HomeMy WebLinkAboutStaff Report 1.B 10/06/2008`..
CITY OF PETALUMA, CALIFORNIA
October 6, 2008
AGENDA BILL
.
Agenda Title: Adoption of an Urgency Ordinance Authorizing Amendment
Meeting Date:
of the Contract Between the City of Petaluma and the Board of
October 6, 2008
Administration of 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
Category: ❑ Presentation ❑ Consent Calendar ❑ Public Hearing ® Unfinished Business ❑ New Business
Department:
Director:
Contact Person:
Phone Number:
Human Resources
John Brown
P al Rob,
778 -4343
Cost of Proposal: N/A
Name of Fund:
Amount Budgeted: N/A
Account Number:
Recommendation: It is recommended that the City Council take the following action:
Adoption of an Urgency Ordinance Authorizing Amendment of 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:
Adoption of this Urgency Ordinance will put the ordinance into immediate effect, eliminating the usual 30 -day
period between adoption and the effective date. The urgency ordinance will only be in effect until the effective
date of the same ordinance which is proposed for adoption in the regular manner. If the Council passes the
urgency ordinance, the City can accelerate the process required to offer additional service credits to potential
retirees by 30 days, assuming the Council decides to implement the program.
Because of impending layoffs the City is evaluating offering two years of additional service credit to
Miscellaneous, Police, and Fire Employees as an incentive to retire early. If the City decides to offer the
additional service credit, PERS regulations require that the City cost the increase in retirement benefits and make
the cost public for at least two weeks. Thereafter, the City Council must designate by resolution the window
period, which must be at least 90 days in length, and eligible employees must retire within the window period.
Adopting the Urgency Ordinance enables the City to open the "window" of opportunity for employees sooner
enabling retirements to occur sooner. This will mitigate impending layoffs and save money. Final
implementation of the additional service credit will require Council approval by separate resolution. Adding this
provision to the PERS contract does not mandate its use. There is no obligation to ever implement this provision.
Attachments to Agenda Packet Item:
1. Urgency Ordinance Authorizing An Amendment to 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.
Reviewed by Admin. Svcs. Dir:
Reviewed by City Attorney:
AwDroved by,�Qty Manager:
Date:
Date:
Date.
Re
Date Last Revised:
File:
CITY OF PETALUMA, CALIFORNIA
OCTOBER 6, 2008
AGENDA REPORT FOR
ADOPTION OF AN URGENCY ORDINANCE AUTHORIZING AMENDMENT RATION OF THE CT
BETWEEN THE CITY OF PETALUM MEND T� BOARD ALLOO � G THE CITY TO OFFER
CALIFORNIA EMPLOYEES RETIRE
TWO ADDITIONAL YEARS AND FIRE EMPLOYEES
MISCELLANEOUS, POLICE,
1 RECOMMENDATION:
Adopt Urgency Ordinance to Amend the Contract.
2. BACKGROUND:
cil ado ted a Resolution of In to amend the City's e ordinance is sheduleddto the occur at
Cead P
Reading of the Ordinance on September 15, 2008. Adoption of t
the
Council meeting on October 6, 2008. PERS requires that the en. opt City has ordinance s requirement.
place at least 20 days after adoption of the Resolution of Intent 2008, if it is adopted
Normally the effective date of the ordinance would
ndment October
d be the day following the
on that date. The effective date of the PE
effective date of the ordinance which would be November 6, 2008.
I PP
f a roved, this Urgency Ordnance allows the City to move 2008 and thereby have the option the
to the contract to October 8, 2008 instead of November ,
offering the additional service credit sooner. The City reading as a backup to o the urgency ordinance.
g
also be adopted as a regular ordinance after its second red g
The City continues to evaluate whether or not offering additional service credit is beneficial to the
T Y
City at this time.
Prior to implementing any offer of additional service credit disclose l that is required
the publics.
calculate the cost or "additional employer contributions, an
Following that disclosure, staff would then bring back to Council an enabling Resolution to
implement the provisions of the Contract Amendment.
3 FINANCIAL IMPACTS:
There is no cost to either the City or the employees frothe Pim implementing the provisions i lf of other
the
than staff and legal review time. Costs associated p
offered a
Amendment are based on which classifications are re Counc 1 for e benefits
mplementation
and will be addressed when or if the item is brought back be o
If t Y
he Cit decides to implement the provisions of the Am dmf Chet resent iced to of calculate additional the
"additional employer contributions" based upon an estimate
to er contributions which will be required in the future for be included providing e two
the City's ice credyer
emp y
The cost of the two years additional service credit will
ars after th
contribution rate for the fiscal year starting two ye ne ad 20 t ea designated period. The
increase in the employer contribution rate may continue for as g
The
annual valuation report for the fiscal year that begins two t years a er the
es d ng from designated the two
period will show the amount of the increase in the employer con
years service credit.
1149414.1
ORDINANCE NO. N.C.S.
Introduced by Councilmember
Seconded by Councilmember
URGENCY ORDINANCE AUTHORIZING AN AMENDMENT F ADMINISTRAT ON CT
BETWEEN THE CITY OF PETALUMA AND BOARD
OF THE CALIFORNIA PUBLIC EMPLOYEES' YEARS RETIREMENT SYSTEM
SERVICE CREDIT T'O G
THE CITY TO OFFER TWO ADDITIONAL
MISCELLANEOUS, POLICE AND FIRE EMPLOYEES
W
HEREAS, on September 15, 2008, the City Council adopted Resolution t between 2008 -1858 and of
Resolution of Intention to App rove an Amendment
Retirement System ( "PERS ") and the City
Administration of the California Public Employ
Council of the City of Petaluma; and
WHEREAS, on September 15, 2008, the city to implement he contract amendment ridenti identified in
amendment to the City's contract with PER p
the Resolution of Intention; and
WHEREAS, the contract amendment `N8i a d this Ordinance would allow the City to provide two
Ordinance introduced September 15, 200
years additional service credit pursuanto m Go iscellaneous members' and oe al safety members' of vernment Code
doing so would permit retirement of certain
the City's workforce; and
WHEREAS, the City recently identified rev e sh ttf lls and d a red r eCbylto delaytadoption ceof
expenditures in its General Fund account sufficient
a General Fund budget for Fiscal Year 2008 -2009 until accurate revenue projections and cost-
cutting measures can be identified; an d
WHEREAS, employee salaries and benefits comprise approximately 78% of general fund
expenditures; and
WHEREAS, p
ossible cost - cutting measures applicable to programs and services have been
identified by City staff and management, but ore bed revenue for Fiscal Year 2008 -2009 without
to reconcile general fund expenditures w projected
requiring reduction of the City workforce; and
WHEREAS, providing additional service credit to potential retirees could increase the number of
City employees electing retirement and /or early retirement; and
WHEREAS, increasing the number of City employ ees electing retirement or early retirement
ee layoffs otherwise
could result in cost
savings
iscal Year o
2008 2009 budget exp ndit res with projected revenues; and
needed to balance
WHEREAS, expected cost savings from hmod modification on would be significanit,ywith the magnitude ude of
retirement pursuant to the PERS contract
savings dependent on the number of employees who might opt to participate; and
WHEREAS, implementing the amendment esttposs possible time to facilitate
savings n the current
retirement of City employees at the ea p
fiscal year; and
WHEREAS, the Petaluma City Council Rules, Policies and Procedures, § VI.B.2 provides that
ordinances may be adopted by majority vote of the Council members , present, except for those
ordinances which require a larger number of votes for approval;
WHEREAS, the Charter of the City of Petaluma provides at Article XII, Section 76A that an
urgency ordinance may be adopted to take immediate effect when that ordinance is governed by
a particular provision of state law prescribing the manner of its passage and adoption; and Govern take
ent Code section 36937 provides that an urgency ordinance may
WHEREAS, passed by a 4/5 majority of the membership of the City Council and is
immediate effect if p ublic eace, health or safety.
necessary for the immediate preservation of the p P
NOW THEREFORE, be it ordained by the council of the City of Petaluma as follows:
Section 1. Findings, The above recitals are hereby declared to be true and correct and
findings of the City Council of the City of
Section 2. Contract Amendment Authorized. An amendment to the contract eesReteement the
City of Petaluma and the Board of Administration said mendmtent being attached hereto, marked Exhibit
System is hereby authorized, a copy
A, and by such reference made a part hereof as though herein set out in full. ouncil is
Section 3. Ma or Authorized to Execute sa dm amendment foer and Mayor
on behalf of the City of
hereby authorized and directed to exec
Petaluma.
provision of this ordinance or the application thereof to any
Section 4. Severability. If any p application of mainder of the ordinance,
person part circumstance is held ipersonshorrci circumstances shall not be affected thereby and
ThesC'i II
such part or provision to other per provisions of this ordinance are severable. y
continue in full force and effect. To this end, p passed each section, subsection, subdivision,
Council hereby declares that it would have p one or more
paragraph, sentence, cl subdivisions, paragraphs re f that
sentences clauses, or phrases be held
sections, subsections,
unconstitutional, invalid, or unenforceable.
Section 5. Effective Date. This ordinance ealth,hand safety of he City of Petaluma fon the
immediate preservation of the public peace,
basis of the facts stated herein and shall, after its initial passage n force fromfandfupon theedate of
members of the City Council, take effect
its passage. rther force
Section 6. Duration. This r fi a
ance shlnon urgency Ordinance of the theeCity of Petaluma
effective date of Ordinance No. 2
of
Authorizing an Amendment to the Contract between the City Systaluma introduced and
Board
on September
Administration of the California Public Employees'
15, 2008.
Section 7. 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 AND ADOPTED THIS
AYES:
NOES:
ABSENT:
1149308.1
day of October, 2008, by the following vote:
CaIPERS
EXHIBIT h
California
Public Employees' Retirement System
AMENDMENT
TO CONTRACT
Between the
Board of Administration
System
California Public Employees' Retirement
and the
City Council
City of Petaluma
California Public Employees' Retirement System,
The Board of Administration, overning body of the above public agency,
hereinafter referred to as Board, and en Y, having entered into a contract effective
hereinafter referred to as Public Agency, 1974
1 1950, and witnessed October 18, 1949, and as amended effective August ,
January , June 1, 1965, April 1, 1969, January 1,
1959, November 1, 1959, March 1, 1965, 1 1982, January 1, 1987, December 28,
November 1, 1980, November 1, 1981, July 4, 1998, April 5, 1999,
1987, January 1, 1992, January 4, 1996, June 30, 1996, May
16, 2003 which provides for participation of Public Agency
June 30, 2001 and January agree as follows:
in said System, Board and Public Agency hereby a
through 12 are hereby stricken from said contract as executed
A. Paragraphs 1 1 g 2003, and hereby replaced by the following paragraphs
effective January
numbered 1 through 12 inclusive:
1.
All words and terms used herein which e mean ngna in
efined therein
Employees' Retirement Law shall have t
unless otherwise specifically provided. "Normal and age 50 for local safety
mean age 55 for local miscellaneous members
members.
;? f +���
�.Li ts,,
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 miscellaneous member shall
credited prior and current service as a local misc
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.
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
LORI MCGARTLAND'`CHIEF
EMPLOYER SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AMENDMENT ER# 0293
PERS- CON -702A (Rev. 10 \05)
PRESIDING OFFICER
WOO Date
Attest:
Clerk
i