HomeMy WebLinkAbout05-07-2019 Item 14 - Amend City Contract with Board of Administration of CalPERS
Department Name: Human Resources
Cost Center: 3001
For Agenda of: May 7, 2019
Placement: Business Item
Estimated Time: 5 minutes
FROM: Monica Irons, Human Resources Director
Prepared By: Brittani Roltgen, Human Resources Analyst
SUBJECT: SECOND READING OF ORDINANCE NO. 1660 (2019 SERIES)
AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN
THE CITY OF SAN LUIS OBISPO AND THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM TO PROVIDE SECTION 20516 (COST
SHARING)
RECOMMENDATION
Adopt Ordinance No. 1660 (2019 Series) authorizing an amendment to the contract between the
Board of Administration of the California Public Employees’ Retirement System (CalPERS) and
the City of San Luis Obispo to provide Section 20516 cost sharing.
DISCUSSION
Background
City Council introduced Ordinance No. 1660 (2019 Series) on March 5, 2019 authorizing an
amendment to the contract between the City of San Luis Obispo and CalPERS. More than 20
days have passed since the Resolution No. 10990 (2019 Series) was adopted by Council on
March 5, 2019 and the first reading of Ordinance No. 1660 (2019 Series), in accordance with
Government Code Section 20471. This constitutes the second reading of the ordinance amending
the current contract. Upon adoption by Council, the contract with CalPERS will be amended and
the cost sharing will go into effect at the start of the first full pay period in July 2019.
Sections 20474 and 20469 of PERL require a secret ballot election by the employees affected
whenever the contract is amended to change the employees’ rate of contribution. The election
must be held after the first reading and before the final reading of the Ordinance amending the
retirement contract. The Clerk’s Office held the secret ballot election from March 11, 2019 to
March 27, 2019 and the overwhelming majority of ballots received supported the contract
amendment. The results of the election were certified by the City Clerk and submitted to
CalPERS on April 3, 2019.
Policy Context
City Council adopted the FHRP on April 17, 2018 which assumed additional employee
contributions toward retirement costs. City Council adopted Resolution 10990 (2019 Series)
authorizing CalPERS to proceed with draft contract amendment.
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Public Engagement
City Council introduced Ordinance No. 1660 (2019 Series) on March 5, 2019 at a public
meeting.
CONCURRENCE
The Director of Finance and the City Attorney concur with the recommended action.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this
report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15278.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2019-20 and ongoing
Funding Identified: N/A
Fiscal Analysis:
Funding Sources Current FY Cost
Annualized
On-going Cost
Total Project
Cost
General Fund ($526,099)
State
Federal
Fees
Other:
Total ($526,099)
CalPERS will reduce the required employer contribution by 1.5% which will result in an
ongoing savings of approximately $526,099 for Fire and the Unrepresented Management and
Confidential groups by the end of fiscal year 2019-2020. These savings are part of the FHRP’s
strategy to close a $8.9M budget gap for all funds.
ALTERNATIVES
Do not approve the ordinance. This alternative is not recommended since this change was
approved by Resolutions and negotiated Memorandums of Agreement with employee groups and
failure to amend the contract with CalPERS would place the City in violation of those agreements.
Moreover, the Fiscal Health Response Plan relies on these changes to meet its objectives.
Attachments:
a - Ordinance
b- Contract Amendment
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Item 14
O 1660
ORDINANCE NO. 1660 (2019 Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF SAN
LUIS OBISPO, CALIFORNIA AND THE BOARD OF ADMINISTRATION
OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
WHEREAS, the City of San Luis Obispo has contracted with the California Public
Employees’ Retirement System (CalPERS) for retirement benefits for its sworn Police Safety,
sworn Fire Safety and Miscellaneous employees since July 1, 1952; and
WHEREAS, over the years, the City has amended its retirement benefit structure to reflect
changes as negotiated during the meet-and-confer process with each bargaining group; and
WHEREAS, the City acted to ensure the retirement pension system is sustainable and
amended the retirement contract to provide reduced benefit second tier retirement formulas for all
employee groups; and
WHEREAS, City employees committed to ensure their retirement pension system is
sustainable by paying their full member contributions as established in the Public Employee
Retirement Law; and
WHEREAS, City Council approved Resolution 10919 ratifying the memorandum of
agreement between the City and the San Luis Obispo Firefighters Local 3523 and authorized an
increase to the employee contribution to CalPERS as allowed in Government Code section 20516
to contribute an additional one and one-half percent (1.5%) toward their retirement costs; and
WHEREAS, City Council approved Resolution 10920 regarding compensation and
benefits for appointed officials, department heads, and management employees and authorized an
increase to the employee contribution to CalPERS, as allowed in Government Code section 20516,
to contribute an additional one and one-half percent (1.5%) toward their retirement costs; and
WHEREAS, City Council approved Resolution 10953 regarding compensation and
benefits for unrepresented confidential employees and authorized an increase to the employee
contribution to CalPERS as allowed in Government Code section 20516 to contribute an additional
one and one-half percent (1.5%) toward their retirement costs; and
WHEREAS, the increased employee contribution for these employee groups would be
effective the first full pay period of July 2019; and
WHEREAS, the City is amending its contract with CalPERS to provide that, pursuant to
Government Code Section 20471, there must be at least a 20-day period between the adoption of
the Resolution of Intention and the adoption of the final Ordinance.
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Item 14
Ordinance No. 1660 (2019 Series) Page 2
O 1660
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. That an amendment to the contract between the City Council of the City of
San Luis Obispo and the Board of Administration, California Public Employees’ Retirement
System is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit,
and by such reference made a part hereof as though herein set out in full.
SECTION 2. The Mayor of the City of San Luis Obispo is hereby authorized, empowered,
and directed to execute said amendment for and on behalf of said Agency.
SECTION 3. This ordinance shall take effect 30 days after the date of adoption, a
summary of this ordinance, together with the names of Council members voting for and against,
shall be published at least five (5) days prior to its final passage, in The Tribune, a newspaper
published and circulated in this City.
INTRODUCED on the 5th day of March 2019, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 7th day of May 2019, on the following roll call vote:
AYES:
NOES:
ABSENT:
______________________________
Mayor Heidi Harmon
ATTEST:
________________________________
Teresa Purrington, City Clerk
APPROVED AS TO FORM:
________________________________
J. Christine Dietrick, City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
______________________________
Teresa Purrington, City Clerk
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P'sceNm
APR 3 0 2019
SLO CITY CLERK
PROOF OF PUBLICATION
(2015.5 C.C.P.)
A 06
1010 Marsh St., San Luis Obispo, CA 93401
(805) 546-8208 . FAX (805) 546-8641
STATE OF CALIFORNIA,
County of San Luis Obispo,
I am a citizen of the United States and a
resident of the county aforesaid; I am over the
age of eighteen years, and not a party interested
in the above entitled matter. I am the principal
clerk of the printer of the New Times, a
newspaper of general circulation, printed and
published weekly in the City of San Luis
Obispo, County of San Luis Obispo, and which
has been adjudged a newspaper of general
circulation by the Superior Court of the County
of San Luis Obispo, State of California, under
the date of February 5, 1993, Case number
CV72789: that notice of which the annexed
is a printed copy (set in type not smaller than
nonpareil), has been published in each regular
and entire issue of said newspaper and not in
any supplement thereof on the following dates,
to -wit:
in the ye r 2019.
I certify (or declare) under the the penalty of
perjury that the foregoing is true and correct.
Dated at San Luis Obispo, Ca 'fornix, this
day�of 1 k _2019.
Patricia Horton, New Times Legals
Ad,.m & N, ..idl-WMG Ad,,wrTrhic, OlIwODLISINESS/Public NulicexlNl W Puh
Proof of Publication of
(YOUR AD HERE)
sin -1 u8S 94;10:1
ORDINANCE N0.1660 (2019 SERIES)
AN ORDINANCE 01 THE CITY COUNCIL OF THE CITY
OF SAN LUIS OBISPO, CAUFOR NIA. AUTHORIZING
AN AMENDMENT TO THE CONTRACT BETWEEN THE
CITY COUNCIL OF THE CITY OF SAN LUIS OBfsPD.
CALIFORNIA AND THE BOARD OFADMINISTRATION OF
THE CALIFORNIA PUBLIC EMPLOYEES, RETIREMENT
SYSTEM
NOTICE IS HEREBY GIVEN that tha City Council
Of the City of Sari Luis Obispo, California, at its
Regutar Meeting of Tuesday, March S. 2019,
introduced the above titled ordinance upon a
motion by Vice Mayor pease, second by Councl
Member Stewart, and can the following roll Call
vote:
AYES: ' Council Members Carlyn Christianson,
Aaron Gomer, Erica A. Stewart, Vice Mayor Andy
Pease, and Mayor Heidi Harmon
NOES: None
ABSENT: None
ORDINANCE N0.1600 (2019 SERIES) - The City is
amenaln its contract with CaIPE RS to provide
Section 20516 (Cost Sharing) to increase the
empleyea contribution to Cal PIERS by on and
on"alf percent (1.5%). The contract amendment
will Apply to appointed officials, departm ant heads,
unrepresented management, unrepresented
confidential employees and all employe as
represented by the San Luis Obispo Firefighters
Local 3523.
NOTICE IS HEREBY FURTHER GIVEN Ihat tha City
Council of the City of San Luis Obispo will
consider adopting the aforementioned Ordinance
at its Regular Meeting of May 7, 2018 at 5:00
p.m., which wlII be held in the Council Chamber,
located at 990 Palm Street, San Luis Obispo,
Callfernia.
Caples of the camplate ordinance are avai1&0
n the City Clerk's OUICe In City Hall and online at
Arww.slocity.org. For more information, contact
she Human Resources Department at 781-7250.
reresa Purrington
:ity Clerk
April 25, 2019
5/8/2019
05‐07‐2019 Item 14 ‐ Staff Presentation 1
CalPERS Retirement Contract
Amendment – Cost Sharing
Monica Irons, Human Resources Director
Brittani Roltgen, Human Resources Analyst
May 07, 2019
Contract Amendment
Requirements
Council adopted a resolution of
intention approving the contract
amendment (March 5, 2019)
Council approved first reading of
an Ordinance authorizing contract
amendment (March 5, 2019)
1
2
5/8/2019
05‐07‐2019 Item 14 ‐ Staff Presentation 2
Contract Amendment
Requirements - Continued
Secret Ballot Election Held
(Certified April 3, 2019)
Final reading and adoption of
Ordinance authorizing contract
amendment (May 7, 2019)
Fiscal Impact
Reduction of employer pension rates
in future valuation reports
Increase of employee pension rates in
future valuation reports
This Contract Amendment will result in
on-going savings of approximately
$526,000 annually
3
4
5/8/2019
05‐07‐2019 Item 14 ‐ Staff Presentation 3
Questions
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