HomeMy WebLinkAbout2011-03-08 - AGENDA REPORTS - CALPERS BENEFITS CONTR AMEND (2)Agenda Item: 4
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Jennifer Curtis
DATE: March 8, 2011
SUBJECT: SECOND READING OF ORDINANCE TO AMEND CONTRACT
WITH CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM TO PROVIDE 20475 (DIFFERENT LEVEL OF
BENEFITS) AND SECTION 21353 (2% AT 60 RETIREMENT
FORMULA) AND RESOLUTION TO AMEND SAME
CONTRACT TO PROVIDE NO EMPLOYER PAID MEMBER
CONTRIBUTIONS FOR NEW HIRES
DEPARTMENT: City Manager's Office
RECOMMENDED ACTION
City Council amend the contract with the California Public Employees' Retirement System
(Ca1PERS) to provide Section 20475 (Different Level of Benefits), Section 21353 (2.0610 at 60
retirement formula), and Section 20691 (Employer Paid Member Contributions) for local
miscellaneous members entering membership for first time after the effective date of this contract
amendment; conduct a second reading and adopt an ordinance entitled "AN ORDINANCE OF
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, AMENDING
THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION, CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL, CITY OF
SANTA CLARITA," and adopt a resolution entitled "A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, BETWEEN THE BOARD
OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE CITY COUNCIL OF THE CITY OF SANTA CLARITA FOR EMPLOYER PAID
MEMBER CONTRIBUTIONS."
BACKGROUND
On February 8, 2011, the resolution of intention, contract amendment, and ordinance were first
brought to the City Council. The resolution was adopted and the ordinance was passed to the
second reading. In order for the contract amendment to be completed, the adoption of the
ordinance must occur at least 20 days after the approval of the resolution.
Public employee pensions have recently been the focus of attention throughout the state. Due to
the economy and recession, the long-term sustainability of pensions has been discussed and
debated leading many public agencies to review their pension programs to determine if changes
are needed. The City of Santa Clarita has a history of being proactive in matters of finance.
The City contracts with the California Public Employees' Retirement System (CalPERS) to
provide employees with retirement benefits. Government Code Section 20475 allows the
contracting agency, the City, to amend its contract or previous amendments to its contract with
CalPERS in order to provide different benefits to new employees hired after the effective date of
the amendment. The City is prohibited from reducing contracted pension benefits for current
employees. Therefore, the City seeks to amend its contract with CalPERS and provide newly
hired employees with the 2.0% at 60 retirement formula based on the 36 highest paid consecutive
months and for these new employees to pay their own member contribution.
In a proactive effort to ensure employee benefits are sustainable in the long-term, the City
Manager put together an employee workgroup. This group was asked to review benefits and
propose changes based on comparisons with benchmark cities, changes in the economy, and
statewide trends. The workgroup met several times last fall and offered suggestions, which were
carefully considered. One of the suggestions was to decrease the retirement formula for future
employees to 2.0% at 60 from 2.7% at 55. This lower formula will provide future employees
with a defined retirement benefit, but one that is based on an older retirement age and a lower
percentage of final compensation. In addition, future employees will be responsible for paying
their full seven percent member contribution.
The City Manager met with unrepresented employees 'in December 2010 to discuss this change,
and the City met and conferred -with SEIU Local 721 and in January 2011 reached agreement on
implementing this 2.0% at 60 retirement formula for new hires. The current Memorandum of
Understanding runs through December 31, 2012, so a side letter of agreement has been
completed and approved by both parties.
ALTERNATIVE ACTIONS
1. City Council could elect not to amend the City's contract with CalPERS and continue to offer
the current retirement formula to future employees.
2. Other action as directed by the City Council.
FISCAL IMPACT
It is anticipated that in the long-term this pension change will result in. a cost savings to the City.
i
ATTACHMENTS
Ordinance
Resolution
Contract Amendment Exhibit
91
ORDINANCE NO. 11 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA CLARITA, CALIFORNIA, AMENDING THE CONTRACT BETWEEN THE
BOARD OF ADMINISTRATION, CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM AND THE CITY COUNCIL, CITY OF SANTA CLARITA
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 1. That an amendment to the contract between the City Council of the City
of Santa Clarita and the Board of Administration, California Public Employees' Retirement
System is hereby authorized, a copy of said amendment being attached hereto, marked "Exhibit,"
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, empowered and
directed to execute said amendment for and on behalf of said Agency.
SECTION 3. This Ordinance shall be in full force and effect thirty (30) days from its
passage and adoption.
SECTION 4. The City Clerk shall certify to the passage of this Ordinance and shall
cause the same to be published as required by law.
PASSED, APPROVED, AND ADOPTED this 8th day of March 2011.
MAYOR
ATTEST:
CITY CLERK
DATE:
a
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
I, Kevin Tonoian, Acting City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Ordinance 11- was regularly introduced and placed upon its first reading at a
regular meeting of the City Council on the day of 2011. That thereafter, said
Ordinance was duly passed and adopted at a regular meeting of the City Council on the day
of 2011, by the following vote, to wit:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
AND I FURTHER CERTIFY that the foregoing is the original of Ordinance and
was published in The Signal newspaper in accordance with State Law (G.C. 40806).
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL ORDINANCE
I, , City Clerk of the City of Santa Clarita, do hereby
certify that this is a true and correct copy of the original Ordinance 11- , adopted by the City
Council of the City of Santa Clarita, CA on , 2011, which is now on file in my office.
Witness my hand and seal of the City of Santa Clarita, California, this day of
2011.
City Clerk
By
Deputy City Clerk
RESOLUTION II-
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA CLARITA, CALIFORNIA, BETWEEN THE BOARD OF
ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA
FOR EMPLOYER PAID MEMBER CONTRIBUTIONS
WHEREAS, the governing body of the City of Santa Clarita has the authority to
implement Government Code 20691;
WHEREAS, one of the steps in the procedures to implement or change Section
20691 is the adoption by the governing body of the City of Santa Clarita of a Resolution
regarding said Employer Paid Member Contributions (EPMC); and
WHEREAS, the governing body of the City of Santa Clarita has identified the
following conditions and purpose related to EPMC:
All employees of miscellaneous group hired prior to April 9, 2011, shall receive 8%
EPMC while all employees of miscellaneous group hired after said date shall receive
0% EPMC
• The effective date of this resolution shall be April 9, 2011.
NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby
resolve as follows:
SECTION 1. The City of Santa Clarita elects to provide EPMC as set forth above.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 8th day of March 2011.
MAYOR
ATTEST:
CITY CLERK
DATE:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA)
I, Kevin Tonoian, Acting City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a
regular meeting thereof, held on the day of 2011, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL RESOLUTION
I, , City Clerk of the City of Santa Clarita, do hereby
certify that this is a true and correct copy of the original Resolution 11- adopted by the City
Council of the City of Santa Clarita, California on , 2011, which is now on file in my
office.
Witness my hand and seal of the City of Santa Clarita, California, this day of
2011.
City Clerk
By
Deputy City Clerk
M
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 Santa Clarita
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
November 14, 1988, and witnessed October 20, 1988, and as amended effective
August 14, 1992, July 1-,-2005, January 1, 2006 and July 2, 2007 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 July 2, 2007, and hereby replaced by the following paragraphs
numbered 1 through 14 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 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.
PLEASE Do NOT SIGN "EXHIBIT ONUV"
2. Public Agency shall participate, in the Public Employees' Retirement
System from and after November 14, 1988 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 CaIPERS 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 fees
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 CalPERS' 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.
PLEASE DO NOT SIGN "EXHIBIT ONLY"
(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 .or to
the California Constitution.
4. 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. 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:
a. SAFETY EMPLOYEES; AND.
b: PART-TIME SEASONAL CROSSING GUARDS AND PART-TIME
SEASONAL MANAGEMENT INTERNS HIRED ON OR AFTER
JULY 2, 2007.
6. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member in
employment before and not on or after January 1, 2006 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 prior and current service as a local miscellaneous member in
employment on or after January 1, 2006 and not 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 21354.5 of said Retirement Law (2.7% at age 55 Full).
8. 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).
9. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 20938 (Limit Prior Service to Members Employed on
Contract Date).
/ 6, 2�
PLEASE DO NOT SIGN "EXHIBIT ONLY"
�o
b. Section 21024 (Military Service Credit as Public Service).
Section 21574.5 (Indexed Level of 1959 Survivor Benefits).
d. Section 20475 (Different Level of Benefits). Section 21353 (2% @
60 Full formula) is applicable to local miscellaneous members
entering membership for the first time in the miscellaneous
classification after the effective date of this amendment to contract.
10. Public Agency, in accordance with Government Code Section 20834, shall
not be considered an "employer" for purposes of the Public Employees'
Retirement Law. Contributions of the Public Agency shall be fixed and
determined as provided in Government Code Section 20834, and such
contributions hereafter made shall be held by the Board as provided in
Government Code Section 20834.
11. 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 of said Retirement System.
12. 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 21574.5 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. 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.
C. 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.
13. 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.
�i
14. 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 effekvz)'0n the day of
BOARD OF ADMINISTI`t`' CITY COUNCIL
PUBLIC EMPLOYE $�� IREMENT SYSTEM CITY OF SANTA CLARITA
BY BY
L CGARTLAND, CHIEF PRESIDING OFFICERC,ok
E PLOYER SERVICES DIVISIONy1�
PUBLIC EMPLOYEES' RETIREMENT SYSTEM _,<<.,
c C-\
��vj
t s Date
�° Attest:
Clerk
AMENDMENT ER# 1468
PERS-CON-702A
21
PUBLIC NOTICE
NOTICE IS HEREBY GIVEN that on March 8, 2011, the City Council of the City of Santa Clarita
adopted Ordinance No. 11-6 entitled:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA,
CALIFORNIA, AMENDING THE CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION, CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE CITY COUNCIL, CITY OF SANTA CLARITA
by the following vote:
AYES:
Kellar, Ender, Weste, McLean
NOES:
None
ABSENT:
Ferry
A certified copy of the complete text of the ordinance is posted and may be read in the City Clerk's
Office, 23920 Valencia Boulevard, Suite 304, Santa Clarita, and/or a copy may be obtained from that
office.
Dated this 9th day of March, 2011.
KeviZsanta
ono�an, Acting City, Clerk ,
City �ClaritaG