HomeMy WebLinkAbout0317.092·.1
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June 22, 1992
HONORABLE CITY COUNCIL
Palo Alto, California
Members of the Council:
All 702 PUBLIC EMPLOYEE'S RETIREMENT SYSTE.'l (PER~.L ___ CREDI'T
The California Supreme Court refused to hear a~ appeal to litiga
tion filed seeking reversal of the 1991 leqislati~n (AB 702) which
credited to member aqencie:!; ~nd the State substantial contributions
to the. Public Employees Retirement System (PERS). A League of
California cities representative told staff that all state of
california appeals of AB 702 are now exhausted ~ He said. that
conceivably, ~n appeal could be made to the. U. S. Supreme Court,
but that he was not aware of any clesire to do so. Nor, he said,
were any United States constitutional issues raised in any of the
legal arguments made in California courts. Tberefore, it appears
the California supreme Court refusal means that AB 702 stands, and
the $6.1 million PERS credit now belongs to the city.
The table below summarizes the ~ize of the credit:
AS 702 PERS REBATE ($ million)
General Fund
Enterprise Funds
Total
CMR:317:92
1991-92
$2.1
0.5
$2.6
$2.9
~
$3.5
$5.0
L..l
$6.1
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As reported in ectober (CMR: 449: 91), January (CHR: 122: 92), and
February (CMR:154:92). staff has been placing the credit in a
special reserve, pending the cutcome of litigation~ Now t1",at the
litiqation has been resolved, there is no accounting ~~asor. to keep
the credit in a special reserve. J1I.bsent any specific c0uncil
direction, Slteff .. ill book the $2.6 million total cre:dit for
"1991-92 to reduce the Salaries and Benefits expenses in each
Fund. As a result, the General Fund's Reserve for Capital
projects, as of June 3D, 1992, will be $2.1 million larger than
otherwise projected.
In light of the continuing State budget crisis} and language in the
original AS 702 legislation stipulating that the credit monies
should be used first to ret~in or rehire as many as possibl~ of
those PERS members subject to layoff or reduction, Council may ~ish
to postpone consideration of disposition of the 199:2-93 credit
until a state budget i~ adopted~
--2;i:Oted
,
Director 9i-Yinance
~ \)r=-~ whl.~ ZANER
Cit.y Ma.na.ger
Releted sta.ff Reports:
CMR:317:92
CMR 449:91
CMR 122 :92
CMR 154:92
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