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02-04-2014 - Amendment to City Council Authorized Benefits to Remove California Public Employees' Retirement (CalPERS) Benefits for Future City Council MembersC7 TO: Mayor and City Council FROM: Christopher J. Chung City Manager BY: Nita McKay Director of Finance & Administrative Services City of West Covina Memorandum AGENDA ITEM NO. 8 DATE February 4, 2014 SUBJECT: AMENDMENT TO THE CITY COUNCIL AUTHORIZED BENEFITS TO REMOVE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT (CaIPERS) BENEFITS FOR FUTURE CITY COUNCIL MEMBERS RECOMMENDATION: It is recommended that the City Council adopt the following resolution: RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AMENDING CITY COUNCIL AUTHORIZED BENEFITS TO REMOVE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT (CaIPERS) BENEFITS FOR FUTURE CITY COUNCIL MEMBERS DISCUSSION: At the City Council meeting on January 21, 2014, City Council discussed options related to City Council Members' benefits, specifically the elimination of Council Members' participation in the California Public Employees Retirement System (Ca1PERS). Government Code Section 36516(d) states that the amounts that the City pays towards a Council Member's retirement, health, federal, and social security benefits are not subject to the same salary limits in the Government Code, as long as those benefits are the same as those provided by the City to City employees. Therefore, there is no Government code that prohibits City Council from eliminating any benefit from the approved benefits for Council Members, including their participation in Ca1PERS retirement benefits. CaIPERS rules concerning memberships of elective officers states, "The election of optional membership may be Fled at any time while a compensated elective officer holds the office and the office is not otherwise excluded by law or excluded by an agency's contract. Once elected, the membership remains in effect for all future service in an elective officer position with the same employer unless there is a significant break in employment." Existing Council Members, with CaIPERS benefits, will continue receiving retirement benefits. This election to be a member of CaIPERS cannot be rescinded once a Council Member has chosen to be a member of CaIPERS. Individual Council Members may decline membership in CaIPERS and not receive retirement benefits at the time they assume office. Approval of the attached resolution would eliminate Ca1PERS as a benefit for all elected officials elected for the first time after January 1, 2014. FISCAL IMPACT: If the attached resolution is adopted, the annual cost savings, utilizing the current 14.734% employer share, would be $6,720 assuming all five Council Members received the Ca1PERS benefit. Prepared by: N • to McKay Director of Finance tive Services RESOLUTION NO. 2014 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AMENDING CITY COUNCIL AUTHORIZED BENEFITS TO REMOVE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT (CalPERS) BENEFITS FOR FUTURE CITY COUNCIL MEMBERS WHEREAS, the City of West Covina has evaluated benefits provided to City Council Members; and WHEREAS, the City desires to amend the current authorized benefits provided to City Council Members; and WHEREAS, this shall apply to all elected officials elected for the first time after January 1, 2014. NOW, THEREFORE, the City Council of the City of West Covina does resolve, determine and order as follows: SECTION 1. The City Council hereby resolves that membership in CalPERS is no longer an authorized benefit for City Council Members. The City Clerk shall certify to the adoption of this Resolution. APPROVED AND ADOPTED on this 4°i day of February, 2014. Mayor Steve Herfert ATTEST: City Clerk Nickolas S. Lewis I, NICKOLAS S. LEWIS, CITY CLERK of the City of West Covina, California, do hereby certify that the foregoing resolution was duly adopted by the City Council of the City of West Covina, California, at a regular meeting held thereof on the 4°i day of February, 2014 by the following vote of the City Council: AYES: NOES: ABSENT: ABSTAIN: City Clerk Nickolas S. Lewis APPROVED AS TO FORM: City Attorney Arnold Alvarez-Glasman