HomeMy WebLinkAbout2000-03-20 City CouncilTO:
ATTN:
FROM:
DATE:
SUBJECT:
of Palo Alto
City Manager’s Report
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
CITY MANAGER DEPARTMENT: HUMAN RESOURCES
MARCH 20, 2000 CMR:135:00
APPROVAL OF A RESOLUTION AND ORDINANCE TO AMEND
THE CITY OF PALO ALTO’S CONTRACT WITH THE PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM (PERS) TO INCLUDE
GOVERNMENT CODE SECTION 20434, WHICH WILL ALLOW ANY
OFFICERS OR EMPLOYEES OF A FIRE DEPARTMENT
EMPLOYED TO PERFORM DUTIES FOR FIRE FIGHTING, FIRE
PREVENTION, FIRE TRAINING, HAZARDOUS MATERIALS,
EMERGENCY MEDICAL SERVICES OR FIRE OR ARSON
INVESTIGATION SERVICES TO BE DEFINED AS "LOCAL FIRE
FIGHTERS" FOR THE PURPOSE OF RETIREMENT BENEFITS
3
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 Government
Code Section 20434, expanding the definition of"Local Firefighter" to include employees
performing the duties of fire prevention, fire training, hazardous materials services,
emergency medical services or fire or arson investigation.
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
Currently, any employee performing hazardous materials duties, fire prevention duties, arson
or fire investigation duties and emergency medical services may be either a firefighter that
meets the definition of local firefighter as defined in Section 20343 of the Public Employees
CMR:135:00 Page 1 of 3
Retirement Law, or a "non-firefighter" for an employee that does not meet the defmition. The
duties performed are the same whether the employee is a firefighter or non-fire fighter.
Fire fighters performing the duties receive safety retirement (2% @ 50) while non-fire fighters
receive miscellaneous retirement benefits (2 % @ 55).
In 1997 and 1998, Sections 20434 and 20434.5 were added to the Govemment Code to
permit contacting public agencies the option of amending their PERS contract to allow
employees appointed to these positions to be classified as "local firefighter" for the purposes
of retirement benefits. All but two other fire agencies in Santa Clara County have added this
amendment and now provide safety retirement for employees hired to perform duties
involving hazardous materials, fire prevention, fire training, fire prevention and fire or arson
investigation.
Expecting qualified candidates to come from the private sector, Palo Alto originally set up
the positions to permit hiring non-safety employees. In recent years, however, these
positions have been occupied by firefighters who are covered by safety retirement (2% @
50), as well as employees that have not been active firefighters who are covered by
miscellaneous retirement (2% @ 55). These employees have similar job descriptions,
perform similar duties and face the same dangers, but have different retirement benefits. The
inequity in retirement benefits has caused morale, recruiting and retention problems
including the loss of a trained Palo Alto employee to a neighboring agency because of the
inequity in retirement benefits. Another employee is waiting for a resolution of this issue
before making a career decision.
By amending the contract with PERS to include Govemment Code Section 20434, three
current non-safety incumbents in hazardous materials and fire prevention positions with the
City of Palo Alto will be classified as safety employees and receive safety retirement
benefits. The amendment will eliminate benefit inequities for the same positions. It will also
assist in retaining the services of highly trained employees who may seek employment
elsewhere in order to receive increased retirement benefits.
RESOURCE IMPACT
Currently, there are three positions that would be impacted by the amendment. The projected
annual cost for three employees is $18,349, or an increase of 0.071 percent in the PERS
employer rate. A portion of this increase will be offset by a reduction in costs ’associated
with employee turnover.
No additional funding is requested, as funds are available in the 1999-2000 operating budget.
POLICY IMPLICATIONS
This report recommends a change in policy regarding retirement benefit eligibility for
employees performing hazardous material and fire prevention duties.
CMR:135:00 Page 2 of 3
ENVIRONMENTAL REVIEW
This is not a project under the Califomia Environmental Quality Act (CEQA).
ATTACHMENTS
1. 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
20434.
Ordinance Authorizing an Amendment to the Contract. between the Board of
Administration of PERS and the City of Palo Alto to include Government Code Section 20434.
PREPARED BY: Leonard Zucker, Employee Benefits Manager
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
t A.V C. OU,
Director of Human rces
~M
(~ anager ,
CMR:135:00 Page 3 of 3
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 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
(INCLUSION OF EMPLOYEES PERFORMING DUTIES OF FIRE
FIGHTING, FIRE PREVENTION, FIRE TRAINING,
HAZARDOUS MATERIALS, EMERGENCY MEDICAL SERVICES OR
FIRE OR ARSON INVESTIGATION SERVICES WITHIN THE
~LOCAL FIRE FIGHTER" CLASSIFICATION)
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 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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000225 cl 0032309
SECTION 4. This ordinance shall be effective on the
thirty-fi.rst day after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:
Senior Asst. City Attorney
City Manager
Director of Administrative
Services
Director of Human Resources
000225 el 0032309 2
CalPERS
EXHIBIT
California
PublicEmployees" Retirement System
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees’ Retirement System
and the
City..Council
City of Palo Alto ’
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
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.!7, 1983, November 12,
1983, February 11, 1991, Qctober 15, 1994, December 10, 1994,February 27, 1996,
October 15, 1998, January 1, 1999 and October 14, 1999 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 i4, 1999, 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.
Exhibit "A~
PLEASE DO NOT SIGN "EXHIBIT ONLY!’
=
o
Public Agency shall participate in the Public Employees’ Retirement
.System from and after January 1, 1.942. making its employees., as
hereinafter provided, members of said System sUbject to all.pro.visions 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);
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:
aJ PROJECT PROFESSIONAL; PROJECT MANAGER; PROJECT
TECHNICIAN;PROJECT ASSISTANT; PROJECT LABORER;
LANDSCAPE MAINTENANCE TRAINEE;LIBRARY. PAGE;
RECREATION LEADER;WATER SAFETY INSTRUCTOR/
LIFEGUARD;AND POOL MANAGER HIREDON OR AFTER
OCTOBER 14,1999.
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).
PLEASE DONOT SIGN "EXHIBIT ONLY"
o Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21571 (Basic Level of 1959 Survivor Benefits).
Co
Section 21222.1 (Special 5% Increase-1.970).
said Section effective January 1, 1980.
Section 21222.2 (Special 5% Increase-1971).
said Section effective January 1, 1980.
Legislation repealed
Legislation repealed
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 (One-Year Final Compensation).
gJ Section 21317 (Special 15% Increase for Local Safety Members).
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.
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 Managemen! and
Confidential employees;
[ocal .police members who are
employees;.
Management and. Confidential
Local fire members who
employees;
are
uO NOT SIGN "EXHIBIT ONLY"
Management and Confidential
Local miscellaneous’ membes represented by Local 715,. SEIU,
AFL-CIO, and CLC; and
Local police members represented by the Palo Alto Peace Officers’
Association.
10.
Section 20434 ("Local Fire Fighter" shall include "any officer or
employee of a fire department employed to perform firefighting, fire
prevention, fire training, hazardous materials, emergency medical
services, or fire or arson investigation services as described in
Government code Section. 20434).
¯ Public Agency, in accordance with Government Code Section 207901
ceased to be an "employer" for purposes of Section 20834 effective on
September 11, 1977. Accumulated contributions Of Pub!ic 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 Gover.nment 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.
PublicAgency shall also contribute to said Retirement System as follows:
ao 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.
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.oniributions 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.
This amendment shall be effective on the ~ daY of
BOARD OF .ADMINISTRATION
PUBLIC EMPLOYEES’ RETIREMENT,
BY
KENNETH W. MARZION, C
ACTUARIAL & EIV
PUBLIC EMPLOYEES’
CITY COUNCIL ~
CITY OF PALO ALTO ~
BY’ .~,~
PRESID.ING OFFIC~"~-
DIVISION ¯~,~ .
SYSTEM
witness Dat~
Attest:
Clerk
AMENDMENT
PERS-CON-702A (Rev, 8\96)
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 PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM AND THE CITY OF PALO
ALTO (INCLUSION OF EMPLOYEES PERFORMING DUTIES OF
FIRE FIGHTING, FIRE PREVENTION, FIRE TRAINING,
HAZARDOUS MATERIALS, EMERGENCY MEDICAL SERVICES OR
FIRE OR ARSON INVESTIGATION SERVICES WITHIN THE
"LOCAL FIRE FIGHTER" CLASSIFICATION)
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 a~d benefits under Government Code Section
20434 (Any officers or employees of a fire
department employed to perform duties of fire
fighting, fire prevention, fire training,
hazardous materials, emergency medical services or
fire or arson investigation services as "Local
Fire Fighters").
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.
//
//
000225 cl 0032310
SECTION 2. 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
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of Administrative
Services
Director of Human Resources
000225 cl 0032310
C PERS
California
Public.Employees"Retirement System
EXHIBIT
AMENDMENT.TO CONTRACT
Between the
Board of Administration
California Public Employees’ Retirement System
and the
Ci~ Council
C~ty of Palo Alto
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
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, !974, 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 .!7, 1983, November 12
1983, February 1l, 1991, October 15, 1994, December 10, 1994,February.27, 1996
October 15, 1998, January 1, 1999 and October 14, 1999 which provides for
participation of Public Agency in said System, Board and Public Agency hereby agree
as follows:
Ao ’Paragraphs 1 through 12 are hereby stricken from said contract as executed
effective October i4, 1999, and hereby, replaced bythe following paragraphs
numbered t 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.
PLEASE DO NOT SIGN "EXHIBIT ONLY!’
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:
¯ Local Fire Fighters (herein referred to as local safety members);
Local Police Officers (herein referred to a~ local safety members);
Employe.es.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:
PROJECT PROFESSIONAL; PROJECT MANAGER; PROJECT
TECHNIClAN;, PROJECT ASSISTANT; PROJECT LABORER;
LANDSCAPE MAINTENANCE TRAINEE; LIBRARY PAGE;
RECREATION, LEADER;WATER SAFETY INSTRUCTOR/
LIFEGUARD; AND POOL MANAGER HIRED ON OR AFTER
OCTOBER t4, 1999.
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).
PLEASE DO NOT SIGN "ExHiBIT oNLY"
Public Agency elected and elects to be subject to the following optional
provisions:
Section 21571 (Basic Level of 1959 Survivor Benefits).
Section 2i222.1 (Special 5% Increase-1970). Legislation repealed
said Section effective January1, 1980.
Section 21222.2 (Special 5% Increase-1971). Legislation repealed
said Section effective January 1, 1980.
Section 21319 (Specia! 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 (One-Year Final Compensation).
go Section 21317 (Special 15% Increase for Local Safety Members).
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.
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
employees;
are
PLE. .SE DO NOT SIGN "EXHIBIT 0NLY
Management and Confidential
Local miscellaneous membes represented by Local 715, SEIU,
AFL-CIO, and CLC; and
Local police members represented by the Palo Alto Peace Officers’
Association.
section 20434 ("Local Fire Fighter" .shall include any officer or
employee of a fire department employed to perform firefighting, fire
prevention, fire training, hazardous materials, emergency medical
services, or fire or arson investigation services as described in
Government Code Section. 20434).
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 bf 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 shail con{ribute 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."
10.PublicAgency shall also contribute to said Retirement System as follows:
ao 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.
11.Contributions required of Public Agency and its employees shall be
subject to adjustment by Board on account of amendments to the Publi(~
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. ~,djustments 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 day of
BOARD OF ADMINISTRATION ..
PUBLIC EMPLOYEES’
By~
KENNETH W. MARZION, C
ACTUARIAL & EMPL(
PUBLIC EMPLOYEES’
CiTY COUNCIL
CITY OF PALO ALTO
BY.
PRESIDING OFFIC.~"~’~
DIVISION ’" ~.
IREMENT SYSTEM
, ~,~,~.".
Witness Date
Attest:
Clerk
AMENDMENT ,
PERS-CON-702A (Rev. 8\96)