HomeMy WebLinkAboutStaff Report 4.F 09/15/2008r, r_
CITY OF PETALUMA, CALIFORNIA —re
AGENDA BILL September 15..'2008
Agenda Title: Introduction (First Reading) of an Ordinance to Amend the
Meeting Date:
Contract Between the City of Petaluma and the Board of Administration of
September 15, 2008
the California Employees' Retirement System Allowing the City to Offer
Two Additional Years of Service Credit to Miscellaneous, Police, and Fire
Employees
Meeting Time: ® 3 :00 PM.
❑ 7:00 PM
CateV,ory: ❑ Presentation ❑ Consent Calendar ❑ Public Hearing ❑ Unfinished Business ® New Business
Department:
Director:
Contact Person:
Phone Number:
Human Resources
John Brown
Pamala Robbins
778 -4343
Cost of Proposal: N/A
Name of Fund:
Amount Budteted: N/A
Account Number:
Recommendation: It is recommended that the City Council take the following action:
Introduce Ordinance to Amend the Contract Between the City of Petaluma and the Board of Administration of the
California Employees' Retirement System Allowing the City to Offer Two Additional Years of Service Credit to
Miscellaneous, Police, and Fire Employees.
Summary Statement:
This Contract amendment between the City of Petaluma and the California Employees' Retirement System
(PERS) will enable the City to consider the option of offering two years of additional service credit to
Miscellaneous, Police, and Fire Employees as an incentive to retire early. PERS requires an ordinance to adopt
this contract amendment.
If this provision is added to the City of Petaluma's Contract, the City will have the option of offering it to all
classifications or to specific job classifications within specific organizational units (departments /divisions). Final
implementation will require Council approval. However, adding this provision does not mandate its use. There is
no obligation to ever implement this provision.
Attachments to Agenda Packet Item:
1. Ordinance to Amend the Contract Between the City of Petaluma and the Board of Administration of the
California Employees' Retirement System Allowing the City to Offer Two Additional Years of Service Credit to,
Miscellaneous, Police, and Fire Employees.
2. Exhibit A — Amendment to Contract Between the City of Petaluma and the Board of Administration of the
California Public Employees' Retirement System to Allow the City to Offer Two Years of Additional Service
Credit to Miscellaneous, Police, and Fire Employees.
Revi ved in. Svcs. Dir:
Reviewed by City Attorney: torney:
A roved by City Mana er:
Cate:
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Date:
Date: £ ' �=4�
Rev. #
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Date Last Revised:
I 1 -9-O
File:
CITY OF PETALUMA, CALIFORNIA
SEPTEMBER 15, 2008
AGENDA REPORT
FOR
INTRODUCTION (FIRST READING) OF ORDINANCE TO AMEND THE CONTRACT
BETWEEN THE CITY OF PETALUMA AND THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA EMPLOYEEES' RETIREMENT SYSTEM ALLOWING THE CITY TO OFFER TWO
ADDITIONAL YEARS OF SERVICE CREDIT TO MISCELLANEOUS, POLICE, AND FIRE
EMPLOYEES
1. RECOMMENDATION:
Introduce Ordinance to Amend the Contract.
2. BACKGROUND:
Provided that the Council has first adopted a Resolution of Intention to amend the City's contract with
PERS in the manner specified in Exhibit A to the proposed ordinance, the Council may proceed to
introduce an ordinance making that amendment to the contract. Adoption of the ordinance would then
occur at the Council meeting on October 6, 2008, meeting the statutory requirement that the adoption
of the ordinance must take place at least 20 days after adoption of the Resolution of hitention. The
effective date of the ordinance would be 30 days from October 6, 2008, if it is adopted on that date.
The effective date of the PERS Contract Amendment would be the day following the effective date of
the ordinance.
If approved, this contract amendment would allow the City to offer additional service credit, but
would not require the City to do so. The City plans to evaluate whether or not offering additional
service credit is beneficial to the City at this time. The evaluation process will include many factors.
Prior to implementing the offering of additional service credit to employees, the City is required to
calculate the cost or "additional employer contributions," and disclose that information to the public.
Following that disclosure, staff would then bring back to Council an enabling Resolution to
implement the provisions of the Contract Amendment.
3. DISCUSSION:
4. FINANCIAL IMPACTS:
There is no cost to either the City of the employees to amend the PERS Contract to add this
provision. Costs associated with implementing the provisions of the Amendment are based on which
classifications are offered and who takes advantage of the benefits and will be addressed when or if
the item is brought back before Council for implementation.
If the City decides to implement the provisions of the Amendment it is required to calculate the
"additional employer contributions" based upon an estimate of the present value of additional
employer contributions which will be required in the future for providing the two years service credit.
The cost of the two years additional service credit will be included in the City's employer
contribution rate for the fiscal year starting two years after the end of the designated period. The
increase in the employer contribution rate may continue for as long as 20 years.
The annual valuation report for the fiscal year that begins two years after the end of the designated
period will show the amount of the increase in the employer contribution rate resulting from the two
years service credit.
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EFFECTIVE DATE
OF ORDINANCE
Introduced by
ORDINANCE NO. N.C.S.
Seconded by
AUTHORIZING AN AMENDMENT TO THE CONTRACT
BETWEEN THE CITY OF PETALUMA AND BOARD
OF ADMINISTRATION OF THE CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS:
Section 1. An amendment to the contract between the City of Petaluma and the Board of
Administration, California Public Employees' Retirement System is hereby authorized, a copy of
said amendment being attached hereto, marked Exhibit A, and by such reference made a part
hereof as though herein set out in full.
Section 2. The Mayor of the City Council is hereby authorized and directed to execute said
amendment for and on behalf of the City of Petaluma.
Section 3. Severability. The provisions of this Ordinance are severable and if any provision,
clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to
any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall
not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts
thereof of this Ordinance or their applicability to other persons or circumstances.
Section 4. Effective Date. This Ordinance of the City of Petaluma shall be effective thirty (30)
days after the date of its passage.
Section 5. Publication. The City Clerk is hereby directed to post and /or publish this ordinance or
a synopsis of this ordinance for the period and in the manner required by the City Charter.
INTRODUCED AND ORDERED POSTED.
ADOPTED THIS day of , 2008, by the following vote:
AYES:
NOES:
Ordinance No. _N.C.S.
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10 Pamela Torliatt, Mayor
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21 Claire Cooper, CMC, City Clerk Eric W. Danly, City Attorney
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Ordinance No. N.C.S. Page 2
CaIPIlRS
California
Public Employees' Retirement System
EXHIBIT ,
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 and January 16, 2003 which provides for participation of Public Agency
in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 12 are hereby stricken from said contract as executed
effective January 16, 2003, and hereby replaced by the following paragraphs
numbered 1 through 12 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 and age 50 for local safety
members.
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. 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).
4. 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
5. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member shall
be determined in accordance with Section 21354 of said Retirement Law
(2% at age 55 Full).
6. 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 21362.2 of said Retirement Law
(3% at age 50 Full).
7. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21222.1 (One -Time 5% Increase - 1970). Legislation
repealed said Section effective January 1, 1980.
b. Section 20042 (One -Year Final Compensation).
C. Section 20965 (Credit for Unused Sick Leave).
d. Section 21326 (One -Time 1 % to 7% Increase For Local
Miscellaneous Members Who Retired or Died Prior to July 1, 1974).
Legislation repealed 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 Service Credit as Public Service).
g. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local
safety members only.
h. Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members 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
Government Code Section 20434).
j. Section 20903 (Two Years Additional Service Credit).
8. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for 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 accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20834.
9. 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.
10. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per 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 member on account of the 1959
Survivor Benefits provided under Section 21574 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 safety members.
C. 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.
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.
11. 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.
12. 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 EMPLOYEES' RETIREMENT SYSTEM CITY OF PETALUMA
BY BY
LORI MCGARTLAND, CHIEF PRESIDING OFFICER
EMPLOYER SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT ER# 0293
PERS- CON -702A (Rev. 10 \05)
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