HomeMy WebLinkAbout4.10 Amend CalPERS Agreement or
19 82 STAFF REPORT CITY CLERK
` CITY COUNCIL File #720-60
DATE: June 2, 2015
TO: Honorable Mayor and City Councilmembers
FROM: Christopher L. Foss, City Manager "
SUBJECT: Adoption of An Ordinance to Amend the City's Retirement ontract with the
Board of Administration of the California Public Employees' Retirement System
(CaIPERS)
Prepared by Julie Carter, Human Resources Director
EXECUTIVE SUMMARY:
This is the second reading of an Ordinance introduced at the regularly scheduled City Council
Meeting of May 5, 2015. The Ordinance authorizes an amendment to the contract with the
Board of Administration of the California Public Employees' Retirement System to provide
Employee Additional Cost Sharing as defined under Article 2. Section 20516 of the California
Public Employee Retirement Law (PERL). The Ordinance proposes increasing City employee
contributions by 3.05% to their CaIPERS retirement and thus reducing the employer's retirement
program costs. This Staff report is the final legislative step in the schedule of agency actions for
amending the CaIPERS contract.
FINANCIAL IMPACT:
The CaIPERS Employee Sharing Additional Costs program increases employee contributions to
their CaIPERS retirement and thus decreases the employer's retirement program costs.
Employee CaIPERS deductions will be made on a pre-tax basis under Internal Revenue Code
(IRC) Section 414 (h) (2) which was previously adopted by the City.
It is estimated a 3.05% cost sharing arrangement with all CaIPERS eligible employees will result
in a savings of $308,748 annually to the City beginning in Fiscal Year 2015-2016. It is expected
that this action will result in additional cost savings to the City in future years.
RECOMMENDATION:
Staff recommends that the City Council waive the reading and adopt an Ordinance of the City
of Dublin Authorizing An Amendment to the Contract Between The City of Dublin and the Board
Of Administration of the California Public Employees' Retirement System.
Page 1 of 3 ITEM NO. 4.10
Reviewed By
Assistant City Manager
DESCRIPTION:
In the recent months, the City Manager has been in discussions with City employees regarding
City paid wages and benefits. Specifically, the City Manager has been exploring additional ways
to further the partnering relationship with City employees regarding the CaIPERS retirement
program in an effort to address future financial liabilities. After reviewing several cost
containment programs it was determine that the best alternative was continuing Employee
Sharing Additional Cost as defined under Section 20516 of the California Public Employee
Retirement Law (PERL).
At the conclusion of the employee process the City Council and City employees agreed to take
the necessary steps towards employees paying an additional 3.05% towards their CaIPERS
retirement. By signature acknowledge and adoption of Council Resolution 40-15 on April 7,
2015, all CaIPERS covered employees (defined as Classic and New members) recognized the
City's intent to amend its CaIPERS contract.
The City Council certified compliance under Government Code Section 7507 by the adoption of
the Resolution of Intention (Resolution 62-15) on May 5, 2015, and public introduction of the
Ordinance.
Additionally, Government Code Section 20474 requires a secret ballot election by employees
affected whenever a CaIPERS contract is amended to provide a benefit that changes the
employees' rate of contribution. On May 6, 2015, as part of the City Manager's general
employee meeting, a secret ballot election was held among 84 employees; 99% of the
employees voted in favor of the CaIPERS contract amendment.
The City of Dublin's practice is to introduce an Ordinance then place it for City Council adoption.
The attached Ordinance (Attachment 1) amends the contract between the City Council of the
City of Dublin and the Board of Administration of the California Public Employees' Retirement
System (CaIPERS) to provide Section 20516 (Employees Sharing Additional Cost). The
Ordinance shall take effect thirty (30) days after the date of its adoption, and prior to the
expiration of the fifteen (15) days from the passage thereof. With the Council's approval on June
27 2015, the effective date of the Ordinance shall be July 2, 201. The effective date of the
CaIPERS contract amendment shall be July 11, 2015, which is the beginning of the first pay
period after the effective date of the Ordinance.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
Adoption of the Ordinance provides for public noticing in accordance with Section 36933 of the
Government Code within 15 days after its passage. The City Clerk shall cause the Ordinance,
with the names of those City Councilmembers voting for and against the Ordinance, to be
posted in at least three (3) public places in the City. The Ordinance shall have an effective date
of July 2, 2015.
Page 2 of 3
ATTACHMENTS: 1. Ordinance of the City of Dublin Authorizing An Amendment To The
Contract Between The City of Dublin And The Board Of
Administration Of The California Public Employees' Retirement
System
Page 3 of 3
ORDINANCE NO. —2015
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY DUBLIN AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF DUBLIN AND THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
THE CITY COUNCIL OF THE CITY OF DUBLIN DOES ORDAIN AS FOLLOWS:
Section 1: ADOPTION OF CONTRACT AMENDMENT
That an amendment to the contract between the City Council of the City of Dublin and the Board of
Administration, California Public Employee's Retirement Systems 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: EXECUTION OF AMENDMENT
The Mayor of the City of Dublin is hereby authorized, empowered and directed to execute said contract
amendment for and on behalf of the City of Dublin.
Section 3: EFFECT: POSTING
This Ordinance shall take effect thirty (30) days after the date of its adoption, and prior to the expiration
of fifteen (15) days from the passage thereof, the City Clerk of the City of Dublin shall cause this Ordinance to
be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the
Government Code of the State of California.
PASSED AND ADOPTED by the City Council of the City of Dublin on this 2,d day of June 2015.
AYES:
I
NOES: €
f
ABSENT:
:
ABSTAIN:
Mayor
ATTEST:
City Clerk
C
ATTACHMENT 1
i
Ca1PERS
-EXHIBI'T
California
Public Employees' Retirement System
. AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees ' Retirement System
and the
City Council
City of Dublin
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
February 1, 1983, and witnessed December 13, 1982, and as amended effective April
12, 1986, November 21, 1987, July 1, 2000, August 20, 2005 and October 20, 2012
which provides for participation of Public Agency in said System, Board and Public
Agency hereby agree as follows:
A. Paragraphs 1 through 13 are hereby stricken from said contract as executed
effective October 20, 2012, and hereby replaced by the following paragraphs
numbered 1 through 13 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.
I
2. Public Agency shall participate in the Public Employees' Retirement
System from and after February 1, 1983 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) Any dispute, disagreement, claim, or proceeding (including
without limitation arbitration, administrative hearing, or litigation)
between Public Agency and its employees (or their
representatives)which relates to Public Agency's election to
amend this Contract to provide retirement benefits, provisions or
formulas that are different than such employees' existing
retirement benefits, provisions or formulas,
(c) Public Agency's agreement with a third parry 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.
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 it
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. FIREFIGHTERS; AND
b. POLICE OFFICERS.
f
2
6. The percentage of final compensation to be provided for each year of j
credited prior and current service as a local miscellaneous member In
employment before and not on or after August 20, 2005 shall be
determined in accordance with Section 21354 of said Retirement Law I
(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 August 20, 2005 shall be determined in
accordance with Section 21354.5 of said Retirement Law (2.7% at age 55
Full).
8. 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).
b. Section 21573 (Third Level of 1959 Survivor Benefits).
C. Section 20042 (One-Year Final Compensation).
d, Section 20556 (Employees Sharing Cost of Additional Benefits):
From and after October 20, 2012 and until the effective date of this
amendment to contract Section 21354.5 (2.7% @ 55 Full formula)
effective August 20, 2005 and Section 20042 (One-Year Final
Compensation) effective July 1, 2000 for local miscellaneous
members, The employee cost sharing contributions are not to
exceed 4.072%.
e, Section 20516 (Employees Sharing Cost of Additional Cost):
From and after the effective date of this amendment to contract, 7%
for classic local miscellaneous members and 3.05% for new local
miscellaneous members,
9. 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, i
10. 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,
t
11. 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. 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.
12. 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.
13. 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 DUBLIN
BY
? BY
RENEE OSTRANDER, CHIEF PRESIDING OFFI.CtjR
EMPLOYER ACCOUNT MANAGEMENT DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Witne_s-i Date
�J
Attest:
Clerk
i
AMENDMENT CaIPERS ID#6598539431
PERS•CON-702A