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Home My WebLink About03 - CalPers Contract AmendmentAugust 22, 2000 Agenda Item No. 3 CITY OF NEWPORT BEACH HUMAN RESOURCES DEPARTMENT TO: Mayor and City Council 0, , l FROM: Sharon Wood, Assistant City Manager_ l/" SUBJECT: Ordinance Authorizing an Amendment to the Contract with CatPERS RECOMMENDATION Adopt the following urgency ordinance: An Ordinance of the City Council of the City of Newport Beach Authorizing an Amendment to the Contract Between the City of Newport Beach and the Board of Administration of the California Public Employees' Retirement System. DISCUSSION The City Council approved Supplemental Memoranda of Understanding (MOUs) with the five safety employee associations on August 8, 2000. Among other things, these Supplemental MOUs provide the 3% @ 55 retirement plan to the City's safety employees. The Council received and filed information with respect to the cost of providing this benefit and adopted a Resolution of Intention to approve an amendment to the City's contract with CalPERS on July 25, 2000. The required 20 days have passed since adoption of the Resolution of Intention, and the Council may now adopt the ordinance authorizing the contract amendment. Because of the amount of time that was needed to negotiate this benefit and the other terms of the Supplemental MOUs with the five employee associations and to process the amendment pursuant to PERS requirements, staff is recommending that the ordinance be adopted as an urgency measure. This will allow the amendment to take effect immediately, which will assist a number of long -term employees who have been uncertain about retirement plans. ORDINANCE NO. AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM The City Council of the City of Newport Beach does hereby ordain as follows Section 1. . That an amendment to the contract between the City of Newport Beach and the Board of Administration, California Public Employees' Retirement System is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit "A," and by such reference made a part hereof as though set out in full. Section 2. The Mayor of the City of Newport Beach is hereby authorized, empowered and directed to execute said amendment for and on behalf of the City. Section 3. This Ordinance shall take effect immediately. Section 4. The City Council finds and declares this Ordinance to be necessary as an emergency measure for the preservation of the public peace, health or safety as follows: (a) The City Council has entered into numerous labor agreements pursuant to which the City has committed to provide employees with the retirement benefit (benefit) represented by the contract attached as Exhibit "A" effective September 1, 2000 or as soon thereafter as possible. (b) The City has experienced significant and unexpected delays in determining how to provide the benefit in the "cost neutral" fashion required by pre- existing labor agreements. (c) In light of these delays, the City could be considered to have breached these labor agreements if it failed to provide the benefit pursuant to an ordinance and contract that are effective as soon as possible. (d) The City would be exposed to potential damages or possible disruptions in providing municipal services if the City breached the labor agreements. (e) City Council adoption of this Ordinance as an emergency measure is the only way the City can ensure that it has faithfully performed obligations pursuant to these labor agreements and the only way to ensure no disruption or reduction in municipal services. Adopted and approved this 22nd day of August 2000 by the following vote: AYES, COUNCILMEMBERS _ NAYS, COUNCILMEMBERS _ ABSTAIN, COUNCILMEMBERS John E. Noyes, Mayor Attest: City Clerk . Ca1PERS California Public Employees' Retirement System I - IffiII I I! ]10 f C x Between the Board of Administration California ]Public ]Employees' Retirement System and the City Council City of Newport Beach 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 July 1, 1945, and witnessed April 27, 1945, and as amended effective March 1, 1948, November 1, 1951, April 1, 1956, October 31, 1970, September 18, 1971, December 11, 1971, September 24, 1977, December 18, 1977, June 17, 1978, March 24, 1979, June 30, 1979, January 12, 1989, December 2, 1989, June 12, 1996 and July 12, 2000 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective July 12, 2000, and hereby replaced by the following paragraphs numbered 1 through 12 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 July 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. 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. Ocean Beach Lifeguards (included as local safety members); d. 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. CADETS; AND b. RESERVE OFFICERS. 5. The percentage of final 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 21354 of said Retirement Law (2% at age 55 Full). 6. 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). The required member contribution rate is 9% of reportable compensation. 7. Public Agency elected and elects to be subject to the following optional provisions: a. Section 20421 ( "Local Safety Member" shall include ocean beach lifeguards of a city as described in Government Code Section 20421). b. Section 21573 (Third Level of 1959 Survivor Benefits) for local miscellaneous members. C. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local safety members. d. Section 21024 (Military Service Credit as Public Service), Statutes of 1976. e. Section 21389 (Second Opportunity to Elect 1959 Survivor Benefits) for local miscellaneous. Legislation repealed said Section effective September 27, 1979. f. Section 20965 (Credit for Unused Sick Leave) for local miscellaneous members. g. Section 20042 (One -Year Final Compensation). 8. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on September 24, 1977. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 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 of said Retirement System. 10. 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 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 miscellaneous members. b. 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 safety members. C. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required, by law. d. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law. 11. 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. 12. 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 dc-y� day of -t 11W6 BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF NEWPORT BEACH BY BY KENNETH W. MARMON, CHIEF PRESIDING OFFICER ACTUARIAL & EMPLOYER SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM Witness Date Attest: Clerk AMENDMENT PERS- CON -702A (Rev. 8\96)