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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
-:
~
From:
BARBARA DILLON
Subject:
RESOLUTION OF THE MAYOR & COMMON COUNCll..
. . . EXPRESSING ITS INTENTION TO APPROVE
AN AMENDMENT TO CONTRACT BETWEEN THE
BOARD OF ADMINISTRATION OF THE PUBUC
EMPLOYEES' RETIREMENT SYSTEM AND THE CITY
OF SAN BERNARDINO
D
PERSONNEL
MARCH 18, 1997
Date:
~(Q)~W
AN ORDINANCE. . . AUTIlORIZlNG AN AMEND-
MENT TO THE CONTRACT BErWEEN THE BOARD OF
ADMINISTRATION OF THE PUBUC EMPLOYEES'
RETIREMENT SYSTEM AND THE CITY OF
SAN BERNARDINO
Synopsis of Previous Council Action:
On March 17, 1997, the Mayor and Common Council approved a motion to receive and file the
mid-year budget report and to instruct the Director of Personnel to meet with the
"miscellaneous" employee bargaining units to discuss the following: Two (2) years additional
service credit to PERS members who retire during a designated period if a mandatory transfer,
layoff or demotion is imminent and specific PERS requirements are met, (This benefit is also
know as the "golden handshake.")
Recommended Motion:
Motion 1: Adopt the resolution of the Mayor and Common Council of the City of San
Bernardino expressing its intention to approve an amendment to the contract between the Board
of Administration of the Public Employees' Retirement System and the City of San Bernardino.
lIIll1
Motion 2:
That said ordinance be laid over.
.A-Ah,., A/? ),,/1/"" h? }
Signature
Contact person:
Raman Dillon
Phone:
384-5161
Supporting data attached:
Yes
Ward:
Council Notes:
Previously
Amount:
Source: (Acct. No.)
(Acct. Description)
Finance:
, l!-2yg/. :017
.s:15,/"~ dJ?"
FUNDING REQUIREMENTS:
Previously.
Continued to
6& /0'2/17
Agenda Item No.. ~ ~ S- _
5/1"1/17
I
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
BACKGROUND
On March 17, 1997, the Mayor and Common Council approved a motion to receive and file the
mid-year budget report and to instruct the Director of Personnel to meet with the
"miscellaneous" employee bargaining units to discuss the following: Two (2) years additional
service credit to PERS members who retire during a designated period if a mandatory transfer,
layoff or demotion is imminent and specific PERS requirements are met. (This benefit is also
known as the "golden handshake. ")
Pursuant to PERS regulations, the Mayor and Common Council must adopt a Resolution of
Intention and an ordinance approving an amendment to the PERS contract.
ANALYSIS
The attached Resolution of Intention (Exhibit A) states the intention of the Mayor and Common
Council of the City of San Bernardino to amend its contract with the Public Employees'
Retirement System to provide Section 20903 (Two (2) Years Additional Service Credit) for local
miscellaneous members. Exhibit B is the ordinance, which is presented for a first reading.
COSTING
Although Section 20903 does not increase the employer contribution rate, there is a dollar cost
for this benefit. After the expiration of the designated period, the agency will need to submit
to PERS a list of members eligible to receive the additional service credit who retired during the
designated period. The designated period must be subsequent to the effective date of the
contract amendment and cannot be less than 90 nor more than 180 days in length. The agency
will be notified of the actual costs and payment options available after all eligible members have
received the additional service credit.
RECOMMF.NDATION
Based on the foregoing, it is recommended that the Mayor and Common Council adopt:
*
Resolution of the Mayor and Common Council of the City of San Bernardino expressing
its intention to approve an amendment to contract between the Board of Administration
of the Public Employees' Retirement System and the City of San Bernardino.
and,
* That said ordinance be laid over.
EXHIBIT B
1
ORDINANCE NO.
2 AN ORDINANCE OF THE CITY OF SAN BERNARDINO AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION
3 OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY OF SAN
BERNARDINO.
4
5
6
7
8
9
10
11
THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
DO ORDAIN AS FOLLOWS:
SECTION 1. The Mayor is hereby authorized and directed to approve an amendment
to the contract between the City of San Bernardino and the Board of Administration of the
California Public Employees' Retirement System. A copy of said amendment is attached
hereto as Exhibit "A" and by such reference made a part hereof as though herein set out in full.
SECTION 2. The authorization to execute the above-referenced amendment to
Contract is rescinded if the parties to the Contract fail to execute it within sixty (60) days of the
\
1 AN ORDINANCE OF THE CITY OF SAN BERNARDINO AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINlSTRA TION
2 OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY OF SAN
BERNARDINO.
3
4
I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a
. 1997, by the following vote, to wit:
meeting thereof, held on
AYES
NAYS
ABSTAIN ABSENT
15
16
17
18
19
Rachel Clark
City Clerk
The foregoing Ordinance is hereby approved this
day of
.1997.
Tom Minor, Mayor
City of San Bernardino
20
Approved as to
21 form and legal content:
22 JAMES F. PENMAN,
City Attorney
1\ ()
24 By: JA/YfCO i ./~
25 rJ
23
26
27
28
SRA:tbm[persord]
2
EXHIBIT A
AM:ENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF SAN BERNARDINO
The Board pf Administtation, Public Employees' Retirement System, hereinafter referred to as
Board, and the governing body of above public agency, hereinafter referred to as Public Agency,
baving entered into a contract effective March 1, 1945, and witnessed Febl'UllI)' 6, 1945, and as
amended effective November 1, 1949, September 1, 1951, January 1, 1952, July 1, 1954,
Febl'UllI)' 1, 1965, Febl'UllI)' 24, 1969, March 8,1971, October 1,1973, October 28,1974, March
17, 1975, April 28, 1975, November 10, 1975, July 6, 1977, January 7, 1985, May 27, 1985,
September 16,1988, August 27, 1990 and August I, 1996:
A. Paragraphs 1 through 13 an: hereby stricken from said contract as executed effective
August 1, 1996, and hereby replaced by the following paragraphs numbered 1 through 13
inclusive:
1. All words and terms used herein which an: dermed in the Public Employees'
Retirement Law shall have the meaning as defined therein unless otherwise
specifically provided. "Normal retirement age" shall mean age 60 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 March 1, 1945 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 an: 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 an: 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);
PLEASE DO NOT SIGN "EXH!B:T m'iL'/"
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. CROSSING GUARDS HIRED ON OR AFfER JANUARY 1, 1952;
b. . LIBRARY PAGES HIRED ON OR AFfER MARCH 17, 1975;
Co LIFEGUARDS;
d. SENIOR LIFEGUARDS;
e. SUPERVISING LIFEGUARDS;
f. RECREATION INTERNS;
g. RECREATION AIDES;
h. RECREATION LEADERS;
i. SENIOR RECREATION LEADERS;
j. RECREATION SPECIALIST;
k. LOCKER ATTENDANTS;
L VEmCLE OPERATORS; AND
m. EXTRA RELIEF HEAVY LABORERS (EXTRA BOARD).
S. Prior to January I, 1975, those members who were hired by Public Agency on a
temporary and/or seasonal basis not to exceed 6 months were excluded from
PERS membership by contract. Government Code Section 20336 supersedes this
contract provision by providing that any such temporary and/or seasonal
employees are excluded from PERS membership subsequent to January I, 1975.
Legislation repealed and replaced said Section with Government Code Section
20305 effective July I, 1994.
6. The percentage of fmal compensation to be provided for each year of credited
prior and current service as a local miscellaneous member shall be determined. in
accordance with Section 21251.13 of said Retirement Law (2% at age 60 Full).
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 of said Retirement Law (2% at age 50 Full).
8. Public Agency elected and elects to be subject to the following optional
provisions:
a Sections 21624. 21626 and 21628 (Post-Retireme1!t Survivor Allowance)
for local miscellaneous members and local fire members only.
, '
"' EASE DO NOT SIGll ""'/"'''''-l t'.~"1J1I
r,. " "n c^nl~ \,tiiLI
b. Section 21222.1 (Special 5% Increase-1970). Legislation repealed said
Section effective January I, 1980.
c. Section 20042 (One- Year Final Compensation).
d. Section 21024 (Military Service Credit as Public Service), Statutes of
1974.
e. Section 21222.2 (Special 5% Increase-1971). Legislation repealed said
Section effective January I, 1980.
f. Section 21319 (Special 15% Incre8se for Local Miscellaneous Members).
g. Section 21573 (Third Level of 1959 Survivor Benefits) for local fire
members only.
h. Section 20903 (Two Years Additional Service Credit) for local
miscellaneoU$ members only. .
9. Public Agency, in accordance with Government Code Section 20790, ceased to be
an "employer" for purposes of Section 20834 effective on April 28, 1975.
ACClUDulated contributions of Public Agency shall be fixed and determined as
provided in Government Code Section 20834, and acClUDulated contributions
thereafter shall be held by the Board as provided in Government Code Section
20834.
10. 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. Public Agency shall contribute $1.50 per member, per month on account
of the liability for 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 fire members.
"
b. 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.
c. 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.
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.
B.
This amendment shall be effective on the
day of
,19_.
BOARD OF ADMINISTRATION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
CITY COUNCIL
OFTIiE
CITY OF SAN BERNARDINO
BY~ BY~
KENNE ~~ON. CHIEF P~D"!I: ornCER
ACTUARIAL PLOYER SERVICES DMSION ~~
PUBLIC EMPLO ' RETIREMENT SYSTEM c::1 ~
~~ ~
7~ ~
~~~ Witness Date ~.
.~;;\ ~
qJ;.... Attest: ~.
...,~~ ~
q~.
~):,
Clerk
AMENDMENT
PERS-CON.702A (Rn,II961
'.
INTEROFFICE MEMORANDUM
City of San Bernardino
TO:
Honorable Mayor and Common Council
~J~~~~&n/
Barbara Dillon, Director of Personnel
FROM:
SUBJECf:
Agenda Item #15 - Response to Inquiries on Golden Handchllke _
May 5, 1997
DATE:
May 15, 1997
COPIES:
Jorge Carlos, Administrative Assistant to Council; Rachel Clark, City
Clerk; Barbara Pachon, Director of Finance; Lorraine Velarde, Executive
Assistant to the Mayor; Fred Wilson, Acting City Administrator
-------------------------------------------------------------------------------------
At the April 21, 1997 meeting of the Mayor and Common Council, Councilmembers had
inquiries on the following issues related to amending the City's contract with PERS, to provide
two years of additional service credit (Golden Handshake):
1. How many employees are actually considering taking the Golden
Handshake, if it were offered'!
2. How will the two years additional service credit be financed'!
Attached is a summary of the questions and answers for your review.
Thank you
BD/dp
attachment
$;11~h '1
#-;;lS'
,
GOLDEN HANDSHAKE
1. How many employees are actually considering taking the Golden Handshake if it
were offered?
Forty-seven (47) employees who are in job classifications on the Golden Handshake list
attended a Golden Handshake information meeting. A meeting was conducted at City
Hall and at the City Yards by Ms. June Copple of the PERS Field Office on April 30,
1997.
Although it is unknown for sure how many employees would ultimately accept the
Golden Handshake if it is offered, it-is probably a fair assumption that some of the 47
employees who attended the information meetings would be the most likely to go out.
The attached schedule shows the costs for the two years additional service credit only for
the forty-seven (47) employees who attended the information meetings held on April
30th.
2. How will the two years additional service credit be rmanced?
At the end of the window period, the Service Credit Cost will be finali7ed by PERS
based on which employees actually elect the Golden Handshake option. PERS will
charge a $10 valuation fee for each member who retires during the designated window
period and receives the additional service credit.
Currently, the City has the option of paying the service credit costs either by lump sum
payment or financing the costs. The City has the ability to finance the costs for two
years and can probably get PERS approval to extend financing to a maximum time period
of five years with interest being charged at 8.5% per year on the unpaid balance.
An additional option to the City which has been approved by PERS is using the excess
funds in the City's PERS Surplus Asset Account (PSAA). Due to a change in procedures
from PERS, Cities can no longer be allowed to directly draw down on PERS Surplus
Asset Accounts after 6/30/97. Any credit balance that is remaining in a PERS Surplus
Asset account after 6/30/97 will be rolled into lowering the City's regular PERS rate in
future years.
In discussing Golden Handshake funding options with PERS, staff found that PERS
assumed that the City would not have any balance in its PERS Surplus Asset Account
past 6/30/97 for calculating the City's regular PERS rates effective 7/1197. Staff has
been able to show PERS that this is not a correct assumption, and therefore, we should
be permitted to use this account to fund the Golden Handshake costs after 6/30/97.
2 of 5
There are several advantages of using the PERS Surplus Asset Account (PSAA) to fund
the Golden Handshake.
. The first benefit is that the PSAA prevents the City from having to incur actual
additional expenses to fund the program costs. There is no additional cost to be
budgeted which would result in increasing the City's budget deficit.
. The second benefit is that the City gets to use the credit balance at PERS
immediately, rather than have PERS factor in the credit balance into the City's
PERS rates over future years. PERS will not recalculate and lower our 7/1197
PERS rates, if we do not use the credit balance to fund the Golden Handshake.
The soonest PERS will factor in the surplus credit into the City's rates will be for
rates effective 7/1198.
. The third benefit is that since few employees are ultimately expected to take
advantage of the Golden Handshake Program, not much of the PSAA will be used
for the Golden Handshake program. All balances left in the PSAA will be used
by PERS and factored into future City PERS rates.
It must be noted the negative impact of using the PSAA is that a part of the credit
balance is being used up and therefore, will not be available to reduce future years'
PERS rates for the City of San Bernardino. It should also be noted that it would be
cheaper to directly delete positions without offering the Golden Handshake, but the
Golden Handshake does give the following benefits to the City of San Bernardino:
Benefits to Golden HandshllKe Pro~ram
*
Creates vacancies so that positions can more easily be
deleted.
*
Older, loyal long-term employees to the City are given the
benefit and have a choice to take program or not.
*
Saves jobs of younger employees who have younger
families to support at home. Usually, when filled positions
are deleted, the younger employees are the ones who are
bumped out of jobs by older, long-term employees.
*
Permanently reduces staff in each department that takes
advantage of the program. City Administrator will ask
departments to keep positions vacant for a period of time
to recoup payoffs.
3 of 5
.. BENEFIT COST FOR
GOLDEN HANDSHAKE
PERS SERVICE
% CREDIT 1997/98 FY BUDGET TOTAL TOTAL
DEPARTMENT TITLE RATE COST SALARY BENEFITS BUDGET SAVINGS
GENERAL FUND
City Council Exec Assist to Council 0.49 31,464 64,212 13,942 78,154 48,690
City Clerk Account Clerk III 0.52 15,344 29,508 7,422 36,930 21,566
Account Clerk III 0.41 11,852 28,908 5,100 34,008 22,156
Deputy City Clerk I 0.33 11,534 34,952 9,889 44,841 33,307
Civil Service Chief Examiner 0.49 39,043 79,680 19,856 99,336 60,293
Facilities Mgmt Senior Custodian 0.52 18,043 30,852 7,358 36,210 22,167
Parking Control Ckr 0.52 14,739 28,344 5,316 33,680 16,921
Finance Account Clerk II 0.52 13,010 25,020 6,496 31,516 18,506
Assistant Buyer 0.39 13,160 33,744 7,342 41,086 27,926
Cashier II 0.52 12,374 23,796 6,372 30,168 17,794
Admin Oper Super 0.52 21,316 40,992 9,798 50,790 29,474
Library Typist Clerk III 0.41 10,258 25,020 4,961 29,961 19,723
Junior Librarian 0.49 15,653 31,944 5,367 37,311 21,658
Junior Librarian 0.49 15,653 31,944 5,367 37,311 21,658
Lib Comp Lab Coord 0.49 18,640 36,040 6,167 44,207 25,587
Park & Recreation Typist Clerk III 0.52 13,322 25,620 6,500 32,120 18,796
Typist Clerk II 0.49 11,096 22,644 4,708 27,352 16,258
Police Police Records Clerk I 0.33 8,257 25,020 5,345 30,365 22,108
Police Records Clerk I 0.49 12,260 25,020 4,962 30,002 17,742
Police Records Clerk I 0.33 8,257 25,020 5,342 30,362 22,105
Police Records Clerk II 0.33 9,120 27,636 5,202 32,836 23,718
Steno 0.52 13,672 26,292 4,990 31,282 17,610
Secretary 0.41 10,780 26,292 5,118 31,410 20,630
Senior Secretary 0.33 10,276 31,140 5,612 36,752 26,476
Public WorkslEng Construction Inspect 0.45 17,372 38,604 5,949 44,553 27,181
Senior Secretary 0.52 15,881 30,540 5,570 36,110 20,229
Survey Party Chief 0.31 14,393 46,428 8,946 55,374 40,981
Landscape Inspect I 0.39 13,095 33,576 7,421 40,997 27,902
Streets Lead Maint Worker 0.39 13,628 34,944 7,574 42,518 28,890
Lead Maint Worker 0.49 17,123 34,944 7,574 42,518 25,395
GENERAL FUND TOTALS 448,612 1,212,062 763,450
NON-GENERAI. FUND
Animal Control Sr. Animal License Ckr 0.33 8,257 25,020 6,879 31,899 23,642
Refuse Sanitation Route Super 0.39 17,400 44,616 8,761 53,377 35,977
Collector 0.49 13,889 28,344 6,845 35,189 21,300
Refuse Oper III 0.49 15,888 32,424 7,305 39,729 23,841
4 of 5
,
"
. PERS SERVICE
% CREDIT 1997/98 FY BUDGET TOTAL. TOTAL.
TITLE RATE COST SALARY BENEFITS BUDGET SAVINGS
Refuse Oper III 0.39 12,645 32,424 5,834 38,258 25,613
Refuse Oper II 0.39 11,447 29,352 6,978 36,330 24,883
Refuse Oper I 0.31 8,232 26,556 6,680 33,236 25,004
Account Cieri< II 0.33 8,257 25,020 5,345 30,365 22,108
Account Cieri< II 0.33 8,257 25,020 6,516 31,536 23,279
Motor Sweeper Oper 0.49 15,117 30,852 5,603 36,455 21,338
Maint Super 0.39 16,310 41,821 6,590 48,411 32,101
Lead Storekeeper 0.49 13,889 28,344 5,226 33,570 19,681
Ld Equip Mach 0.49 18,640 38,040 7,904 45,944 27,304
Ld Equip Mach 0.49 18,640 38,040 7,904 45,944 27,304
Equip Mach II 0.39 14,110 36,180 7,705 43,885 29,775
Equip Mech Ii 0.31 11,216 36,180 7,705 43,885 32,669
Equip Mach I' 0.49 15,264 31,152 7,125 38,277 23,013
DEPARTMENT
Street.Sweeping
Garage
NON-GENE~L. fUN~ ror~"r~, :..:;i;,.i.-
'-;.:'Jl;'~:;:;~:"'::p'::'if;:
.. c.." j~';:' ,:~~ii::f!~:~"~~;~~:~~~:!!;~r.~J!r:'::;t:t
'-"::':'~:i!':J:~:~'~~)!~~~i~i~j::':~~2t!::~:~~~~2!i
"- _.,'",m_'-."
,-.-', "'- :;":.'f<~""".
GRAND TOTALS.- _
. "1-,878.352
1,202~3
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