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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: LINN LIVINGSTON, DIRECTOR
OF HUMAN RESOURCES
Subject: A RESOLUTION OF
INTENTION AND ORDINANCE
AUTHORIZING AN AMENDMENT TO
THE CONTRACT BETWEEN THE
PUBLIC EMPLOYEES' RETIREMENT
SYSTEM (PERS) AND THE CITY OF
SAN BERNARDINO TO PROVIDE A
2.7% @ 55 RETIREMENT BENEFIT
FOR MISCELLANEOUS EMPLOYEES.
MICC Meeting Date: August 20, 2007
Dept: HUMAN RESOURCES
Date: AUGUST 16, 2007
Synopsis of Previous Council Action:
On October 16, 2000, the Mayor and Common Council approved an ordinance and
resolution authorizing an amendment to the contract between the Board of
Administration of the Public Employees' Retirement System (PERS) and the City of San
Bernardino to 2% @ 55 retirement benefit for miscellaneous employees.
Recommended Motion:
1. Adopt Resolution of Intention.
2. Waive further reading and layover said Ordinance for final adoption on September
17,2007. tt . ~~
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Signature
Contact person: Linn Livinaston
Phone:
384-5161
Supporting data attached:
Ward:
FUNDING REQUIREMENTS: Amount: No cost with this action.
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
4r/AN~~~
Agenda Item No. ~::'>
p.)o '()7
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
Subiect:
A Resolution of Intention and Ordinance authorizing an amendment to the contract between the
Public Employees' Retirement System (PERS) and the City of San Bernardino to provide a 2.7%
@ 55 retirement benefit for miscellaneous employees.
Back2round:
During the negotiation process with the General, Middle-Management and
Management/Confidential bargaining groups, the Mayor and Common Council agreed to amend
the current retirement formula for employees in the non-safety bargaining groups, including
Water Department employees, to a 2.7% @ 55 formula.
The agreement requires the City to amend their PERS contract to provide Section 21354.5 (2.7%
@ 55 full formula) for local miscellaneous members, effective 1/01/08. The anticipated annual
cost to the City for this benefit, not including the Water Department, is $2,403,800, based on the
November 2006 PERS valuation. The cost does not include the Water Department and assumes a
20-year amortization period.
Pursuant to PERS' regulations, the Mayor and Common Council must approve the Resolution of
Intention, an Ordinance, approving an amendment and hold a secret ballot vote, scheduled for
August 22, 2007, to include all local miscellaneous employees with a passing vote of 51 % prior
to the implementation date of 1/01/08. Vote information will be presented prior to the fmal
reading of the Ordinance.
The attached Ordinance and Resolution authorizes an amendment of the City contract with PERS
(Exhibit A) to provide the 2.7% @ 55 benefit for all local miscellaneous members.
Financial Impact:
The anticipated annual cost to the City is as follows:
$2,065,200 Employer Rate Increase (6.172%)
$338,600 Employee Rate Increase (Pick up by City) (1 %)
$2,403,800
The 2007-08 FY cost is $1,201,900 (January 1,2008 through June 30, 2008) which is included in
the FY 2007-08, budget with $961,000 being charged to the General Fund and $240,300 charged
to Non-General Funds.
The on-going annual cost for the 2.7% @ 55 benefit is $2,403,800 using the 20-year
amortization period. The City will be requesting a 30-year amortization from PERS to become
2
effective during FY 2008-09. If successful, the change from 20 to 30 years could save the City
approximately $500,000 per fiscal year.
Recommendation:
I Adopt Resolution of Intention.
2 Waive further reading and layover said Ordinance for fmal adoption on September 17,2007.
3
Resolution No
2
3
RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT T
CONTRACT BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA POOLI
EMPLOYEES' RETIREMENT SYSTEM AND THE MAYOR AND COMMO
COUNCIL OF THE CITY OF SAN BERNARDINO.
4
5
6
WHEREAS, the Public Employees' Retirement Law permits the participation of publi
agencies and their employees in the Public Employees' Retirement System by the execution of
contract, and sets forth the procedure by which said public agencies may elect to subjec
themselves and their employees to amendments to said Law; and
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WHEREAS, one of the steps in the procedures to amend this contract is the adoption b
the governing body of the public agency of a resolution giving notice of its intention to approv
an amendment to said contract, which resolution shall contain a summary of the change propose
in said contract; and
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12
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14 WHEREAS, the following is a statement of the proposed change:
15 To provide Section 21354.5 (2.7% @ 55 Full formula) for local miscellaneous members.
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NOW, THEREFORE, BE IT RESOLVED that the governing body of the abov
agency does hereby give notice of intention to approve an amendment to the contract betwee
said public agency and the Board of Administration of the Public Employees' Retiremen
System, a copy of said amendment being attached hereto, as Exhibit "A" and by this referenc
made a part hereof.
/II
/II
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RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT T
CONTRACT BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA POOLI
2 EMPLOYEES' RETIREMENT SYSTEM AND THE MAYOR AND COMMO
COUNCIL OF THE CITY OF SAN BERNARDINO.
3
4
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor an
5 the Common Council of the City of San Bernardino at a
meeting thereof, hel
6 on
day of
, 2007, by the following vote, to wit:
7
COUNCILMEMBERS:
ESTRADA
BAXTER
10
BRINKER
AYES
NA YES
ABSTAIN ABSENT
8
9
II
DERRY
KELLEY
JOHNSON
MCCAMMACK
12
13
14
15
16
Rachel G. Clark, City Clerk
17
The foregoing resolution IS hereby approved this
day 0
18
,2007.
19
20
Patrick 1. Morris, Mayor
City of San Bernardino
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Approved as to form:
22
23
JAMES F. PENMAN,
City Attorney
24
.k
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:Agenda Items:Reso.2.7@55
A
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 San Bernardino
.
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 March
1, 1945, and witnessed February 6, 1945, and as amended effective November 1, 1949,
September 1, 1951, January 1, 1952, July 1, 1954, February 1, 1965, February 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, August1, 1996, July 3, 1997, January 1, 1998, August 1, 1998,
November 1, 1999, June 1, 2001 and July 1, 2001 which provides for participation of
Public Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 13 are hereby stricken from said contract as executed
effective July 1, 2001, and hereby replaced by the following paragraphs
numbered 1 through 14 inclusive: .
1. All words and terms used herein which are defined in the Public
Employees' Retirement Law shall have the meaning as defined therein
unless otherwise specifically provided. "Normal retirement age" shall
mean age 55 for local miscellaneous members and age 55 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 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.
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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. CROSSING GUARDS HIRED ON OR AFTER JANUARY 1,1952;
b. LIBRARY PAGES HIRED ON OR AFTER MARCH 17, 1975;
c. 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;
I. VEHICLE OPERATORS; AND
m. EXTRA RELIEF HEAVY LABORERS (EXTRA BOARD).
5. Prior to January 1, 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 superseded this contract provision by providing that any
such temporary and/or seasonal employees are excluded from PERS
membership subsequent to January 1, 1975. Legislation repealed and
replaced said Section with Government Code Section 20305 effective July
1,1994.
6. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member in
employment before and not on or after the effective date of this
amendment to contract shall be determined in accordance with Section
21354 of said Retirement Law (2% at age 55 Full).
7. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member in
employment on or after the effective date of this amendment to contract
shall be determined in accordance with Section 21354.5 of said
Retirement Law (2.7% at age 55 Full).
,
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8. 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 21363.1 of said Retirement Law
(3% at age 55 Full).
9.. Public Agency elected and elects to be subject to the following optional
provisions:
a. Sections 21624, 21626 and 21628 (Post-Retirement Survivor
Allowance).
b. Section 21222.1 (One-Time 5% Increase - 1970). Legislation
repealed said Section effective January 1, 1980.
c. Section 20042 (One-Year Final Compensation).
d. Section 21024 (Military Service Credit as Public Service).
e. Section 21222.2 (One-Time 5% Increase - 1971). Legislation
repealed said Section effective January 1, 1980.
f. Section 21319 (One-Time 15% Increase for Local Miscellaneous
Members Who Retired or Died Prior to July 1, 1971). Legislation
repealed said Section effective January 1, 2002.
g. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local
miscellaneous members and local fire members only.
h. Section 20903 (Two Years Additional Service Credit) for local
miscellaneous members only.
i. Section 21635 (Post-Retirement Survivor Allowance to Continue
After Remarriage) for local fire members only.
10. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
April 28, 1975. Accumulated contributions of Public Agency shall be fixed
and determined as provided in Government Code Section 20834, and
accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20834.
11. Public Agency shall contribute to said Retirement System the contributions
determined by actuarial valuations of prior and future service liability with
respect to local miscellaneous members and local safety members of said
Retirement System.
12. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21574 of said Retirement
Law. (Subject to annual change.) In addition, all assets and
liabilities of Public Agency and its employees shall be pooled in a
single account, based on term insurance rates, for survivors of all
local miscellaneous members and 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.
13. Contributions required of Public Agency and its employees shall be
subject to adjustment by Board on account of amendments to the Public
Employees' Retirement Law, and on account of the experience under the
Retirement System as determined by the periodic investigation and
valuation required by said Retirement Law.
14. Contributions required of Public Agency and its employees shall be paid
by Public Agency to the Retirement System within fifteen days after the
end of the period to which said contributions refer or as may be prescribed
by Board regulation. If more or less than the 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
!:'<z ~
BOARD OF ADMINISTRATION i~~'v
PUBLIC EMPLOYEES' RETIREfMENT SYSTEM
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CITY COUNCIL ^~;::F
CITY OF SAN BER~~,~DlNO
,~.<Y
BY .,
PRESIDING .?f~I.CER
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Witness;bate
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Attesy'"
BY
LORI MCGARTLAND, .CHIEF
EMPLOYER SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Clerk
AMENDMENT ER# 0061
PERS-CON-702A (Rev. 10\05)
,
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
(888) CalPERS (225-7377)
SUMMARY OF MAJOR PROVISIONS
2.7% @ 55 Formula (Section 21354.5)
Local Miscellaneous Members
SERVICE RETIREMENT
To be eligible for service retirement, a member must be at least age 50 and have five years of
CalPERS credited service. There is no compulsory retirement age.
The monthly retirement allowance is determined by age at retirement, years of service credit
and final compensation. The basic benefit is 2.7% of final compensation for each year of
credited service upon retirement at age 55. If retirement is earlier than age 55, the percentage
of final compensation decreaseS for each quarter year of attained age to 2% at age 50.
Final compensation is the average monthly pay rate during the last consecutive 36 months of
employment, or 12 months if provided by the employer's contract, unless the member
designates a different period of 36 or 12 consecutive months when the average pay rate was
higher.
DISABILITY RETIREMENT
Members substantially incapacitated from performing the usual duties for the position for his/her
current employer, and from performing the usual duties of the position for other CalPERS
covered employers (including State agencies, schools, and local public agencies), and where
similar positions with these other employers with reasonably comparable in pay, benefits, and
promotional opportunities are not available, would be eligible for disability retirement provided
they have at least five years of service credit. The monthly retirement allowance is 1.8% of final
compensation for each year of service. The maximum percentage for members who have
between 10.000 and 18.518 years of service credit is one-third of their final compensation. If
the member is eligible for service retirement the member will receive the highest allowance
payable, service or disability. If provided by the employer's contract, the benefit would be a
minimum of 30% of final compensation for the first five years of service credit, plus 1 % for each
additional year of service to a maximum benefit of 50% of final compensation.
INDUSTRIAL DISABILITY RETIREMENT
If provided by the employer's contract, members permanently incapacitated from performing
their duties, as defined above under Disability Retirement, and the disability is a result of a job-
related injury or illness may receive an Industrial Disability Retirement benefit equal to 50% of
their final compensation. If provided in the employer's contract and the member is totally
disabled, the disability retirement allowance would equal 75% of final compensation in lieu of
the disability retirement allowance otherwise provided. If the member is eligible for service
retirement, the service retirement allowance is payable. The total allowance cannot exceed
90% of final compensation.
PRE-RETIREMENT DEATH BENEFITS
Basic Death Benefit: This benefit is a refund of the member's contributions plus interest and up
to six months'pay (one month's salary rate for each year of current service to a maximum of six
months).
PERS-CON-57 (rev. 2/05)
1957 Survivor Benefit: An eligible beneficiary may elect to receive either the Basic Death
Benefit or the 1957 Survivor Benefit. The 1957 Survivor Benefit provides a monthly allowance
equal to one-half of the highest service retirement allowance the member would have received
had he/she retired on the date of death. The 1957 Survivor Benefit is payable to the surviving
spouse or registered domestic partner until death or to eligible unmarried children until age 18.
1959 Survivor Benefit: (If provided by the employer's contract and the member is not covered
under social security.) A surviving spouse or registered domestic partner and eligible children
may receive a monthly allowance as determine by the level of coverage. This benefit is payable
in addition to the Basic Death Benefit or 1957 Survivor Benefit. Children are eligible if under
age 22 and unmarried.
Pre-Retirement Optional Settlement 2 Death Benefit: (If provided by the employer's contract.)
The spouse or registered domestic partner of a deceased member, who was eligible to retire for
service at the time of death, may to elect to receive the Pre-Retirement Optional Settlement 2
Death Benefit in lieu of the lump sum Basic Death Benefit. The benefit is a monthly allowance
equal to the amount the member would have received if he/she had retired for service on the
date of death and elected Optional Settlement 2, the highest monthly allowance a member can
leave a spouse or registered domestic partner.
COST-Of-LIVING ADJUSTMENTS
The cost of living allowance increases are limited to a maximum of 2% compounded annually
unless the employer's contract provides a 3, 4, or 5% increase.
DEATH AFTER RETIREMENT
The lump sum death benefit is $500 (or $600, $2,000, $3,000, $4,000 or $5,000 if provided by
the employer's contract) regardless of the retirement plan chosen by the member at the time of
retirement.
TERMINATION Of EMPLOYMENT
Members who have separated from employment may elect to leave their contributions on
deposit or request a refund of contributions and interest. Those who leave their contributions
on deposit may apply at a later date for a monthly retirement allowance if the minimum service
and age requirements are met. Members who request a refund of their contributions terminate
their membership and are not eligible for any future benefits unless they return to CalPERS
membership.
EMPLOYEE CONTRIBUTIONS
Miscellaneous members covered by the 2.7% @ 55 formula contribute 8% of reportable
earnings. Those covered under a modified formula (coordinated with Social Security) do not
contribute on the first $133.33 earned.
The employer also contributes toward the cost of the benefits. The amount contributed by the
employer for current service retirement benefits generally exceeds the cost to the employee. In
addition, the employer bears the entire cost of prior service benefits (the period of time before
the employer provided retirement coverage under CaIPERS). All employer contribution rates
are subject to adjustment by the CalPERS Board of Administration.
PERS.CON-57 (rev. 2/05)
Ordinance No
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AN ORDINANCE OF THE MAYOR AND COMMON COUNCIL OF THE CI
OF SAN BERNARDINO AUTHORIZING AN AMENDMENT TO THE CONTRAC
BETWEEN THE MAYOR AND COMMON COUNCIL OF THE CITY OF S
BERNARDINO AND THE BOARD OF ADMINISTRATION OF THE CALIFORNI
PUBLIC EMPLOYEES' RETIREMENT SYSTEM.
4
5
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THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDIN
DO ORDAIN AS FOLLOWS:
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SECTION 1. That an amendment to the contract between the Mayor and Commo
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Council of the City of San Bernardino and the Board of Administration, California Publi
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Employees' Retirement System is hereby authorized, a copy of said amendment being attache
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hereto, marked Exhibit "A" and by such reference made a part hereof as though herein set out i
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full.
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SECTION 2. The Mayor of the City of San Bernardino is hereby authorized, empowere
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and directed to execute said amendment for and on behalf of said Agency.
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SECTION 3. This Ordinance shall take affect thirty (30) days after the date of it
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adoption, and prior to the expiration of 30 days from the passage thereof, shall be published a
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least once in the San Bernardino County Sun, a newspaper of general circulation, published an
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circulated in the City of San Bernardino and thenceforth and thereafter the same shall be in ful
19
force and effect.
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III
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III
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23 III
24 III
25 III
III
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AN ORDINANCE OF THE MAYOR AND COMMON COUNCIL OF THE CIT
OF SAN BERNARDINO AUTHORIZING AN AMENDMENT TO THE CONTRAC
2 BETWEEN THE MAYOR AND COMMON COUNCIL OF THE CITY OF SA
BERNARDINO AND THE BOARD OF ADMINISTRATION OF THE CALIFORNI
3 PUBLIC EMPLOYEES' RETIREMENT SYSTEM.
the Common Council of the City of San Bernardino at a
meeting thereof, hel
4
I HEREBY CERTIFY that the foregoing Ordinance was duly adopted by the Mayor an
5
6
on
day of
,2007, by the following vote, to wit:
7
8
COUNCILMEMBERS:
AYES
NA YES
ABSTAIN ABSENT
9 ESTRADA
10 BAXTER
12
BRINKER
DERRY
KELLEY
JOHNSON
11
13
14 MCCAMMACK
15
16
Rachel G. Clark, City Clerk
17
18
The foregoing resolution IS hereby approved this
day 0
19
,2007.
20
21
Patrick J. Morris, Mayor
City of San Bernardino
22
Approved as to form:
23
JAMES F. PENMAN,
24 City Attorney
25
By:
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