HomeMy WebLinkAbout2001-08-06 City Council (3)City of Palo AltoS
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: HUMAN RESOURCES
DATE:AUGUST 6, 2001 CMR: 328:01
SUBJECT:APPROVAL OF A RESOLUTION AND ORDINANCE TO APPROVE
AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM AND THE CITY OF PALO ALTO (TO
PROVIDE SECTION 21362.2 (3%@ 50 FULL FORMULA)FOR
LOCAL FIRE MEMBERS)
RECOMMENDATION
¯ Staff recommends that Council approve amending the City’s contract with the Public
Employees’ Retirement System (PERS) to provide Section 21362.2, 3% @ 50 Full Formula
for the International Association ofFirefighters (IAFF), Local 1319 and the Palo Alto Fire
Chiefs Association as follows:
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 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.
BACKGROUND
On January 16, 2001, the Council approved a three-year Memorandum of Agreement (MOA)
with City fire fighters represented by IAFF. The agreement covers the period beginning July
1, 2000 and ending June 30, 2003. The MOA includes a provision under Article XXIV,
Section 3 "Contingency for 3% @ 50 or 3% @ 55" which provides that if, during the time
period between July 1, 2001 and June 30, 2003, the retirement formula known as 3% @ 50
or the retirement formula known as 3% @ 50, or a non-PERS agency retirement formula
providing an equivalent formula, or a combination of them, become effective for at least
eight of the 15 survey agencies, the City will amend its contract with PERS to provide 3%
@ 50 for eligible IAFF representation unit members as well as management fire safety
members. The benefit would be effective for eligible IAFF representation unit members and
CMR: 328:01 Page 1 of 3
management fare safety members as of the date the eighth survey agency’s benefit becomes
effective, or as soon thereafter as possible.
DISCUSSION
The following eight agencies have met and conferred and agreed to amended their contracts
with PERS to provide the improved retirement benefit:
Public Agency
Berkeley
Fremont
Hayward
Milpitas
Mountain View
Santa Clara
Livermore/Pleasanton
San Jose
Effective Date
December 23, 2000
July 1, 2001
January 1, 2001
July 16, 2001
July 1, 2001
October 15, 2000
October 1, 2001
Non-PERS equivalent plan
in effect prior to 1990
RESOURCE IMPACT
As estimated by CalPERS, the annual cost of this benefit to the City of Palo Alto is
approximately 12% of IAFF salaries expense or $1.1 million. With an October 1, 2001
effective date, the cost is estimated to be $0.8 million in fiscal 2001-02. The employer
PERS contribution rate is calculated annually based on investment performance,
demographic changes, and amendments to the contract between the City and CalPERS. If
this contribution rate, which will now include the 3% @ 50 benefits, exceeds the
budgeted 14.7% then additional funding will be required.
POLICY IMPLICATIONS
This policy does not reflect a change in existing policies.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act.
ATTACHMENTS
Resolution to Approve an Amendment to the Contract between the Board of Administration
of PERS and the City of Palo Alto to include Government Code Section 21362.2.
Ordinance to Approve an Amendment to the Contract between the Board of Administration
of PERS and the City of Palo Alto to include Government Code Section 21362.2.
CMR: 328:01 Page 2 of 3
PREPARED BY:
DEPARTMENT HEAD:
Leonard Zucker, Employee Benefits Manager
JAY d.~ROtIND S
Director of Human Resources
CITY MANAGER APPROVAL." ~
Emi s
Assistant City Manager
CMR: 328:01 Page 3 of 3
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 CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT
SYSTEM AND THE CITY OF PALO ALTO (TO PROVIDE
SECTION 21362.2 (3% @ 50 FULL FORMULA) FOR LOCAL
FIRE 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 shall
contain a summary Of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed
change:
To provide Section 21362.2 (3% @ 50 Full formula) for
!ocal fire members only.
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.
010726 cl 0032477 1
SECTION 2.
project under the California Environmental Quality Act,
thereforg, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
The City Council finds that this is not a
and
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Senior Asst. City Attorney City Manager
Director of Human Resources
Director of Administrative
Services
010726 cl 0032477 2
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF
PALO ALTO AUTHORIZING AN AMENDMENT TO
CONTRACT BETWEEN THE CITY OF PALO ALTO
AND THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
(TO PROVIDE SECTION 21362.2 (3% @ 50 FULL
FORMULA) FOR LOCAL FIRE MEMBERS)
The Council of the City of Palo Alto does ORDAIN as
fol!ows:
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 full.
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.
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010726 cl 0032476 1
SECTION 4. This ordinance shall be effective on the
thirty-first day after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Senior Asst. City Attorney City Manager
Director of Human Resources
Director of Administrative
Services
010726 cl 0032476 2