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CITY COUNCIL
Staff Report
SR 2016-1205
November 1, 2016
Public Hearing
TO:
SUBMITTED BY:
APPROVED BY:
SUBJECT:
RECOMMENDATION
1. Adopt the 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
Carmel-by-the-Sea to include provisions pursuant to Government Code 20516 Cost Sharing for
Miscellaneous members in accordance with the previously approved Memorandum of Understanding.
2. Waive reading in full and introduce on first reading an Ordinance Authorizing an Amendment to the
contract between the City of Carmel-by-the-Sea and the Board of Administration California Public
Employees Retirement System (CalPERS).
BACKGROUND / SUMMARY
At the City Council meeting on November 30, 2015, the City Council adopted Resolution No. 2015-108
approving the Memorandum of Understanding (MOU) for represented employees of the general employees
union and management employees union, LIUNA/UPEX, Local 792, AFL-CIO and the City of Carmel-by-theSea, for the period of July 1, 2014 through December 31, 2016.
Employees in this bargaining unit agreed to pay, in addition to the employee contribution the following:
Tier 1: Bargaining unit members hired on or before November 1, 2011
Effective November 1, 2015, or when the PERS contract amendment is processed whichever is sooner,
in addition to paying 7.0% member contribution, bargaining unit members covered by this Section shall
pay, through payroll deduction, an additional 1.5% of PERSable compensation towards the Citys costs,
for a total contribution of 8.5% toward the normal cost of pension benefits as permitted by Cal. Gov.
Code Section 201516.
Effective July 1, 2016, in addition to paying the 7.0% member contribution, as well as 1.5% of the
employer contribution, bargaining unit members covered by this Section shall pay, through payroll
deduction, an additional 1.5% of PERSable compensation towards the Citys costs, for a total
contribution of 10% toward the normal cost of pension benefits, as permitted by Cal. Gov Code Section
20516.
Tier II: Bargaining Unit Members Hired After November 1, 2011 and Prior to January 1, 2013, and Unit
Members Qualified for Reciprocity (Classic Members).
Effective November 1, 2015, in addition to paying 7% member contribution, bargaining unit members
covered by this Section shall pay, through payroll deduction, an additional 1.5% of PERSable
compensation towards the Citys costs, for a total contribution of 8.5% toward the normal cost of
pension benefits as permitted by Cal. Gov. Code Section 201516.
Effective July 1, 2016, in addition to paying the 7% member contribution, and 1.5% of the employer
contribution, bargaining unit members covered by this Section shall pay, through payroll deduction, an
additional 1.5% of PERSable compensation towards the Citys costs, for a total contribution of 10%
toward the normal cost of pension benefits, as permitted by Cal. Gov Code Section 20516.
Tier III: PEPRA Retirement Tier Required for Bargaining Unit Members Hired On or After January 1, 2013
(Non-Classic Members)
Effective November 11, 2015, in addition to paying 50% of normal costs as described above,
bargaining unit members covered by this Section shall pay, through payroll deduction, an additional
1.5% of PERSable compensation toward the Citys costs of pension benefits, as permitted by Cal. Gov.
Code Section 20516.
Effective July 1, 2016, in addition to paying 50% of normal costs as described above, bargaining
members covered by this Section shall pay, through payroll deduction, an additional 1.5% of PERS
compensation toward the Citys normal costs of pension benefits as permitted by Cal. Gov. Code
Section 20516, for a total of 3.0% of PERSable compensation paid toward the Citys costs.
Although employees in this bargaining unit agreed to pay, staff failed to process the required CalPERS
documents and employees have not been required to pay the additional member contribution. CalPERS
requires that clearly defined procedures be followed for contract amendments. The following steps are being
taken in order to complete the contract amendment process:
Government Code Section 20474 requires a secret ballot election by the employees affected whenever
the contract is amended to provide a benefit that changes the employees rate of contribution. This
election must be held for the contract group following the adoption of the Resolution of Intention, and
prior to the adoption of the Ordinance to amend the CalPERS contract.
The City must certify compliance under Government Section 7507 that the future annual costs of the
proposed CalPERS contract amendment were made public.
Following the Resolution of Intention to amend the Citys contract with CalPERS, an Ordinance must be
adopted as follows:
The Ordinance and a City Council vote on adoption, must occur no sooner than 20 days after the
adoption of the Resolution of Intention. The final ordinance will be presented to the City council for
adoption on December 6, 2016.
The effective date of the contract amendment must be the first day of a payroll period and may not be
earlier than the day following the effective date of the Ordinance. The contract amendment effective
date is January 16, 2017 and employees will begin paying the agreed upon 3% of the Citys
contribution.
FISCAL IMPACT
The City has been paying the approved upon employee cost sharing contribution which is approximately
$71,665 on behalf of the miscellaneous members for the time period April December 2016. Moving forward,
the City will be saving approximately $114,000 in the General Fund per fiscal year.
FISCAL IMPACT
PRIOR CITY COUNCIL ACTION
Resolution #2015-108: A resolution of the City Council of the City of Carmel-by-the-Sea approving a
Memorandum of Understanding (MOU) for represented employees of the general employees union and
management employees union, LIUNA/UPEX, Local 792, AFL-CIO.
ATTACHMENTS
1. Resolution of Intention to Approve an Amendment to Contract between the Board of Administration
California Public Employees Retirement System (CalPERS) and the City of Carmel-by-the-Sea
2. Ordinance of the City of Carmel-by-the-Sea Authorizing an Amendment to the contract between the
City of Carmel-by-the-Sea and the Board of Administration California Public Employees Retirement
System (CalPERS)
3. Exhibit Amendment to Contract
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 CARMEL-BY-THE-SEA
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 20516 (Employees Sharing Additional
Cost) of 3% for local miscellaneous 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 System, a copy of said amendment being attached
hereto, as an "Exhibit" and by this reference made a part hereof.
By:_________________________________
Presiding Officer
_________________________________
Title
________________________________
Date adopted and approved
DRAFT
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
ORDINANCE NO. 2016-___
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF CARMEL-BY-THE-SEA AND THE BOARD OF
ADMINISTRATION OF THE PUBLIC EMPLOYEES RETIREMENT SYSTEM
WHEREAS, the City entered into a contract with the California Public Employees Retirement System
(CalPERS) in 1955 and numerous amendments since that date; and
WHEREAS, as a result of labor negotiations with the represented employees of the general employees
union and management employees union, LIUNA/UPEX, Local 792, AFL-CIO, the parties agreed that the
employees would make an additional employee contribution towards the Employers portion of the PERS Rate
of 3.0% for Miscellaneous members; and
WHEREAS, an amendment to the CalPERS contract is needed in order to implement this new benefit.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA DOES ORDAIN AS FOLLOWS:
Section 1.
The City Council of the City of Carmel-by-the-Sea hereby authorizes entering into the Amendment to
the Contract between the Board of Administration, California Public Employees Retirement System and
the City of Carmel-by-the-Sea (Amendment), a copy of which is attached hereto, marked as Exhibit 1,
and incorporated herein by reference as though set out in full
Section 2.
The City Administrator of the City of Carmel-by-the-Sea is hereby authorized, empowered, and directed
to execute the Amendment for and on behalf of the City.
Section 3.
The City Clerk has prepared and published, at least five days before the date of adoption, a summary
of this ordinance once in a newspaper of general circulation printed and published in Monterey County
and circulated in the City of Carmel-by-the-Sea and thenceforth and thereafter the same shall be full
force and effect.
Section 4.
EFFECTIVE DATE
This ordinance shall take effect thirty (30) days after its second reading by the City Council.
ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 1st day of
November, by the following roll call vote:
AYES:
COUNCILMEMBERS:
NOES:
COUNCILMEMBERS:
ABSENT:
COUNCILMEMBERS:
ABSTAIN:
COUNCILMEMBERS:
SIGNED:
ATTEST:
_______________________
Steve G. Dallas, Mayor
___________________________
Ashlee Wright, City Clerk
.~.
CalPERS
EXHIBIT
California
Public Employees' Retirement System
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Carmel-By-The-Sea
A.
Paragraphs 1 through 15 are hereby stricken from said contract as executed effective
April 15, 2012, and hereby replaced by the following paragraphs numbered 1 through
17 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 classic
local miscellaneous members entering membership in the miscellaneous
classification on or prior to April 15, 2012, age 60 for classic local miscellaneous
members entering membership for the first time in the miscellaneous
classification after April15, 2012, age 62 for new local miscellaneous members,
age 50 for classic local safety members and age 57 for new local safety
members.
3.
Public Agency agrees to indemnify, defend and hold harmless the California
Public Employees' Retirement System (CaiPERS) and its trustees, agents and
employees, the CaiPERS Board of Administration, and the California Public
Employees' Retirement Fund from any claims, demands, actions, losses,
liabilities, damages, judgments, expenses and' costs, including but not limited to
interest, penalties and attorney fees that may arise as a result of any of the
following:
4.
5.
(a)
(b)
(c)
b.
c.
7.
8.
9.
10.
11 .
12.
b.
c.
d.
e.
g.
h.
i.
13.
20834.
14.
15.
B.
b.
c. .
16.
17.
BY_______________________________
CHERYL EASON
CHIEF FINANCIAL OFFICER
PUBLIC EMPLOYEES' RETIREMENT SYSTEM