HomeMy WebLinkAbout2009-09-16; City Council; MinutesCITY OF CARLSBAD CITY COUNCIL WORKSHOP
SPECIAL MEETING
Faraday Administration Offices
1635 Faraday Avenue
Room 173-A
Carlsbad, CA 92008
Wednesday, September 16, 2009
11 a.m. to conclusion of business at approximately 1 p.m.
MINUTES
CALL TO ORDER:
ROLL CALL:
1. There was no discussion on Item No. 1.
Council discussion on Council Member reports on regional roles and assignments, as
necessary, including:
Blackburn Buena Vista Lagoon JPC
Chamber of Commerce Liaison
City/School Committee
Encina Joint Powers (JAC)
Encina Wastewater Authority
North County Dispatch Joint Powers Authority (alternate)
Packard Buena Vista Lagoon JPC
City/School Committee
North County Transit District Board of Directors
*North County Transit District Planning Committee
League of California Cities - SD Division
North County Dispatch Joint Powers Authority
Hall Chamber of Commerce Liaison
SAN DAG Board of Directors
SANDAG Executive Committee
SANDAG Transportation Committee
Kulchin CalCoast Board of Directors
Carlsbad ConVis (alternate)
Encina Joint Powers (JAC)
Encina Wastewater Authority (EWA)
North County Transit District (alternate)
*San Diego Authority for Freeway Emergencies (SAFE)
SANDAG Board of Directors (2nd alternate)
*SANDAG Shoreline Preservation Committee
Lewis LAFCO Cities Advisory Committee
North County Mayors and Managers
SANDAG (1st alternate)
San Diego County Water Authority Board of Directors
Requests to Speak on a listed item: A total of 15 minutes is provided. Please submit a
speaker card indicating the item you wish to address. Comments/speakers are limited to three
(3) minutes each.
There were no Public Comment speakers.
2. Review and discussion of the San Diego County City Manager's Association Regional
City Pension Standard report of August 10, 2009.
City Manager Lisa Hildabrand presented the staff report on the Proposal for Regional
City Pension Standards prepared by the San Diego County City/County Management
Association. (Copy on file in the City Clerk's Office.) Ms. Hildabrand explained the
concerns regarding the future sustainability of the current benefits.
She described the recommendations as follows:
• Establishment of a Second Tier Retirement (effective January 2010) for new
hires; Safety Employees 2% at 50; Miscellaneous Employees 2% at 60;
Retirement based on average of highest three years compensation
• Require current employees of all cities to pay for a portion of their pensions
(Savings could range from 1-9% of payroll annually.)
Ms. Hildabrand noted that these recommendations would be subject to the meet and
confer process and legislative action by each agency.
In addition, she outlined the recommendations for legislative pension reform at the State
level as follows:
• Establish 90% benefit cap for safety and miscellaneous employees
• Prohibit Employer Paid Member Contribution (EMPC) as PERable wages
• Flexibility for employing agencies to determine when part-time employees are
entitled to pension benefits
• Flexibility from PERS to allow employees to move into a lower level tier (in the
case of two-tier plans) if it is to the employee's advantage
• Provide reciprocal access to tier 1 benefits for employees that change jobs after
January 2010
• Establish additional reserve funding to reduce volatility
• Retain full disability benefits for those who are injured and cannot work in any
capacity, but restrict disability benefits for those that are able to work in the same
or similar job after work-related injury
• Change CalPERS Board membership to achieve better employee/employer
balance and public agency representation
Discussion ensued regarding the effect of the City's Charter on the pension issue.
Assistant City Attorney Paul Edmonson noted that in matters related to the City's
contract with PERS, State laws and our Contract regarding the retirement system would
supersede a local ordinance.
Council Member Packard, the City's representative to the League of California Cities
San Diego Division reported on their discussions regarding pension reform. He noted
their concerns that if regional standards are not approved by all agencies, recruiting
issues and staff turn-over would result. He noted that for this reason, the League
representatives have been asked to determine each City's support for this report.
The Council discussed the need for participation by all agencies in the region, the
effect of the current economy on the pension system, and the subsequent need for
reforms.
Council Member Blackburn noted that he could support the majority of the proposals,
but could not support the recommendation to require existing employees to pay more of
their retirement costs, as this would amount to a reduction in pay for the employees.
Following further discussion, the Council, by consensus expressed support for the
general concepts contained in the Report, dated August 10, 2009, from the San Diego
County City/County Managers Association regarding Regional City Pension Standards,
and that they were not taking a position regarding Carlsbad employees. The Council
also acknowledged that any such changes would be subject to the meet and confer
process and legislative action by each agency, and that was not being proposed here.
3. Review,, discussion and direction to staff regarding parking on Carlsbad Boulevard and
other locations throughout the City including time, place and manner of parking of
oversize, overweight or other large recreational vehicles.
City Engineer Bob Johnson presented the staff report, using a PowerPoint presentation.
(Copy on file in City Clerk's Office.) He described the five options to address parking of
recreational vehicles in the beach area as follows:
• Do nothing - maintain the status quo
• Stripe designated parallel parking spaces
• Establish daytime parking time restrictions
• Restrict RV parking at the beach during designated summer months
• Prohibit all RV parking at the beach
Mr. Johnson also explained issues associated with each option, such as related costs
for signage and enforcement.
In response to inquiry, Police Chief Zoll explained the potential impacts of RV
parking restrictions on the police department, noting that they would likely be enforced
by patrol units, not by Community Resource Officers, due to lack of resources.
Mr. Johnson also reported that the current fine for parking citations is $50.00, stating
that some people willingly pay the fine in order to park at the beach for a day. It was
confirmed that the City receives only a portion of the fines that are collected. Also
noted by Mr. Johnson was the potential for legal challenges to certain types of
restrictions.
Assistant City Attorney Edmonson explained that any restrictions that are enacted must
be uniform for all vehicles. He also noted that the maximum fine allowed by the
Government Code for parking citations is $250.00.
Mr. Johnson concluded his report with slides showing that the lower Tamarack Beach
parking lot is not feasible for RV parking.
The Council discussed the various options and the need to increase the fines to an
amount that would discourage illegal parking. Most concurred that option #3 not be
given further consideration, and that option #4 would be too restrictive.
Council Member Blackburn suggested that the Council consider restricting RV parking
on Carlsbad Boulevard, north of Tamarack Avenue only.
Council Member Hall concurred that, in order to be fair, a certain amount of parking
should be preserved for RV's.
Mayor Lewis suggested that the City should obtain input from owners of RV's.
By consensus, the Council requested that staff hold a workshop to present the options
to RV'ers, obtain feedback, and return the information to the Council for further
discussion.
Assistant City Attorney Edmonson recommended that, whatever regulations the Council
chooses to adopt, contain a sunset clause and be effective for a trial period, such as
two years.
At 12:00 Noon the Mayor called a brief recess for lunch and resumed the Council
Workshop at 12:10 p.m., with all members present.
4. Review, discussion, and direction to staff on processing Special Event Permits,
including discussion of proposed process, procedures and policies.
Management Analyst Rob Houston, presented the staff report, using a PowerPoint
presentation. (Copy on file in the City Clerk's Office.) He outlined the reasons for
allowing special events and how requests are currently reviewed by staff as to Location,
Schedule, Impacts to the City, Staff, and Others, Resources, and Fiscal Impact. He
also reviewed the current special event schedule and showed a map of the locations of
the events, most of which occur in the Village or along Carlsbad Boulevard.
Sergeant Greg Koran reviewed the proposed guiding principles: Promote Carlsbad;
Build Community; Enrich the Individual; Energize the Village; and Maintain Balance and
Variety.
In response to inquiry from Mayor Lewis, Mr. Houston explained that there is no waiting
list for applications but that some requests, after review, are not approved.
Mayor Pro-Tern Kulchin asked for information about the application form that must be
completed by applicants. Mr. Houston explained that there are not separate forms for
non-profits organizations or for-profit organizations, and that all applicants must use the
same form. He also explained that the applicants must only fill out the portions of the
application that applies to their proposed event. Mr. Houston also explained that events
that require street closures, traffic control, and/or security are considered special events
by the city.
In response to inquiry from Council Member Hall, Mr. Houston stated that a
neighborhood party would not necessarily be considered a special event, depending on
the size and location of the event, and whether it requires street closures, traffic control,
and/or security.
Mayor Lewis inquired if staff reviews proposed events based on potential revenues to
the City. Mr. Houston replied that criteria is currently not a part of the review process.
Council discussed the proposed guiding principles and concurred that events should be
considered on the following basis: Promote Carlsbad, Maintain Balance of Location and
Variety, Build Community through Neighborhood Events, Facilitate Local Events, and
Provide Economic Benefit and Promote Tourism.
In response to inquiry from Mayor Lewis regarding the music for the Jazz Concerts,
Community Coordinator Colleen Finnegan explained the process that is used each year
to select a producer to provide the talent, sound system, and crews for the concerts.
In response to Council inquiry, City Manager Lisa Hildabrand stated that the report on
the insurance and liability issues related to special events is not yet complete, but will
be forthcoming to the Council for review.
5. Discussion of Council efficiency and effectiveness including impact of regional
assignments with regard to contact with other Council members, decision and
policymaking, serving the community and effective methods of feedback.
There was no discussion on Item Number 5.
6. City Manager review of goal and major project tracking report and update discussion of
Council goal setting process and discussion of capacity and effectiveness in the delivery
of City processes and services.
There was no discussion on Item Number 6.
7. Discussion of feedback, communications or correspondence on issues for the good of
the community, including directions to the City Manager or City Attorney, as appropriate,
for the scheduling of items for future agendas, workshops or study sessions.
There was no discussion on Item Number 7.
Requests to Speak: Continuation of Requests to Speak (if necessary) None.
ADJOURNMENT
The Mayor adjourned the meeting at 1:05 p.m.
TZ,'
Assistant City Clerk
SDCCMA
San Diego Cit y/C o u n t y
anagers Association
TO: San Diego Division, League of California Cities
FROM: City/County Management Association
DATE: August 10, 2009
SUBJECT: Proposal for Regional City Pension Standard
Introduction
In January 2009, the city managers in the San Diego City/County Managers Association
(CCMA) began a study of the pension programs offered local government employees in
California and the San Diego region. While all are in agreement that these pension programs
have worked well to support career local government employees for decades, there is growing
recognition that they are not financially sustainable and are increasingly politically
controversial.
To that end, the CCMA has committed to providing recommendations for a second tier pension
offering that could be implemented by the great majority of cities in San Diego County. This
pension offering would not affect existing city employees who have vested rights to the current
pension program, but would affect new employees after a date certain and be both sustainable
and defensible.
Background
For 70 years the State of California and local governments have offered a "defined benefit"
retirement plan for employees. This system guarantees annual pension payments based on
retirement age, years of service, and salary. Most cities in California are members of the
Public Employees Retirement System (PERS). All cities in San Diego County, with the
exception of the City of San Diego, are PERS members.
The goal of the study is to provide full career employees with pension benefits that maintain
their standard of living into retirement. The benefit level should be set to be fair and adequate,
but fiscally sustainable for employers and taxpayers. Any proposal for such a regional pension
standard must be based on sound actuarial work.
While we recognize that the defined benefit plan has worked for decades and should be
retained, it is clear that defined benefit pensions are increasingly rare in the private sector.
The great majority of private employers offer "defined contribution" plans where the employer
contribution is a fixed dollar amount and the benefits are based on contributions and
investment earnings. These plans put the risk largely on the employee to amass and manage
assets to ensure an adequate pension after retirement. Such 457 and 401 (k) plans have not
performed well in recent years due to turmoil in the markets. Yet, there is growing sentiment
amongst the public and opinion leaders that State and local government workers should be
forced into defined contribution plans.
We feel this would be mistaken for several reasons. First and foremost, defined benefit plans
have proven to be more efficient than defined contribution plans for delivering pension
benefits. Defined benefit plans generally earn far more than defined contribution plans,
because they are professionally managed. Defined benefit plans offer lower fees and cover
disability retirements and death benefits that are not included in defined contribution plans.
Further, defined benefit plans offer a protection for inflation and manage longevity risk better
than defined contribution plans by pooling larger numbers of people. Moving from a defined
benefit plan to a defined contribution plan entails large start-up costs and forces changes in
asset allocations that will produce lower investment results in the defined benefit plan that
remains for existing employees. Hence, it would likely cost the taxpayers more for many years
to force future local government employees into a defined contribution plan.
However, the defined benefits plans have become more expensive in recent years. In the late
1990's, when PERS was earning extraordinary returns on its portfolio, the California legislature
enacted significant benefit enhancements for public employees in the PERS systems that were
optional for participating local governments. Market conditions at that time led to "super
funding" of local government pensions causing management and labor to seek increased
benefits to stay competitive. It is now common for public safety officers to retire close to age
50 with almost a full salary under the 3% at 50 plan. These increased benefits have proven to
be unsustainable and need to be rolled back to more appropriate pre 1999 levels.
The costs for these defined benefit plans vary based on two factors: the benefit paid to
retirees, and returns earned by investment managers. The pension funds are not immune to
stock market declines, and PERS has suffered staggering losses in its portfolio since mid
2008. While the market is showing some resiliency, member agencies will be called upon to
pay significantly increased contributions to fund pensions for current employees and make up
for the huge losses in '08-'09 over the next 30 years. This will put added pressure on cities at
a time when municipal services are stressed to the limit.
Local revenues are depressed at a time when PERS rates will be increasing. HdL, which
audits sales tax for the majority of cities and counties in California, does not anticipate a return
to 2005 sales tax levels until 2013 or later due to changes in consumer behavior and access to
credit. Property tax revenues, long considered the most reliable for steady growth of all
municipal revenues, are down in San Diego County this year and only meager improvement is
expected in the coming years. The PERS policy adopted June 16, 2009, spreads the deep
losses from FY 2008-09 over the next thirty years, beginning in 2010 and rising through 2013.
The increased rates will catch cities just as they are beginning to crawl out of this tenacious
global recession. As such, pension costs will soon escalate beyond our ability to manage
them while the benefits exceed what taxpayers themselves can receive and what is needed to
attract qualified employees. The local government pension situation will become untenable.
The CCMA working group has met on the subject seven times since January and involved
public pension actuary John Bartel to assess the financial impacts of the proposal. Further, we
held meetings with local labor representatives, the San Diego County Taxpayers Association
and California Foundation for Fiscal Responsibility.
Findings
Ideally, responsible and effective pension reform would be addressed at a Statewide level with
consistent pension standards for all. Yet, we cannot wait for a Statewide solution due to the
stalemate in Sacramento. Poorly conceived pension reform by initiative could lead to greater
costs for taxpayers and harm local government's ability to attract and retain qualified
employees. By acting as a region, no one city will be disadvantaged by pension reform.
Therefore, the CCMA supports a modified level of retirement benefits for all new city
employees in the San Diego region.
The CCMA recommends that current employees pay for a portion of their pensions and that a
new pension tier for those city employees hired after January 2010, with the following features:
1) Current employees shall participate in the funding of their pensions in all cities. This
reform will generate immediate budgetary savings to cities to the extent that existing
employees participate in paying for their own retirement. Savings could range from 1 - 9% of
payroll annually.
2) Second Tier Retirement Proposal
> Safety employees - 2% at 50;
> Miscellaneous employees - 2% at 60; and
> Average of highest three years.
The second tier proposal will deliver savings over a much longer time period as it only affects
new hires after January 2010. When the majority of employees are under the second tier,
cities can expect to save approximately 2% of payroll per year. Within 30 years, annual
savings of 5% of payroll can be expected. The second tier will also lower each city's volatility
index (ratio of assets held for pension payments to payroll), which will help stabilize future rate
increases.
These changes can be negotiated and then legislated at the local level. Each city has a
responsibility to meet and confer in good faith to reach agreement with its bargaining units.
The committee also recommends that San Diego cities seek legislative pension reform at the
State level. These would include:
> Establishing a 90% benefit cap for miscellaneous employees and safety employees;
> Employer Paid Member Contribution (EPMC) prohibited as PERSable wages;
> Give employers flexibility to determine when part-time employees are entitled to pension
benefits;
> Obtain flexibility from PERS to allow employees to move into a lower level tier in the
case of two-tier plans if there is some advantage to the individual employee in doing so;
> Provide for reciprocal access to tier 1 benefits for employees who change jobs after
January 2010;
> Establish additional reserve funding to reduce volatility;
> Retain full disability benefits for those who are injured and cannot work in any capacity,
but restrict disability benefits for those who are able to work (in same or similar job) after
work-related injury; and
> Change CalPERS Board membership to achieve better employee/employer balance
and greater public agency representation.
The San Diego Division of the League of California Cities should advocate these changes to
the greater League Board and to our State representatives.
These reforms would provide adequate and sustainable pensions for long-term employees in
San Diego County cities.
Next Steps
CCMA recommends communicating these ideas to other regional manager groups in the
hopes of obtaining wider support for pension reform. Los Angeles, Contra Costa, San Mateo,
Sacramento, Marin, and Santa Clara area cities have indicated interest. The Orange County
Area Managers Group received a presentation of these ideas on June 3 and immediately
formed a committee to begin its own work. Also, several local water districts have met to
discuss our thinking for pension reform.
The City Managers Department of the League of California Cities has asked the regional
approaches to pension reform be a topic of a panel discussion at the annual meeting next
February.
City Managers will discuss these recommendations with their city councils and seek direction
to begin negotiating pension reform as labor agreements expire. In this way, sustainable and
defensible pension plans will become the norm over time among San Diego County cities.
The City/County Managers Association includes Carlsbad, Chula Vista, Coronado, County of
San Diego*, Del Mar, El Cajon, Encinitas, Escondido, Imperial Beach, La Mesa, Lemon Grove,
National City, Oceanside, Poway, San Diego*, San Marcos, Santee, Solana Beach, and Vista.
*Note: The City of San Diego and County of San Diego have their own pension systems and
have implemented second tiers.
PENSION REFORM IN CALIFORNIA
League of California Cities
March 1,2005
For close to 60 years California state and local governments have offered "defined
benefit" retirement plans to their employees which provide a guaranteed annual pension
based upon retirement age, years of service, and some period of highest salary (typically
the last one or three years of work). These plans generally provide an annual cost-of-
living adjustment and additional inflation protection that maintains the purchasing power
over time at a specified minimum level. The Public Employee's Retirement System
(PERS), the State Teachers' Retirement System (STRS), and a variety of individual cities
and counties administer these retirement plans.
Over the years local and state government retirement costs have risen and fallen based on
two principal factors: (1) the investment returns of the various systems; and (2) the level
of benefit payments provided to employees. In the late 1990s the California legislature
enacted dramatic benefit enhancements for public employees in the PERS system that
were optional for participating local governments. Some local governments adopted these
benefit enhancement plans—for a variety of reasons, typically to retain employees and at
times at a shared cost with the employees. When the retirement systems suffered serious
investment losses in the early part of this decade, these losses combined with the benefit
enhancements to cause dramatic increases in employer contribution rates.
Defined Contribution Mandate Proposed
In the fall of 2004 a proposed constitutional and statutory initiative (File No.
SA2005RF0007) was filed that would close all state and local public sector defined
benefit plans (including locally administered plans) to new entrants effective July 1,
2007. Employees hired after that date could only enroll in defined contribution retirement
plans. Defined contribution plans provide fixed annual employer contributions to
employee accounts that are invested, along with employee contributions. Unlike defined
benefit plans, the employee has no guaranteed pension benefit and employers never incur
any unfunded liabilities.
The initiative (which has a legislative counterpart by Assembly Member Richman) would
establish maximum employer contributions of 9 percent for police officers and
firefighters and 6 percent for other employees, assuming participation in federal Social
Security (3 percent higher if no Social Security). Local agencies could exceed these limits
with a two-thirds vote of their electorate. The state could do so with a three-fourths vote
of both houses of the Legislature in two consecutive sessions. Mr. Richman has informed
the League in a letter dated February 17 that he is willing to enter into negotiations to
avoid the need for the initiative.
In his 2005 State of the State message, Governor Schwarzenegger recommended a
defined contribution pension mandate for new state and local employees. In a
presentation to the League board of directors on February 25, 2005 Tom Campbell,
Director of Finance, explained the Governor's proposal contains no caps on employer
contribution and would not require lower state or local contributions. It would simply
remove the risk of increased costs to the taxpayer due to future stock market declines by
requiring that all new state and local employees be provided a defined contribution plan
in place of the traditional defined benefit plan. Mr. Campbell indicated that in all other
respects (e.g., PERS administration, employer contributions, employer contributions,
etc.) the plans would be identical.
League Pension Reform Task Force
In late 2004 the Executive Director asked the City Manager's Department's standing task
force on PERS to undertake a study of the defined contribution proposal and potential
other defined benefit reforms. A group of other appointed and elected officials were
subsequently added to the task force to provide broader input, and since early December
it has met regularly to study the problems with the existing defined benefit retirement
systems and to evaluate the defined contribution proposal. The task force is chaired by
Bob LaSala, Lancaster City Manager.
The League also retained the services of a retirement actuary, John Bartel of Bartel
Associates, LLC, who worked with the Task Force to ensure its recommendations for
reform of the defined benefit system were actuarially sound. He assisted the Board in its
discussions. His report to the Pension Reform Task Force, dated February 26, 2005 and
entitled Replacement Ratio Study: Preliminary Results, is available from the League.
Review and Comment on Discussion Draft Sought
The task force report was reviewed by subcommittee of the Public Employee Relations
Policy Committee on Wednesday, February 23, 2005 and forwarded to the League board
of directors with a favorable recommendation. On Saturday, February 26, 2005 the board
accepted the report, with modifications, and authorized staff to circulate the report as a
discussion draft for review and comment. It is important to note the ideas contained in
this report represent an initial assessment by the League on pension reform. It is offered
for discussion and consideration in the pension reform debate. Comments are requested
from League member cities, other local government associations, local government labor
organizations, state legislators and the Administration. Comments should be sent to the
League of California Cities, c/o Anthony Thomas, Legislative Representative, 1400 K
St., Sacramento, CA 95814 athomas(aicacities.org.
A Framework for Public Pension Reform1
March 1, 2005
General Pension Reform Principles
Any serious discussion of public pension reform must begin with a set of principles/goals
to guide any following recommendations. Until questions about the appropriate role and
purpose of public pension benefits in local government compensation packages are
answered, it would be at least premature and perhaps self-defeating to make any specific
benefit recommendations. In keeping with this philosophy, it is recommended that the
following principles precede any benefit recommendations:
• The primary goal of a public pension program should be to provide a full-career
employee with pension benefits that maintain the employees' standard of living in
retirement.
• The proper level of public pension benefits should be set with the goal of providing a
fair and adequate benefit for employees and fiscally sustainable contributions for
employers and the taxpayers.
• Public pension benefits should be supported with proper actuarial work to justify
pension levels. . The Legislature should reject any and all attempts to establish
pension benefits that bear no relation to proper actuarial assumptions and work.
• Pension benefits should be viewed in the context of an overall compensation structure
whose goal is the recruitment and retention of employees in public sector jobs. In
recognition of competitive market forces, any change in the structure of retirement
benefits must be evaluated in concert with other adjustments in compensation
necessary to continue to attract and retain an experienced and qualified workforce.
• The reciprocity of pension benefits within the public sector should be maintained to
ensure recruitment and retention of skilled public employees - particularly in light of
the retirement of the post World War II "Baby Boom" generation which will result in
unprecedented demand for public sector employees.
• Perceived abuses of the current defined benefit retirement programs need to be
addressed. Benefit plans which result in retirement benefits which exceed the levels
established as appropriate to maintain employees' standard of living should be
reformed. It is in the interest of all public employees, employers and taxpayers that
retirement programs are fair, economically sustainable and provide for adequate
benefits for all career public employees, without providing excessive benefits for a
select few.
1 This report constitutes the recommendations of the League Pension Reform Task Force that was accepted
by the League of California Cities Board of Directors for distribution as a discussion draft.
• The obligation to properly manage public pension systems is a fiduciary
responsibility that is shared by PERS, employers and employees. This joint
responsibility is necessary to provide quality services while ensuring long-term fiscal
stability. These parties need to be held responsible to ensure a high level of
protection against mismanagement of public resources that could jeopardize a
community's ability to maintain services and provide fair compensation for its
workforce.
• Charter cites with independent pension systems should retain the constitutional
discretion to manage and fund such pension plans.
Reform Recommendations
Public employee defined benefit programs have been appropriately criticized in a number
of areas. The following reform recommendations address short-comings within some
defined benefit retirement programs, while preserving the aspects of the program that
have served the employees, employers and taxpayers of California well for over 60 years.
Pension Benefit Levels
Principles: Public pension benefit plans should:
> Allow career-employees to maintain standard of living post-retirement.
> Be designed with consideration of age at retirement, length of service, compensation
level and applicability of Social Security.
> Be supported with proper actuarial work to justify pension levels. The Legislature
should reject any and all attempts to establish pension benefits that bear no relation to
proper actuarial assumptions and work.
> Promote career public service without creating incentives to work past retirement age,
nor disincentive to early retirement. Employees who voluntarily choose to either work
beyond retirement age or retire early should not be penalized or rewarded.
Recommendations
• Maintain the defined benefit plan as the central pension plan for public employees in
California.
• Rollback/repeal public retirement plans that provide benefits in excess of levels
required to maintain a fair, standard of living2 that are not financially sustainable and
may have no actuarial justification. The new and exclusive benefit formulas to
achieve these goals should be:
2 This should be determined in accordance with a Cal PERS 2001 target replacement benefit study and/or
the Aon Georgia State Replacement Ration Study (6th update since 1988).
1. Safety Employees: 3% @ 55 formula, offset by 50% of anticipated social
security benefit for safety employees with social security coverage. Safety
employees retain the current cap on retirement at 90% of final compensation.
2. Miscellaneous Employees(Non-safetv): 2% @ 55 formula, offset by 50% of
anticipated social security benefit for miscellaneous employees with social
security coverage. A cap of 100% of final compensation is placed on newly-
hired, miscellaneous(non-safety) employees.
• The above formulas would incorporate "Three-Year-Average" for "final
compensation" calculation. All "Highest Final Year" compensation calculations
would be repealed for newly-hired employees.
• Provide alternatives to a defined benefit plan for job classifications not intended
for career public service employment.
• Give employers greater flexibility to determine when a part-time employee is
entitled to public pension benefits. The current hourly threshold in PERS is too
low.
Rate Volatility
Principles
> Responsible fiscal planning suggests the need to "manage" volatility in defined
benefit plan contribution rates.
> Rates have historically been relatively constant and comparable to rates currently paid
by most public agency employers.
> Recent rate volatility is primarily due to large fluctuations in annual investment
returns for the retirement plan investment portfolios, causing significant changes in
plan funding status.
> Normal Costs for defined benefit plans have remained relatively constant over time.
Recommendations
• Public Agency retirement contribution rates, over time, should be constructed to stay
within reasonable ranges around the historical "normal cost" of public pension plans
in California. Sound actuarial methods should be adopted to limit contribution
volatility while maintaining a sound funding policy.
• Establish "reserve" funding for public pension systems that will help smooth the
volatility of pension benefit costs. Plan surpluses are to be retained within plan
assets, but should be reserved for amortization of future unfunded liabilities, and
should not be used to offset plans' normal cost contribution rates.
Shared Risk
Principles
> Currently, in most local jurisdictions, employers shoulder the burden of rate volatility
risk - both positive and negative. This principle should be carefully examined with
the intent of better spreading the risk of rate volatility among both employers and
employees.
> Negotiated labor agreements containing language whereby employers "pick-up"
employees' retirement contributions are assumed to be part and parcel of a "total
compensation" package; this implies that agencies with Employer Paid Member
Contributions would also typically reflect correspondingly lower base salaries.
Recommendations
• When employer contribution rates exceed the "normal costs" threshold, employees
should be expected to take some of the financial responsibility for those excessive
increases.
Disability Retirement
Principles
> Retirement-eligible employees who are injured in the workplace should be entitled to
full disability retirement benefits; disability retirement benefits should, however, be
tied to individual's employability and be structured so as to encourage return to work,
where applicable.
> Larger disability reform measures should be considered outside of the scope of
general pension reform.
Recommendations
• Full tax-exempt disability retirement should be retained for employees who are
injured and can not work in any capacity
• Reform the disability pension provisions of public retirement systems to restrict
benefits when a public employee can continue to work at the same or similar job after
sustaining a work-related injury.
• Employees eligible for disability retirement should be first afforded applicable service
retirement benefits, and THEN provided disability retirement benefits up to
applicable "cap" on total retirement benefits.
Portability of Plan Benefits
Principles
> Reciprocity of public agency retirement benefits is critical to recruitment of qualified,
experienced public sector employees.
> Limiting portability of retirement plan benefits to non-public sector employment
helps in the retention of senior and management level employees.
Recommendation
• Any pension reform package should retain transferability of retirement benefits across
public sector employers. No employee currently in a defined benefit plan should be
required to involuntarily give up a defined benefit formula before retirement.
Tiered Plans
Principles
> Agencies should strive to avoid multi-tiered compensation structures where there are
large discrepancies in benefits accruing to employees. In addition to having adverse
impacts on recruitment and employee morale, multi-tiered approaches can raise issues
of comparable worth and equity.
Recommendations
• Any pension reform measures should seek to minimize disparity between current and
prospective public agency employees.
• Any reduction(s) or change(s) to current Defined Benefit plans should be considered
in context of other compensation issues that will tend, over time, to "equate"
compensation plans within and across public agency employers.
Management Oversight
Principles
> The obligation to properly manage public pension systems is a fiduciary
responsibility that is shared by PERS, employers and employees. This joint
responsibility is necessary to provide quality services while ensuring long-term fiscal
stability. These parties need to be held responsible to ensure a high level of protection
against mismanagement of public resources that could jeopardize a community's
ability to maintain services and provide fair compensation for its workforce.
Recommendations
• Public agencies that do not make the Annual Required Contribution under GASB 27
should be made subject to appropriate oversight.
• The membership of the Public Employees and Retirement System Board should be
changed to achieve both a better balance of employer and employee representatives as
well as a better balance of public agency representatives.
Conclusion
Defined benefit retirement plans have been the traditional approach for close to 60 years
in California and have produced fair and sustainable retirement benefits that have been
central to recruiting and retaining quality public employees. Defined benefit plans should
be retained as the central component of public pension systems in California.
FAQ's Cheat Sheet
What was the League Board of Director's Action on Task Force Information?
The League of CA Cities Board of Director's decided at their Feb 2005 meeting to accept
the Leagues Task Force report as a "discussion document," to be circulated to
stakeholders throughout Sacramento as well as our members. The board has
recommended the retention of the Defined Benefit plan as the primary plan for public
employees pension benefits in California.
What is the reasoning for having the document as a "Discussion Piece" and not
taking a hard line for or against the DB/DC plan?
By labeling the task force report as a "discussion document," we allow stakeholders,
league members and all who view the report to "discuss" its merits pursuant to their
expertise as well as being able to utilize the report to select portions that may be helpful
when negotiations start on the specifics of both plans. The League did not take a hard
line for or against the DB/DC plans due to the issues ever-changing dynamics on a daily
basis. The League is in the position of being a facilitator/policy entity wherein we are
communicating with all stakeholders and being asked our opinion on outcomes to
decisions on the impacts of both plans. By taking a position too early, we will cut off
access to a key stakeholder in this process. The League board will take a position when
negotiations progress to a more detailed pension reform product.
What was the thinking in coming to a 3% @ 55 formula for public safety?
The 3 @ 55 formula was recommended based on the actuarial work done by an actuary
who the League asked to generate a formula that would reflect a fair retirement benefit
for a career employee that maintains his/her standard of living in retirement.
• From the work put into the document, the 3% @ 55 is a "fair" retirement benefit
for a career public safety employee.
• In conversing with various city managers, they confirmed that safety officers did
intend to retire closer to 55 than 50 in order to get the "higher multiplier factor"
which increases the retiree's retirement check under the old 2% @ 50 formula.
• The 2% @ 50 formula (which is what most P.S. officers use as a point of
reference to support their point) the "retirement multiplier" rises to 2.7 @ age
55 which (as mentioned before), most officers retire at that age.
• The 3% @ 50 formula is well above the "standards" looked at in the models the
League researched.
Page 2
FAQ's Cheat Sheet
What does the 50% offset by Social Security mean?
The 50% offset by social security is intended to provide a fair retirement benefit for a
career employee when that employee has both PERS and social security benefits. The
intent behind this proposal is to only offset the PERS benefit when social security
benefits are given along with PERS retirement benefits. In other words, previous
employment and qualification for social security benefits would not trigger the offset.
What do the CAPS for Miscellaneous and Public Safety Employees mean?
Public Safety
It was decided that the 90% cap for public safety employees was sufficient to maintain at
its current level. This was placed in law historically to encourage early retirement.
Public Safety employees currently have a 90% cap.
Miscellaneous
It was decided that having a 100% cap would allow an employee if they wished, they had
the option to reach the 100% but factually he/she would have to work for at least 40 years
to accomplish this feat. It was also intended to help discourage spiking retirements.
Some of this was based on political reasons to list a 100% cap.
The three year average versus the final single highest year compensation
The 3-year average was done to minimize/prevent the spiking issue that has become a
source of abuse by some employees.
For example, employee A is a year away from retirement and there is a slot that is a pay
grade above his/hers that will increase or "spike" their retirement income. He/she moves
into that pay grade and that pay grade is used as the basis of their retirement.
By utilizing the three-year average, the person can still move into that slot for the final
year but he/she will have to incorporate the other two years and not just that final year of
compensation.
Please keep in mind that the document produced by the League is a "discussion
document" only. The document can be used as a point of reference for any entity
who is looking at the impacts of moving from a DB to a DC plan and take what will
and will not work for their respective organization. The League has met with labor,
CalPERS, Legislative leadership, the administration, CSAC, committee consultants
and will continue to do so throughout the process.
9/15/2009
BACKGROUND
Options for RV parking prohibitions
discussed recently
•July 15, 2009 - beach locations
•August 19, 2009 - citywide
CITY COUNCIL
DIRECTION TO STAFF
Prepare ordinance revisions for City
Council approval:
•Vehicles must move a minimum of one-half mile
after parking on-street for 72 consecutive hours
•Vehicle can't return to same on-street parking
location for a minimum of 24 hours
9/15/2009
RV BEACH PARKING
PROHIBITION OPTIONS
Do nothing-status quo remains
Stripe parallel parking spaces
Establish time limits for daily parking
Prohibit RV parking during designated
summer months
Prohibit RV parking on Carlsbad
Boulevard
OPTION 1
DO NOTHING
•First come, first served
•No funds expended
OPTION 2
STRIPE PARALLEL PARKING SPACES
'Formalizes on-street parking
1 Drivers of longer vehicles may be
discouraged from occupying multiple
parking spaces
•Ordinance required to formalize
parking in designated space
9/15/2009
LOWER TAMARACK PARKING LOT
feasible for RV parking?
impacts to state revenue
hourly parking not conducive to RV
LOWER TAMARACK PARKING LOT
BEST
COPY
9/15/2009
OPTION 3
DAYTIME PARKING TIME LIMITS
•All vehicles impacted alike
•Creates turnover
•Requires PD enforcement
•Signs required
•Some drivers may accept ticket as the
price for a day at the beach
OPTION 4
RESTRICT RV PARKING DURING SUMMER
AT THE BEACH
•Requires ordinance
•Requires PD enforcement
•Signs need to be posted
Legal challenges may result
OPTION 5
RESTRICT RV PARKING AT THE BEACH
•Requires ordinance
•Requires PD enforcement
•Signs need to be posted
•Legal challenges may result
9/15/2009
LOWER TAMARACK PARKING LOT
LOWER TAMARACK PARKING LOT
COPY
9/15/2009
DECISIONS
•Which option?
•Options applicable to Parking North
and/or Parking South?
•Other locations?
Special Events Visioning Team
City Council Workshop Presentation
09/16/09
Special Events
Visioning
Mick Calarco Sue Irey
Karen Chen Greg Koran
Peter Gordon Ingrid Lenz
Rob Houston
KEY ROLES THE CITY PLAYS
Process - KnsuriiiK Lin- Special JECveiU
Permitting paperwork is completed correctly
. Approving new event proposals -
Determining If a new event p rupc^al will be
right for the City of Carbbml. ihi? includes
looking a! what impacLs the, event would huve
in the City, what City resources are required
and available toaseirii in ihe eveui, and if thy
•event will be safe.
Special Events Visioning Team
City Council Workshop Presentation
09/16/09
WHY WE HAVE SPECIAL EVENTS
ORDINANCE LANGUAGE
"... that special events enhance the
city's lifestyle and provide benefits
to area residents, visitors, and
businesses through the creation of
unique venues for expression,
recreation and entertainment that
are not normally provided as part of
-• governmental services,*" (S.17.010)
Special Events Visioning Team
City Council Workshop Presentation
09/16/09
Our Path Forward
PROPOSED GUIDING PRINCIPLES
Promote Carlsbad
Enrich the
Individual
Maintain Balance ;'
with Variety
Build
Community
s Energize the
Village
CONSIDERATIONS FOR APPROVAL
• Location
Special Events Visioning Team
City Council Workshop Presentation
09/16/09
MAP OF SPECIAL EVENTS IN CARLSBAD
CONSIDERATIONS FOR APPROVAL
/. Location
> Schedule
CURRENT SPECIAL EVENTS
Special Events VisioningTeam
City Council Workshop Presentation
09/16/09
CONSIDERATIONS FOR APPROVAL
•.Location , ' . •' "
•'Schedule ; •
/ Impacts to City, Staff and Other
Resources
* Fiscal Impact