HomeMy WebLinkAbout1998-11-02 City Council (14)~I~ lI*~I City of Palo Alto
.............................................................................................................................................................................. CityMa nag e r i s R ep o rt
TO:HONORABLE CITY COUNCIL
3
FROM:CITY MANAGER DEPARTMENT: HUMAN RESOURCES
DATE:NOVEMBER 2, 1998 CMR:416:98
SUBJECT:APPROVAL OF A RESOLUTION AND ORDINANCE TO AMEND
THE CITY OF PALO ALTO’S CONTRACT WITH THE PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM- (PERS)TO PROVIDE
SECTION 21354, 2% @ 55 FULL FORMULA FOR LOCAL
MISCELLANEOUS MEMBERS
RECOMMENDATION
This report recommends the following Council actions to amend the City of Palo Alto’s
contract with the Public Employees’ Retirement System (PERS) to provide Section 21354,
2% @ 55 Full Formula for Miscellaneous employees, including non-management employees
represented by the Service Employees’ International Union (SEIU) Local 715, and
unrepresented management and confidential non-safety employees.
Adopt a Resolution of Intention of the Council of the City of Palo Alto to approve an
Amendment to the Contract between the Board of Administration of the Public
Employees’ Retirement System and the City of Palo Alto.
Adopt an Ordinance of the Council of the City of Palo Alto authorizing an Amendment
to the Contract between the City Council of the City of Palo Alto and the Board of
Administration of the California Public Employees’ Retirement System
DISCUSSION
On July 20, 1998, the City Council approved an agreement with employees represented by
SEIU for a three-year period beginning May 1, 1998 and ending April 30, 2001. Part of this
agreement provided for amendment of the City’s agreement with PERS to provide_Section
21534, 2% @ age 55 retirement benefits. The Council has also approved this benefit for
non-safety management and confidential employees to bring them in line with benefits
received by most other Bay Area local government employees.
The current retirement plan benefit formula is 2% @ age 60. Under this formula, a 60-year
old employee with 25 years of service could retire with a pension equal to 50 percent of final
CMR:416:98 Page 1 of 2
salary. Under the amendment, the new formula will increase the monthly pension benefits
for all employees aged 50 to 63 retiring after January 1, 1999.
The effective date of the amendment is January 1, 1999. This benefit change will affect 547
SEIU bargaining unit employees, as well as 225 non-safety management and confidential
employees.
RESOURCE IMPACT
The cost of the benefit amendment for fiscal year 1998-99 (six months) is $1,115,351. The
projected annualized cost is $2,230,702. Funding for the benefit amendment for fiscal year
1998-1999 is provided for in the budget. Funding for the benefit amendment in future years
will be included in future budgets.
POLICY IMPLICATIONS
The action recommended by this report will put into effect the retirement policy changes
previously authorized by the City Council.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act (CEQA).
ATTACHMENT
1. Resolution to Approve an amendment to the Contract between the Board of
Administration of PERS and City of Palo Alto (2% @ 55 Full Formula for
Miscellaneous Employees)
Ordinance Authorizing an Amendment to theContract between the City of Palo Alto and
Board of Administration of PERS (2% @ 55 Full Formula for Miscellaneous
Employees)
PREPARED BY: Leonard Zucker, E~loyee Benefits Manager
DEPARTMENT HEAD: jA~( ~C. RO~DS~/~////~’
CITY MANAGER APPROVAL: Di~;of Hu~ource~/~
~ M~ager
CMR:416:98 Page 2 of 2
RESOLUTION NO.
RESOLUTION OF INTENTION OF THE COUNCIL OF THE CITY
OF PALO ALTO TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE BOARD OF ADMINISTRATION OF THE P~LIC
EMPLOYEES’ RETIREMENT SYSTEM AND THE CITY OF PALO
ALTO (LOCAL MISCELLANEOUS MEMBERS)
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;
and
WHEREAS, one of the steps in the procedures to amend this
contract is the adoption by the governing body of the public agency
of a resolution giving notice of its intention to approve an
amendment to said contract, which resolution shal! contain a
summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed
change:
To provide Government Code section 21354
(2% @55 Full Formula) for local
miscellaneous members.
NOW, THEREFORE, the Council of the City of Palo Alto does
RESOLVE as follows:
SECTION i. The City Council of the City of Palo Alto does
hereby give notice of intention to approve an amendment to the
contract between the City of Palo Alto and the Board of
Administration of the Public Employees’ Retirement System, a copy
of said amendment being attached hereto, as an "Exhibit" and by
this reference made a part hereof.
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981026 lac 0032054
~. The City Council finds that this is not a
project under the California Environmental Quality Act, and
therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED :
AYES :
NOES :
ABSENT:
ABSTENTIONS :
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:City Manager
Senior Asst. City Attorney Director of Administrative
Services
Director of Human Resources
2
981026 lac 0032054
AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF PALO ALTO
EXHIBIT
The Board of Administration, Public Employees’ Retirement System, hereinafter referred to as
Board, and the governing body of above public agency, hereinafter referred to as Public Agency,
having entered into a contract effective January 1, 1942, and witnessed March 9, 1942, and as
amended effective January 1, 1948, April 1, 1949, January 1, 1952, July 1, 1954, February 1,
1956, November 1, 1964, September 23, 1968, December 14, 1970, February 1, 1974, July 8,
1974, January 5, 1975, April 1, 1975, September 11, 1977, July 1, 1979, February 21, 1981, July
11, 1981, December 12, 1981, June 12, 1982, September 17, 1983, November 12, 1983, February
11, 1991, October 15, 1994, December 10, 1994, February 27, 1996 and October 15, 1998 which
provides for participation of Public Agency in said System, Board and Public Agency hereby
agree as follows:
Paragraphs 1 through 12 are hereby stricken from said contract as executed effective
October 15, 1998, and hereby replaced by the following paragraphs numbered 1 through
12 inclusive:
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 50 for local safety members.
Public Agency shall participate in the Public Employees’ Retirement System from
and after January 1, 1942 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.
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);
Co
DO NOT SIGN "EXHIBIT ONLY"
Employees other than local safety members (herein referred to as local
miscellaneous members).
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:
NO ADDITIONAL EXCLUSIONS
o
°
°
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).
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).
Public Agency elected and elects to be subject to the following optional
provisions:
a.Section 21571 ~asic Level of 1959 Survivor Benefits).
.b.Section 21222.1 (Special 5% Increase-1970). Legislation repealed said
Section effective January 1, 1980.
Section 21222.2 (Special 5% Increase-1971). Legislation repealed said
Section effective January 1, 1980.
d.Section 21319 (Special 15% Increase for Local Miscellaneous Members).
Section 21325 (Special 3% - 15% Increase) for or on behalf of those local
miscellaneous members and local safety members who retired or died
prior to January 1, 1974.
Section 20042 (On~-Year Final Compensation).
g.Section 21317 (Special 15% Increase for Local Safety Members).
h°Section 21326 (Special 1%-7% Increase) for or on behalf of those local
miscellaneous members and local safety members who retired or died
prior to July 1, 1974.
Section 21024 (Military Service Credit as Public Service), Statutes of
1976.
DO NOT StON "EXHIBIT ONIY"
Section 20692 (Employer Paid Member Contributions Converted to
Payrate During the Final Compensation Period) for local miscellaneous
members and local safety members in the following groups:
Local miscellaneous members who are Management and Confidential
employees.
Local police members who are Management and Confidential employees.
Local fire members who are Management and Confidential employees.
Local miscellaneous members represented by Local 715, SEIU, AFL-CIO,
and CLC.
Local police members represented by the Palo Alto Peace Officers’
Association.
o Public Agency, in accordance with Government Code Section 20790, ceased to be
an "employer" for purposes of Section 20834 effective on September 11, 1977.
Accumulated contributions of Public Agency shall be fixed and determined as
provided in Government Code Section 20834, and accumulated contribution~,,
thereafter shall be held by the Board as provided in Government Code Section
20834.
10.
11.
Public Agency shall contribute to said Retirement System the contribution~
determined by actuarial valuations of-prior and furore service liability with respect
to local miscellaneous members and local safety members of said Retirement
System.
Public Agency shall also contribute to said Retirement System as follows:
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.
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.
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
BOARD OF ADMINIS,,TRATION __ tz-,~_..PUBLIC EMPLOYEES RETIREMENT
day of ., 19
CITY COUNCIL
OF THE
CITY OF PALO ALTO
BYBY
KENNETH W. MARZION, CH~E~"
ACTUARdAL & EMPLOYEt~.~ERVICES DIVISION
PUBLIC EMPLOYEES’ RE~TtREMENT SYSTEM
PRESIDING OFFICER
Witness Date ~
Attest:
Clerk
AMENDMENT
PERS-CON-702A (Rev. 8\96)
ORDINTLNCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO 7LLTO
AUTHORIZING AN AMENDMENT TO CONTRACT BETWEEN THE
CITY OF PTLLO ALTO AND THE BOARD OF 7kDMINISTIK~T!ON
OF THE PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (2% @55
FULL FORMULA FOR LOCAL MISCELLANEOUS MEMBERS)
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION i. The City Council hereby authorizes an amendment
to the Contract between the City Council of the City of Palo Alto
and the Board of Administration, California Public Employees’
Retirement System, a copy of said amendment being attached hereto,
marked ~Exhibit A", and by such reference made a part hereof as
though herein set out in ful!.
SECTION 2. The Mayor of the City of Palo Alto is hereby
authorized and directed to execute said amendment for and on behalf
of the City of Palo Alto.
SECTION 3. The City Council finds that this is not a
project under the California Environmental Quality Act, and
therefore, no environmental impact assessment is necessary.
SECTIQN 4 This ordinance shall be effective on the
thirty-first day after the date of its adoption.
INTRODUCED:
PASSED :
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:City Manager
Senior Asst. City Attorney Director of Administrative
Services
Director of Human Resources.
981026 lac 0032053
AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF PALO ALTO
EXHIBIT
The Board of Administration, Public Employees’ Retirement System, hereinafter referred to as
Board, and the governing body of above public agency, hereinafter referred to as Public Agency,
having entered into a contract effective January 1, 1942, and witnessed March 9, 1942, and as
amended effective January 1, 1948, April 1, 1949, January 1, 1952, July 1, 1954, February 1,
1956, November 1, 1964, September 23, 1968, December 14, 1970, February 1, 1974, July 8,
1974, January 5, 1975, April 1, 1975, September 11, 1977, July 1, 1979, February 21, 1981, July
11,198!, December 12, 1981, June 12, 1982, September 17, 1983, November 12, 1983, February
11, 1991, October 15, 1994, December 10, 1994, February 27, 1996 and October 15, 1998 which
provides for participation of Public Agency in said System, Board and Public Agency hereby
agree as follows:
Paragraphs 1 through 12 are hereby stricken from said contract as executed effective
October 15, 1998, and hereby replaced by the following paragraphs numbered 1 through
12 inclusive:
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 50 for local safety members.
Public Agency shall participate in the Public Employees’ Retirement System from
and after January 1, 1942 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.
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);
S!ON "EXHIBIT
Employees other than local safety members (herein referred t6,as local
miscellaneous members).
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:
NO ADDITIONAL EXCLUSIONS
o 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).
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).
Public Agency elected and elects to be subject to the following optional
provisions:
a.Section 21571 ~asic Level of 1959 Survivor Benefits).
.b.Section 21222.1 (Special 5% Increase-1970). Legislation repealed said
Section effective January 1, 1980.
Co Section 21222.2 (Special 5% Increase-1971). Legislation repealed said
Section effective January 1, 1980.
d.Section 21319 (Special 15% Increase for Local Miscellaneous Members).
eo Section 21325 (Special 3% - 15% Increase) for or on behalf of those local
miscellaneous members and local safety members who retired or died
prior to January 1, 1974.
f.Section 20042 (One-Year Final Compensation).
g.Section 21317 (Special 15% Increase for Local Safety Members).
No Section 21326 (Special 1%-7% Increase) for or on behalf of those local
miscellaneous members and local safety members who retired or died
prior to July 1, 1974.
Section 21024 (Military Service Credit as Public Service), Statutes of
1976.
10.
11.
DO NOT SIGN "EXHIBIT OlxllY"
Section 20692 (Employer Paid Member Contributions Converted to
Payrate During the Final Compensation Period) for local miscellaneous
members and local safety members in the following groups:
Local miscellaneous members who are Management and Confidential
employees.
Local police members who are Management and Confidential employees.
Loca! fire members who are Management and Confidential employees.
Local miscellaneous members represented by Loca! 715, SEIU, AFL-CIO,
and CLC.
Local police members represented by the Palo Alto Peace Officers’
Association.
Public Agency, in accordance with Government Code Section 20790, ceased to be
an "employer" for purposes of Section 20834 effective on September 11, 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 and local safety members of said Retirement
System.
Public Agency shall also contribute to said Retirement System as follows:
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.
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.
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
BOARD OF ADMINIS,,TRATION
PUBLIC EMPLOYEES RETIREMENT S~.Y~EM
BY
KENNETH W. MARZION,
ACTUARIAL &.EMPLOYE~,,~ERVICES DIVISION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
day of ,19__
CITY COUNCIL
OF THE
CITY OF PALO ALTO "~
BY
P~SID~G OFFICER
Wimess Date
Attest: ; "
Clerk
AMENDMENT
PERS-CON-702A (Rev. 8’06)