HomeMy WebLinkAboutAgenda Packet - October 19, 1988 - CC • 3
liEgglaial 0 OF AZUSA
7/maugyar,C4
TO: Honorable Mayor and Members of ! = City Coun '1
FROM: Geoff Craig, Director of Finance/
DATE: October 19, 1988 (for October meeting)
SUBJECT: #44ndment to PERS Contract to Provide Third Level
199, SteloriVtfrnef to` Miscellaneous
tind aO s Employees.
The City's contract with the Public Employee's Retirement System
provides for the basic 1959 Survivor Benefit. This benefit
provides a monthly allowance to be paid to survivors. This agenda
item recommends that Council begin the process of increasing this
benefit for all full-time City employees, as agreed in the City's
Memoranda of Understanding with its employees.
Findings
In 1949, the City entered into a contract with the Public
Employees' Retirement System (PERS) to provide such benefits to
Azusa's safety employees and to its miscellaneous employees as
two separate groups. In 1959, state retirement law enabled
contract agencies to amend their respective PERS contracts to
allow for a monthly allowance for the survivors of employees
whose death occurs either prior to retirement eligibility or
after retirement eligibility. This is termed the "1959 Survivor
Benefit. " Azusa adopted this amendment.
Currently the contracts provide for the basic 1959 Survivor
Benefit. By amending the contract, the monthly allowance paid
to survivors is increased according to the following schedule:
From To
Spouse plus two children $430 $840
Spouse plus one child; or $360 $700
two eligible children
One eligible child; or spouse $180 $350
reaching age 62 .
HUMAN RESOURCES OFFICE
■■
213 East Foothill Blvd. , P.O. Box 1395, Azusa, CA 91702-1395
S '
Honorable Mayor and Members of the City Council
October 19, 1988
Page 2
This amendment includes the requirement under Government code
Section 20740 for the miscellaneous employer rate to become
unpooled (the safety employer rate became unpooled in 1984 with
the adoption of the "CHP plan") . This means that after unpooling,
the employer contribution rate will be based only on the experience
of the City of Azusa rather than on the experience of all agencies
in the pool. This will allow a significant cost savings that will
more than offset the price of the increased benefit. A portion of
the savings will be passed to the employees in the form of a 1%
salary increase effective January 1, 1989. The remaining shall be
placed in the fund balance.
Local Miscellaneous Members:
Azusa's employer rate without the optional benefit is 10.114%.
The new rate will be 8.188%. thus the change in cost of the
employer rate is -1.926% (8.188% -10.114%) . Applying this rate
to the most current payroll figures produces a reduction amount
of $3,611.96 per pay period or $93,910.96 annually. This
percentage decrease is the projected actuarial rate to the year
2000, but, as Azusa's contract reads, the employer rate is
subject to change with future amendments and/or experience and
other factors.
Local Safety Members:
Azusa's employer rate without the optional benefit is 19.484%.
The new rate will be 19.409%, thus the change in cost of the
employer rate is -0.075% (19.409% -19.484%) . Applying this rate
to the most current payroll figures produces a reduction amount
of $67.98 per pay period or $1,767.48 annually. This percentage
decrease is the projected actuarial rate to the year 2000, but,
as Azusa's contract reads, the employer rate is subject to change
with future amendments and/or experience and other factors.
The employer contribution rate for this amendment is $3 . 00 per
month per employee. However, the time of payment may vary,
depending on Azusa's retirement funding reserve level. The
implementation process for a PERS contract amendment is quite
formal. Following is a timeline of the various events that are
required.
October 24, 1988 Council passes a resolution of intent
to amend the PERS contract; and
Conducts the first reading of an
ordinance amending the PERS contract; and
Honorable Mayor and Members of the City Council
October 19, 1988
Page 3
October 24, 1988 Authorizes the Mayor to sign the agreement
(continued) releasing 1959 Survivor Benefits Assets
and Liabilities.
November 21 Council adopts final ordinance; staff
recommends that there also be an urgency
ordinance be adopted in order for it
take effect immediately.
November 27 Effective date of amendment.
RECOMMENDATION
Staff recommends Council:
(1) Adopt the attached resolution of intention; and
(2) Introduce the attached ordinance to amend its contract
with the Public Employees' Retirement System to provide
the Third Level of the 1959 Survivor Benefit for both
the Miscellaneous and Safety contracts; and
(3) Authorize the Mayor to sign the Agreement Authorizing the
Release of 1959 Survivor Benefits Assets and Liabilities
into the Third Level 1959 Survivor Benefit Pool.
djw
attachments: Resolution of Intention
Ordinance
Exhibit A (Amendment)
Agreement Authorizing the Release of . . . .
RESOLUTION NO. 8530
A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF
THE CITY OF AZUSA TO APPROVE AN AMENDMENT TO THE
MISCELLANEOUS AND SAFETY CONTRACTS BETWEEN THE
BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND 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 procedure 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 Sections 21382.4 (Third Level of 1959
Survivor Benefits) for local miscellaneous members
and local safety members.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the
City of Azusa does hereby give notice of intention to
approve an amendment to the contractS between the said
Council and the Board of Administration of the Public
Employees' Retirement System, a copy of said amendment being
attached hereto, and identified as an Exhibit and by this
reference made a part thereof.
ADOPTED AND APPROVED THIS 24th day of October, 1988.
7:‘1 .)1 (44112-
MAYOR
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the City Council of the City of Azusa at an adjourned
meeting hereof held on the 24th day of October, 1988.
following vote of Council:
AYES: COUNCILMEMBERS: AVILA, STEMRICH, NARANJO, LATTA,
MOSES
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
/ TY CLERK
•
ainglEg . ' OF AZUSA
7A&
TO: Honorable Mayor and Members of si City Coun ' 1
FROM: Geoff Craig, Director of Finance �. '`y
DATE: October 19, 1988 (for October meeting)
SUBJECT: Amendment to PERS Contract to Provide Third Level
of the 1959 Survivor Benefit to Miscellaneous
and Safety Employees.
The City's contract with the Public Employee's Retirement System
provides for the basic 1959 Survivor Benefit. This benefit
provides a monthly allowance to be paid to survivors. This agenda
item recommends that Council begin the process of increasing this
benefit for all full-time City employees, as agreed in the City's
Memoranda of Understanding with its employees.
Findings
In 1949, the City entered into a contract with the Public
Employees' Retirement System (PERS) to provide such benefits to
Azusa's safety employees and to its miscellaneous employees as
two separate groups. In 1959, state retirement law enabled
contract agencies to amend their respective PERS contracts to
allow for a monthly allowance for the survivors of employees
whose death occurs either prior to retirement eligibility or
after retirement eligibility. This is termed the "1959 Survivor
Benefit. " Azusa adopted this amendment.
Currently the contracts provide for the basic 1959 Survivor
Benefit. By amending the contract, the monthly allowance paid
to survivors is increased according to the following schedule:
From To
Spouse plus two children $430 $840
Spouse plus one child; or $360 $700
two eligible children
One eligible child; or spouse $180 $350
reaching age 62.
HUMAN RESOURCES OFFICE
■■
213 East Foothill Blvd. , P.O. Box 1395, Azusa, CA 91702-1395
Honorable Mayor and Members of the City Council
October 19, 1988
Page 2
This amendment includes the requirement under Government code
Section 20740 for the miscellaneous employer rate to become
unpooled (the safety employer rate became unpooled in 1984 with
the adoption of the "CHP plan") . This means that after unpooling,
the employer contribution rate will be based only on the experience
of the City of Azusa rather than on the experience of all agencies
in the pool. This will allow a significant cost savings that will
more than offset the price of the increased benefit. A portion of
the savings will be passed to the employees in the form of a 1%
salary increase effective January 1, 1989. The remaining shall be
placed in the fund balance.
Local Miscellaneous Members:
Azusa's employer rate without the optional benefit is 10.114%.
The new rate will be 8. 188%. thus the change in cost of the
employer rate is -1.926% (8.188% -10. 114%) . Applying this rate
to the most current payroll figures produces a reduction amount
of $3, 611.96 per pay period or $93,910.96 annually. This
percentage decrease is the projected actuarial rate to the year
2000, but, as Azusa's contract reads, the employer rate is
subject to change with future amendments and/or experience and
other factors.
Local Safety Members:
Azusa's employer rate without the optional benefit is 19.484%.
The new rate will be 19.409%, thus the change in cost of the
employer rate is -0.075% (19.409% -19.484%) . Applying this rate
to the most current payroll figures produces a reduction amount
of $67.98 per pay period or $1,767.48 annually. This percentage
decrease is the projected actuarial rate to the year 2000, but,
as Azusa's contract reads, the employer rate is subject to change
with future amendments and/or experience and other factors.
The employer contribution rate for this amendment is $3.00 per
month per employee. However, the time of payment may vary,
depending on Azusa's retirement funding reserve level. The
implementation process for a PERS contract amendment is quite
formal. Following is a timeline of the various events that are
required.
October 24, 1988 Council passes a resolution of intent
to amend the PERS contract; and
Conducts the first reading of an
ordinance amending the PERS contract; and
Honorable Mayor and Members of the City Council
October 19, 1988
Page 3
October 24, 1988 Authorizes the Mayor to sign the agreement
(continued) releasing 1959 Survivor Benefits Assets
and Liabilities.
November 21 Council adopts final ordinance; staff
recommends that there also be an urgency
ordinance be adopted in order for it
take effect immediately.
November 27 Effective date of amendment.
RECOMMENDATION
Staff recommends Council:
(1) Adopt the attached resolution of intention; and
(2) Introduce the attached ordinance to amend its contract
with the Public Employees' Retirement System to provide
the Third Level of the 1959 Survivor Benefit for both
the Miscellaneous and Safety contracts; and
(3) Authorize the Mayor to sign the Agreement Authorizing the
Release of 1959 Survivor Benefits Assets and Liabilities
into the Third Level 1959 Survivor Benefit Pool.
djw
attachments: Resolution of Intention
Ordinance
Exhibit A (Amendment)
Agreement Authorizing the Release of . . . .
RESOLUTION NO. 8530
A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF
THE CITY OF AZUSA TO APPROVE AN AMENDMENT TO THE
MISCELLANEOUS AND SAFETY CONTRACTS BETWEEN THE
BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND 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 procedure 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 Sections 21382.4 (Third Level of 1959
Survivor Benefits) for local miscellaneous members
and local safety members.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the
City of Azusa does hereby give notice of intention to
approve an amendment to the contractS between the said
Council and the Board of Administration of the Public
Employees' Retirement System, a copy of said amendment being
attached hereto, and identified as an Exhibit and by this
reference made a part thereof.
ADOPTED AND APPROVED THIS 24th day of October, 1988.
7 - - MAYOR
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the City Council of the City of Azusa at an adjourned
meeting hereof held on the 24th day of October, 1988.
following vote of Council:
AYES: COUNCILMEMBERS: AVILA, STEMRICH, NARANJO, LATTA,
MOSES
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
/ TY CLERK
Contrac_ Office,
Post Office _ox 942709
Sacramento, CA 94229-2 'C?
Telephcr.e (916) 326-3606
326-3000 (Telecommunications
Device for the Deaf)
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
I hereby certify that in accordance with Section 7507 of the Government
Code the future annual costs as determined by the System Actuary and/or the
increase in retirement benefit(s) have been made public at a public meeting
by the City Council of City of Azusa
(governing body) (public agency)
at least two weeks prior to the adoption of the final Ordinance/Resolution.
if /
Date: October 24, 1988 ,
of iginal signature •
Adolph A. Solis, City Clerk
official title
Y ,
PERS-CON-12A (Rev. 7/88)
C0601
S :: : .
Office Box 5.427
E3:_arrento, CA G4«_ -.. -.
Te,ephone (916) 32E-:6SE
326-3000 (Telecommunications
Device for the Deaf) •
CERTIFICATION OF GOVERNING BODY'S ACTION
c.
•
•
I hereby certify that the foregoing is a true and correct copy of a
Resolution adopted by the City Council
(Governing Body)
of the City of Azusa
(Name of Public Agency)
•
on October 24, 1988
(Date)
•
•
4211;11'
• JTY CLERK or
Secr tary of the Board
FCSD-CON-12 •
C0600 (Rev. 7/88)
ORDINANCE NO. 2386
AN 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. That 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 . This Ordinance shall take effect thirty
(30) days after the date of its adoption, and prior to the
expiration of fifteen (15) days from passage thereof shall be
published at least once in the Azusa Herald, a newspaper of
general circulation, published and circulated in the City of
Azusa and thenceforth and thereafter the same shall be in full
force and effect:
PASSED AND APPROVED this 21st day of November, 1988.
// . / . Lti/ .�
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. 2386 was regularly
introduced and placed upon its first reading at an adjourned meeting
of the City Council on the 24th day of October , 1988 . That
thereafter, said Ordinance was duly adopted and passed at a
regular meeting of the City Council on the 21st
day of November , 1988, by the following vote, to wit:
AYES: COUNCILMEMBERS: AVILA, STEMRICH, NARANJO, LATTA, MOSES
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
ADOLPH 7TS, CII`Y 'CLERK
H-/
Finance Dept * 213 E Foothill Blvd * Box 1395 * Azusa 91702-1395
(818) 334-5125
AGENDA ITEM
TO: HONORABLE CHAIRMAN AND BOARD OF DIRECTORS
INDUSTRIAL DEVELOPMENT AUTHORITY
FROM: ROBERT.E. TALLEY, AUTHORITY TREASURER
DATE: OCTOBER 18, 1988
SUBJECT: �LOCAL LAGENCY-INVESTMENT'-FUND
Background
The Local Agency Investment Fund is a special fund in the State
Treasury which permits a local government to remit idle money in
its treasury to the State Treasurer for the purpose of special
investment. This letter will recommend that the Authority
authorize the Treasurer to participate in this program.
Findings
The Local Agency Investment Fund (LAIF) is a special fund in the
State Treasury, created by law. The law permits a local
government official, with consent of the governing body of the
Authority, to remit idle funds in the local treasury to the State
Treasurer for deposit for the purpose of investment. The local
government unit has the exclusive determination of the length of
time its money will be on deposit with the State Treasurer. The
State Treasurer will invest the money through the Pooled Money
Investment Account of the State of California. This creates a
multi -billion dollar money pool and enables the Authority to
enjoy the return from investment in instruments of $100,000 or
more. This size usually provides higher yields than are commonly
available to local government units.
The Authority would be able to convert its deposits in the LAIF
to cash within twenty-four hours or less. There are no interest
Penalties or losses because the investment is withdrawn sooner
th
an the originally contemplated term. The minimum investment is
$5,000 and both investments and disbursements are handled by wire
between banks. Interest is paid at the end of a calendar quarter
through an allocation which is made to all participants in the
Local Agency Investment Fund. In this way, the Industrial
Development Authority of the City of Azusa would be greatly
benefited from the sizes of the investments of other agencies,
such as the State of California.
Generally, the Industrial Development Authority has little or no
funds of its own to invest. However, the City of Azusa and the
Redevelopment Agency, both of which are already authorized to
participate in the LAIF, often have in excess of the $5,000,000
limit per participant. By approval of this resolution and the
corresponding loan and investment resolutions, the City will be
able to "loan" funds to the Industrial Development Authority for
it to invest in the LAIF. In this way, the City will obtain a
high rate of return coupled with the ultimate in safety.
A draft resolution
has been
prepared and attached
for
consideration. Details
of the
program are available
in
the
office of the Authority
Treasurer.
Recommendation
It is recommended that
the Board
of Directors adopt the
attached
resolution authorizing
investment
of the idle funds
of
the
Industrial Development
Authority
of the City of Azusa
in
the
Local Agency Investment
Fund.
RET .pap