HomeMy WebLinkAboutAgenda Report - September 21, 1983 (57)VNCIL C0MMUNICATI
TO THE CITY
COUNCIL
DATE Ti
FROM THE CITY
MANAGER'S OFFICE
SEPTEMBER 16, 1983
SUBJECT
DEFERRED COMPENSATION PLAN
Home Savings and Loan Association, our Deferred
Compensation Administrator, in an effort to standardize
all their plans, has asked us to adopt a new Plan.
Their rationale (and it makes sense) is that when IRS
rulings and changes are made, those changes can be made
uniformly. Also, it is easier and more efficient for them
to be familiar with one Plan rather than a whole
multitude of Plans.
There are no substantive changes between this Plan and the
Flan under which we are now operating.
Council is respectfully requested to adopt the attached
Deferred Compensation Plan for the City of Lodi.
RR L. GLENN
sistant City Manager
JLG:vc
attachment
DATED:
RESOLUTION NO.
A RESOLUTION AMENDING RESOLUTION NO. 4336 -
A RESOLUTION ADOPTING2 MANAGEMENT INCENTIVE PLAN
AS CITY POLICY
WHEREAS, Resolution No. 4336 was adopted by the City
Council of the City of Lodi on March 16, 1977, which
Resolution adopted a Management Incentive Plan as City
Policy;
NOW, THEREFORE, Resolution No. 4336 is hereby
amended to read as follows:
Section B. Deferred Compensation
"As a supplement to the City's deferred compensation
plan, the City will provide, in addition to normal
salary and contributions to deferred compensation,
an additional contribution to expand retirement
benefits. For Classification A employees, an
additional 1.58 of income= for Classification b, an
additional �$ of income will be added to
individually —'selected deferred income plan.
Employees will receive this during their employment
with the City of Lodi and cannot withdraw it until
they either retire or leave the service of the
City."
DATED:
JOB TITLE SALARY CONTROL POINT RANGE
CormAunity Development Director
$3510
$3191-3861
Finance Director
$3384
$3076-3722
Fire Chief
$3595
$3268-3955
Police Chief
$3795
$3450-4175
Public Works Director
$3923
$3566-4315
Parks & Recreation Director
$3214
$2922-3535
Utilities Director
53845
$3495-4230
Assistant City Manager
$3410
$3100-3751
Administrative Assistant
$2318
$2107-2550
Community Relations Assistant
$1789
Flat Rate
City Manager
$4631
Flat Rate
City Clerk
$2323
Flat Rate
City Attorney
$3869
Flat Rate
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0
City of Lodi
DEFERRED COMPENSATION PLAN
0
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III. PARTICIPATION . . . . . . . . . . . _ 8
3.01 Eligibility . . . . . . . 8
3.02 Continuation of
Participation 9
3.03 Termination Other Than By
Separation From Service. 9
3.04 Amount of Deferral. 9
i
I. NAME
AND PURPOSE . . . . . . . . . . .
1.01
Name . . . . . . . . . . . .
1.02
Purpose . . . . . . . . . .
II. DEFINITIONS . . . . . . . . . . . . .
2.01
Administrator . . . . . . .
2.02
Advisory Committee . . . . .
2.03
Beneficiary . . . . . . .
2.04
Code , , , . . . . . . .
2.05
Compensation . . . . . . . .
2.06
Deferred Compensation . , .
2.07
Disability . . . . . . . . .
2.08
Employee . . . . . . . .
2.09
Eligible State Deferred
Compensation Plan . . . .
2.10
Employer . . . . . . . . . .
2.11
Employment Period or
Pay Period . . . . . . . .
2.12
Enrollment Period
2.13
Includible Compensation
2.14
Investment Fund . . . . . .
2.15
Normal Retirement Age
2.16
Participant . . . . . . . .
2.17
Participation Account
2.18
Participation Agreement .
2.19
Plan . . . . . . . . . . . .
2.20
Serv.-Lce . . . . . . . . . .
2.21
Separation from Service
2.22
State . . .. . . , .
2.23
Substantial Risk of
Forfeiture . . . . . . . .
2.24
Unforeseeable Emergency
2.25
Other Definitions
PAGE
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III. PARTICIPATION . . . . . . . . . . . _ 8
3.01 Eligibility . . . . . . . 8
3.02 Continuation of
Participation 9
3.03 Termination Other Than By
Separation From Service. 9
3.04 Amount of Deferral. 9
i
PAGE
3.05 Changes In Amount of
Deferred Compensation 9
3.06 Investment Objectives 10
3.07 Election of Method of
Distribution . . . . . . 10
3.08 Effect of Execution of
Participation Agreement 11
3.09 Effect of Community Property
Laws on Participant's
Interest in the Plan 11
3.10 Plan -to -Plan Transfer . 13
IV. LIMITATION OF DEFERRAL OF COMPENSATION.
14
4.01
Regular Years .
14
4.02
Years Immediately Preceding
Retirement . . . . . .
15
4.03
Participants in More Than
One Deferred Compen-.
satin:. Plan . . . . . .
16
4.04
Participants in Certain
Annuity Plans
16
V. ADMINISTRATION
OF THE PLAN . . . . . .
17
5.01
Designation of Advisory
Board . . . . . . . . . . .
17
5.02
Authority. . . . . . . .
17
5.03
Rights and Duties
17
5.04
Advice, Consultation and
Delegation of Authority .
19
5.05
Grievances Against
Administrator . . . . .
20
5.06
Investment Fund . . . . .
24
5.07
Investments of Deferred
Compensation Funds . . . .
25
5.08
Eligible Investment
Objectives
25
5.09
Participation Accounts . . .
25
5.10
Costs of Administration . .
26
5.11
Amendment and Termination
of the Plan
26
5.12
Non-discriminatory Exercise
of niscretion .
27
VI. DISTRIBUTION OF BENEFITS . . . . . . .
27
6.01
Distribution After Separation
From Service . . . . . . .
27
IX.
X.
Aft
6.02
Distribution Before
Separation From Service -
Unforeseeable Emergency .
6.03
Changes in Distributions
6.04
Purchase of Annuity by
Employer . . . . . . . . .
6.05
Withholding of :'axes
6.06
Satisfaction of Payment _
EMPLOYER
PARTICIPATION . . . . . . . .
NON -ASSIGNABILITY . . . . . . . . . . .
8.01
Non -•Assignability . . . . . .
8.02
Assignment and Alienation
8.03
Assignment After Payout
Commences . . . . . . . .
8.04
Payment to Third Party
8.05
Participant's Debts to
the Employer . . .
EMPLOYER'S
LIABILITIES . . . . . . .
9.01
Discretion re: Investments .
9.02
Indemnity . . . . . . . . .
MISCELLANEOUS . . . . . . . . . . . . .
10.01
Status of Participants
10.02
Condition of the Plan .'
10.03
Governing Law . . . . . . . .
10.04
Designation of
Beneficiaries .
10.05
No Right of Future
Employment . . . . . . . .
10.06
Gender . . . . . . . . . . .
10.07
Persons Affected by Plan . .
10.08
Communications . . . . . .
10.09
Waiver of Rights to Salary
10.10
Headings . . . . . . . .
10.11
Interpretation
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This DEFERRED =IPENSATION PLAN is established and
adopted by City of Lodi (the "Employer") on ,
19 , effective as of
, 19 for the bene -
fits of its eligible persons.
I.
NAME AND PURPOSE
1.01 Name. The name of this Plan is the City of
Lodi DEFERRED COMPENSATION PLAN (the "Plan").
1.02 Purpose. It is the primary purpose of the
Plan to permit Eligible Employees to enter into agreements
with the Employer which will provide for deferral of payment
of a portion of their compensation until death, Disability,
Separation From Service, or other events as provided herein,
in accordance with the provisions of Sections 53213-53214 of
the Government Code of California. It is intended that the
Plan constitute an "eligible State deferred compensation
plan" within the meaning of, and that the Plan satisfy the
requirements of, Code Section 457(b).
1
2.01 "Administrator." Administrator shall mean
the duly authorized person, persons or designees appointed
by the City to act as the Employer's agent in administering
the Plan.
2.02 "Advisory Committee." Advisory Committee
shall mean that body which shall be designated by the City
to operate and oversee the Plan..
2.03 "Beneficiary." Beneficiary shall mean any
person, ir;cluding Participant's estate, whose interest in
the Plan is derived from the Participant and who is desig-
nated by the Participant to receive a pension, annuity,
death benefit, or other benefit Under the provisions of the
Plan.
2.04 "Code." Code shall mean the Internal Revenue
Code of 1954, as amended or supplemented from time to time
or superseded by federal laws of similar effect, and any re-
gulations promulgated thereunder.
2.05 "Com ensation." Compensation shall mean the
sum of the full basic salary and overtime pay, paid to an
Employee for Service during a Plan Year. Compensation shall
2
be taken into account at its present value. however, if
` Compensation is subject to a Substantial Risk of Forfeiture,
such Compensation shall be taken into account and valued in
the Plan Year in which such Compensation is no longer sub-
ject to a Substantial Risk of Forfeiture.
2.06 "Deferred COm ensation." Deferred Compensa-
tion shall. mean that portion of an Employee's Includible
Compensation which such Employee has elected to defer in accor-
dance with the provisions of this Plan. Deferred Compensation
shall'be taken into account at its present value. However,
if the Deferred Compensation is subject to a Substantial
Risk of Forfeiture, such Compensation shall be taken into
account and valued in the Plan Year in which such Compensation
is no longer subject to a Substantial Risk of Forfeiture.
2.07 "Disability." Disability shall mean substan-
tial permanent incapacity, physically or mentally, to perform
the Participant's usual duties in the Employer's Service, as
determined by the Advisory Board on the basis of medical ex-
amination and advice.
3
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2.08 "Employee." Employee shall mean any officer
or full-time regular Employee of the Employer_
2.09 "Eligible State Deferred Compensation Plan."
Eligible State Deferred Compensation Plan shall mean a }plan
described in Code Section 457(b).
2.10 "Employer." Employer or "City" shall mean
all officers, bureaus, departments and districts of City of
Lodi.
2.11 "Emm2loyment Period" or "Pay Period." Employ-
ment Period or Pay Period shall mean the biweekly period es-
tablished by the Employer during which occurs Service of an
Eligible Employee upon which Compensation is based.
2.12 "Enrollment Period." Enrollment Period shall
mean January 1 to December 31. This plan has an unlimited
enrollment period. An Employee is eligible to enroll once
full time status is granted.
vj
4
2.13 "Includible Compensation." Includible Com-
pensation shall mean Compensation which (taking into account
the provisions of Code Sections 457(b) and 403(b) is cur-
rently includible in gross income. Amounts of Compensation
for this purpose shall be determined without regard to com-
munity property laws.
2.14 "Investment Fund." Investment Fund shall
mean the total amount of Deferred Compensation from all
Participants, which amount shall be held as a part of the
general assets of the Employer.
2.15 "Normal Retirement Age." Normal Retirement
Age shall mean (a) the later of the earliest age at which
the Participant has the right to retire under the Employer's
basic pension plan without consent of the Employer and to
receive immediate retirement benefits without actuarial or
similar reduction because of retirement before a later spe-
cified age in the Employer's basic pension plan or age 70-1/2
or (b) for a Participant who continues to work beyond the
age specified in subsec-�_-ion (a), the date or age designated
by the Participant; provided, however, that such date or age
5
f. /10, �
shall not be later than the mandatory retirement age provided
by the Employer, or the date or age at which the Participant
separates from Service.
2.16 "Participant." Participant shall mean any
Eligible Employee who has fulfilled the requirements of
enrollment in the Plan.
2.17 "Participation Account." Participation
Account shall mean the book account of the Employer to which
is credited the Participant's Deferred Compensation, together
with any interest, dividends, gains, ]tosses, or the like
credited or debited thereto.
2.18 "Participation Agreement." Participation
Agreement shall mean the written agreement executed and filed
by an Eligible Employee with the Employer pursuant to Sec-
tion 3.01, in which such Eligible Employee elects to become
a Participant in the Plan.
2.19 "Plan." Plan shall mean this Deferred Com-
pensation Plan of City of Lodi.
2.20 "Service." Serviceshall mean employment of
an Employee by the Employer.
6
2.21 "Separation from Service." Separation from
K
Service for an Employee shall have the same meaning as is
given under Code Section 402 (e) (4) (A) (iii) relating to lump
sum distributions. This includes, but is not limited to,
death, retirement for reasons of age or permanent disability,
resignation or discharge.
2.22 "State." State shall mean (a) a State, (b) a
political subdivision of a State, and (c) an agency or in-
strumentality of a State or political subdivision of a State.
2.23 "Substantial Risk of Forfeiture." Substan-
tial Risk of Forfeiture shall mean that rights to compensa-
tion are conditioned upon the future performance of substan-
tial Service by any individual.
2.24 "Unforeseeable Emergency_." Unforeseeable
Emergency shall mean severe financial hardship to the Par-
ticipant resulting from a sudden and unexpected illness or
accident of the Participant or of a dependent (as defaced
in code Section 152(a) of the Participant, loss of the Par-
ticipant's property due to a casualty, or other similar
IL
extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant, to
the extent for which the hardship is not relieved by the re-
ceipt of payment through reimbursement or insurance
7
compensation or otherwise. Unforeseeable Emergency shall not•
include the need to send a child to college or the desire to
F
• F
purchase a home.
2.25 Other Definitions. All other terms of this
Plan, as now in effect or hereinafter amended, which are not
defined herein shall be interpreted and defined within the
meaning given thereto by the Code.
zzz.
PARTICIPATION
3.01 Eligibility.
(a) initial Enrollment Period. Eligible
Employees may elect to become a Participant in the Plaid by
` executing a Participation Agreement and filing it with the
Employer. A Participation Agreement entered into pursuant
to this subsection shall become effective the pay period
following execution of such Participation Agreement by the
Employer unless the Eligible Employee designates a later
Employment Period for such purpose. Compensation shall be
deferred for any pay period only if a Participation Agree-
ment providing for such deferral has been entered into by
the Eligible Employee and the Employer prior to the begin-
ning of such month.
i
t
8
3.02 Continuation of Participation. Elections to
participate pursuant to Section 3.01 shall remain in force
unless terminated as provided in Section 3.03.
3.03 Termination Other Than By Separation Front
Service. The Participant may terminate participation in
the Plan, for reasons other than by the Participant's Sep-
aration from Service, by written notice to the Employer
at least fourteen (14) days prior to the commencement of the
Pay Period for which the revocation is to be effective. The
Participant shall not be permitted to file a new Participa-
tion Agreement until at least ninety (90) days after termina-
tion of such Participant's former participation in the Plan
No amounts shall be payable to a Participant upon termination
of participation in the Plan unless otherwise due pursuant
to Chapter VI of this Plan.
3.04 Amount of Deferral. Each written election to
participate in the Plan shall specify the dollar amount of
Compensation to be deferred. The amount to be deferred shall
be deducted from the Compensation otherwise payable to the
Participant, but shall not be less than Ten Dollars ($10.00)
per Pay Period; nor shall s_ch amount exceed limits set forth
in Chapter IV of this Plan.
3.05 Changes In Amount of Deferred Compensation.
The Participant may elect to increase or decrease the amount
4
40
r]
0
C ]
of Compensation to be deferred by written notice to the
Advisory Board of the Participant's intention to amend at
least thirty (30) days prior to the cormencement of the Pay-
roll Period for which the increase or decrease is to become
effective; provided, however, that a Participant may not elect
to amend Participant's Participation Agreement more than
2 times per calendar year. An election by a Participant to
amend the Participation Agreement for the sole purpose of
increasing or decreasing the amount of compensation to be
Deferred shall not be deemed a termination of the Participant'3
participation in the Plan.
3.06 Investment objectives. A Participant may
select, pursuant to Section 5.08, one or more investment
objectives designated by the Employer, provided that the
amount deferred for each objective is not less than Ten Dollars
($10.00) per Pay Period. All deferred amounts shall be as
whole dollars only. Actual investments made by the Employer
are subject to the Employer's discretion as provided within
Section 5.07.
3.07 Election of Method of Distribution. Each
Participant may elect, prior to the earliest distribu%*Aon
date provided under this Plan, distribution of benefit op-
tions and payout options as provided in Chapter VI. If a
Participant voluntarily terminates employment prior to re-
tirement, the Participant may alternatively recgiiest that the
10
election of the method of distribution of payment of bene-
fits be postponed until such Participant reaches an age not
later than ?normal Retirement Age.
The Employer shall give due consideration to such requests
but shall not be bound by them. Final determination regard-
ing the method and manner of all distributions from the Plan
shall, at all times, be at the discretion of the Employer.
3.08 Effect of Execution of .Lticipation Agreement.
Each participant shall be deemed to have assented to all the
terms and conditions of the Plan upon execution of a Partici-
pation Agreement. No Participant or Beneficiary shall have
the power br right to sell, transfer, assign, hypothecate,
or otherwise dispose of all or any part of the Participant's
Participation Account or any right which the Participant or
Beneficiary may have under the Plan, except as provided in
Chapter VIII.
3.03 Effect of Community Property saws on
Participant's Interest in the Plan.
(a) Creation of community_proparty interest_'
if a Participant's interest in his or her Compensation is or
becomes community property, in whole or in part, such Partici-
pant shall immediately so notify the Employer, and such Par-
ticipant's spouse shall immediately sign and assent to the
11
Participation Agreement and Designation of Beneficiary Form
- then in effect and any subsequent version thereof.
E
!b) Division of Participant's community
property interest. If the Participant's interest in the
Plan is community property of the Participant and the Par-
tacipant's spouse, in whole or in part, and a community
property interest is awarded, in whole or in part, to the
Participant's spouse pur3ua::t to proceedings for legal sepa-
ration, dissolution, nullity or other proceedings to ter-
minate the marriage, than that portion of the Participant's
interest in the Plan awarded to the Participant's spouse
shall be paid to the Participant's spouse under one of the
,options described in Section 6.01; provided that the amount
so paid shall not exceed the balance of the Participant's
Participation Account and further provided that the amount
of Deferred Compensation credited to the Participant's Par-
ticipation Account shall be reduced accordingly. If the
Participant's interest is being distributed to the Partici-
pant in any.manner other than by way of a single payment at
the time the Participant's spouse is awarded a community
property interest therein, then the Employer shall, at its
discretion, pay such interest awarded to the Participant's
spouse by the same method by which such funds are being -dis-
tributed to the Participant, provided that the payments to
the Participant shall be reduced accordingly.
0 •
3.10 Plan -to -Plan Transfers.
A
(a) Transfer to another plan. A Partic-
ipant who separates from Service in order to accept emplov-
meet with an entity other than the Employer, which entity
also sponsors an Eligible State Deferred Compensation Plan,
and who becomes a participant in such plan (the "transferee
plan") shall have the balance in such Participant's Partici
ipation Account automatically transferred to the transferee
plan. Payments of benefits will not commence upon the Par-
ticipant's Separation from Service, notwithstanding any
other provision of this Plan, if (1) the Employer and the en-
tity sponsoring the transferee plan are located within the
same State; and (2) the transferee plan provides for the ac-
ceptance of such balance.
(b) Transfer from another plan. A Partic-
ipant who, in order to accept employment with the Employer,
terminated employment with an entity other than the Employer,
which entity also sponsors an Eligible State Deferred Com-
pensation Plan, and who was a participant in such plan (the
"transferor plan") shall, upon receipt by the Plan of the
amounts deferred by such Participant in the transferor plan,
have such Participant's Participation Account credited with
the balance of such `articipant's account in the transferor
plan if (1) the Eml .,yer and the entity sponsoring the trans-
feror plan are located within the same State and (2) the
13
transferor plan provides for the automatic transfer of
such balance.
Subject to Sections 3.06 and 5.07, the Employer
may invest and reinvest the amounts deferred by such Partic-
ipant in the transferor plan and credited to such Partici-
pant's Participation Account; provided, however, that in no
event shall the value of such amounts deferred and credited
be reduced by such investment or reinvestment.
IV.
LIMITATION OF
DEFERRAL OF COMPENSATION
4.01 Regular Years. During each Employment Period
in which an Eligible Employee is a Participant in the Plan,
the Employer shall defer payment of such part of the Partici-
pant's Compensation as is specified in the Participant's
Participation Agreement provided that, except as provided in
Section 4.02, no Participant may defer under the Plan during
a taxable year more than the lesser of:
($7,,500), or
(a) Seven Thousand Five Hundred Dollars
(b) One-third (1/3) of the Participant's
includible Compensation.
14
•
4.02 Years Immediately Preceding Retirement.
(a) Limited catch-up. For any of the-Par-
ticipant's
he Par-ticipant's last three (3) taxable years ending before the
attainment of Normal Retirement Age, no Participant may defer
under the Plan more than the lesser of:
or
(1) Fifteen Thousand Dollars ($15,000),
(2) The sum of:
(A) The limit provided in Section
4.01 otherwise applicable to the taxable year, plus
(B) The sum for all taxable years
before the taxable year of the difference: for each year
between the limit provided in Section 4.01 applicable to
such prior taxable year and the amount of Compensation for
such prior taxable year actually deferred. A prior taxable
year shall be taken into account under this subsection (B)
of this subsection (2) only if such taxable year begins after
December 31, 1978; the Participant was eligible to participate
in the Plan during all or any portion of such taxable year,-
and
ear,and the Compensation deferred during the taxable year was
subject to the limit provided in Section 4.01.• For purposes
of this subsection (B) of this subsection (2), a Pazticipant
15
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will be considered eligible to participate in the Plan for a
taxable year if the Participant performs services for the
Employer, ei';her as an Employee or an Independent Contractor;
and a prior taxable year includes a taxable year in which
the Participant was eligible to participate in an Eligible
Stage Deferred Compensation Plan sponsored by an entity other
than the Employer, provided that the Employer and the entity
sponsoring such other plan are located within the same State.
(b) Restriction on limited cutch -up. No
Participant may elect more than once to defer Compensation
in accordance with the limit provided in this Section or
such limit provided in any other Eligible State Deferred
Compensation Plan.
4.03 Participants in More Than One Deferred
Compensation Plan. For any Participants who are also
participants of more than one Eligible State Deferred
Compensation Plan, the amount of Compensation deferred for
all such plans during any taxable year shall not exceed
Seven Thousand Five Hundred Dollars ($7,500.00), as mod-
ified by the adjustment under Section 4.02.
/I
4.04 Participants in Certain Annuity Plans. For
any Participant who is also a participant in a qualifying
employer -purchased annuity described in Code Section 403(b),
the amounts excluded in any taxable year under such plan
16
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shall be treated as amounts deferred for purposes of Sections
4.01, 4.02, and 4.03 and the amounts deferred under Sections
4.01, 5.02, and 4.03 shall be treated as amounts excluded un-
der Code Section 403 (b) (2) (A) (ii) .
V.
ADMINISTRATION OF THE PLAN
5.01 Designation of Advisory Board. The Employee
shall designate six (6) persons to serve as an administrative
committee to act in the Employer's behalf. Any such designa—
tion may be subsequently changed by the Employer.
Any action of the Advisory Board shall be deemed
action of the Employer and shall be deemed to be taken in
accordance with the original legislation granting authority
to the Advisory Board to act in behalf of the Employer.
5.02 Authority. One or more authorized members of
the Advisory Board may execute any document or documents on
behalf of the Employer. The Employer shall accept and rely
exclusively upon any direction or document executed by such
authorized member(s) as representing action by the Employer
until the Employer revokes such designation.
5.03 Rights and Duties. The Advisory Board shall
enforce this Plan in accordance with its terms and shall b+-.
17
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charged with its general administration. The Advisory Board
shall exercise all of its discretion in a uniform manner and
shall have all necessary power to accomplish those purposes,
including but not limited to the power:
(a) To determine all questions relating to
the eligibility of Employees to participate;
(D) To compute and certify to the Employer
the amount and kind of benefits payable to Participants and
their Beneficiaries;
(c) To maintain all data, records, documents,
and paperstpertaining to the administration of a Plan;
(d) To authorize all disbursements by the
Employer from the Investment Fund;
(e) Subject to the limitations set forth in
Section 5.07, to direct the investments to be made by the
Employer in a manner consistent with the investment authorized
by this Plan;
(f) To make such rules for the regulation of
the Plan as are not inconsistent with the terms hereof, which
determination shall be conclusive and binding on all Partici—
pants, applicants for participation in the Plan, Beneficiaries
1 ��
..._:.............-�....,parr•rwevrasvm.ve...+r-..aaro�cr�m-r-•.r-..a-.- r...,,,�.. ,...._......._ ..... ..... .�. .. .. _
and the Administ*tor;
(g) To hear and rule on grievances against
the Administrator as set out in Section 5.05.
5.04 Advice, Consultation and Delegation of
Authority. The Employer may employ or contract with any one
or more persons or organizations to render consultation and/or
advice and/or to perform services with regard to responsibili-
ties of the Advisory Board under the Plan. Said Administrator
shall be selected by the Employer after consideration of
recommendations by the Advisory Board. The Administrator
shall be governed by the Advisory Board. Persons or organi-
zations eligible to act as Administrator may include, without
limitation, actuaries, attorneys, accountants, and pension,
benefits, financial, and administrative consultants.
(a) Administrator's capacity. Xiy such per-
son so employed or independently contracted for shall act in
advisory consulting capacity only and shall not constitute a
fiduciary solely for reason of so acting; and the employment
or contracting of any such persons shall not relieve the
Advisory Board from its responsibility under this Plan.
(b) Allocation of duties to Administrator.
The Advisory Board may, from time to time, allocate to the
Administrator any of the Board's rights, powers, duties,
19
r'
and/or responsibilities (including, without limitation, the
power to approve applicants for participation), and/or the
Advisory Board may delegate to the Administrator any of its
rights, powers, duties, and/or responsibilities with respect
to the operation and administration of the Plan. No such
allocation or delegation shall be deemed to have occurred
unless the same be in writing to the Employer. Any such
allocation and delegation shall be reviewed at least annually
and shall be terminable upon such notice to the Employer as
the Advisory Board deems reasonable and prudent under the
circumstances.
5.05 Grievances Against Administrator.
(a) Claims. A claim is a request for a
Plan benefit by a Participant, Beneficiary or applicant for
participation in the Plan. A claim is filed when the
requirements of this section have been met. A claim may be
filed by delivering a written communication to the Adminis-
trator.
(b) Notification to Claimant of Decision.
(1) If a claim is wholly or partially
denied, notice of the decision, meeting the requirements of
subsection (c) of this Section, shall be furnished to the
claimant within ninety (90) days after receipt of the claim,
20
unless special *cumstances require an exi"nsion of time
for processing of the claim. If such an extension of time
for processing is required, written notice of the extension
f shall be furnished to the claimant prior to the termination -
of the initial ninety (90) day period. In no event shall
such extension exceed a period of ninety (90) days from the
end of such initial period. The extension notice shall indi—
cate the special circumstances requ ring extention of time
and the date by which the Advisory Board expects to render
the final decision.
(2) If notice of the denial of a claim
is not furnished in accordance with subsection (1) of this
subsection (b), the claim shall be deemed denied, and the
claimant shall be permitted to proceed to the review stage
described in subsection (d) of this Section.
(c) Contents of Notice. The Administrator
shall provide to every claimant who was denied a claim for
benefits written notice setting forth in a manner calculated
to be understood by the claimant:
the denial;
(1) The specific reason or reasons for
(2) Specific reference to pertinent
Plan provisions on which the denial is based;
21
(3) A description of *y additional
material or information necessary for the claimant to perfect
a claim and an explanation of why such material or information
[[f
fs?: is necessary; and
(4) Appropriate information as to the
steps to be taken if the Participant or Beneficiary wishes
to submit his or her claim for review.
(d) Review Procedure.
(1) upon denial of a claim, a claimant
or his or her duly authorized representative may appeal the
denied claim to the Advisory Board. The claimant or his or
her duly authorized representative may
(A) request a review upon written
application to the Advisory Board;
(B) review pertinent documents;
(C) submit issues and comments in
writing.
(2) A claimant must file any request
for review of a denied claim within sixty (60) days after
receipt by the claimant of written notification of denial of
22
the claim.
(e) Decision on Review.
(1) A decision by the Advisory Board
shall be made promptly and shall not ordinarily be made later
than sixty (60) days after the Advisory Board's receipt of a
request for a review, unless special circumstances (such as
the need to hold a hearing if the Advisory Board so determines)
require an extension of time for processing,.in which case a
decision shall be rendered as soon as possible, but not later
than one hundred twenty (120) days after receipt of a request
for a review.
(2) If such an extension of time for
review is required because of special circumstances, written
notice of the extension shall be furnished to the claimant
prior to the commencement of the extension.
(3) The decision on review shall be in
writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by the
claimant, as well as specific reference to the pertinent
Plan provisions on which the decision is based.
(4) The decision on review shall be
furnished to the claimant within the appropriate time
23
..ai ,-�.s-'-.'i.;F,':yy�"K"''r'•:per+,Y$'J,',..,c'x":'Ci'-.f,^!"Aa°ffi.4..t'^'.y�,, -
described in sub!ttion (? ) of this subsecttQrh (e) . It the
decision on review is not furnished within such time, the
claim shall be deemed denied on review.
5.06 Investment Fund. The Employer shall main-
tain a separate fund to provide a convenient method of set-
ting aside a portion of its assets to meet the Employer's
obligations under the Plan. The fund shall at all times re-
main a part of the general assets of the City and shall re-
f inain available for payment of City obligations. The fund
shall be credited with the Deferred Compensation of the Par-
ticipants at such times as the Compensation would have been
payable to individual Employees (or Independent.Contractors)
if they were not Participants in the Plan. The Employer may t
® delegate these administration Lnd coordination of Plan func-
tions to the Administrator.
F
P
Neither the existence of this Plan, the fund, any
Participation agreement, nor any Participation Account shall
be deemed to create a trust or custodial account on behalf of,
on for the benefit of, any Participant of the Plan or Bene-
ficiaries thereof. The City shall at all times be the legal
and beneficial owner of all assets in the Investment Fund
innluding any and all dividends, capital gains distributions,
interest or other income payable on any of the Employer's
investments of Deferred Compensation, No Participant of the
Plan or Beneficiaries thereof shall have, by reason of the
24
Plan, Participate Agreement, or Participa .)O -on Account,
any 'secured or preferred interest in, or to, any assets of
the Employer. The Participant and the Beneficiaries there-
of shall have only the right to receive the benefits payable
U
under the Plan as provided in Chapter VI. The Employer shall
have the sole right to vote any shares of stock which it may
acquire by such investment.
5.07 Investments of Deferred Compensation Funds.
The Employer may, from time to time, invest and reinvest
amounts of Deferred Compensation in one or more types of
investxmentp authorized by California Government Code 953609,
as now in effect or as the same may be amended or revised
from time to time, which in the Employer's sole judgment
will best ;achieve the Employer's objectives.
The Employer may, but is not required to, invest
Deferred Compensation biweekly in the in\,�stment vehicles
provided for in this Plan pursuant to Section 5.09.
5.09 Eligible Investment Objectives. The Employer
may allow Participants to choose any investments allowed by
the State of California as the Advisory Board may from time
to time make available. Actual investment by the Employer in/
any of thtse objectives is subject to Section 5.07.
5.09 Participation Accounts. The City shall cause
25
"t.ia.'d€•.'A�.`.;. :.. . , . , ... "Rclfwra, 'R+:'".'f' '"....,t^., , •,rids.;..-:"'bs. ,r ... '+d*': , a- f * i +xi - ..r,_ 'v'xrm? ^•'c rrm;3:'s,;avit
to be establishe'*or each Participant a Pa licipation
i
Account to provide a convenient method of measuring the City's
obligations to the Participant under the Plan. The City shall
x cause to have credited to each Account amounts equal to the
Compensation deferred by the Participant under the Plan. The
assets of the Account shall be invested in such investments
as the Plan may allow pursuant to Section 5.0£3. Participation
Accounts shall at all times remain part of the general assets
of the City and shall remain available for the payment of
City obligations. Each Participant's Participation Account
shall further be credited with earnings, gains, or losses ap-
plicable to such investments. Each Participation Account will
be valued at least quarterly.
- - 5.10 Costs of Administration. The City shall not
be liable for any costs incurred in the administration of the
Plan. Such costs shall be borne by the Plan itself, with
the costs to be paid from the assets of the Investment Fund.
5.11 Amendment and Termination of the Plan. This
Plan may be amended, modified, or terminated by the City at
any time, or the City may, without amending or terminating
the Plan, cease to set aside assets under the Plan. No amend-
ment or termination of the Plan or cessation of the setting
aside of assets shall reduce or impair the rights of any Par-
ticipant nr Beneficiary which may have already accrued. Upon
termination of the Plan, the City may at its option, distribute
26
to all Participar& an amount equal to the O."nne of their i k`
Participation Accounts as of the month• -end following such '
termination pursuant to any of the provisions of Section 6.01.
Such amendment, modification, or termination of the Plan, in
whole or in part, shall not take effect with respect to a
Participant until the Employer delivers to each Participant
a written copy of such amendment, modification, or notice
of termination.
5.12 Non-discriminatory Exercise of Discretion.
In exercising the discretion granted to the Employer,
Administrator or Advisory Board by this Plan, the respective
parties shall exercise such discretions in a uniform and
non-discriminatory manner.
VI.
DISTRIBUTION OF BENEFITS
6.01 Distribution After Separation From Service.
(a) Payout options. In the event of a Par-
ticipant's Separation From Service, the balance of the Par-
ticipant's Participation Account shall be distributed to the
Participant in any one or more of the following methods so
elected by the Participant, subject to the Employer's dis-
cretion, pursuant to Section 3.07:
27
it
f,
(1) Lump sum .a ment. `"'The total balance
payable in one cash payment.
E (2) Life annuity. An annuity payable
annually, quarterly or monthly to the Participant during a
period of years measured by the lifetime of the Participant
or the Participant's spouse if so selected; however, in no
event shall the Employer distribute to the Participant,
Participant's spouse, and/or Beneficiary(s) more than the
balance in the Participant's Participation Account_ If the
Employer finances this distribution with the _urchase of an
annuity pursuant to Section 6.04, no amounts will be payable
to the Participant, his or her estate, or any Benefic-'k-ary(s)
upon the death of the measuring life.
(3) Joint and survivor annuity. An
annuity payable annually, quarterly or monthly to the Partici-
pant and the Participant's spouse during a period of years
measured by the joint life and last survivor expectancy of
the Participant and Participant's spouse; however, in no
event shall the Employer distribute to the Participant, Partici-
pant's spouse, and/or Beneficiary(s) more than the balance in
the Participant's Participation Account. If the Employer
finances this distribution with the purchase of an annuity
pursuant to Section 6.04, no amounts will be payable to the
estate of Participant or Participant's spouse, or to any
Beneficiary of Participant or Participant's spouse, at the
28
death of the sur nor of Participant and Palncipant's spouse
(4) Payments for a specified period -
Participant as recipient. Annual, quarterly or monthly pay-
ments to Participant over a term net to exceed thirty (30)
years, which term does not exceed the life expectancy of the
Participant, in amounts calculated to -liquidate the Partici-
pant's Participation Account as of the last payment. In the
event of the death of the Participant before -the end of the
selected term, the payments will continue to the named Bene-
ficiary for a period not exceeding the lesser of (A) the
life of the named Beneficiary (or any shorter period) , if
the named Beneficiary is the Participant's spouse or
(B) fifteen (15) years, if the named Beneficiary is not the
Particirarit' s spouse.
(5) Pants for a specified period -
Participant and/or Participant's spouse as recipients. Annual,
quarterly or monthly payments to Participant and/or Participant's
spouse over a term not to exceed thirty (30) years, which
term does not exceed the joint life and last survivor expectancy
of the Participant and Participant's spouse in amounts calcu-
lated to liquidate the Participant's Participation Account as
of the last payment. In the event of the death of the Partic-
ipant and the Participant's spouse before the end of the selected
term, the payments will continue to the named Beneficiary for
a period not exceeding the lesser of (A) the amount 'of years
29
(b) Election to postpone pc gut. When a
Participant voluntarily terminates employment prior to retire-
ment, the Participant may alternatively request that the Em-
ployer withhold the payment of benefits until such Participant
reaches an age no later than the Normal Retirement Age. This
election must be made, if at all, prior to the earliest distri-
bution date allowable under this Plan.
(c) Death of Participant in Service. In the
event of death of the Participant while the Participant is in
Service, the Employer shall not couLmence payment of benefits
until ninety (90) days after notification of the death of the
Participant, in compliance with State laws governing the pay -
sent of death benefits.
Ad) Continued investment of Participation
Account. A Participant's Participation Account may continue
to be invested until, in the Employer's sole judgment, cash
is to be withdrawn for payment of benefits.
(e) Commence:.snt of benefit payout. Except
as provided in subsection (c) of this Section, all payments
of benefits will commence on the first day of the third cal-
endar month following Participant's termination of smploy--
went, except where the Participant has elected to not receive
30
xt
�.o... l-yl;"',P�F�r-"i�'N3q'T+�3�yy..��.���.'�'.Y.?t�71"17; r.Tr�T-'�'rs�'+T.."R
payments until A, date provided under sub_ tion (b) of
this Section. If such election has been made, payment
of benefits will commence on the first day of the month
following the Participant's applicable birthday.
6.02 Distribution Before Separation From Service --
Unforeseeable Emergency. In the event of an Unforeseeable
Emergency of the Participant, the Employer may cause to be
distributed to the Participant such amounts, and in such
methods, that the Employer may, in its discretion, deem
appropriate.
6.03 ChaEges in Distributions. Notwithstanding
any other provision of this Plan, the Employer may at any
-- time change the time or methods of distribution of benefits
M
under the Plan. The Employer may, at its discretion, dis-
charge in full its obligations under the Plan to any Partic-
ipant, or following the death of the Participant, to -the
Participant's Beneficiary or Beneficiaries, by distributing
an amount equal to the balance of the Participant's Partici—
pation Account.
6.04 Purchase of Annuity by Employer. in connection
with the financing of any distribution under Section 6.01 by
an annuity not otherwise provided for as an eligible investment
pursuant to Section 5.08 of this Plan, the Raployer may cause
to be purchased from an insurance company of Employer's choice
AA
31
9
IM"T-Wal-T
a fixed or varidoe annuity policy at suchme as the
Participant becomes eligible for monthly distributions. The
Employer shall be the owner of such annuity policy, and the
rights of the Participant shall be limited to the right to
receive monthly payments pursuant to such policy. All obli-
gations of the Employer with respect to the Plan shall be
frozen in amount at the time the annuity policy is delivered
to the Employer.
6.05 Withholding of Taxes. Notwithstanding any
other provision in this Plan, upon distribution of benefits
the Employer shall withhold applicable federal and state in-
come taxes and any other amounts required by law.
*.06 Satisfaction of Payment. Any payment to a
Participant or to such person's legal representative or
Beneficiary, in accordance with the provisions of the Plan,
shall, to the extent of suchpayment only, be in full satis-
faction.of all claims hereunder against the Administrator,
the Advisory Board, and the Employer, any of whom may require
such Participant, legal representative, or Beneficiary as a
condition precedent to such payment to execute a receipt and
release therefore in such form as shall be determined by the
Administrator, the Advisory Board, or the Employer, as
applicable. The Employer does not guarantee the Plan, the
Participants, former Participants, or their Beneficiaries
against loss of or depreciation in value of any right or
32
benefit that any f them may acquire under 'the terms of the
Plan. Further, the Employer does not warrant any tax bene-
fits of the Plan.
VII.
EMPLOYER PARTICIPATION
Notwithstanding any other provisions of this Plan,
the Employer may make additional deposits in the Deferred
Compensation Fund as additional Compensation for services to
be rendered by the Employee for Independent Contractor] to
the Employer during an employment period; provided, (a) the
Employee.has elected to have such additional Compensation
deferred, invested, and distributed pursuant to this Plan,
prior to the Employment Period in which the Compensation
will be earned, and (b) that such additional deposits shall
not exceed the maximum deferral permitted in Sections 4.01
and 4.02.
vizi.
-NON-ASSIGNABILITY
8.01 Non -Assignability. Benefits provided under
s
the Plan may not be anticipated, assigned (either at law or
in equiiy), alienated, or made subject to attachment, garnish-
ment, levy, execution or -other legal or equitable process,
except as provided in this Section.
33
8.02 Assignment" and "alienation." For purposes
of this Section, the terms "assignment" and "alienation"
include:
(a) any arrangement providing for the pay-
ment to the Employer of benefits which would otherwise be due
to a Participant under the Plan, and
(b) any direct or indirect arrangement (whe-
ther revocable or irrevocable) whereby a party acquires from
a Participant or Beneficiary a right or interest enforceable
against the Plan in, or to, all or any part of a Plan benefit
payment which is, or may become, payable to the Participant
or Beneficiary.
For the purposes of this Section, the tern's "assign-
ment" and "alienation" do not include, and Section 8.04 does
not apply to, the following arrangements:
(1) any arrangement for the withholding
of federal, state, or local tax on Plan benefit payments;
(2) any arrangement for the recovery by
the Plan of overpayments of benefits previously made to a
Participant;
34
;;
(3) any arrangement it the direct
deposit of benefit payments to an account- in a bink, savings
Y
f:
and loan association, or credit union, provided such arrange-
{. f
inent is not part of an arrangemei,L constituting an assignment s
or alienation; or
k
(4) any arrangement for the transfer
of benefit rights from the Plan to another plan.
8.03 Assignment after Payout Commences. Once a
Participant or Beneficiary begins receiving benefits under
the Plan, the Participant or Beneficiary may assign or
alienate the right to future benefit payments.
��- '8.04 Payment to Third Party. An arrangement
whereby a Participant or Beneficiary directs the Plan to pay
all`, or any portion, of a Plan benefit payment to a third
party (including.the Participant's employer) will no•z con-
stitute an "assignment or alienation" if:
(a) it is revocable at any time by the
Participant or Beneficiary; and
(b) the third party files a written acknowl-
edgement with the Administrator which states that the third
party has no enforceable right in, or to, any Plan benefit
payments or portion thereof (except to the extent of payments
35
actually receive pursuant to the terms of the arrangement).
For purposes of this subsection, a blanket written acknowl-
edgement for all Participants and Beneficiaries who are
covered under the arrangement with the third party is suffi-
cient. The written acknowledgement must be filed with the
Administrator not later than ninety (90) days atter the
arrangement is entered into.
R.05 Participant's Debts to the Employer. Notwith-
standing any other provision of this Chapter, if at the time
of distribution of Participant's Participation Account, the
Participant has an outstanding obligation to the Employer
for any reason, Employer may elect to collect the amount due
by of'.:setting such amount against the balance of the Partici-
pant's Participation Account.
IX.
EMPLOYEV S LIABILITIES•
9.01 Discretion re: Investments. The Employer
may, but is not required to, Invest funds pursuant to agree-
ments between Participants and the Employer in accordance
with the request made by each Participant at the time of
enrollment or change in enrollment, prospectively only. The
Employer shall retain the right to approve or disapprove
such investment request. Any action ley the Employer in
investing funds, or approving of any such investment of funds
36
'^'�?5K4It!A*;�xve,4;,.yi,,.c„e ...�R=p;YfY.ix!«;M..^mT"S,"`�n•^{"'..,,-'. ...,.:._,.. <.,.........;. ,..i _ T.,-rr:icc Yr .:'^:.+...hn..�zy�tr.+rv. •.. .. �^c,-._
shall not be considered either an endorsement or guarantee 1
of any investment, nor shall it be considered to be a test
of the financial soundness or the suitability of any invest-
ment for the purpose of meeting future ob_igations as pro-
vided in Section 5.07.
9.02 Indemnity. The Employer does not warrant the
tax benefit of the Plan. The Plan shall indemnify and hold
harmless the Employer, members of the Advisory Board, the
Administrators, and any other persons to whom any fiduciary
responsibility with respect to the Plan is allocated or dele-
gated from and against any and all liabilities, costs, and
expenses incurred by such persons as a result of any act, or
omission to act, in connection with the performance of such
persons' duties, responsibilities and obligations under the
Plan other than such liabilities, costs and expenses as may
result from the negligence, gross negligence, bad faith,
willful conduct, and/or criminal acts of such persons.
X.
MISCELLANEOUS
10.01 Status of Participants. Neither the estab-
lishment of the Plan nor any modification thereof, nor the
establishment of any benefits, shall be construed as giving
to any Participant or other person any legal or equitable
right against the Employer except as herein provided; and in
37
tt���''n�itn:mc....,.,,A.u....w.»emw.w+r.%xro,r:vt,:.-iC?wf"�}:s�?s�'A"'.✓snA+nyb�.f-F-rr+,.. ... ,.. +. .. �. ,. - � _. . _....
no event shall UP terms of employment of any Employee or
Participant be modified or in any way affected hereby.
10.02 Condition of the Plan. It is a condition
of the Plan, -and each Employee by participating herein expressly
agrees, that he shall look solely to the general assets of the
Employer for payment of any benefit to which he is entitled
under the Plan.
10.03 Governing Law. This Plan shall be construed,
administered and enforced according to the Code and the laws
of the State of California.
10.04 Designation of Beneficiaries. Each Partici-
., pant shall'have the right, by written notice to the Employer,
to designate Beneficiaries to receive any benefit to which
said Participant may be entitled in the event of the Partici-
pant's death prior to the completion of distribution of bene-
fits. If the Participant's interest in the Plan is a com-
munity property interest, said written notice must be signed
by the Participant's spouse. If no such designation is in
effect at a Participant's death, the Partycipant's Bene-
ficiary shall be the Participant's estate, or if no executor
or administrator is appointed within six (6) months after
the Participant's dea'.h, the Employer shall direct said bene-
fits to be pard to the Beneficiary or Beneficiaries designated
in his last Will, or if there is no Will, then to the heirs
38
'"�'`»!�'4.9aawy �.x�a�m�.a^,5�•a�•:"+"�;roz�;.•x�...,..:y,,.rw.-...�.>,fi-,..,..,� �....,...... ,.,..nom,.... -,T. _......�_....._... . .......... .... _, ......... _._ _. _
i at law of the Pa icipant. y, ���%LL��.•��.... r
10.05 No Richt of Future Employment. Nothing in
the Plan shall be construed as conferring upon any Partici-
pant any right to continue employment with the Employer.
10.06Gender. As used in this Plan the masculine,
feminine, or neuter gender and the singular or plural number
shall be deemed to include the other unless the context
clearly indicates otherwise.
'10.07 Persons Affected by Plan. The Plan shall be
binding upon and shall inure to the benefit t -if the Employer,
its successors and assigns, all Participants and Beneficiaries,
and their' heirs and authorized representatives.
10.08 Communications. Except as otherwise expressly
pxovided, any notice or other communication required or per-
mitted under this Plan shall be in writing, and if directed
to the Employer, shall be sent to its principal office and,
if directed to a Participant or to a Beneficiary, shall be
sent to such Participant or Beneficiary at the last known ad
dress for such person as it appears in the E=mployer's records.
:.0.09 Waiver of Rights to Salmi. Each Partici-
pant in the Plan shall be deemed to have waived any rights to
periodic payments of salaries or wages with respect to any
39
1
Deferred Compensation pursuant to the provisions of appro-
priate salary resolutions and ordinances concerning periodic
payment of salaries or wages to officers and Employees*of
the Employer.
10.10 HeadiDgs. Headings used in the Plan are
inserted for convenience of reference only.
10.11 Interpretation. If any provision of the Plan
shall be susceptible of more than one (1) interpretation,
such provision shall be interpreted in a manner consistent
with the qualification o the Plan as an Eligible state
Deferred Compensation Plan within the meaning of Code
Section 453(b).
M
11
OPINION BY City Clerk Reimehe presented an Opinion of John K. Van De
ATI)aR Y GH*RAL Kamp, Attorney General regarding sex prograaming on
RE SEX P television which was received and which concluded that "A
MING California City does not have the legislative power to enact
a penal ordinance which would prohibit a person from
displaying on a television received for the viewing by a
minor, a "sex program" when such minor's parent is not
present or such minor does not have a parent's written
permission to view the program.
City Attorney Stein gave a brief analysis regarding the
subject opinion.
TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California ..
JOHN K. VAN DE KAMP
Attorney General
----------------------------------------------
OPINION
No. 83-305
of
JOHN K. VAN DE KAMP SEPTEMBER 8, 1983
'Attorney -General
JOHN T. MURPHY
Deputy Attorney General
--------------------------------------------------- ------
THE HONORABLE PHILLIP ISENBERG, A MEMBER OF THE
CALIFORNIA ASSEMBLY, has requested our opinion on the
following question:
Does a California city have the leggislative power
to enact a penal ordinance which would prohibit a person
from displaying on a television receiver, for the viewing by
a minor, •a "sex program" when such minor'e parent is. not
present or such minor dors not have a parent's written
permission to view the program?
CONCLUSION
A California city does not have the legislative
power to enact a penal ordinance which would prohibit a
person from displaying on a television receiver, for the
viewing by a minor, a -"sex program" when such••minor's
parent is not present or such minor does not have a parent's
written permission to view the program.
ANALYSIS
A proposal was made to a city council that it
prohibit by penal ordinance the display of a "sex program"
on a television receiver i/ to a minor whose parent was not
present or had not authorized such viewing in Writing. A
'sex program" would be defined in terms of displaying
1. The ordinance is directed primarily atprograms
transmitted by cable television systems. However, for this
opinion we will not distinguish cable programs from programs
presented by video disk, tape or other means.
,specified unclod parts of the human anOoy or specified
sexual conduct.hose owning or controlling the television
receiver would be responsible for what was displayed to
minors thereon. The obvious purpose of the proposal is to
punish persons who permit minors to view without parental
approval television programs consisting of explicit nudity
or sexual conduct. We are asked whether a California city
has the legislative powe to enact such an ordinance. We
conclude that it does not.
THE ORDINANCE CONFLICTS WITH GENERAL LAW.
Article XI, section 7, of the California
Constitution states:
"A county or city may make and enforce within
its limits all local, police, sanitary, or other
ordinances and regulations n.,,- n conflict wit:
general law." (See also Gov. 4..�e, S 37100.)
Since a city ordinance enacted under this power
would be void if it conflicts with general state laws, we
must examine the possible conflicts. A conflict may occur
(1) if an ordinance d, uplicates state law, or (2) if an
ordinance contradicts state` w by prohibiting what state
law allows or allowing what state law prohibits. (Lancaster
v. Municipal Court (1972) 6 Cal.3d 805, 807-808; .In re Lane
(1962T 58 Cal.2d 99, 106; Abbott v. City off L_o_sA_n_R_eles
(1960) 53 Cal.2d 674, 681-6$'£; woe v. --Cit and Count ` of
San Francisco (1982) 136 Cal.App.3d 509,- -
con3 ct may also arise where state law has preen ted the
particular field of law by' express declarat o. by_
implication. iLancaster v. Municipal Court, supra, 6 Cal.3d
at 808; Doe v. Cit and Count of San ancisco, supra, 136
Ca1.App.3dat 5
Since the proposal would forbid the.display.of "sex
programs,to children without parental presence or prior
written permission, we are immediatei alerted to the state
laws prohibiting the dissemination o "harmful matters":oto,
minors (Pen. Code, S 313-313.4.) Penal Code -section, -313-0:,
subdivision (a), provides as follows:
"Every person who, with knowledge that a
person is a minor, or who fails to exercise
reasonable care in ascertaining the true age of a
minor, knowingly distributes, sends, causes. to. t4
sent, exhibits, or offers to distribute or exhibit
any harmful matter to the minor is guilty of a
misdemeanor."
"Harmful matter" is defined in Penal Code section 313:
2. 83'n, 30.5
whole, the 'Harmful matter' means matter, taken as a
predominant appeal of which to the
average person.,applying contemporary standards, is
to prurient interest, i.e., a shameful or morbid
interest in nu�ditt sex, -or excretion, and is
patently offensive to a prevailing standards in
the adult community as a whole with respect to what
is suitable material for minors, and is utterly
without redeeming social importance for minors.
"(1) When it appears from the nature of the
matter or the circumstances of its dissemination,
distribution or exhibition that it is designed for
clearly defined deviant sexual groups, the
predominant appeal of the matter shall be judged
with reference to its intended recipient group.
"(2) in prosecutions under this chapter, where
circumstances of production, presentation, sale,
dissemination distribution or publicity indicate
that matter is being commercially exploited:
by the
defendant, for—the-sake sake of its prurient, appeal,: ,.such
evidence is probative with respect to the ,nature of
the matter and can justify the conclusion ,that the
matter,'..—is utterly without redeeming:. social
importance for minors.
'Matter',, means any book, magazine,
newspaper, or other printed or written material or
any ice, drawin photo ra ... motion picture,
or of er:r ctor a re resentat on or any statue.or
o er figure,,or any recording, transcription, or
mechanical, chemical, or electrical.reAroduction or:
any '.other `articles, equipment, machines., or:
materials,
(c) Personmeans any individual,
partnership,'firm , association, corporation; or,.
other.,legal entity.
"(d) 'Distribute' means to transfer possession_
of, whether with or without consideration.
"(e) 'Knowingly' means being aware of the
character of the matter.
"(f) 'Exhibit' means to show.
"(g) 'Minor.' means any natural person under 18
years of age." (Emphasis added.)
3. 83-305
In plain meaning, these state statutes prohibit a
person :from knowingly exhibiting or showing to a minor a
picture,. drawin§, photograph, motion picture or pictorial
representation f1) the .predominant appeal of which to the
average person applying contemporary standards is to
prurient interest, (2) is patently offensive to the
prevailing standards in the adult community as a whole with
respect to what is suitable material for minors and (3) is
utterly without redeeming social importance for minors.
Does a person who knowingly makes a television receiver
available to a minor upon which such harmful matter, in the
form of nudity or sex, is being shown fall within the
proscription of Penal Code section 313.1, subdivision (a)?
We believe so, unless the person is exempted from the
statutes.
As we have seen, the proposal. would forbid the
television display to minors of "sex programs." Assuming
for the purpose of this analysis only that the ordinance
would meet constitutional tests 2/, it is our opinion that
such an ordinance would duplicate the state harmful matter
laws by criminalizing the same conduct which has alread
been made criminal by such laws. (See In re Portnoy(19.42T
21 Cal.2d 237, 240- (slot machine ordinanceduplicated Penal
Code provisions); Pipoly v. Benson (1942) 20 Cal.2d 366, 370
(pedestrian roadcross ng ordnance duplicated Vehicle :Code
provisions): In re Mingo (1923) 190 Cal. 769, 771 (liquor
possession, or inan'ce duplicated Wright Act) .) The
invalidity arises, not from a conflict of langgusgge,:..but
from the inevitable conflict of jurisdiction which would
result from dual regulation covering the same ground."
(Pi of v. `Benson, supra, 20 Cal.2d at 371; Peovie ;v.
Villarino (1955) 1347 -Ca - l . App.2d - Supp.. 893 90 `�` the
ordinance would proscribe the. same conduct ;`already
proscribed by the state and, accordingly, would c2uplicate
the harmful matter statutes.
We also conclude that an ordinance of the. kind
proposed would contradict the state laws. It would'null'ify
the exemptions to Penal Code section 313.1 contained" , in
Penal Code section 313.2:
2. The ordinance raises serious questions concerning
speech, privacy, vagueness, overbreadth and equal
protection. In First Amendment context, "[p]recision of
regulation must be the touchstone. . ." (N.A.A.C.P.. v.
Button (1963) 371 U.S. 415, 438.) In view- or our
conclusion, however, it is not necessary that we address
these matters.
4. 83-305
3
"(a) Nothing in' this chapter shall prohibit
any parent or guardian from distributing any
harmful matter to his child or ward or permitting
his child or ward to attend an exhibition of any
harmful matter if the child or ward is accompanied
by him.
"(b) Nothing in this chapter shall prohibit
any person from exhibiting any -harmful matter to
any of the following:
"(1) A minor who is accompanied by his parent
or guardian.
"(2) A minor who is accompanied by an adult
who represents.himself to be the parent or guardian
of the minor and whom the person, by the exercise
of reasonable care, does not have reason to know is
not the parent or guardian of the minor."
Accordingly, the person exhibiting the program to the minor
would not violate Penal Code section 313.1, subdivision (a),
if the minor were accompanied by a parent, a guardian or 'a
person representing himself as. either. In contrast, the
ordinance would exempt from criminal liability•a person who
has obtained the, prior. written permission°: -of -a parent
Consequentl the -proposed ordinance would, in effect,
authorize at state law prohibits.
We conclude that the ordinance described in the
proposal would both duplicate and contradict state law and;
thus, conflict'therewith.
We also conclude that such an, ordinance would tae
invalid because .state law has preempted ;.this .`field of ::law,
If a ' f ieYd of ' :law. has been preempted ;:. by, state law, no lddal
law regulating that field is. allowed-. (Lancaster _
Mal Court; supra, 6 Ca1.3d < 805, 80$" or inan'ce
Prohibit ng massage parlors invalid, since regulation of
sexual conduct is a.. field fully, occupied by;,.state ;laws-.) ' We
.believe the , field -:Of law at issue is the ,:di-stribut.on :Fto
children of harmful matter in the form of explicit nudity "or
aexual conduct.: While we find no :express -"leg 4,,A ive
statement ° of ` intent to preempt. this. field', neverthe ess such
intent is implied from the state laws.
Abbott v. City of Los Angeles, supra, 53 Cal.2d
674 concerned -a city ordinance requiring convicted felons
to register. State law, however, compelled only`sex`
offenders to register. The court struck down the ordinance
recognizing a legislative intent to provide `uniform
treatment of convicted criminals and holding that state law
preempted the field of registration of criminals. (Abbott,
5. 83-305
4.
Id., at p. 688.) Similarly, in In re Lane, supra, 58
Ca .2d 99, 105, the court found a local ordinance' regu sting
prostitution was preempted by state laws in the field of
sexual conduct. The tests to determine whether or not the
Legislature has occupied a particular field by implication
are found in Galvan v. Superior Court (1969) 70 Cal.2d 851,
859-860 (quot—ng`Trom In. re Hubbard (1964) 62 Cal.2d 119,
128): .
subject matter has been so* fully
and completely covered by general law as to clearly
indicate that it has become exclusively a matter of
state concern; (2) the subject matter has been
partially covered by general law couched in such
t,,�rms as to indicate clearly that a paramount. state
concern will not tolerate further or additional
loc -.l action; or (3) the subject matter has been
part ally covered by general law, and the subject
is of such a nature that the adverse effect of a
local ordinance on the transient citizens of the
state outweighs the possible benefit 'of the
municipality."
The state laws fully cover the field of
distribution of harmful • matter to children. As we..
previously discussed Penal Code- section 313, subdivision
(b) , provides. -that harmful matter may be found.. in "any. book,
magazine, newspaper, or other printed'or written.m�teria] or;
_ any picture, drawing, photograph, motion picture, or other _
pictorial representation or any statute`- or other figurex or
any recording, transcription, or mechanical, :chemical`or
electrical reproductionor any other. articles; equippment,
machines, or materials."•- The proposal concerns:_:.itseaf with.:
pictorial representations, namely, sexually Sex licit:'.
television programs. This type of :harmful matter is ;'`clearly
within the .Penal Code proscription. Indeed, Penal 'Code;-
section 313, subdivision (a), covers the entire subject df
the distribution of harmful . matter, " as ` it'" relates
children. This field of law, then, is fully; comp letelyand .
comprehensively covered by the state, statutes 3/ which
coverage indicates a legislative intent to 066upy tre field..'
Consequently, the ordinance would not survive the''at�
preemption test. r
Carl v. Cit of Los Angeles (1976) 61 'Cat' 'AP „
265 involy�^an or Hance which,rater alia, prohibited :;the .
offer of sale or the sale of harmful matter (as deft h end to
3. Other state statutes also deal with indecency._
visa -vis children. (See Pen. Code, f 272 (contributin to=
deliquency of minors); Pen. Code, 1273ab (child abuse)j
6. 83-305`
Penal Code section 313) from a newsrack on any public
sidewalk unless an adult person was present who was
authorized to prevent the purchase by a minor. 'In finding
the ordinance invalid, the court said:
We think it is obvious that section 313.1 of
the .Penal Code preempts the field of offering and
selling harmful matter to minors. The parallel
decisions holding that the stetutes relating to
adult obscenity preempt the field leave no room for
argument on this point. (Whitneyv. Municipal
Court, 58 Cal.2d907, 909-911 -[27 Cat.Rptr. 16. 377
T.2d_80]; In re Moss,58 Cal.2d V7, 117 [23 Cala
Rptr.361 , 3T3 -`ad 4251; Spitea�uer v. Count
of Los Angeles, 227 Cal.App.2d 376, 37 [38
aZ�1.Rp`tr: _7M] ; Mier v. Municipal Court, 211
Cal.App.2d 470, 4727M [27 Cal. ptr..
We observe no conceptual difference between a distribution
from a news rack, on one hand, and .a transmission from -..a
television screen, on the other'h"A- As "in Carl,'local
legislation regulating such harmful matter .would be void. 4/
Under the second test preempt ionwill be found when
the field has been partially covered by general state,,,law.
couched in such terms as to *indicati, clearly :that: e
paramount state concern will not; tolerate further :or:.:;_
additional local action.. To"a 'PP1y this test w wast examine
"the. pattern of [the state] legs lation;, the: ,langu ga:: used
in the relevant provisions; .and the' nature :.:of . the
subject. matter." (Long Beach Pohice Officers' -Assn, v. = z
Cit of Lon -Beach (I 976)_761
• PP• The
pattern o e legislation at issue dem6ne rates 'a completes
scheme o£ regulation. Definitions are; provided. (Pen.' Code,
S 313) , the forbidden conduct ` is`.' described :. (Pen.:: -Code, f
313.1) , the exceptions'are.., specified (Pen.: Code, 11 313`.2
and 313.3) , the punishment is indicated; Oen. ;Code',_ a 31,3:b� w:Y
and a severability clause is included (Pen. Codek;: f 31_313)-*,
The statutes carefully adopt judicial definitiona<:<when
describing the content` of the matter.,.deemed harmful ,to.
.distribute or exhibit to minors. Y(Erznoznik• V. Citq_:of
4. Where the purpose of the local , legislation -is to t'
resolve a peculiarly local problem,, the=:_ ordinance stay
survive as a regulation in a separate field of law. Pep le
v. Kukkanen (1967) 248 Cal.App.2d Supp. 899, 903(local
ordinance prohibiting topless waitresses found valid-; as
local regulation of live entertainment rather than of sexual
conduct)'-) 7 r
7. 83-305
Jacksonville (1975) 422 U.S. 205, 212-213; -Miller V.
Ca i ornia 1973) 413 U.S. 15, 24.) The statutes represent a
thoughtful legislative effort to regulate content. without
enteringin the arena of protected speech. Since the
{: ordinane would be disruptive in the legislative scheme, it
is our opinion that the ordinance would gnot pass the second
test of preemption.
We further conclude, under the third test, that the
proposal would have adverse effects on the state's -
transient citizens outweighing local benefits. A burden
would be placed on transient citizens generally if cities
were to enact penal ordinances in varying forms, with
conflicting notions of what is harmful to children, on the
subject of television viewing. (Seo Long Beach Peace
Officers Assn. v. City of Long Beach, supra, 61 GaT p .Za
64, 371.5 Moreover, the uniform state law provisions
proscribing the dissemination of harmful matter to children
would be disrupted by disparate local controls.
THE SUBJECT MATTER OF THE ORDINANCE IS NOT A MUNICIPAL.
.AFFAIR.
A chartered city, as distinguished from a general
law city, has exclusive power over municipal affairs. (Cal.
Const., art. XI, I 5(a).) The case of Bishop v. Cit of
San Jose (1969) 1 Cal.3d 56 examined'thTs constitut ona
power. At issue in BisnhoR was the authority of a chartered..
city to pay its emp ogees salaries below the level of the
state wage law. The court recognized that a chartered,. city
has "autonomy .with respect to all municipal affairs."' (1
Cal.3d at 61.) However, as to matters of "a ate -wide'
concern," chartered cities remain subject :to and controlled:::
by applicable•. general state law "regardless of the;
provisions of their charters, if it; is the intent and
purpose of such general law to occupy the field to the
exclusln of municipal' regulation (the preemption.
doctrine)." (1 Cal.3d at 60-61.
Under Bishop, it must be determined in the first, _
instance whether the local ordinance of a chartered city
conflicts with general state law. If it does, as we have
already determined here, then it must be decided whether the
subject regulated is a municipal affair or a matter of. -
statewide concern. (See 58 Ops.Cal.Atty.Gen. 519, 512: ,
(1975).) Our opinion is that the subject matter is one of
statewide concern and that the kind of ordinance proposed,
if enacted by a chartered city, would be void.
Municipal affairs are matters which affect the
local citizens rather than the people of the state
generally. Accordingly, such subjects as wages and salaries
(Sonoma County Org. of Pub. Employees v. County of Sonoma.
8. 83-305
(1979) 23 Cal.3d 296, 315; Vial V. Cit off San Diego (1981)
122 Cal.App.3d 346, 347) , police andtiredepartment
operations (Brown v. Cit of -Berkeley (1976) 57 Cal.App.3d
223, 236) and public park reg u at ons (Simons v. ' City Of
Los An eIes (1976) 63 Cal.App.3d 455,--4-6-7)- have -ween
ed t u ne-d-by the courts to be municipal affairs. Indeed, a
municipal affair is always a judicially defined term.
(Bisho v. city of San Jose, _supra, 1 Cal . 3d 56, 63.) On
t e of er hand, a matter- of statewide concern extends beyond
the local interests at stake. For example, gun control
(Long Beach Police Officers Assn. v. city of Long Beach,
supra, 61 Cal.App-3d-372), telephone lines and
hig- ways Pacific Tel. and Tel. Co. v. City and County of
San FranciscoCal.-Td--766, 173; Southern CaL.
oa s ii v. * McGuire (1934) 2 Cal.2d 115, - an
regional- lance (CEEED v. California Coastal Zone
Conservation Comn'n (197 43 Cal.App.3d 306,- -2 are
matters of statewide concern. (See Professional Fire
Fighters, Inc. v. Cit of Los Angeles 60 Cal.2d�-276,��-�
collecte cases) .
The purpose of harmful. matter legislation is to
protect_ children. Courts have long recognized juveniles as
a class of persons in whose welfare the state has a uniue
interest. (Ginsbergv. New York (1968) 390 U.S..,. 619,
640-641 (obscene books). Interstate Circuit v. Dallas (1968)
390 U.S. 676, 690 (obscene films); Prince v. ssac usetts
(1944) 321 U.S. 158, 170 (streetemplooyment�tur er
Burn _Mfg.. _Co. v. Beauchamp(1913) (child labor Marine
o nt Ltd. v. Wo son 1982) . 30 Ca1.3d 721, 7 + �-T�►�
(housing);T.N.G. v. Superior Court (1971) 4 Cal.3d 767,_778.
(juvenile law).) Th s concern. fo= children is not limited
to cities but is statewide in scope. The distribution_of
harmful matter to children cannot be said to be of paramount
importance to cities only.
The interest of the city in this field of law may
certainly overlap the state's interest. However, `'wjhe�,:._
there is doubt as to whether an attempted reggulation relates
to a municipal or to a state matter, or if it be a mixed
concern of both, the doubt must be resolved in favor of the
legislative authority of the state." (Abbott v. City: of.
Los Angeles, supra, 53 Cal.2d 674, 681.)