HomeMy WebLinkAboutD-1 Staff Report - Approve Letter of Oppostion to AB 1912SCHEDULED ITEM
D-1
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: DANIEL BOBADILLA, ACTING CITY MANAGER
FROM: LOUIE F. LACASELLA, SENIOR MANAGEMENT ANALYST
DATE: MARCH 19, 2018
SUBJECT: APPROVE LETTER OF OPPOSITION TO AB 1912, AS PROPOSED TO BE
AMENDED, REGARDING JOINT POWERS AUTHORITY PENSION
OBLIGATIONS
SUMMARY:
The City’s legislative lobbyist, Gonsalves and Son informed the City that Assembly Bill (AB) 1912 is
proposed to be amended and that it would retroactively hold all forming agencies of a Joint Powers
Authority (JPA) to be accountable for all terminated JPA pension obligations. The City Manager’s
Office is continuing to work with Gonsalves and Son and the League of California Cities to track this
legislative proposal. The proposed action requests that the City Council formally approve a letter of
opposition to AB 1912, as proposed to be amended.
RECOMMENDATION:
Staff recommends the City Council take the following action:
1) Approve a letter of opposition to AB 1912, as proposed to be amended; and
2)Authorize the City Council to sign the letter.
DISCUSSION:
AB 1912, as proposed to be amended, would retroactively hold all forming agencies of a JPA to be
accountable for all terminated JPA pension obligations. To date, the City has only been a member of one
JPA that has terminated its pension payments to the California Public Employees' Retirement System
(CalPERS), that being the East San Gabriel Valley Human Services Consortium (LA Works). LA Works
termination fee to CalPERS was approximately $19 million.
The City Manager’s Office is continuing to work with Gonsalves and Son and the League of California
Cities to track this legislative proposal. Staff has also been in communication with the Cities of Covina,
APPROVED
CITY COUNCIL
3/19/2018
Letter of Opposition to AB 1912
March 19, 2018
Page 2
Glendora and West Covina, as each of them will be taking action later this month at their respective City
Council meetings to consider formally opposing the bill.
This bill applies to all JPAs, not just LA Works, which would include JPAs like the San Gabriel Valley
Council of Governments (SGVCOG) for instance. Staff is currently analyzing all JPAs that the City is a
member of and their pension obligations and funding sources (Grants, City Membership fees, etc.).
AB 1912, if passed, signals a significant change in the understanding of JPAs, as Cities have believed
for years that contractual obligations of a JPA, like pension obligations, remain those of the JPA and do
not pass-through to its members.
FISCAL IMPACT:
There is no fiscal impact associated with the recommended action.
Prepared by: Reviewed and Approved:
Louie F. Lacasella Daniel Bobadilla
Senior Management Analyst Acting City Manager
Attachment:
1) Letter of Opposition to AB 1912
March 19, 2018
The Honorable Blanca E. Rubio
California State Assembly
100 North Barranca Street, Suite 895
West Covina, CA 91791
RE: AB 1912 (Rodriguez) JPA Pension Obligations, as proposed to be amended - Notice of
Opposition
Dear Assembly Member Rubio:
The City of Azusa strongly opposes AB 1912 (Rodriguez), as proposed to be amended, which would
retroactively hold all forming agencies of a Joint Powers Authority (JPA) to be accountable for all
terminated JPA pension obligations.
The City believes that contractual obligations of a JPA, like pension obligations, should remain those of
the JPA and not pass-through to its members.
For these reasons, the City of Azusa strongly opposes AB 1912.
Sincerely,
The Azusa City Council
Joseph Romero Rocha
Mayor
Edward J. Alvarez Angel Carrillo
Councilmember Councilmember
Uriel Edward Macias Robert Gonzales
Mayor Pro-Tem Councilmember
cc: Joe A. Gonsalves & Son
Jennifer Quan, League of California Cities
Attachment 1