HomeMy WebLinkAbout2003-07-08; City Council; 17231; Amendment to CalPERS Safety ContractP w i5 a n
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4B # 17,231 TITLE:
HTG, 7-8-03 AMENDMENT TO CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM (CALPERS) SAFETY CONTRACT
IMPACTING LOCAL, FIRE SAFETY MEMBERS DEPT. H-R-
CITY ATTY
c,Ty MGRm
1. Adopt Resolution No. 2003-180 , 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-665 amending the CalPERS safety contract impacting
local fire safety members.
3. Adopt Resolutions No. 2003-181 and 2003-182 reducing the City’s current nine
percent (9%) CalPERS employer paid member contribution for local fire safety
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 January 15,2002, the City Council adopted Resolution No. 2002-030 approving a
Memorandum of Understanding (MOU) with the Carlsbad Firefighters’ Association (CFA).
The term of the MOU is five (5) years and will expire on December 3 1 , 2006. By approving
this MOU, 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
local fire safety employees effective the pay period inclusive of January 1 , 2004. The
Carlsbad sworn police employees received the 3% at 50 retirement benefit on June 30,2001.
Therefore, upon approval of this amendment, all local safety employees will have the same
retirement benefit.
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 August 5,2003. The effective date of the Ordinance would be September 4,
2003. The effective date of the contract amendment would be December 22,2003.
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 local fire safety employees to eight percent (8%) effective the
pay period inclusive of January 1,2004. 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).
Page 2 of AB # 17,231
FISCAL IMPACT:
A portion of the FY 2003/2004 fiscal impact of the 3% @ 50 retirement benefit for local fire
safety employees will be offset by the reduction of the City’s current nine percent (9%)
CalPERS employer paid member contribution rate for local fire safety employees to eight
percent (8%). Based on current payroll costs this equates to an annual reduction in cost of
approximately $50,700. 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.
The way that the City of Carlsbad’s retirement contract with CalPERS is structured, both fire
safety employees and sworn police employees are combined into one “safety” contract.
Therefore, the CalPERS employer contribution rate associated with the safety retirement
contract is applied to both fire and sworn police employees.
Implementation of the 3% @ 50 retirement benefit for local fire safety employees will
increase the City’s CalPERS employer contribution rate for all safety employees by an
estimated 6.584% (from 9.367% to 15.951%) as of the effective date of the contract
amendment. Using current payroll costs, this represents an annual cost of approximately
$795,000.
The net fiscal impact of the implementation of this benefit, approximately $744,300, is
included in the 2003/2004 adopted budget. All the long-range forecasts that were presented
to the City Council during the 2003/2004 budget presentations reflected the fiscal impact of
this benefit. Future fiscal year impacts will be reflected during the annual budget process.
EXHIBITS:
1. Resolution No. 2003-180 , including Exhibit A
2. Ordinance No. NS-665
3. Resolution No. 2003-181
2003-182 4. Resolution No.
DEPARTMENT CONTACT: Debbie Porter, (760) 602-244 1, dport@ci.carlsbad.ca.us
RESOLUTION NO. 2003-180
RESOLUTION OF INTENTION
TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM
AND THE
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 21 362.2 (3% @J 50 Full formula) for
local fire members.
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 S
attached hereto, as an "Exhibit" a
By:
MAYOR
Title
July 8, 2003
Date adopted and approved
(Amendment)
CON-302 (Rev. 4/96)
CalPERS EXHIBIT A
California
Public Employees' Retirement System
Between the
Board of Administration
Calitornia 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 1, 1997, June 14, 1997 and June 25, 2001 which provides for participation of
Public Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 14 are hereby stricken from said contract as executed
effective June 25, 2001, 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 and age 50 for local safety
members.
2 .- IC GO NOT SIGN "EXHIBIT ONLY"
2. Public Agency shall participate in the Public Employees' Retirement
System from and after January 1, 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.
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 INSTRUCTOWLIFEGUARD 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).
' '/?ACE .< \L? DO NOT SIGN "EXHIBIT ONLY"
7. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member shall be
determined in accordance with Section 21362.2 of said Retirement Law
(3% at age 50 Full).
8. Public Agency elected and elects to be subject to the following optional
provisions:
a.
b.
C.
d.
e.
f.
9-
h.
I.
j.
Sections 21624, 21626 and 21628 (Post-Retirement Survivor
Allowance).
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).
Section 20965 (Credit for Unused Sick Leave).
Section 20042 (One-Year Final Compensation).
Section 21 427 (Improved Nonindustrial Disability Allowance) for
local miscellaneous members only.
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.
Section 21583 (Second Opportunity to Elect 1959 Survivor
Benefits).
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).
Section 21574 (Fourth Level of 1959 Survivor Benefits) for local fire
members only.
9. 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.
IO. 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.
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 21 573 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 21 574 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 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.
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.
7
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. d -' -. \
B. This amendment shall be &&tive on the day of I
+ ,/ BOARD OF AD M I N I STRATI O&J~
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Xb L- CITY COUNCIL
PUBLIC EMPLOYEES RET@~ENT SYSTEM CITY OF CARLSBAD
$3 BY p\
KENNETH W. MARZl@$ CHIEF
ACTUARIAL & EMR~OYER SERVICES DIVISION
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PRESIDING OFFIC&$l
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B. This amendment shall be &&tive on the day of I
BOARD OF AD M I N I STRATI O&J~
-- .
a' CITY COUNCIL
PUBLIC EMPLOYEES RET@~ENT SYSTEM CITY OF CARLSBAD
C'L,' A. m. f i' BY BY p.- \ -,
KENNETH W. MARZIC$$ CHIEF PRESIDING OFFIC&$l
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ACTUARIAL & EMRtOvER SERVICES DIVISION -3 43 PUBLIC EMPLOY@* RETIREMENT SYSTEM GJ ,/i
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Clerk
AMENDMENT ER# 0338
PERS-CON-702A (Rev. 8\02)
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ORDINANCE NO. NSz665
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 local fire safety employees effective the pay period inclusive of
January 1,2004; and
NOW, THEREFORE, the City Council of the City of Carlsbad ordains as
‘ollows:
SECTION 1 : That an amendment to the contract between the City Council of
he City of Carlsbad and the Board of Administration of the California Public
fmployees’ Retirement System is hereby authorized, a copy of said amendment
narked “Exhibit A to Resolution No. 2003-180
SECTION 2: The Mayor of the City of Carlsbad is hereby authorized,
:mpowered, and directed to execute said amendment for and on behalf of said
igency.
EFFECTIVE DATE: This ordinance shall be effective thirty days after the
late of its adoption; and the City Clerk shall certify the adoption of this ordinance
nd cause it to be published at least once in a newspaper of general circulation in
ie City of Carlsbad within fifteen days after its adoption.
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INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City
Council on the day of July 8, 2003, and thereafter
PASSED AND ADOPTED at a regular meeting of the City Council of the City
of Carlsbad on the day of , by the following vote, to wit:
AYES:
NOES:
ABSENT:
CLAUDE A. LEWIS, Mayor
ATTEST:
LORRAINE M. WOOD, City Clerk
(SEAL)
age 2 of 2 of Ordinance No. NS-665
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RESOLUTION NO. 2003-181
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 LOCAL FIRE SAFETY
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 local fire safety employees.
II. This benefit shall consist of paying 8% of the normal member
contributions as EPMC.
111. The effective date of this Resolution shall be December 22, 2003.
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 8th day of July, 2003; by the following vote, to
wit on behalf of the City:
AYES: Council Members Lewis, Finnila, Kulchin, Hall, Packard
NOES: None
ABSENT: None
ATTEST:
@A, @aa.X
LORRAINE M. MOD, City Cl&k
(SEAL)
Page 2 of 2 of Resolution No. 2003-181
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RESOLUTION NO. 2003-182
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE ONE
LOCAL FIRE SAFETY EMPLOYEES TO BE DEDUCTED ON A
PERCENT (1 %) CALPERS EMPLOYEE CONTRIBUTION FOR
PRE-TAX BASIS.
WHEREAS, the City of Carlsbad has the authority to implement the
provisions of section 414(h)(2) of the Internal Revenue Code (IRC); and
WHEREAS, the Board of Administration of the California 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
Resolution of the Board of Administration would satisfy the legal requirements of
section 414(h)(2) IRC; and
WHEREAS, the City of Carlsbad has determined that even though the
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 local fire safety
mployees who are members of the California Public Employees’ Retirement
System.
NOW, THEREFORE, BE IT RESOLVED by the City Council for the City of
zarlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That the City of Carlsbad will implement the provisions of section
41 4(h)(2) Internal Revenue Code by making employee contributions pursuant to
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California Government Code section 20691 to the California Public Employees’
Retirement System on behalf of its local fire safety employees who are members of
the California Public Employees’ Retirement System. “Employee contributions” shall
mean those contributions to the California 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 California Public
Employees’ Retirement System, although designated as employee contributions,
are being paid by the City of Carlsbad in lieu of contributions by the local fire safety
employees who are members of the California 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 California Public Employees’ Retirement System.
5. That the City of Carlsbad shall pay to the California 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 California 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.).
I//
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Page 2 of 3 of Resolution No. 2003-182
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7. That the contributions designated as employee contributions made by
the City of Carlsbad to the California Public Employees' Retirement System shall
be treated for all purposes, other than taxation, in the same way that member
contributions are treated by the California Public Employees' Retirement System.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council of the City of Carlsbad on the 8" day of July, 2003; by the following vote,
to wit on behalf of the City:
AYES: Council Members Lewis, Finnila, Kulchin, Hall, Packard
NOES: None
ABSENT: None
ATTEST:
1 LORRAINE M. MOD, City Cl&
(SEAL)
'age 3 of 3 of Resolution No. 2003-182
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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 GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
CITY COUNCIL of the
(governing body)
CITY OF CARLSBAD - (public agency)
on JULY 8, 2003
(date)
CIerWSecretary
PERS-CON-12 (rev. 1/96)
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(91 6) 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
of the CITY COUNCIL
(governing body)
CITY OF CARLSBAD
(public agency)
On July 8, 2003 which is at least two weeks prior to the adoption of the
(date)
CIeridSecretary
PERS-CON-12A (rev. 1/96)