPERS for the first time in the
miscellaneous classification after the effective date of the amendment to the contract.
This cost would be paid by the City.
The employee contribution rate affected by the amendment to the contract will be 7.0%
of reportable earnings after the effective date of the amendment. This cost would be
paid by the employee.
In a study done by CALPERS Actuarial Office, the projected annual dollar savings of the
amendment to the contract for CALPERS Section 20475, (Different Level of Benefits) is
3.704% times the fiscal year payroll for full-time employees hired after July 1, 2011.
Recommendation
1) Adopt Resolution No. 2011-059 declaring its intention to approve an amendment
to the contract between the Board of Administration of the California Public
Employee's Retirement System (CALPERS) and the City of Lake Elsinore
regarding the change in benefits of the proposed contract.
2) Approve the Board of Administration of the California Public Employees'
Retirement System (CALPERS) documents:
• Certification of Governing Body's Action.
• Certification of Compliance with Government Code Section 7507.
• Approve the Certification of Compliance with Government Code
Section 20475.
Prepared by: James R.
Director of
Approved by: Robert A.
City Mana,
Services
Page 2 of 12
RESOLUTION NO. 2011-059
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, CALIFORNIA, DECLARING ITS
INTENTION TO APPROVE AN AMENDMENT TO
CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE
CITY OF LAKE ELSINORE
WHEREAS, the Public Employees' Retirement Law permits the participation of
public agencies and their employees in the Public Employees' Retirement System by
the execution of a contract, and sets forth the procedure by which said public agencies
may elect to subject themselves and their employees to amendments to said Law; and
WHEREAS, one of the steps in the procedures to amend this contract is the
adoption by the governing body of the public agency of a resolution giving notice of its
intention to approve an amendment to said contract, which resolution shall contain a
summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:
To provide Section 20475 (Different Level of Benefits).
Section 21353 (2% @ 60 Full formula) and Section 20037 (Three-
Year Final Compensation) without Sections 21624, 21626 and
21628 (Post-Retirement Survivor Allowance) applicable to local
miscellaneous members entering membership for the first time in
the miscellaneous classification after the effective date of this
amendment to contract.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the above
agency does hereby give notice of intention to approve an amendment to the contract
between said public agency and the Board of Administration of the Public Employees'
Retirement System, a copy of said amendment being attached hereto, as an "Exhibit"
and by this reference made a part hereof.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 11 ch day of October, 2011.
BRIAN TISDALE, MAYOR
ATTEST:
VIRGINIA BLOOM, CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
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Page 4 of 12
Ca1PERS
EXHIBIT
California
Public Employees' Retirement System
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Lake Elsinore
-41100-
The Board of Administration, California Public Employees' Retirement System,
hereinafter referred to as Board, and the governing body of the above public agency,
hereinafter referred to as Public Agency, having entered into a contract effective July 1,
1965, and witnessed April 30, 1965, and as amended effective December 10, 1983,
December 19, 1987, July 14, 1995, May 9, 1997, December 24, 1999, March 22, 2003
September 12, 2003 and June 24, 2009 which provides for participation of Public
Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 16 are hereby stricken from said contract as executed
effective June 24, 2009, and hereby replaced by the following paragraphs
numbered 1 through 17 inclusive:
1. All words and terms used herein which are defined in the Public
Employees' Retirement Law shall have the meaning as defined therein
unless otherwise specifically provided. "Normal retirement age" shall
mean age 55 for local miscellaneous members entering membership in
the miscellaneous classification on or prior to the effective date of this
amendment to contract and age 60 for local miscellaneous members
entering membership for the first time in the miscellaneous classification
after the effective date of this amendment to contract and age 60 for local
safety members.
Page 5 of 12
Public Agency shall participate in the Public Employees' Retirement
System from and after July 1, 1965 making its employees as hereinafter
provided, members of said System subject to all provisions of the Public
Employees' Retirement Law except such as apply only on election of a
contracting agency and are not provided for herein and to all amendments
to said Law hereafter enacted except those, which by express provisions
thereof, apply only on the election of a contracting agency.
Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the CaIPERS Board of Administration,
and the California Public Employees' Retirement Fund from any claims,
demands, actions, losses, liabilities, damages, judgments, expenses and
costs, including but not limited to interest, penalties and attorneys fees
that may arise as a result of any of the following:
(a) Public Agency's election to provide retirement benefits,
provisions or formulas under this Contract that are different than
the retirement benefits, provisions or formulas provided under
the Public Agency's prior non-CaIPERS retirement program.
(b) Public Agency's election to amend this Contract to provide
retirement benefits, provisions or formulas that are different than
existing retirement benefits, provisions or formulas.
(c) Public Agency's agreement with a third party other than
CaIPERS to provide retirement benefits, provisions, or formulas
that are different than the retirement benefits, provisions or
formulas provided under this Contract and provided for under
the California Public Employees' Retirement Law.
(d) Public Agency's election to file for bankruptcy under Chapter 9
(commencing with section 901) of Title 11 of the United States
Bankruptcy Code and/or Public Agency's election to reject this
Contract with the CaIPERS Board of Administration pursuant to
section 365, of Title 11, of the United States Bankruptcy Code
or any similar provision of law.
(e) Public Agency's election to assign this Contract without the prior
written consent of the CaIPERS' Board of Administration.
(f) The termination of this Contract either voluntarily by request of
Public Agency or involuntarily pursuant to the Public Employees'
Retirement Law.
(g) Changes sponsored by Public Agency in existing retirement
benefits, provisions or formulas made as a result of
amendments, additions or deletions to California statute or to
the California Constitution. Page 6 of 12
i-
r
4. Employees of Public Agency in the following classes shall become
members of said Retirement System except such in each such class as
are excluded by law or this agreement:
a. Local Fire Fighters (herein referred to as local safety members);
b. Local Police Officers (herein referred to as local safety members);
C. Employees other than local safety members (herein referred to as
local miscellaneous members).
5. In addition to the classes of employees excluded from membership by
said Retirement Law, the following classes of employees shall not become
members of said Retirement System:
NO ADDITIONAL EXCLUSIONS
6. Removal of the exclusion of "Persons Compensated on an Hourly Basis",
pursuant to Section 20503, is declarative of agency's previous
interpretation and does not mandate any new classes of employees into
membership.
7. The percentage of final compensation to be provided for each year of
credited prior and current service for those local miscellaneous members
in employment prior to December 19, 1987 shall be determined in
accordance with Section 21354 of said Retirement Law subject to the
reduction provided therein for Federal Social Security (2% at age 55
Modified).
8. The percentage of final compensation to be provided for each year of
credited prior and current service for those local miscellaneous members
in employment on or after December 19, 1987 and not on or after March
22, 2003, shall be determined in accordance with Section 21354 of said
Retirement Law (2% at age 55 Full) pursuant to Government Code
Section 20515.
9. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member in
employment on or after March 22, 2003 and not entering membership for
the first time in the miscellaneous classification after the effective date of
this amendment to contract shall be determined in accordance with
Section 21354.4 of said Retirement Law (2.5% at age 55 Full), pursuant to
Government Code Section 20515.
10. The percentage of final compensation to be provided for each year of
credited current service as a local miscellaneous member entering
membership for the first time in the miscellaneous classification after the
effective date of this amendment to contract shall be determined in
accordance with Section 21353 of said Retirement Law (2% at age 60
Full). Page 7 of 12
xi3
11. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member shall be
determined in accordance with Section 21368 (1.25% at age 60),
supplemental to Social Security.
12. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 20042 (One-Year Final Compensation) for local
miscellaneous members entering membership on or prior to the
effective date of this amendment to contract.
b. Section 20515 (Full Formula Plus Social Security) for past and
future service for local miscellaneous members in employment on
and after December 19, 1987. Legislation repealed said Section
effective January 1, 2002.
C. Sections 21624, 21626 and 21628 (Post-Retirement Survivor
Allowance) for local miscellaneous members entering membership
on or prior to the effective date of this amendment to contract.
d. Section 21024 (Military Service Credit as Public Service) for local
miscellaneous members only.
e. Section 20503 (To Remove the Exclusion of Persons Compensated
on an Hourly Basis, Prospectively from September 12, 2003).
f. Section 20903 (Two Years Additional Service Credit) for local
miscellaneous members only.
g. Section 20475 (Different Level of Benefits). Section 21353 (2% @
60 Full formula) and Section 20037 (Three-Year Final
Compensation) without Sections 21624, 21626, and 21628 (Post-
Retirement Survivor Allowance) applicable to local miscellaneous
members entering membership for the first time in the
miscellaneous classification after the effective date of this
amendment to contract.
13. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
December 10, 1983. Accumulated contributions of Public Agency shall be
fixed and determined as provided in Government Code Section 20834,
and accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20834.
14. Public Agency shall contribute to said Retirement System the contributions
determined by actuarial valuations of prior and future service liability with
respect to local miscellaneous members and local safety members of said
Retirement System. Page 8 of 12
15. Public Agency shall also contribute to said Retirement System as follows:
a. A reasonable amount, as fixed by the Board, payable in one
installment within 60 days of date of contract to cover the costs of
administering said System as it affects the employees of Public
Agency, not including the costs of special valuations or of the
periodic investigation and valuations required by law.
b. A reasonable amount, as fixed by the Board, payable in one
installment as the occasions arise, to cover the costs of special
valuations on account of employees of Public Agency, and costs of
the periodic investigation and valuations required by law.
16. Contributions required of Public Agency and its employees shall be
subject to adjustment by Board on account of amendments to the Public
Employees' Retirement Law, and on account of the experience under the
Retirement System as determined by the periodic investigation and
valuation required by said Retirement Law.
17. Contributions required of Public Agency and its employees shall be paid
by Public Agency to the Retirement System within fifteen days after the
end of the period to which said contributions refer or as may be prescribed
by Board regulation. If more or less than the correct amount of
contributions is paid for any period, proper adjustment shall be made in
connection with subsequent remittances. Adjustments on account of
errors in contributions required of any employee may be made by direct
payments between the employee and the Board.
B:.,This amendment shall be effective on the day of
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC E ' PLOYEES' RETIREMENT SYSTEM CITY OF LAKE ELSINORE
BY BY
DARRYL WATSON;"CHIEF PRESIDIN.P OFFICER
CUSTOMER ACCOUNT SERVICES DIVISION
PUBLIC EMPLOYEES' R' TIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT ER#585
PERS-CON-702A
Page 9 of 12
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
(governing body)
of the
(public agency)
on
(date)
Clerk/Secretary
Title
PERS-CON-12 (rev. 1/96)
Page 10 of 12
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O.Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
I hereby certify that in accordance with Section 7507 of the Government Code
the future annual costs as determined by the System Actuary for the
increase/change in retirement benefit(s) have been made public at a public meeting
of the
of the
(governing body)
(public agency)
on
(date)
Resolution / Ordinance.
which is at least two weeks prior to the adoption of the
Adoption of the retirement benefit increase/change will not be placed on the consent
calendar.
Clerk/Secretary
Title
Date
PERS-CON-12A (rev. 1/96) Page 11 of 12
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 20475
I hereby certify that the of the
(governing body)
(public agency)
has fully discharged all of the obligation imposed by Chapter 10 (commencing with
Section 3500) of Division 4 of Title 1, Government Code.
By
Title
Witness
Date
PERS-CON-30 (Rev. 1/96)
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