HomeMy WebLinkAboutStaff Report 4.C 04/17/2017Agenda Item #4.0
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DATE: April 17, 2017
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Amy Reeve, Director of Human Resources
SUBJECT: Resolution of Intention to Approve an Amendment to the Contract Between the
Board of Administration of the California Public Employees' Retirement System
and the City Council of the City of Petaluma; and Introduction (First Reading) of
An Ordinance Authorizing an Amendment to the Contract Between the City
Council of Petaluma and the Board of Administration of the California
Employees' Retirement System
RECOMMENDATION
It is recommended that the City Council adopt the attached Resolution of Intention to Approve
an Amendment to the Contract Between the Board of Administration of the California Public
Employees' Retirement System and the City Council of the City of Petaluma; and, Introduce an
Ordinance Authorizing an Amendment to the Contract Between the City Council of Petaluma
and the Board of Administration of the California Employees' Retirement. ,
BACKGROUND
During the prior year of negotiations for successor Memoranda of Understanding, both
AFSCME and PPMMA negotiated changes to the City's contract with Ca1PERS. The resolution,
and ordinance are required to amend the City's contract with Ca1PERS to implement the 3%
employee cost share of the PERS Employer Contribution for local miscellaneous members of
the AFSCME (Unitl Confidential, Unit 2 Maintenance and Unit 3 Clerical and Technical) and
PPMMA (Unit 4 Professional, Unit 9 Mid Managers and Unit 11 Confidential) bargaining units.
In exchange for the 3% additional employee cost share, members received a 3% salary
adjustment.
To permit an Amendment to the Contract and classify employee contributions appropriately, the
Ordinance may be adopted on or after May 7, 2017. There must be a 20 day period between the
Adoption of the Resolution of Intention and the Adoption of the Ordinance pursuant to
Government Code Section 20471.
This change has little effect other than making the cost - sharing a permanent part of the PERS
contract. Additionally, it causes the 3% contribution to be reflected as a credit to the employee's
annual PERS statement. Should an employee resign prior to vesting in the retirement system and
choose to withdraw their contributions, the 3% would be included in the amount withdrawn,
subject to heavy taxation. Should an employee withdraw funds prior to the amendment of the
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contract between the City and Ca1PERS, the City will provide a refund check of the employee
contributions, subject to appropriate taxation.
In addition to this adjustment to the employee cost share, each of these represented units also
negotiated to pay an additional I% employee cost share beginning in July, 2018. In exchange, at
commencement of the additional cost share the employees will receive a 0.75% salary
adjustment. The contract will be amended in 2018 to reflect the additional cost sharing
arrangement and will be brought back to Council for consideration.
DISCUSSION
As the Council is aware, in recent years, the City has requested that the amount of contribution
by individual employees to the PERS Employer Contribution increase to combat rising
retirement costs. Thus far and including this action, AFSMCE and PPMMA bargaining units
contribute 3% to the Employer Contribution, on top of the amount contributed toward the
Employee Contribution, for a total employee contribution of 10% for Classic employees and
9.25% for PEPRA employees.
FINANCIAL IMPACTS
Although the City provided a 3% salary offset in exchange for the employee pick -up to PERS,
the PERS amendment will bring a degree of permanence to the cost sharing agreement and will
help to control costs in the long -term. There may be a financial impact in the rare circumstance
of an employee resigning from the City prior to vesting and choosing to withdraw their PERS
contributions, which would enable them to recover the additional 3% they contributed. This,
however, is extremely rare, as most employees are vested and /or choose to "maintain their funds
in their respective PERS accounts until retirement.
ATTACHMENTS
1. Resolution of Intention
2. Ordinance Authorizing an Amendment to Contract with CalPers
3. Amendment to Contract with CalPers
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Attachment 1
Resolution No. 2017- N.C.S.
of the City of Petaluma, California
RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO THE
CONTRACT BETWEEN THE BOARD OFADMINISTRATION OF THE CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE
CITY OF PETALUMA
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 public agencies may elect to
subject themselves and their employees to amendments to said Law; and
WHEREAS, the City of Petaluma, by action of the City Council in accordance with the
Public Employee's Retirement Law, has entered into a contract with PERS effective January 1,
1950, and subsequently amended, with the most recent amendment occurring December 28,
2012, which PERS contract provides for participation of the City and its employees in PERS;
and
WHEREAS, one of the steps in the procedures to amend a public agency contract with
PERS is the public agency governing body's adoption of a resolution giving notice of its
intention to approve a contract amendment, which resolution shall contain a summary of the
proposed change; and
WHEREAS, following is a summary of a proposed change the City intends to implement
to the City's PERS contract in accordance with agreements reached with City bargaining units
regarding such change and the Public Employees' Retirement Law to provide for contributions
of specified unit members to the City's cost of participating in the City's PERS agreement:
To become subject, from and after the effective date of the amendment, to Section 20516
of the Public Employees' Retirement Law (Employees Sharing Additional Cost) to
provide for employee cost sharing of 3% for local miscellaneous members in the
American Federation of State, County and Municipal Employees Unit 1 Confidential,
American Federation of State, County and Municipal Employees Unit 2 Maintenance,
American Federation of State, County and Municipal Employees Unit 3 Clerical and
Technical, Petaluma Professional and Mid - Managers Association Unit 4 Professional,
Petaluma Professional and Mid - Managers Association Unit 9 Mid Managers and
Petaluma Professional and Mid - Managers Association Unit 11 Confidential;
NOW, THEREFORE, BE IT RESOLVED that the City Council,of the City of
Petaluma hereby gives notice in accordance with Section 20471 and other applicable sections of
the Public Employees' Retirement Law of the City's intention to approve an amendment to the
contract between the City and the Board of Administration of the Public Employees' Retirement
System, a copy of said amendment being attached hereto, as "Exhibit A" and by reference made
a part hereof.
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EFFECTIVE DATE
OF ORDINANCE
Introduced by
ORDINANCE NO. N.C.S.
Seconded by
Attachment 2
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF
PETALUMA AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM
12 WHEREAS, the Public Employees' Retirement Law permits the participation of
13 public agencies and their employees in the Public Employees' Retirement System
14 (PERS) by the execution of a contract, and sets forth the procedure by which public
15 agencies may elect to subject themselves and their employees to amendments to said
16 Law; and
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18 WHEREAS, the City of Petaluma, by action of the City Council in accordance
19 with the Public Employee's Retirement Law, has entered into a contract with PERS
20 effective January 1, 1950, and subsequently amended, with the most recent amendment
21 occurring December 28, 2012, which PERS contract provides for participation of the City
22 and its employees in PERS; and
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24 WHEREAS, one of the steps in the procedures to amend a public agency contract
25 with PERS is the public agency governing body's adoption of a resolution giving notice
26 of its intention to approve a contract amendment, which resolution shall contain a
27 summary of the proposed contract change; and
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29 WHEREAS, on April 17, 2017, the Petaluma City Council adopted Resolution
30 no. giving the following summary of a proposed change to the City's PERS contract
31 in accordance with agreements reached with City bargaining units regarding such change
32 and the Public Employees' Retirement Law to provide for contributions of specified unit
33 members to the City's cost of participating in the City's PERS agreement:
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35 To become subject, from and after the effective date of the amendment, to Section
36 20516 of the Public Employees' Retirement Law (Employees Sharing Additional
37 Cost) to provide for employee cost sharing of 3% for local miscellaneous
38 members in the American Federation of State, County and Municipal Employees
39 Unit 1 Confidential, American Federation of State, County and Municipal
40 Employees Unit 2 Maintenance, American Federation of State, County and
41 Municipal Employees Unit 3 Clerical and Technical, Petaluma Professional and
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Attachment 2
1 Mid - Managers Association Unit 4 Professional, Petaluma Professional and Mid -
2 Managers Association Unit 9 Mid Managers and Petaluma Professional and Mid -
3 Managers Association Unit 11 Confidential; and
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5 WHEREAS, in accordance with Sections 20471 and 20474 of the Public
6 Employees' Retirement Law, adoption of Resolution no. giving notice of a
7 proposed amendment to the City's PERS contract must occur not less than 20 days prior
8 to the date at which this ordinance is adopted; and
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10 WHEREAS, in accordance with Section 20474 of the PERS Law, an election of
11 the employees affected by the proposed amendment to the City's PERS contract will be
12 conducted and canvassed, and this ordinance may only be adopted if a majority of the
13 affected employees do not vote to disapprove of the proposed amendment;
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16 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS
17 FOLLOWS:
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19 Section 1: An amendment of the contract between the City Council of the City of
20 Petaluma and the Board of Administration, California Public Employees' Retirement System is
21 hereby authorized, a copy of said amendment being attached hereto, marked "Exhibit A ", and
22 by such reference made a part hereof as though herein set out in full.
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24 Section 2: The Mayor is hereby authorized, empowered, and directed to execute said
25 amendment for and on behalf of the City.
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27 Section 3: In accordance with Section 20474 of the Public Employees' Retirement Law,
28 the City and its affected employees shall become subject to the amendment attached as
29 Exhibit A beginning the first day of the first pay period following the effective date of this
30 ordinance.
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32 Section 4: This Ordinance shall take effect thirty (30) days after the date of its adoption.
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35 Section 5: If any section, subsection, sentence, clause, phrase or word of this
36 ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court
37 of competent jurisdiction or preempted by state legislation, such decision or legislation shall not
38 affect the validity of the remaining portions of this ordinance. The City Council of the City of
39 Petaluma hereby declares that it would have passed and adopted this ordinance and each
40 and all provisions thereof irrespective of the fact that any one or more of said provisions be
41 declared unconstitutional, unlawful or otherwise invalid.
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44 Section 6: The City Clerk is hereby directed to publish or post this ordinance or a synopsis
45 for the period and in the manner provided by the City Charter and other applicable law.
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47 INTRODUCED, and ordered posted /published, this 171h day of April, 2017.
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1 ADOPTED this day of 2017, by the following vote:
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Ayes:
Noes:
Abstain:
Absent:
ATTEST:
David Glass, Mayor
APPROVED AS TO FORM:
Claire Cooper, City Clerk Eric W. Danly, City Attorney
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Attachment 2
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