HomeMy WebLinkAbout2001-04-24; City Council; 16166; Amend CALPERS Safety ContractCITY OF CARLSBAD - AGENDA BILL
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MT& 4-24-01
IEPT. HR
AMENDMENT TO CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM (CALPERS) SAFETY CONTRACT
3ECOMMENDED ACTION:
1. Adopt Resolution No.dbO )W I aL, a resolution of intention to approve an amendment to the
contract between the Board of Administration of the California Public Employees’
Retirement System (CalPERS) and the City of Carlsbad.
2. Introduce Ordinance No. NS -5 8 a amending the CalPERS safety contract impacting
local police members, as defined by all sworn police employees.
3. Adopt Resolutions No. &X@l*la 7 and 2OOl-lJf' reducing the City’s current nine
percent (9%) CalPERS employer paid member contribution for sworn police employees
to eight percent (8%) and authorizing the resulting one percent (1%) employee retirement
contribution to be deducted from each employee’s salary on a pre-tax basis.
ITEM EXPLANATION:
On March 6,2001, the City Council adopted Resolution No. 2001-68 approving a
Memorandum of Understanding with the Carlsbad Police Officers Association (CPOA) and
authorizing the City to initiate an amendment of the City’s contract with CalPERS to provide
the 3% at 50 retirement benefit (Section 21362.2) for all sworn CPOA-represented safety
employees effective the pay period inclusive of June 30,200l. The Council also authorized
this benefit to be extended to sworn police management employees.
The City Council would need to take two actions to implement the proposed revisions to the
retirement contract: (1) adopt a Resolution of Intention and, (2) introduce the Ordinance to
amend the contract. Adoption of the final Ordinance cannot be earlier than 20 days after
adoption of the Resolution of Intention. Therefore, adoption of the final Ordinance is
scheduled for May 15,200l. The effective date of the Ordinance would be June 14,200l.
The effective date of the contract amendment would be June 25,200l.
There are two rates associated with the cost to the City for the CalPERS retirement benefit: 1)
the employer contribution rate and 2) the employer paid member contribution rate. The City
Council authorized a reduction of the City’s current nine percent (9%) CalPERS employer
paid member contribution for sworn police employees to eight percent (8%) effective the pay
period inclusive of July 1,200l. The resulting one percent (1%) employee contribution can
be deducted from each employee’s salary on a pre-tax basis by implementing provisions of
section 414(h)(2) of the Internal Revenue Code (IRC).
FISCAL IMPACT:
The way that the City of Carlsbad’s retirement contract with CalPERS is structured, both
sworn police employees and fire employees are combined into one “safety” contract.
Page2ofAB# I&! 161
Therefore, CalPERS rates associated with the safety retirement contract are applied to both
sworn police and fire employees. If the 3% at 50 retirement benefit were to be implemented
for all employees covered by the safety contract, the City’s CalPERS employer contribution
rate for all safety employees would increase by an estimated 10.026%. However, to date, the
City Council has only authorized this benefit to be extended to sworn police employees.
Implementation of the 3% at 50 retirement benefit for only sworn police employees will
increase the City’s CalPERS employer contribution rate for all safety employees by an
estimated 3.512% as of the effective date of the contract amendment. Using current payroll
costs, this represents an annual cost of approximately $390,000. The fiscal impact of this
adjustment will be included in the 2001/2002 budget. Future fiscal year impacts will be
reflected during the annual budget process.
The 2001/2002 fiscal impact of the 3 % @ 50 retirement benefit for sworn police employees
will be offset by the reduction of the City’s current nine percent (9”/0) CalPERS employer
paid member contribution rate for sworn police employees to eight percent (8%). Based on
current payroll costs this equates to an annual reduction in cost of approximately $64,200.
There will be no fiscal impact associated with allowing the resulting one percent (1%)
employee retirement contribution to be paid on a pre-tax basis.
EXHIBITS:
1. Resolution No. @O 1 - lab, including Exhibit A
2. Ordinance No. u S - 5 b 2
3. Resolution NO. d 60 1 - 1 a 7
4. Resolution No. aoo b-lq?
RESOLUTION NO. 2001-126
RESOLUTION OF INTENTION
TO APPROVE AN AMENDMENT TO CONTRACT
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ANDTHE -
CITY COUNCIL
CITY OF CARLSBAD
WHEREAS, the Public Employees’ Retirement Law permits the participation of public
agencies and their employees in the Public Employees’ Retirement System
by the execution of a contract, and sets forth the procedure by which said
public agencies may elect to subject themselves and 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 governing body of the public agency of a resolution giving notice ‘of
its intention to approve an amendment to said contract, which resolution
shall contain a summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:
To provide Section 21362.2 (3% @ 50 Full formula) for
local police members only.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency
does hereby give notice of intention to approve an amendment to the
contract between said public agency and the Board of Administration of the
Public Employees’ Retirement System, a copy of said amendment being
attached hereto, as an “Exhibit” and by this reference made a part hereof.
By:
April 24, 2001
Date adopted and approved
ACTING MAYOR PRO TEM
Titles . P A
(Amendment)
CON-302 (Rev. 4/96)
CalPERS EXHIBIT A
California
Public Employees’ Retirement System
AMENDNENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Carlsbad
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 January 1, 1956, and witnessed
December 23, 1955, and as amended effective July I, 1957, January 1, 1959, March 5,
1959, March 18, 1975, April 1, 1975, August 18, 1977, June 21, 1980, January 1, 1981, June
21, 1982, November 22, 1982, June 26, 1989, November 16, 1990, July 3, 1992, November
3, 1993, June 30,1995, June 3,1996, January 7, 1997 and June 14, 1997 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
June 14, 1997, 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 and age 50 for local safety members.
2. Public Agency shall participate in the Public Employees’ Retirement System
from and after January I, 1956 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.
PLEASE DO NOT SIGN “EXHIBIT ONLY"
3. 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. Local Fire Fighters (herein referred to as local safety members);
b. Local Police Officers (herein referred to as local safety members);
C. Employees other than local safety members (herein referred to as local
miscellaneous members).
4. 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. SENIOR INSTRUCTOR/LIFEGUARD HIRED AFTER NOVEMBER 3,
1993.
5. This contract shall be a continuation of the contract of the Carlsbad Municipal
Water District, hereinafter referred to as “Former Agency”. The accumulated
contributions, assets and liability for prior and current service under the Former
Agency’s contract shall be merged pursuant to Section 20508 of the
Government Code. Such merger occurred February 17, 1992.
6. The percentage of final compensation to be provided for each year of credited
prior and current service for local miscellaneous members shall be determined
in accordance with Section 21354 of said Retirement Law, subject to the
reduction provided therein for service on and after June 1, 1958, the effective
date of Social Security coverage, and prior to December 31, 1980, termination
of Social Security, for members whose service has been included in Federal
Social Security (2% at age 55 Full and Modified).
7. The percentage of final compensation to be provided for each year of credited
prior and current service as a local fire member shall be determined in
accordance with Section 21362 of said Retirement Law (2% at age 50 Full).
8. The percentage of final compensation to be provided for each year of credited
prior and current service as a local police member shall be determined in
accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full).
The required member contribution rate is 9% of reportable compensation.
9. Public Agency elected and elects to be subject to the following optional
provisions:
a. Sections 21624, 21626 and 21628 (Post-Retirement Survivor
Allowance).
PLEASE DONOT SIGN "EXHIBIT ONLY"
b. Section 20425 (“Local Police Officer” shall include employees of a police
department who were employed to perform identification or
communication duties on August 4, 1972 and who elected to be local
safety members).
C. Section 20965 (Credit for Unused Sick Leave).
d. Section 20042 (One-Year Final Compensation).
e. Section 21427 (Improved Nonindustrial Disability Allowance) for local
miscellaneous members only.
f. Section 21024 (Military Service Credit as Public Service), Statutes of
1976.
Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members and local police members only.
h Section 21583 (Second Opportunity to Elect 1959 Survivor Benefits).
i. Section 20434 (“Local Fire Fighter” shall include any officer or employee
of a fire department employed to perform firefighting, fire prevention, fire
training, hazardous materials, emergency medical services, or fire or
arson investigation services as described in Government Code Section
20434).
i. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local fire
members only.
10. Public Agency, in accordance with Government Code Section 20790, ceased to
be an “employer” for purposes of Section 20834 effective on August 18, 1977.
Accumulated contributions of Public Agency shall be fixed and determined as
provided in Government Code Section 20834, and accumulated contributions
thereafter 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 and local safety 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 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
and local police members.
b. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21574 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 fire members.
C. 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.
d. 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.
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 rrect amount of contributions is paid for
any period, proper adjustment s 3 e made in connection with subsequent
remittances. Adjustments on ai!?
&
nt of errors in contributions required of any
employee may be made by .
Board. *
ct payments between the employee and the
& B. This amendment shall be e ‘G eive on the day of
BOARD OF ADMINISTRATI 9 CITY COUNCIL
PUBLIC EMPLOYEES’ RE 8 MENT SYSTEM CITY OF CARLSBA
00 %
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BY ,& BY ,@
KENNETH W. FFICER
ACTUARIAL & YER SERVICES DIVISION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Witness Date
Attest:
AMENDMENT
PERS-CON-702A (Rev. 8\96)
Clerk
STATE OF CALIFO
COUNTY OF S
of
‘PY
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ORDINANCE NO. Ns-582
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
WHEREAS, the City Council authorized the City to initiate an amendment of
the City’s contract with CalPERS to provide the 3% at 50 retirement benefit (Section
21362.2) for all sworn police employees effective the pay period inclusive of June
30,200l; and
NOW, THEREFORE, the City Council of the City of Carlsbad ordains as
follows:
SECTION 1: That an amendment to the contract between the City Council of
the City of Carlsbad and the Board of Administration of the California Public
Employees’ Retirement System is hereby authorized, a copy of said amendment
marked “Exhibit A” to Resolution No. 2001-126 .
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.
EFFECTIVE DATE: This ordinance shall be effective thirty days after the
date of its adoption; and the City Clerk shall certify the adoption of this ordinance
and cause it to be published at least once in a newspaper of general circulation in
the City of Carlsbad within fifteen days after its adoption.
I//
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INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City
Council on the day of April 24,2001, and thereafter
PASSED AND ADOPTED at a regular meeting of the City Council of the City
of Carlsbad on the day of 9 by the following vote, to wit:
AYES:
NOES:
ABSENT:
CLAUDE A. LEWIS, Mayor
ATTEST:
LORRAINE M. WOOD, City Clerk
(SEAL)
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RESOLUTION NO. 2001-127
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, REDUCING THE CITY’S
CURRENT NINE PERCENT (9%) CALPERS EMPLOYER
PAID MEMBER CONTRIBUTION FOR SWORN POLICE
EMPLOYEES TO EIGHT PERCENT (8%)
WHEREAS, the City Council of the City of Carlsbad has the authority to
implement Government Code Section 20691; and
WHEREAS, the City Council of the City of Carlsbad has a written labor policy
or agreement which specifically provides for the normal member contributions to be
paid by the employer; and
WHEREAS, one of the steps in the procedures to implement Section 20691
is the adoption by the City Council of the City of Carlsbad of a Resolution to
commence said Employer Paid Member Contributions (EPMC); and
WHEREAS, the City Council of the City of Carlsbad has identified the
following conditions for the purpose of its election to pay EPMC:
I. This benefit shall apply to all sworn police employees.
II. This benefit shall consist of paying 8% of the normal member contributions as EPMC.
III. The effective date of this Resolution shall be June 25, 2001.
NOW, THEREFORE, BE IT RESOLVED by the City Council for the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
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2. That the City Council of the City of Carlsbad elects to pay EPMC, as set
forth above.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council of the City of Carlsbad on the 24th day of April, 2001; by the following vote,
to wit on behalf of the City:
AYES: Council Members Finnila, Nygaard and Hall.
NOES: None.
ABSENT: Council Members Hall and Kulchin.
ATTEST:
(SEAL)
1 /I
RESOLUTION NO. 2001-128
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE ONE
PERCENT (1%) CALPERS EMPLOYEE CONTRIBUTION FOR
SWORN POLICE EMPLOYEES TO BE DEDUCTED ON A
PRE-TAX BASIS.
WHEREAS, the City of Carlsbad has the authority to implement the
7 /I provisions of section 414(h)(2) of the Internal Revenue Code (IRC); and
WHEREAS, the Board of Administration of the Public Employees’ Retirement
System adopted its resolution re section 414(h)(2) IRC on September 18, 1985; and
WHEREAS, the Internal Revenue Service has stated in December 1985, that
the implementation of the provisions of section 414(h)(2) IRC pursuant to the
a
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13 Resolution of the Board of Administration would satisfy the legal requirements of
14 section 414(h)(2) IRC; and
15 WHEREAS, the City of Carlsbad has determined that even though the
l6 implementation of the provisions of section 414(h)(2) IRC is not required by law, the
tax benefit offered by section 414(h)(2) IRC should be provided to its sworn police 17
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20 NOW, THEREFORE, BE IT RESOLVED by the City Council for the City of
21 Carlsbad, California, as follows:
22 1. That the above recitations are true and correct.
23 2. That the City of Carlsbad will implement the provisions of section
24 414(h)(2) Internal Revenue Code by making employee contributions pursuant to
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employees who are members of the Public Employees’ Retirement System.
California Government Code section 20691 to the Public Employees’ Retirement
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27 System on behalf of its sworn police employees who are members of the Public
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Employees’ Retirement System. “Employee contributions” shall mean those
contributions to the Public Employees’ Retirement System which are deducted from
the salary of employees and are credited to individual employee’s accounts
pursuant to California Government Code section 20691.
3. That contributions made by the City of Carlsbad to the Public Employees’
Retirement System, although designated as employee contributions, are being paid
by the City of Carlsbad in lieu of contributions by the sworn police employees who
are members of the Public Employees’ Retirement System.
4. That employees shall not have the option of choosing to receive the
contributed amounts directly instead of having them paid by the City of Carlsbad to
the Public Employees’ Retirement System.
5. That the City of Carlsbad shall pay to the Public Employees’ Retirement
System the contributions designated as employee contributions from the same
source of funds as used in paying salary.
6. That the amount of the contributions designated as employee
contributions and paid by the City of Carlsbad to the Public Employees’ Retirement
System on behalf of an employee shall be the entire contribution required of the
employee by the Public Employees’ Retirement Law (California Government Code
sections 20000, et seq.).
III
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7. That the contributions designated as employee contributions made by the
City of Carlsbad to the Public Employees’ Retirement System shall be treated for all
purposes, other than taxation, in the same way that member contributions are
treated by the Public Employees’ Retirement System.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council of the City of Carlsbad on the 24’h day of April, 2001; by the following vote,
to wit on behalf of the City:
AYES: Council Members Finnila, Nygaard and Hall.
NOES: None.
ABSENT: Council Members Hall and Kulchin.
ATTEST:
, Acting Mayor Pro Tern
(SEAL)
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(916) 326-3420
CERTIFICATION OF MEMBER CONiRIBUTION RATE
I hereby certify that the City of Carlsbad and its police employees understand and agree
that the required member contribution rate for members subject to Section
21362.2 (3% @ 50 Full formula) is 9% of reportable compensation.
Actinq Mayor Pro Tern
Title
3%@5013%@55 Full/Supplemental formula
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
’ Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(916) 326-3420
,
CERTIFICATION OF GOVERNING BODY’S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
City Council
(governing body)
of the
City of Carlsbad
(public agency)
on April 24, 2001
(date)
.
m&
C&k/Secretary
PERS-CON-12 (rev. l/96)
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(9 16) 326-3420
.
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
I hereby certify that in accordance with Section 7507 of the Government Code
the future annual costs as determined by the System Actuary and/or the increase
in retirement benefit(s) have been made public at a public meeting of the
City Council
(governing body)
of the
City of Carlsbad
(public agency)
on April 24, 2001
(date)
which is at least two weeks prior to the adoption of the
Resolution / Ordinance.
Title ’ Y
Date r /&we 25; d&Y
PERS-CON-12A (rev. l/96)
April 19,200l
TO: ISABELLE PAULSEN
FROM: Senior Management Analyst
AGENDA BILL TITLED: AMENDMENT TO CALIFORNIA PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM (CALPERS) SAFETY CONTRACT
The attached forms are in reference to the agenda bill titled, “AMENDMENT TO
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS)
SAFETY CONTRACT” that is going to Council on April 24, 2001. I’ve also
included a copy of the memo from Alice Cook of CalPERS that gives instructions
on how to send these documents. After the associated Resolution of Intention is
adopted by Council, please send the FOUR signed documents (the three
attached forms and the Resolution of Intention) to Alice Cook per Alice’s
instructions. In fact, because we are on a very tight schedule to complete the
steps required by CalPERS in this contract amendment process, please send
the appropriate forms to Alice via overnight mail so that she receives them
by April 26,200l. After she receives the forms she will then send the next set of
forms to me to use with my May 15,200l agenda bill.
Alice Cook
Actuarial & Employer Services Division
PO Box 942709
Sacramento, CA 94229-2709
Please let me know if I need to do anything else. Thank you for helping me meet
the deadlines.
DEBBIE PORTER
Attachment
e%%ction 7507 requires that th&,futuie annual costs’of the’proposed
@ke@$be made public at a public meeting at least two weeks prior to the
Final Ordinance. The agency is to certify compliance on the enclosed
@%i%@%tion of Compliance with Government Code Section 7507.
P. .Ty’ Iii su.mmary, the following documents must be returned to this office before we can . forv@td the actual contracts and other final documents necessary to compl&e the
proposed amendment. DO NOT HOLD THESE DOCUMENTS PENDING ADOPTION
OF THE FINAL ORDINANCE. -
iSORIGINAL SIGNATURES ARE REQUIRED
1. Resolution of,lntention, original
2. Certification of Governing Body’s Action (CON-12) original c3
City of Carlsbad -2- March 30,200l
3. of Compliance with Government Code Section 7507, (CON-12A),
4. Certification of Member Contribution Rat
If your agency adopts the Resolution of Intention on April 24, 2001, the earliest date
the final Ordinance may be adopted is May 14,200l. There must be a 20’day period
between the adoption of the Resolution of Intention and the adoption of the final
Ordinance pursuant to Government Code Section 20471. THERE ARE NO
EXCEPTIONS TO THIS LAW.
The effective date of this amendment cannot be earlier than the first day of a payroll
period following the effective date of the final Ordinance.
Please do not retype the Amendment to Contract and/or agreement documents.
Only documents provided by this office will be accepted. If you have a problem
with any of the documents, please contact this office prior to presenting to your
‘governing body for adoption.
If you have any questions regarding this letter or the enclosed material, please do not
hesitate to contact me at (916) 326-3993.
Sincel_rely,
Employer Represexative
Public Agency Contract Services
AJC:jm
Enclosures
cc: San Diego Regional Office
,
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t /c- .- 1 : -, 1 -,w. -.. -.
PULL AND RETAIN TRlS COPY BEFORE AFFIXING TO THE PACKAGE.
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