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HomeMy WebLinkAbout2001-04-24; City Council; 16166; Amend CALPERS Safety ContractCITY OF CARLSBAD - AGENDA BILL 48 # lb, 1bb TITLE: 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 % q9 < 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 II. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 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// Ill Ill 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 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) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 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. Ill Ill /II 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 9 10 11 12 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 18 19 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 25 employees who are members of the Public Employees’ Retirement System. California Government Code section 20691 to the Public Employees’ Retirement 26 27 System on behalf of its sworn police employees who are members of the Public 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 Ill Ill Ill Ill 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 , o\ 5 d t /c- .- 1 : -, 1 -,w. -.. -. PULL AND RETAIN TRlS COPY BEFORE AFFIXING TO THE PACKAGE. zl N 0 1 : 1 1 : : \ g 1 L , ]I J I