HomeMy WebLinkAboutOrdinance 2451 N.C.S. 12/27/20121
2
3
4
5
6
7
EFFECTIVE DATE ORDINANCE NO. 2451 N.C.S.
OF ORDINANCE
December 27, 2012
Introduced by Seconded by
Gabe Kearney Mike Healy
URGENCY ORDINANCE TO TAKE IMMEDIATE EFFECT, AUTHORIZING AN AMENDMENT TO
THE CONTRACT BETWEEN THE CITY OF PETALUMA AND BOARD OF ADMINISTRATION
OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM FOR SECTION 20475
10 (DIFFERENT LEVEL OF BENEFITS), SECTION 21353 (2%@ 60 FULL FORMULA), AND SECTION
11 20037 (THREE-YEAR FINAL COMPENSATION) APPLICABLE TO LOCAL MISCELLANEOUS
12 MEMBERS ENTERING MEMBERSHIP FOR THE FIRST TIME IN THE MISCELLANEOUS
13 CLASSIFICATION AFTER THE EFFECTIVE DATE OF AMENDMENT TO THE CONTRACT
WHEREAS, the Public Employees' Retirement Law permits the participation of public
agencies and their employees in the Public Employees' Retirement System (PERS) 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, prior to amending its PERS contract, the city must adopt a resolution giving
notice of its intention to approve an amendment to said contract, which resolution shall contain
a summary of the change proposed; and,
WHEREAS, on December 6, 2012, the City Council adopted Resolution No. 2012-177
N.C.S., a Resolution of Intention to Approve an Amendment to Contract between the Board of
Administration of the California Public Employees Retirement System ("PERS") and the City
Council of the City of Petaluma; and,
WHEREAS, pursuant to Government Code Sections 20475, 21353, and 20037 the contract
amendment which is the subject of the Resolution of Intention and this Ordinance will allow the
City to provide a second tier of retirement benefits at the 2% @ 60 Full formula and three-year
final compensation to local miscellaneous members entering membership for the first time in the
miscellaneous classification after the effective date amendment to the contract; and,
WHEREAS, beginning in FY 2008-2009 the City has identified revenue shortfalls and a
severe imbalance with projected expenditures in its General Fund account sufficient to have
required the City to deplete nearly its entire General Fund reserves and implement cost-cutting
measures in each fiscal year from 2008-2009 to 2012-2013 impacting service levels and
significantly reducing the workforce; and,
WHEREAS, employee salaries and benefits comprise approximately 78% of general fund
expenditures; and,
Ordinance No. 2451 N.C.S. Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
WHEREAS, all Units that include miscellaneous employees have ratified agreements, and
all include a provision for a second tier of retirement for the 2% @ 60 formula and the three-year
final compensation; and,
WHEREAS, in accordance with Section 7507 of the Government Code the future annual
costs as determined by the System Actuary for the change in retirement benefits were made
public at a public meeting of the City Council of the City of Petaluma on December 6, 2012
which is at least two weeks prior to the adoption of this Ordinance; and,
WHEREAS, the System Actuary determined that there will be no immediate employer
contribution rate impact from this amendment, but that when the mix of first and second tier
retirement employees reaches a 50/50 ratio, the employer cost and contribution rate will
decrease by 1.7%which in current dollars is an annual City savings of $203,330; and,
WHEREAS, if a second tier of retirement is implemented, the City will achieve annual cost
savings that will assist the City in restoration of services; and,
WHEREAS, the Public Employees' Pension Reform Act of 2013 (PEPRA) and related Public
Employees' Retirement Law will result in complex changes to retirement benefits effective
January 1, 2013; and,
WHEREAS, PERS requires that an employer must adopt a lower benefit formula prior to
January 1, 2013 and complete the contract amendment process in accordance with all
applicable requirements and that the effective date of the final action of the governing body
be prior to December 31, 2012; and,
WHEREAS, pursuant to the Charter of the City of Petaluma, Article All, Section 76A, an
urgency ordinance may be adopted to take immediate effect when necessary for the
immediate preservation of the public health, safety and welfare and passed by a unanimous
vote of the city council members present of the time of adoption; and,
WHEREAS, Government Code section 36934 provides that an urgency ordinance may be
passed immediately upon introduction and either at a regular or a special meeting.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Petaluma as follows:
Section 1. Findinas. The above recitals are hereby declared to be true and correct and
findings of the City Council of the City of Petaluma.
Section 2. Contract Amendment Authorized. The amendment to the contract between the
City of Petaluma and the Board of Administration, California Public Employees' Retirement
System attached hereto, marked Exhibit A, and incorporated herein by reference is hereby
authorized.
Section 3. Mayor Authorized to Execute Amendment. The Mayor is hereby authorized and
directed to execute said amendment for and on behalf of the City of Petaluma.
Section 4. Severability. If any provision of this ordinance or the application thereof to any
person or circumstance is held invalid, the remainder of the ordinance, including the application
of such part or provision to other persons or circumstances shall not be affected thereby and
shall continue in full force and effect. To this end, provisions of this ordinance are severable. The
City Council hereby declares that it would have passed each section, subsection, subdivision,
Ordinance No. 2451 N.C.S.
Page 2
paragraph, sentence, clause, or phrase hereof irrespective of the fact that any one or more
sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be held
unconstitutional, invalid, or unenforceable.
Section 5. Effective Date. This ordinance is hereby declared to be necessary for the
immediate preservation of the public peace, health, and safety of the City of Petaluma on the
basis of the facts stated herein and shall take effect immediately and be in force from and upon
the date of its passage.
Section 6. Posting/Publishing of Notice. The City Clerk is hereby directed to post/publish this
ordinance or a synopsis of this ordinance for the period and in the manner required by the City
Charter.
INTRODUCED, ORDERED POSTED, and ADOPTED this 271h day of December 2012, by the following
vote:
Ayes: Albertson, Barrett, Mayor Glass, Harris, Healy, Kearney, Vice Mayor Renee
Noes: None
Abstain: None
Absent: None
David Glass, Mayor
ATTEST: APPROVED AS TO FORM:
2014794.1
r
Leslie Thomsen, Assistant City Attorney
Ordinance No. 2451 N.C.S. Page 3
Ak�_,
Ca1PERS
California
Public Employees' Retirement System
Exhibit A
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees'. Retirement System
and the
City Council
City of Petaluma
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
January 1, 1950, and witnessed October 18, 1949, and as amended effective August 1,
1959, November 1, 1959, March 1, 1965, June 1, 1965, April 1, 1969, January 1, 1974,
November 1, 1980, November 1, 1981, July 1, 1982, January 1, 1987, December 28,
1987, January 1, 1992, January 4, 1996, June 30. 1996. May 4, 1998, April 5, 1999,
June 30, 2001, January 16, 2003, October 7, 2008 and November 15, 2012 which
provides for participation of Public Agency In said System, Board and Public Agency
hereby agree as follows:
A. Paragraphs 1 through 14 are hereby stricken from said contract as executed
effective November 15, 2012, and hereby replaced by the following paragraphs
numbered 1 through 15 Inclusive;
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; age 50 for local
safety members entering membership In the safety classification on or
prim to November 15, 2012 and age 55 for local safety members entering
membership for the first time in the safety classification after November
15, 2012.
Ordinance No. 2451 N.C.S. Page 4
2. Public Agency shall participate in the Public Employees' Retirement
System from and after January 1, 1950 .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.
3. Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the Ca!PERS 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 tees
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.
Ordinance No. 2451 N.C.S. Page 5
(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 onto
the California Constitution.
4. Employees of Public Agency in the fallowing 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. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member
entering membership In the miscellaneous classification on or prior to the
effective date of this amendment to contract shall be determined in
accordance with Section 21354 of said Retirement Law (2% at age 55
Full).
7. 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).
8. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member entering
membership in the safety classification on or prior to November 15, 2012
shall be determined in accordance with Section 21362.2 of said
Retirement Law (3% at age 50 Full),
9. The percentage of final compensation to be provided for each year of
credited current service as a local safety member entering membership for
the first time in the safety classification after November 15, 2012 shall be
determined in accordance with Section 21363.1 of said Retirement, Law
(3% at age 55 Full).
Ordinance No. 2451 N.C.S. Page 6
10. Public Agency elected and elects to. be subject to the following ,optional
provisions:
Section 212221 (One -Time, 5% Increase - 1970). -Legislation
repealed said Section effective January 1, 1980..
b. Se6tion.'20042._ (One -Year FinalCompensation) for local safety
members; entering membership on or prior°to November 15, 2012
and..locarmisceilaneous members, entering membership on or prior
to the effective date -of this amendment to contract.
C. Sectlon 20965 (Credit for-Unused'Sick Leave).
d. Section 21326 (One -Time 1% to 7% ,Increase For Local
Miscellaneous: Members Mo!Retlreci or'Died'Prior'to,July 1, 1974).
Legislation repeaied-said Section effective January 1. 2002.
e. Sections .21624, 21626 and 21628 (post Retirement Survivor
Allowance) for local fire members;only.
f. Section,21024 (Military Sorvice Credit as, Public Service),
g, Section :21574,.(Four1h Level of '1959 Survivor Benefits) for local
safety:members only.
In. Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous rnembers only.
Section 20434 ("Local Fire Fighter" shall include any officer or
employee of'a fire department employed to perform firefighting, fire
prevention, fire training,_ hazardous materials, .emergency medical
services; or 'fire' or arson investigation services as described in
Govemment,Code Section 20434).
Section 20903 (Two Years Addltional-Service Credit),
k. Section 20475 (Different Level.of Benefits). Section 2.1363.1 (3%
@ 55 Full formula)' and Section .20037 ,(Three -Year Final
Compensation) are applicable to local safety members entering
membership for the first time In the safety classification after
November 15, 2612.
Sectlon:21353 (2%,@ 60 Full formula) and 'Section;20037 (Three -
Year, Final Compensation) are applicable to local miscellaneous
members entering membership for the first ilme in the
miscellaneous .classification after the effective date. of this
amendment to contract,
Ordinance N9. 2451 N.C.S. Page 7
11. Public Agency, in accordance wfrth, Government Code Section 20790,
ceased :to be an' "employer" W,. purposes of Section 20834' effective on
November 1,, 1980, Accumulated contributions of Public Agency shall be
fixed and determined as provided in Government Code. Section 20834,
and accumulatedcontributions thereafter, shall be held by the Board as
provided in Government'Code Section.20834.
12. Public Agency shall'contnbute to.sald.Retirement• Systamthe contributions
determined'by actaariat valuations of prior and,future service liability with
respect to local -miscellaneous members and local safety members of said
Retirement System.
13. Public Agency sh6ll;also contribiile to said Retirement System as follows
a. Contributions required car covered member'on account of the 1959
Survivor. Benefits provided under Section 21573'of said Retirement
Law. •(Subject to,annual change.) In addition, all assets and
liabilities' of Public Agency and its employees shall be pooled in a
single; account,. based on term insurance rates,:for survivors of all
local miscellaneous members.
b. Contributions.required per covered memoer'omaccount of the 1959
Survlvor'Benefitsprovided under''Section 21574,6f.said Retirement
Law. (Subject to .annual change.) 1p..adtltfion, all 'assets and
liablittles, of Public Agency and Its, employees shall be pooled in a
single- account, based on term, Insure nee'ratesJor survivors of all
locarsafety members.
c. A reasonable amount, as .fixed by the::Board, payable in one
installment within 66 days. of date of contract Ito cover the costs et
administering`said.System as it affects .the, employees of Public
Agency, not including tiie costs: of 'special .valuations or of the
periodic'investigation and .valuatiuns required by law.
d. 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:
14. Contributions required of Public Agency and, its .employees shall be
subject to adjustment by Board' on account of amendments ,to the. Public
Retirement System as determined account of'the•experlence under the
Employees' Retirement Law, and on
by the periodic Investigation and
valuation required by said Rebrerrerit Law.
Ordinance No. 2451 N.C.S. Page 8
15, Contributions re.qulred: f Public Agency and its employees shalt be paid
by Public Agency to the Retirement'System within fifteen days after the
end of the ,pedod to which said contributions fete 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 remittance's:. 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 EMPLOYEES' RETIREMENT SYSTEM CITY OF PETALUMA
BY BY- .
KAREN DE FRANK, CHIEF PRESIDING':OFFICER
CUSTOMER ACCOUNT SERVICES' DIVISION
PUBLIC EMPLOYEES' RETIREMENT'SYSTEM
AMENDMENr CaIPERSID#W64MM
PERS-CON-702A.
Wimess:Date ____,
Attest
Ordinance No. 2451 N.C.S. Page 9