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HomeMy WebLinkAboutAgenda Packet - March 1, 1994 Ela CD OF AZUSA gill / Finance Department • 213 E. Foothill Blvd. • P.O. Box 1395 • Azusa,CA 91702-1395 (818)334-5125 AGENDA ITEM TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL �� j FROM: GEOFF CRAIG,DIRECTOR OF FINANCE 1 I VIA: HENRY GARCIA, CITY ADMINISTRATOR k DATE: MARCH 1, 1994 SUBJECT: AMENDMENT TO PUBLIC EMPLOYEES' RETIREMENT SYSTEM CONTRACT TO PROVIDE CREDIT FOR UNUSED SICK LEAVE, ADDITIONAL SERVICE CREDIT TO RETIREES,AND TO EXTEND ACTUARIAL VALUATION PERIOD TO THE YEAR 2011 Background As a step towards encouraging employees to use sick leave more prudently, thereby reducing the City's costs for overtime, and to assist older employees who will be retiring, this report recommends that the City Council pass a Resolution and introduce an Ordinance to amend its contract with the Public Employees' Retirement System. The additional cost will be offset by extending the actuarial valuation period to the year 2011. Findings Government Code Section 20862.8, Credit for Unused Sick Leave, and Section 20818.2, Two Additional Years of Service Credit, would be enabled for the City of Azusa by a contract amendment with the Public Employees' Retirement System. The cost for Credit for Unused Sick Leave will be 0.208% for miscellaneous employees and 0.288% for police safety employees. This cost will be more than offset by extending the amortization of the City's unfunded liability \(� with PERS to the year 2011 (a reduction of 0.712% for miscellaneous members and 1.782% for 1 safety members) effective July 1, 1995. This will result in a savings as follows: 119 Honorable Mayor and Members of the City Council March 1, 1994 Page 2 Miscellaneous Safety Total Credit for Unused Sick Leave 0.208 0.288 Extension to 2011 (0.712) (1.782) Net Rate (0.504) (1.494) Net Cost $(40,520) $(42,739) $(83,259) Two Years Service Credit for 3 Persons 38.533 32,456 70.989 Total $( 1,987) $(10.283) $(12.270) At present, there are three employees for whom the two years' additional service credit under Section 20818.2 has been considered. The cost of offering it to those three individuals would be approximately $70,989. This cost will be more than offset by the reduced annual payments to the Retirement System. Recommendation Staff recommends that Council (a) Pass the attached Resolution of Intention to Approve an Amendment to the Contract Between the Board of Administration of the Public Employees' Retirement System and the City Council of the City of Azusa; and (b) Introduce an Ordinance Authorizing an Amendment to the Contract Between the City Council of the City of Azusa and the Board of Administration of the California Public Employees' Retirement System; and (c) Authorize the Mayor to sign the "Certification of Compliance with Government Code Section 20818". GJC:JPD:pap f:\council\persamnd.94 ORDINANCE NO. 94-04 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF AZUSA AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM THE CITY COUNCIL OF THE CITY OF AZUSA does ordain as follows: SECTION 1. An amendment to the Contract between the City Council of the City of Azusa and the Board of Administration of the California Public Employees' Retirement System is hereby authorized, 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 Azusa is hereby authorized, empowered, and directed to execute said amendment for and on behalf of said agency. SECTION 3. Pursuant to Government Code Sections 36934 and 36937, the City Council of the City of Azusa hereby declares this ordinance to he an urgency ordinance requiring the immediate enactment thereof because the same is necessary for the immediate preservation ol-the public peace, health, safety and general welfare of the City and its citizens, and accordingly, the provisions of this Ordinance shall become effective at once as an Urgency Ordinance. The facts constituting such urgency arc that the City may be at risk due to its inability to cffcctivcly carry out its obligations pursuant to its Memoranda of Understanding with the Azusa City Employees' Association and the Azusa Police Officers'Association,respectively,thereby adversely affecting the health, safety and general welfare of the citizens of the community. SECTION 4. This ordinance shall become effective immediately upon its adoption and shall be in effect for thirty days. SECTION 5. The City Clerk shall certify the passage of this Ordinance as an Urgency Ordinance and shall cause the same to be published as required by law. PASSED AND APPROVED this 30th day of March, 1994. • '',,./-771/1/;/ /,• /- / MAYOR / - STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I, ADOLPH SOLIS, City Clerk of the City of Azusa, do hereby certify that the foregoing Ordinance No. 94-04 was duly adopted and passed as an Urgency Ordinance at a special meeting of the Azusa City Council on the 30th day of March, 1994 by the following vote,to wit: AYES: COUNCILMEMBERS: DANGLEIS,MADRID,NARANJO,ALEXANDER,MOSES NOES: COUNCILMEMBERS: NONE ABSENT: COUNCIL MEMBERS: NONE /ted C7 LERK F:\ORDNC ESWIiR SURG.ORD EXHIBIT A AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF TIIE CITY OF AZUSA The Board of Administration, 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, 1949, and witnessed December 20, 1948, and as amended effective July 1, 1956, September 1, 1958, March 2, 1959, May 1, 1960, September 3, 1967, December 22, 1968, July 15, 1973, April 20, 1975, January 18, 1081, July 1, 1984, January 12, 1986, February 7, 1988 and November 27, 1988, which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective November 27, 1988 and hereby replaced by the following paragraphs numbered 1 through 14 inclusive: 1. 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 60 for local miscellaneous members, age 55 for local fire members and age 50 for local police members. 2. Public Agency shall participate in the Public Employees' Retirement System from and after January 1, 1949 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. 3. 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); (c) Employees other than local safety members (herein referred to as local miscellaneous members). 4. 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 5. Prior to January 1, 1975 those members who were hired by Public Agency on a temporary and/or seasonal basis not to exceed 6 months were excluded from PERS membership by contract. Government Code Section 20336 supersedes this contract provision by providing that any such temporary and/or seasonal employees are excluded from PERS membership subsequent to January 1, 1975. 6. The percentage of final compensation to be provided for local miscellaneous members for each year of credited prior and current service shall be determined in accordance with Section 21251.13 of said Retirement Law, subject to the reduction provided therein for service on and after January 1, 1956, the effective date of Social Security coverage, and prior to March 31, 1975, termination of Social Security, for members whose service has been included in Federal Social Security (2% at age 60 Full and Modified). 7. The percentage of final compensation to be provided for each year of credited prior and current service as a local fire member shall be determined in accordance with Section 21252.1 of said Retirement Law (One-half pay at age 55 Full). 8. The percentage of final compensation to be provided for each year of credited prior and current service as a local police member shall be determined in accordance with Section 21252.01 of said Retirement Law (2% at age 50 Full). 9 Public Agency elected and elects to be subject to the following optional provisions: (a) Sections 21263, 21263.1 and 21263.3 (Post-Retirement Survivor Allowance). (b) Sections 21380-21387 (1959 Survivor Benefits) including Section 21382.4 (Third Level of 1959 Survivor Benefits). (c) Section 20024.2 (One-Year Final Compensation) for local police members only. (d) Section 20818 (Two Years Additional Service Credit). (e) Section 20862.8 (Credit for Unused Sick Leave) for local miscellaneous members and local police members only. -2- 10. Public Agency, in accordance with Government Code Section 20740, ceased to be an "employer" for purposes of Section 20759 effective on November 27, 1988. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20759, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20759. 11. 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. 12. Public Agency shall also contribute to said Retirement System as follows: (a) Public Agency shall contribute $2.00 per employee, per month on account of the liability for the 1959 Survivor Benefits provided under Section 21382.4 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local miscellaneous members and local safety members. (b) 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. (c) 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. 13. 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. 14. 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. -3- • B. This amendment shall be effective on the day of 19 BOARD OF ADMINISTRATION CITY COUNCIL OF TIIE PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF AZUSA By By Chief, Contract Services Division Mayor Public Employees' Retirement System Witness Date Attest: City Clerk f:1kgdApax*s.ad -4- RESOLUTION NO. 9 4-C 3 8 RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF AZUSA 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 20818 (Two Years Additional Service Credit) and Section 20862.8 (Credit for Unused Sick Leave) for local miscellaneous members and local police members, including an extension of the funding periods to the year 2011." NOW, THEREFORE, BE IT RESOLVED that: Section 1. The City Council of the City of Azusa does hereby give notice of intention to approve an amendment to the contract between the said governing body 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. Section 2. The City Clerk shall certify to the adoption of the resolution. APPROVED AND ADOPTED this 7th day of March , 1994. AI ' / MAYOR I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Azusa, at a regular meeting thereof, held on the 7th day of March , 1994, by the following vote of Council: AYES COUNCILMEMBERS : DANGLEIS, MADRID, NARANJO, ALEXANDER, MOSES NOES COUNCILMEMBERS : NONE ABSENT COUNCILMEMBERS : NONE // 7 / /j/ /� C • YCLE