10-19-2010 - Retirement Benefit - Miscellaneous Employees - PERS report (2).docCity of West Covina
Memorandum
A G E N D A
ITEM NO. __D-3d_____
DATE October 19, 2010
TO: Andrew G. Pasmant, City Manager
and City Council
FROM: Thomas Bachman Assistant City Manager
SUBJECT: RETIREMENT BENEFIT
MISCELLANEOUS EMPLOYEES
RECOMMENDATION:
In order to implement the change in retirement benefit from 2.5%@55 to 2%@60 for miscellaneous employees entering membership for the first time in the miscellaneous classification, as
previously approved in the Memorandums of Understanding and the City’s Last Best and Final Offer with five miscellaneous bargaining units, the City Council is requested to introduce
the following ordinance:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF WEST COVINA AND THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM.
DISCUSSION:
At their regular meeting of August 4, 2010, the City Council approved the Memorandums of Understanding (MOUs) between the City and the Mid-Management Employees’ Association, Confidential
Employees’ Association, and a Side Letter Agreement with the General Employees’ Association, and imposition of the City’s Last Best and Final Offer to the Maintenance Employees’ Association
and Non-Sworn Safety Support Employees’ Association. Included in the MOUs, Side letter Agreement, and City’s Last Best and Final Offers were the implementation of the 2%@60 retirement
benefit for those miscellaneous employees hired on or after January 1, 2011. Also included in these agreements was the provision that all new employees would also pay the 7% employee
contribution. These actions were the first step taken by the City towards pension reform and controlling rising pension costs.
In order to effect such a contract amendment, PERS requires several steps: 1) adoption of a Resolution of Intention to amend the contract, 2) conducting a first reading of an ordinance
to amend the contract; and 3) adoption of a final Ordinance (or adopting an urgency Ordinance if time does not allow a 30-day waiting period between the first reading and final adoption).
At least twenty days (20) must elapse between the adoption of the Resolution of Intention and final or urgency Ordinance. Staff will present an Ordinance for adoption at the November
16, 2010 meeting. The effective date of the CalPERS Amendment to Contract is January 1, 2011.
FISCAL IMPACT
This action is the first step of a long-term strategy to control the City’s future pension costs. The 2% @ 60 formula will not result in immediate savings but will generate savings
into the future as new employees are hired. The provision for new employees paying the 7% employee contribution will result in immediate savings to the City as new employees are hired.
Thomas Bachman, Assistant City Manager
And Finance Director
Attachments: City of West Covina Ordinance for Adoption
PERS Resolution of Intention to Approve an Amendment to Contract
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF WEST COVINA AND THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM.
WHEREAS, the City of West Covina has made a determination regarding the issue of providing PERS Benefit of 2%@60 for miscellaneous employees entering membership for the first time in
the miscellaneous groups; and
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;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA DOES ORDAIN AS FOLLOWS:
SECTION 1. That an amendment to the contract between the City Council of the City of West Covina and the Board of Administration, California Public Employees’ Retirement System is hereby
authorized, a copy of said amendment being attached hereto, marked Exhibit, and by such reference made a part hereof as though herein set out in full.
SECTION 2. The Mayor of the City of West Covina is hereby authorized, empowered, and directed to execute said amendment for and on behalf of said Agency.
SECTION 3. The City Clerk shall certify the adoption of this Ordinance and shall cause the same to be posted or published in the manner as required by law.
SECTION 4: This Ordinance shall take effect and be in force thirty (30) days from and after the date of its passage.
APPROVED AND ADOPTED ON this day of .
Mayor Shelley Sanderson
ATTEST:
City Clerk Laurie Carrico
Ordinance No. An Ordinance Of The
City Council Of The City Of West Covina, California,
Authorizing An Amendment To The Contract Between
The City Council Of The City Of West Covina And The
Board Of Administration Of The California Public
Employees’ Retirement System. – Page 2
I, LAURIE CARRICO, CITY CLERK of the City of West Covina, do hereby certify that the foregoing Ordinance No. was regularly introduced and placed upon its first reading at a regular
meeting of the City Council on the day of . That, thereafter, said ordinance was duly adopted and passed at a meeting of the City Council on the day of , by the following
vote:
AYES:
NOES:
ABSENT:
City Clerk Laurie Carrico
Approved as to form:
City Attorney Arnold Alvarez-Glasman