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HomeMy WebLinkAboutAgenda Report - May 1, 1996 (79)COUNCIL COMMUNICATION AGENDA TITLE: Resolution Of Intention To Approve An Amendment To The Contract Between The Public Employees' Retirement System And The City Of Lodi To Include 1) "Credit for Unused Sick Leave," and 2) the Position of Fire Inspector As A Safety Member. MEETING DATE: May 1, 1996 SUBMITTED BY: Human Resources Director RECOMMENDED ACTION: To approve the Resolution Of Intention To Approve An Amendment To The Contract Between The Public Employees' Retirement System And The City Of Lodi To Include 1) "Credit for Unused Sick Leave," and 2) the Position of Fire Inspector As A Safety Member. BACKGROUND INFORMATION: 1) Regarding Credit for Unused Sick Leave: Currently, the City's Sick Leave Conversion program has a direct annual cost of $179,458.79. This cost has been increasing at an average of 12.66% annually over the last 5 years. To control costs, agreements (MOU's) were authorized by the City Council with each of the collective bargaining units to modify the City's contract with PERS to add credit for unused sick leave per Government Code Section 20868.8. This benefit is available to all employees regardless of date hired, however, it is the only sick leave benefit available to employees hired after the effective date of the respective MOU. The Resolution of Intention to amend the contract is the first step in providing this benefit. ANNUAL COST: Temporary Increased Cost: Permanent Increased Cost: Effective 7/l/97 - 6/30/2000 $ 110,163.39 Effective 7/l/2000 $ 21, 028.57 Projected savings from Sick $ 69,295.40 Projected savings from $ 158,430.22 Leave Conversion: (38.61%) Sick Leave Conversion: (88.28%) APPROVED: H. Dixon Flynn -- City anager -r Effective 7/1/97, the City will pay a temporary employer contribution rate until June 30, 2000, in addition to the normal employer cost for the benefit. The temporary increase in the employer contribution rate is due to an increase in the accrued actuarial liability. The annual cost with the temporary rate will be approximately $110,163.39 which is a reduction of 38.61 % from the cost of the Sick Leave Conversion program. Effective July 1, 2000, the annual cost will be approximately $21,028.57, which will be a reduction of 88.28%. The full effect of the cost reductions will not be realized until all future retirees elect the unused sick leave credit option, and current retirees exhaust their sick leave conversion benefit. FUNDING: General, Electric, Sewer and Water Funds BACKGROUND INFORMATION: 2) Regarding Fire Inspector: In 1989, PERS changed the definition of Local Fire Fighter so as to exclude those who performed duties relative to Fire Inspection, Arson Investigation, and Fire Prevention. This change included the provision that an agency may designate such a position as Local Fire Fighter through amending its contract to include Section 20434. The position of Fire Inspector performs life safety functions through these activities, and should be regarded as such. This amendment conforms to our current agreement (MOU) with the Firefighters which states that all members of the bargaining unit will be covered under the same retirement plan. The Resolution of Intention to amend the contract is the first step in providing this benefit. COST: $5,738 annually. FUNDING: Currently funded. Respectfully submitted, Joa Narlbch, Human Resources Director Attachments: (3) Prepared by Marlon Robbins, Human Resources Analyst II cc: Vicky McAthie, Finance Director Hank Howard, Fire Chief RESOLUTION NO. 96-4:2 RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF LODI WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agency of a resolution giving notice of its intention to approve an amendment to said contract, which resolution shall contain a summary of the change proposed in said contract; and WHEREAS, the following is a statement of the proposed change: To provide Section 20434 (Any officers or employees of a fire department employed to perform duties of firefighting, fire prevention, fire training, hazardous materials, emergency medical services or fire or arson investigation services as "Local Fire Fighters" and Section 20965 (Credit for Unused Sick Leave) for local miscellaneous members and local safety members. NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby give notice of intention to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof. AYES: ' COUNCIL MEMBERS: Davenport, Mann, Pennino, Sieglock, and Warner (Mayor) By , NOES: COUNCIL MEMBERS: None P iding Wicer ABSENT: COUNCIL MEMBERS: None Title 0 Date ad ed And approved (Amendment) CON -302 (Rev. 8/94) AMENDMENT TO CONTRACT EXHIBIT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF LODI The Board of Administration, Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of above public agency, hereinafter referred to as Public Agency, having entered into a contract effective June 1, 1966, and witnessed April 27, 1966, and as amended effective July 6, 1966, May 1, 1970, July 1, 1973, July 1, 1977, April 1, 1991 and July 7, 1993 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 14 are hereby stricken from said contract as executed effective July 7, 1993, and hereby replaced by the following paragraphs numbered 1 through 14 inclusive: All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age" shall mean age 60 for local miscellaneous members and age 50 for local safety members. 2. Public Agency shall participate in the Public Employees' Retirement System from and after June 1, 1966 making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency. 3. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement: a. Local Fire Fighters (herein referred to as local safety members); b. Local Police Officers (herein referred to as local safety members); C. Employees other than local safety members (herein referred to as local miscellaneous members). 4. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System: a. PERSONS COMPENSATED ON AN HOURLY BASIS WHO ARE HIRED JUNE 1, 1966 OR THEREAFTER; AND b. ELECTIVE OFFICIALS. LEASE JO NOT SIGI1 "EXHIBIT ONLY" 5. Assets heretofore accumulated with respect to members in the local retirement system have been transferred to the Public Employees' Retirement System and applied against the liability for prior service incurred thereunder. That portion of the assets so transferred which represent the accumulated contributions (plus interest thereof) required of the employees under said local system has been credited to the individual membership account of each such employee under the Public Employees' Retirement System. 6. Benefits paid to pensioners and annuitants under the local system on the effective date of the contract were recalculated, as authorized by Section 20481 of the Government Code, to conform with benefits applicable to persons retiring after the effective date of the contract except that no benefit which would have been payable under the continuation of the local system shall be reduced. The percentage of final compensation to be provided for local miscellaneous members for each year of credited prior and current service shall be determined in accordance with Section 21251.13 of said Retirement Law, subject to the reduction provided therein for service prior to June 30, 1977, termination of Social Security, for members whose service has been included in Federal Social Security (2% at age 60 Full and Modified). 8. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 9. Public Agency elected and elects to be subject to the following optional provisions: Section 21536 (Local System Service Credit Included in Basic Death Benefit). b. Section 21222.1 (Special 5 % Increase - 1970). Legislation repealed said Section effective January 1, 1980. C. Sections 21624 and 21626 (Post -Retirement Survivor Allowance) for local miscellaneous members only. d. Section 21573 (Third Level of 1959 Survivor Benefits). e. Section 21427 (Improved Non -Industrial Disability Allowance) for local miscellaneous members only. f. Section 20042 (One -Year Final Compensation) for local fire members only. Section 20903 (Two Years Additional Service Credit) for local miscellaneous members and local fire members only. h. Section 20434 ("Local Fire Fighter" shall include any officer or employee of a fire department employed to perform firefighting, fire prevention, fire training, hazardous materials, emergency medical services, or fire or arson investigation services as described in Government Code Section 20434). Section 20965 (Credit for Unused Sick Leave). 10. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on July 1, 1977. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 11. Public Agency shall contribute to said Retirement System tide contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System. 12. Public Agency shall also contribute to said Retirement System as follows: a. Public Agency shall contribute $2.00 per member, per month on account of the liability for the 1959 Survivor Benefits provided under Section 21573 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local miscellaneous members and local safety members. b. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law. C. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law. 13. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law. 14. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by direct payments between the employee and the Board. B. This amendment shall be effective on the B04D OF ADMINISTRATION PU EMPLOYEES' RETIREMENT SYSTEM O. BY - re DIVISION CIS ACTUARIAL PUBLIC EMP ,OYER SERVICES DIVISION RETIREMENT SYSTEM day ofd 119 CITY COUA OF THE 10 CITY OF LODI BY �C Presiding Officer y� Witness Date � Attest: ' yl�y AMENDMENT PERS-CON-702A (Rev. 1/96) Clerk CALIFORNIA PUBLIC EIV.._ LOYEES' RETIREMENT SYSTEM Actuarial and Employer Services Division , Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229-2709 (916) 326-3420 CERTIFICATION OF EMPLOYEE ELECTION I hereby certify that the following employees of the City of Lodi have expressed their approval or disapproval of said agency's intention to amend its contract to provide Section 20434 (Any officers or employees of a fire department employed to perform duties of firefighting, fire prevention, fire training, hazardous materials, emergency medical services or fire or arson investigation services as "Local Fire Fighters" on the basis described in the Resolution of Intention adopted by said agency's governing body on , in such manner as to permit each employee to separately and secretly express his choice and that the outcome of such election was as follows: Number of Number of votes Number of votes employees eligible approving said disapproving said to vote amendment amendment Local Fire Fighters as defined in Gov't Code Section 20434 Clerk or Secretary Date (Amendment) PERS-CON-15 (Rev. 1196) Ci T PUBLIC EMPLOYEES' RETIREMENT SYSTEM 2% @ 50 BALLOT (Reclassification) For use by certain local fire members of the City of Lodi to determine their approval or disapproval of the proposal of said agency's governing body to amend its contract with the Board of Administration of the Public Employees' Retirement System to reclassify their positions from miscellaneous to safety status pursuant to Section 20434 (Any officers or employees of a fire department employed to perform duties of firefighting, fire prevention, fire training, hazardous materials, emergency medical services or fire or arson investigation services as "Local Fire Fighters". Local safety members of the City of Lodi are covered by the 2 % @ 50 Formula, as outlined in the attached Summary of Major Provisions. Shall the contribution rate of the designated employees YES [ of the Public Agency named above be changed to 9% of reportable earnings to provide 2% @ 50 formula? NO [ ] (Reclassification) C10038 (Rev. 12192)