HomeMy WebLinkAboutStaff Report 4.C 12/18/2017DATE: December 18, 2017
Agenda Item #4.0
TO: Honorable Mayor and Members of the City Council through City Manager.
FROM: ORLY 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 for Employees of Units
8, 10 and Unrepresented Executive Management Employees 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 for Employees of Units 8, 10 and
Unrepresented Executive Management Employees Between the City Council of Petaluma and
the Board of Administration of the California Employees' Retirement System.
BACKGROUND
During recent negotiations for successor Memoranda of Understanding, updated Compensation
Plans and Executive Contracts, all Department Heads and the Assistant City Attorneys (Unit 8),
Petaluma Public Safety Mid - Management Association, hereafter "PPSMMA" (Unit 10) and the
three Unrepresented Executive Employees (the City Manager, City Attorney and City Cleric)
negotiated to accept an amendment to the City's contract with CalPERS. The amendment will
increase the employee contribution to Ca1PERS by 3% which will be offset by a corresponding
3 %o wage adjustment.
The Resolution and Ordinance are required to amend the City's contract with Ca1PERS prior to
implementation of the 3% employee cost share. After the Ordinance is approved by Council, the
members of each unit will be asked to vote for the Amendment by ballot.
To permit an Amendment to the Contract and classify employee contributions appropriately, the
Ordinance may be adopted on or after January 8, 2018. There must be a 20 day period between
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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 malting 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.
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.
Employee CalPERS contributions vary dependent on whether the employees are Classic
members or subject to the Public Employees' Pension Reform Act of 2013 ( PEPRA), as well as
whether they are classified as Miscellaneous or Safety employees. The following charts
illustrate the proposed employee CalPERS contributions for each unit:
Unit 8 (Department Heads and Assistant City Attorneys)
CALPERS Formula
Current Employee
CalPERS Contribution
+ 3% Employee
CalPERS Contribution
PEPRA Miscellaneous
6.25%
9.25%
Classic Miscellaneous
7%
10%
Classic Safety
9%
12%
PEPRA Safety
11.75%
14.75%
Unrepresented Executive Management (City Manager, City Attorney and City Clerk)
CALPERS Formula
Current Employee
CalPERS Contribution
+ 3% Employee
CalPERS Contribution
PEPRA Miscellaneous
6.25%
9.25%
Classic Miscellaneous
7%
10%
Unit 10 (Petaluma Public Safety Mid - Management Association)
CALPERS Formula
Current Employee
CalPERS Contribution
+ 3% Employee
CalPERS Contribution
Classic Miscellaneous
7%
10%
Classic Safety
9%
12%
FINANCIAL IMPACTS
Although the City will provide a 3% salary offset in exchange for the employee pick -up to
CalPERS, the CalPERS amendment will bring a degree of permanence to the cost sharing
agreement and will help to control costs in the long -term. The cost of the 3% wage offset for all
groups will be approximately $9,167.00.
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ATTACHMENTS
1, Resolution of Intention
2. Ordinance Authorizing an Amendment to Contract with Ca1PERS
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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) of 3%
for local miscellaneous members in the Unrepresented Executive Management group,
Department Heads Unit 8 and Public Safety Mid - Management Association Unit 10; and
3% for local safety members in the Department Heads Unit 8 and Public Safety Mid -
Management Association Unit 10.
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 FOR EMPLOYEES OF UNITS 8, 10 AND
UNREPRESENTED EXECUTIVE MANAGEMENT EMPLOYEES BETWEEN THE CITY
COUNCIL OF THE CITY OF PETALUMA AND THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
10 WHEREAS, the Public Employees' Retirement Law permits the participation of
11 public agencies and their employees in the Public Employees' Retirement System
12 (PERS) by the execution of a contract, and sets forth the procedure by which public
13 agencies may elect to subject themselves and their employees to amendments to said
14 Law; and
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16 WHEREAS, the City of Petaluma, by action of the City Council in accordance
17 with the Public Employee's Retirement Law, has entered into a contract with PERS
18 effective January 1, 1950, and subsequently amended, with the most recent amendment
19 occurring December 28, 2012, which PERS contract provides for participation of the City
20 and its employees in PERS; and
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22 WHEREAS, one of the steps in the procedures to amend a public agency contract
23 with PERS is the public agency governing body's adoption of a resolution giving notice
24 of its intention to approve a contract amendment, which resolution shall contain a
25 summary of the proposed contract change; and
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27 WHEREAS, on December 18, 2017, the Petaluma City Council adopts
28 Resolution no. giving the following summary of a proposed change to the City's
29 PERS contract, in accordance with agreements reached with City bargaining units
30 regarding such change and the Public Employees' Retirement Law to provide for
31 contributions of specified unit members to the City's cost of participating in the City's
32 PERS agreement:
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34 To become subject, from and after the effective date of the amendment, to Section
35 20516 of the Public Employees' Retirement Law (Employees Sharing Additional
36 Cost) to provide for employee cost sharing of 3% for local miscellaneous and
37 safety members in the Department Heads and Assistant City Attorney Bargaining
38 Unit (Unit 8), Petaluma Public Safety Mid - Managers Association (Unit 10) and
39 Unrepresented Executive Management employee unit which includes the City
40 Manager, City Attorney and City Cleric; and
Attachment 2
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2 WHEREAS, in accordance with Sections 20471 and 20474 of the Public
3 Employees' Retirement Law, adoption of Resolution no. giving notice of a
4 proposed amendment to the City's PERS contract must occur not less than 20 days prior
5 to the date at which this ordinance is adopted; and
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7 WHEREAS, in accordance with Section 20474 of the PERS Law, an election of
8 the employees affected by the proposed amendment to the City's PERS contract will be
9 conducted and canvassed, and this ordinance may only be adopted if a majority of the
10 affected employees do not vote to disapprove of the proposed amendment;
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13 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
14 PETALUMA AS FOLLOWS:
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16 Section t: An amendment of the contract between the City Council of the City of
17 Petaluma and the Board of Administration, California Public Employees' Retirement System is
18 hereby authorized, a copy of said amendment being attached hereto, marked "Exhibit A ", and by
19 such reference made a part hereof as though herein set out in full.
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21 Section 2: The Mayor is hereby authorized, empowered, and directed to execute said
22 amendment for and on behalf of the City.
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24 Section 3: In accordance with Section 20474 of the Public Employees' Retirement Law,
25 the City and its affected employees shall become subject to the amendment attached as Exhibit A
26 beginning the first day of the first pay period following the effective date of this ordinance.
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28 Section 4: This Ordinance shall take effect thirty (30) days after the date of its adoption.
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30 Section 5: If any section, subsection, sentence, clause, phrase or word of this ordinance
31 is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of
32 competent jurisdiction or preempted by state legislation, such decision or legislation shall not
33 affect the validity of the remaining portions of this ordinance. The City Council of the City of
34 Petaluma hereby declares that it would have passed and adopted this ordinance and each and all
35 provisions thereof irrespective of the fact that any one or more of said provisions be declared
36 unconstitutional, unlawful or otherwise invalid.
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38 Section 6: The City Clerk is hereby directed to publish or post this ordinance or a
39 synopsis for the period and in the manner provided by the City Charter and other applicable law.
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41 INTRODUCED, and ordered posted /published, this 18th day of December, 2017.
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ADOPTED this
Ayes:
Noes:
Abstain:
Absent:
ATTEST:
Claire Cooper, City Clerk
day of
Attachment 2
2017, by the following vote:
David Glass, Mayor
APPROVED AS TO FORM:
Eric W. Danly, City Attorney