HomeMy WebLinkAbout1995-06-06; City Council; 13169; MERGER OF CARLSBAD MUNICIPAL WATER DISTRICT AND CITY PUBLIC EMPLOYEE RETIREMENT SYSTEM (PERS) PLANS AND OTHER PLAN AMENDMENTS-2
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r,, ClY; OF CARLSBAD - AGEVA BILL rk
MERGER OF CARLSBAD MUNICIPAL WATER DISTRICT
AND CITY PUBLIC EMPLOYEE RETIREMENT SYSTEM
(PERS) PLANS AND OTHER PLAN AMENDMENTS
7 AB # I< I(Q~ TITLE:
MTG.
DEPT.
RECOMMENDED ACTION:
e/sm
FIN
1. Adopt Resolution No. 95- 1 L1 ’l, approving an agreement authorizing the mer
of the City of Carlsbad and Carlsbad Municipal Water District PERS contracts
Adopt Resolution No. 95- ILis , a resolution of intention to amend the Put
Employees Retirement System (PERS) contract.
Adopt Resolution No. 95- It{&, authorizing the release of 1959 Survivor Bene
Assets and Liabilities into the Third Level 1959 Survivor Benefit Pool.
Introduce Ordinance No. NS- q[ I, amending the PERS contract.
2.
3.
4.
ITEM EXPLANATION
With the completion of negotiations with employee groups and previous merger
operations with the Carlsbad Municipal Water District (District), changes to the Ci?
Council approval of the resolutions and ordinance, the following modifications a
amendments to the City’s PERS plan would occur.
1.
Public Employee Retirement System (PERS) plan should now be accomplished. Up
Merger of the Carlsbad Municipal Water District PERS plan into the City’s PEI
plan
In January 1990, the Carlsbad Municipal Water District became a subsidiary distr
of the City of Carlsbad in order to provide a unified water service operation within tl
District’s service area. The City and the District approved an Operating Agreeme
reflecting the new organizational relationship on June 25, 1991. On February 1
1992, as part of the agreement, all District employees became City employees at
were added to the City Public Employee Retirement System (PERS) plan.
State Government Code Section 20567.1 authorizes the merger of the two PEF
plans. PERS has prepared the necessary documents to amend the City’s plan ar
merge the District’s PERS plan into the City plan on February 17, 1992. The Distri
and City PERS plans are very similar with former District employees maintaining tt- same or better PERS benefits. Optional benefits provided by the City’s plan will k applied only to future service credit. At retirement, former District employees’ month PERS benefits will be calculated under the District plan through February 17, 19:
and as City employees thereafter.
2. At no additional out-of-pocket cost to the City, provide higher benefits to eligib
survivors of full time City employees who die prior to retirement.
1959 Survivor benefits are similar to Social Security payments to dependents in th: a monthly allowance is provided to surviving dependents when an employee die
prior to retirement. The level of benefit is separated into three categories: basi increased and third level. The third level provides the highest benefit. Currently, th
base level of benefits is provided for all safety employees while general employee:
management and elected officials receive the increased level.
0 0
. PAGE TWO OF AGENDA BILL NO. \ 3 ! \ bq
PERS recommended that the City amend its 1959 survivor benefit to the third level to pro
a higher benefit for employees at no out-of-pocket cost to the City. Moving employees tc
third level in this benefit would allow surviving dependents to receive payments that sta
approach the levels of those offered by Social Security. Although obtaining higher cover
employees would make the same $2 payment per month. The City may utilize other
inaccessible survivor benefit reserves to fund the third level coverage at no additional
to the City.
3. Transfer reserves for 1959 survivor benefits to fund third level of coverage.
Funding for the third level of 1959 survivor benefits is based on the pooled experience (
participating agencies rather than individual agency experience. The City’s PERS surplu
1959 survivor benefits now totals almost $178,000. At this time, these funds may on1
utilized for survivor benefit coverage. The surplus funds will be transferred to the third
benefit pool and will be drawn down annually to fund the City’s employer cost for the 1
sevel of coverage.
4. Allow employees a second opportunity to elect the PERS survivor benefit coverad
Approximately 20 long-time City employees did not chose the 1959 survivor benefit wher
PERS benefit was originally implemented. Amending tlhe contract will allow those emplo)
who are not now covered by the 1959 survivor benefits to elect coverage. At present, all
employees receive the 1959 survivor benefit.
FISCAL IMPACT
1. Merger of the District and City PERS plans will result in a decrease to the PI
miscellaneous employer rate. The actuarial valuation shows a 0.246% decrease to the C
PERS employer contribution rate for local miscellaneous members which will be reflect€
the PERS rates effective July 1, 1996. All non-safety regular employees are included in
PERS miscellaneous member category, including general employees, management,
elected officials. Beginning in FY 1996-97, the annual cost reduction is approxim:
$35,000.
2. The cost to the City for third level 1959 survivor benefits are pooled among men
agencies, thus reducing extremes based on individual experience. Base and increased I(
of 1959 survivor benefit coverage were included in the City’s PERS rates along with all o
actuarial factors. Historically, the third level pooled cost to the employer has declined c
time with a current cost of $2 per month per employee. Regardless of what level is cho
the employee cost is $2 per month.
3. The transfer of 1959 Survivor reserves will fund the higher benefit. With the change to
third level, the City can now tap into the PERS survivor benefit reserves which t
approximately $178,000. Estimated annual payments of $1 1,000 for the third level benefil
be made automatically from the City survivor benefit reserves. The PERS cont
amendment cost analysis shows that the City’s reserve is projected to fund the benefii
25 years.
0 0
. PAGE THREE OF AGENDA BILL NO. I 3! I (J?
4. The second opportunity for employees to elect 1959 survivor benefit coverage will h
a small fiscal impact to the City with actual costs emerging from future PERS valuation of
third level pool. Employees electing coverage will pay $2 per month from the date of orig
eligibility. The cost is dependent on the number of employees electing the coverage ,
length of employment.
EXHIBITS
1. Resolution No. 95- . \ LPl , approving agreement authorizing merger of City of Carlsbad
Carlsbad Municipal Water District PERS contracts.
2. Resolution No. 95-ILi5 , resolution of intention to approve an amendment to the Pf
3. Resolution No. 95- \g b , authorizing the release of 1959 Survive!: Benefits Assets
Liabilities into the Third level 1959 Survivor Benefit Pool.
4. Ordinance No. NS- 31 I , amending the PERS contract.
contract.
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0 0
ORDINANCE NO. NS-311
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING AN AMENDMENT
TO THE CONTRACT BETWEEN THE CITY COUNCIL AND THE
BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC
EMPLOYEES RETIREMENT SYSTEM
The City Council of the City of Carlsbad, California does ordain as follows:
SECTION 1. That an amendment to the contract between the City Council of the
City of Carlsbad and the Board of Administration, California Public Employees Retirement
System is hereby authorized, a copy of said amendment being attached hereto, marked
"Exhibit A," and by such reference made a part hereof as though herein set out in full.
SECTION 2. The Mayor of the City of Carlsbad is hereby authorized
empowered, and directed to execute said amendment for and on behalf of said Agency
SECTION 3. This ordinance shall be effective thirty days after its adoption, anc
the City Clerk shall certify the adoption of this ordinance and cause it to be published a
least once in a newspaper of general circulation in the City of Carlsbad within fifteen day:
after its adoption.
SECTION 4. To the extent that this ordinance does not deprive any person o
their constitutional rights, it shall be operative on June 30, 1995.
INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad Cit,
Council held on the 6th day of June , 1995, and therefore,
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City o
Carlsbad, California, on the day of y 1995, by the following vote, to wit:
AYES:
NOES:
ABSENT:
CLAUDE A. LEWIS, Mayor
ATTEST:
ALETHA L. RAUTENKRANZ, City Clerk (SEAL)
e 0
EXHIBIl
AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATI(0N
OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF CARLSBAD
The Board of Administration, Public Employees' Retirement System, hereinafter referred to as Boar
and the governing body of above public agency, hereinafter referred to as Public Agency, having enterc
into a contract effective January 1, 1956, and witnessed December 23, 1955, and as amended effecti
July 1, 1957, January 1, 1959, March 5, 1959, March 18, 1975, April 1, 1975, August 18, 1977, Ju
21, 1980, January 1, 1981, June 21, 1982, November 22, 1982, June 26, 1989, November 16, 199
July 3, 1992 and November 3, 1993, which provides for participation of Public Agency in said Systa
Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective Novemb
3, 1993, 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' Retireme
Law shall have the meaning as defined therein unless otherwise specifically provide
"Normal retirement age" shall mean age 60 for local miscellaneous members and age
for local safety members.
Public Agency shall participate in the Public Employees' Retirement System from a
after January 1, 1956 making its employees as hereinafter provided, members of sa
System subject to all provisions of the Public Employees' Retirement Law except su
as apply only on election of a contracting agency and are not provided for herein and
all amendments to said Law hereafter enacted except those, which by express provisic
thereof, apply only on the election of a contracting agency.
Employees of Public Agency in the following classes shall become members of si
Retirement System except such in each such class as are excluded by law or tl
agreement :
a.
b.
c.
2.
3.
Local Fire Fighters (herein referred to as local safety members);
Local Police Officers (herein referred to as local safety members).
Employees other than local safety members (herein referred to as lo
miscellaneous members).
4. In addition to the classes of employees excluded from membership by said Retiremc
Law, the following classes of employees shall not become members of said Retiremc
System:
a. SENIOR INSTRUCTOWLIFEGUARD HIRED AFTER NOVEMBER 3, 1'
0 ' PLEASE DO N T SIGN "EXHIBIT ONtYp 0
5. This contract shall be a continuation of the contract of the Carlsbad Municipal Wa
District, hereinafter referred to as "Former Agency" D The accumulated contributio
assets and liability for prior and current service under the Former Agency's contract sl
be merged pursuant to Section 20567.1 of the Government Code. Such merger occur
February 17, 1992.
The percentage of final compensation to be provided for local miscellaneous members
each year of credited prior and current service shall be determined in accordance u
Section 21251.13 of said Retirement Law, subject to the reduction provided therein
service on and after June 1, 1958, the effective date of Social Security coverage, i
prior to December 31, 1980, termination of Social Security, for members whose sen
has been included in Federal Social Security (2% at 60 Full and Modified).
The percentage of final compensation to be provided for each year of credited prior i
current service as a local safety member shall be determined in accordance with Sect
21252.01 of said Retirement Law (2% at age 50 Full).
Public Agency elected and elects to be subject to the following optional provisions:
a.
b.
6.
7.
8.
Sections 21263, 21263.1 and 21263.3 (Post-Retirement Survivor Allowance]
Section 20020 ("Local Police Officer" shall include employees of a pol
department who were employed to perform identification or communicat
duties on August 4, 1972 and who elected to be local safety members).
Section 20862.8 (Credit for Unused Sick Leave).
Section 20024.2 (One-Year Final Compensation).
C.
d.
e. Section 21298 (Improved Non-Industrial Disability Allowance) for IC
miscellaneous members only.
Section 20930.3 (Military Service Credit as Public Service), Statutes of 197(
Section 21382.4 (Third Level of 1959 cFurvivor Benefits) pursuant to Articl
(commencing with Section 21380).
h. Section 21388 (Second Opportunity to Elect 1959 Survivor Benefits).
Public Agency, in accordance with Government Code Section 20740, ceased to be
"employer" for purposes of Section 20759 effective on August 18, 1977. Accumula
contributions of Public Agency shall be fixed and determined as provided in Govern
Code Section 20759, and accumulated Contributions thereafter shall be held by the Bo
as provided in Government Code Section 20759.
Public Agency shall contribute to said Retirement System the contributions determi
by actuarial valuations of prior and future service liability with respect to IC
miscellaneous members and local safety members of said Retirement System.
f.
g.
9.
10.
e- 0
ll + Public Agency shall also contribute to said Retirement System as follows:
a. Public Agency shall contribute $2.00 per member, per month on account of
liability for the 1959 Survivor Benefits provided under Section 21382.4 of s
Retirement Law. In addition, all assets 2
liabilities of Public Agency and its employees shall be pooled in a single accou
based on term insurance rates, for survivors of all local miscellaneous memb
and local safety members.
A reasonable amount, as fixed by the Board, payable in one installment wit
60 days of date of contract to cover the costs of administering said System a
affects the employees of Public Agency, not including the costs of spec
valuations or of the periodic investigation and valuations required by law.
A reasonable amount, as fixed by the Board, payable in one installment as
occasions arise, to cover the costs of special valuations on account of employ
of Public Agency, and costs of the periodic investigation and valuations requi
by law.
(Subject to annual change.)
b.
C.
12. Contributions required of Public Agency and its employees shall be subject to adjustm
by Board on account of amendments to the Public Employees’ Retirement Law, and
account of the experience under the Retirement System as determined by the perio
investigation and valuation required by said Retirement Law.
Contributions required of Public Agency and its employees shall be paid by Put
Agency to the Retirement System within fifteen days after the end of the period to wh
said contributions refer or as may be prescribed by Board regulation. If more or 1
than the correct amount of contributions is paid for any period, proper adjustment SI
be made in connection with subsequent remittances. Adjustments on account of err
in contributions required of any employee may be made by direct payments between
employee and the Board.
13.
B. This amendment shall be effective on the day of 7 19-
BOARD OF ADMINISTRATION CITY CO
PLOYEES’ RETIREMENT SYSTEM OF TIHE
CITY OF CAF&@BAD 0
BY 6
Presiding Officero;r/
0
e e
/% ACTUARIAL OFFICE
PUBLIC EMPLOYEES, ENT SYSTEM
-5 % Witness Date
% Attest: %
AMENDMENT Clerk
PERS-CON-702A (Rev. 3/95)
I e 0
c-
RESOLUTION NO. 95- 144
AGREEMENT
AUTHORIZING THE MERGER
OF THE CONTRACTS
OF THE
CITY COUNCIL
OF THE
CITY OF CARLSBAD
AND THE
BOARD OF DIRECTORS
OF THE
CARLSBAD MUNICIPAL WATER DISTRICT
WITH THE
BOARD OF ADMINISTRATION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
WHEREAS, the City Council of the City of Carlsbad and the Board of Directors oi
Carlsbad Municipal Water District entered into contracts with the Boar
Administration, Public Employees’ Retirement System, effective Janua
1956 and March 1, 1963 respectively, providing for participation of
employees in said System; and
WHEREAS, the Carlsbad Municipal Water District will not have any employees; a1
WHEREAS, the City of Carlsbad will assume functions of the District and employ
the employees of the Carlsbad Municipal Water District; and
WHEREAS, Section 20567.1 of the Government Code authorizes a merger of cont
for participation in the Public Employees’ Retirement System; and
WHEREAS, The Public Employees’ Retirement System has proposed an Agreemc
be accepted and executed by the governing bodies of the aforementic
public agencies to provide for merger of the contract between the E
of Directors of the Carlsbad Municipal Water District and the Boa
Administration, Public Employees’ Retirement System, into the cor
between the City Council of the City of Carlsbad and said Board;
NOW, THEREFORE BE IT AGREED, that the governing bodies of the aforementi
public agencies authorize, and do hereby authorize, an Agree
between the City Council of the City of Carlsbad, the Board of Direct(
the Carlsbad Municipal Water District, and the Board of Administrati
the Public Employees’ Retirement System to merge the contract bet
said Board and the Carlsbad Municipal Water District into the COI
between said Board and the City of Carlsbad as authorized by SE
20567.1 of the Government Code; and
e 0 ,.
BE IT FURTHER AGREED, that the presiding officer of the governing body of each of t
aforementioned contracting agencies is hereby authorized, empowered, and directed
execute said Agreement for and on behalf of the respective agency.
Witness our hands this 7th day of June ’19%.
BOARD OF ADMINISTRATION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
BY
CHIEF ACTUARY ACTUARIAL OFFICE CLAUDE A. LEWIS, Mayor
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Attest:
w*y,
KAREN R. KUNDT Assistant Ci
BOARD OF DIRECTORS
BY
Presiding Officer CLAUDE A. LEWIS, President
Attest: Attest:
Clerk
PERS-CON-39 (Rev. 3/95)
0 0
RESOLUTION 95-'l45
RESOLUTION OF INTENTION
TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
ANDTHE
CITY COUNCIL
OF THE
CITY OF CARLSBAD
WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and th
employees in the Public Employees' Retirement System by the execution of a contract, :
sets forth the procedure by which said public agencies may elect to subject themselves ;
their employees to amendments to said Law; and
WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the goven
body of the public agency of a resolution giving notice of its intention to approve
amendment to said contract, which resolution shall contain a summary of the cha
proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:
To provide for the merger of the Carlsbad Municipal Water District
(#0503) into the City of Carlsbad (#0338) effective February 17,
1992 pursuant to Government Code Section 20567.1 for local
miscellaneous members, Section 21382.4 (Third Level of 1959
Survivor Benefits) pursuant to Article 6 (commencing with Section
21380) and Section 21388 (Second Opp~rtUnity to Elect 1959
Survivor Benefits) for local miscellaneous members and local safety
members.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby 1
notice of intention to approve an amendment to the contract between said public agency
the Board of Administration of the Public Emplo
amendment being attached hereto, as an "Exhibit"
BY
Title CLAUDE A. LEWIS, Mayor
June 6, 1995
Date adopted and approved
(Amendment)
CON-302 (Rev. 8/94)
a e
RESOLUTION 95- 146
AGREEMENT
AUTHORIZING THE RELEASE OF
1959 SURVIVOR BENEFITS ASSETS AND LIABILITIES
INTO THE
THIRD LEVEL 1959 SURVIVOR BENEFIT POOL
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ANDTHE
CITY COUNCIL
OF THE
CITY OF CARLSBAD
WHEREAS, Government Code Section 21382.4 provides for a single employer rate to be establishec
provide benefits under said Section on account of members employed by contrac’
agencies electing to include the provision of said Section in their contracts; and
WHEREAS, Government Code Section 21382.4, requires pooling of all assets and liabilities of
contracting agencies on account of benefits provided under Article 6, commencing \
Section 21380;
NOW, THEREFORE BE IT AGREED, that assets and liabilities of the City of Carlsbad and
covered employees, on account of the benefits provided under Article 6, commencing 1
Section 21380, shall be pooled pursuant to the provisions of Government Code Sec
2 1382.4.
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF
CIT
BY BY
CHIEF ACTUARY
ACTUARIAL OFFICE CLAUDE A. LEWIS, Mayor
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Date June 7, 1995
PERS-CON-59 (Rev. 3/95)
June 12, 1995
Ms. Ellie Wright, Retirement Specialist PERS Employer Services Division P. 0. Box 942709
Sacramento, CA 94229-2709
CITY OF CARLSBAD (338) & CARLSBAD MUNICIPAL WATER DISTRICT (5(
MERGER AND OTHER PLAN AMENDMENTS
The City Council and Carlsbad Municipal Water District (CMWD) I on June 6, 1995 and approved the merger of the two PERS plai Council action that night also approved the ROI and agreemt releasing the 1959 Survivor Benefit reserves, in addition to I introduction of the Ordinance amending the PERS contract. Ple:
note the effective date language on the Ordinance as directed our City Attorney. Adoption is scheduled for June 27.
The following documents are enclosed:
1.
2. RES 95-145: Resolution of Intention, with attached Form C(
3. RES 95-146: Agreement releasing release of 1959 Survi7
4. RES 95-144: City of Carlsbad agreement authorizing merger
5. RES 902: Carlsbad Municipal Water District agreemt
City of Carlsbad and CMWD agenda bills
12, Certification of Governing Body's Action
Benefits Assets and Liabilities, two certified copies
contracts, two certified copies
authorizing merger, two certified copies
The Certification of Compliance (CON-12A) will be forwarded to : upon adoption of the Ordinance. We're getting close to a fii
chapter on this project. Again, thanks for all your help.
&f- CHER E. ALLEN
Assistant Finance Director
c: deputy City Clerk Finance Director Human Resources Director
F:\USERS\CALLE\WPDATA\PAYROLL\MERGE3
1200 Carlsbad Village Drive Carlsbad, CA 92008-1 989 (61 9) 434-2867 FAX (61 9) 434-8