HomeMy WebLinkAboutAgenda Report - June 23, 1993� or
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CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Amendment of PERS Contract to Provide Two Years
Additional Service Credit (Repeal and Re -Adopt
ordinance)
MEETING DATE: June 23, 1993 (Adjourned City Council Meeting)
PREPARED BY: City Attorney
RECOMMENDED ACTION: Repeal Ordinance 1576,. authorizing amendment to the
contract between the City of Lodi and the Board of
Administration of the California Public Employees
Retirement System, and introduce an amended
ordinance.
BACKGROUND: At the meeting of May 19, 1993, the City Council
adopted Resolution 93-65, a Resolution of Intention
to approve an amends; nt to the contra :t between the
City and the Public Employees Retirement System (PERS). Ti._s addressed what
has became known as the "golden handshake" whereby two additional years of
service credit could be given for City employees approaching retirement. The
reason for this action would be to encourage those employees rearing retirement
age, who are currently being paid at top step, to retire early. The
replacements would be paid commensurately less, amounting to a cost saving for
the City.
Both the Resolution of Intention and the first reading of the ordinance
occ-:rred at the May 19, 1993 Council meeting_ The ordinance's second reading
occurred at the June 2 meeting. Unfortunately, PERS has advised that it does
not believe this complies with statutory time guidelines. On June 21, 1993, I
spoke with PERS representative Cynthia Wiegman who advised that she was of the
opinion that Government Code Section 20460 required that the ordinance amending
the contract between PERS and the City be adopted "not less than 20 days after
the adoption of the Resolution of Intention". In Lodi's case, the time lapse
between introduction and final adoption was t.nly 14 days.
I am not convinced that the 20 -day time limit specified in Government Code
Section 20460 is applicable, since this statute specifically addresses an
ordinance "approving" the contract and not an amendment. "Amendments" are
addressed in the following section, an-! although the wording is somewhat
ambiguous, it implies that amendments c.in be made without the 20 -day waiting
period. In any event, it is easier to comply with PERS' interpretation than to
dispute this with them since there are already employees who have begun making
arrangements and commitments to take the early retirement.
In order to avoid disruption of employees' retirement plans, it is requested
that the Council introduce the ordinance at the adjourned meeting of June 23.
APPROVED i
THOMAS A. PETERSON .ecyc-ed oaDel
City Manager J
PERSRET/TXTA.01V 4-J-1
1
AGENDA TITLE: Am,..,dment of PERS Contract to Proviud Two Years
Additional Service Credit (Repeal and Re -Adopt
Ordinance)
MEETING DATE: June 23, 1993 (Adjourned City Council Meeting)
PAGE TWO
1993, with final adoption occurring at the next regular meeting on July 7,
1993. Under Government Code Section 36937(e) and Government Code Section
20460, the ordinance would take effect immediately following its final
adoption. That would move back the "window of opportunity" by 2 days, since we
originally estimated that employees taking advantage of this provision could
retire as early as July 6, 1993. It would also be necessary that the end of
the period be commensurately extended by 2 daips.
FUNDING: General Fund Operating Reserves
Respectfully submitted,
—4%d U49LoSA, t -
Bob McNatt
City Attorney
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PERSRET/TXTA.01V
ORDINANCE NO. 1582
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AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI
REPEALING ORDINANCE NO. 1576 AND REENACTING AN AMENDMENT TO THE CONTRACT
BETWEEN THE CITY COUNC'L OF THE CITY OF LODI AND THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
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THE CITY COUNCIL OF THE CITY OF LODI DOES ORDAIN AS FOLLOWS:
SECTION 1. That Ordinance 1576 is repealed in its entirety.
SECTION 2. That this ordinance authorizes an amendment to the contract
between the City Council of the City of Lodi and the Board of
Administration, California Public Employees' Retirement System, a copy
of said amendment being attached hereto, marked Exhibit A, and by such
reference made a part hereof as though herein set out in full.
SECTION 3. The Mayor of the City of Lodi is hereby authorized,
empowered, and directed to execute said amendment for and on behalf of
said Agency.
SECTION 4. This ordinance shall take effect immediately upon its final
adoption, pursuant to Government Code Sections 36937(e) and Government
Code Section 20460, providing that -l:ch ordinance shall become
effective "not less than 20 days after the adoption of the Resolution
of Intention". Said Resolution of Intention was adopted May 19, 1993.
This ordinance shall be published at least once in the Lodi News
Sentinel, a newspaper of general circulation published and circulated
in the City of Lodi and shall thenceforth and thereafter be in full
force and effect.
Approved this day of
PHILLIP A. PENNINO
Mayor
Attest:
JENNIFER M. PERRIN
City Clerk
State of California
County of San Joaquin, ss.
I, Jennifer M. Perrin, City Cleik of the City of Lodi, do hereby
certify that Ordinance No. 1582 was introduced at an adjourned regular
meeting of the City Council of the City of Lodi held June 23, 1993 and
was thereafter passed, adopted and ordered to print at a regular
meeting of said Council held 1993 by the following
vote:
Ayes: Council Members -
Noes: Council Members -
Absent: Council Members -
Abstain: Council :Members -
I further certify that Ordinance No. 1582 was approved and signed by
the Mayor on the date of its passage and the same has been published
pursuant to law.
JENNIFER M. PERRIN
City Clerk
Approved as to Form
BOBBY W. mcNATP
City Attorney
AMENDMENT TO CONTRACT
BETWEEN THE �•t�.�u�S � `
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES' RETIREPZENT SYSTEM
AND TIIE
CITY COUNCIL
OF THE
CITY OF LODI
The Board of Administration, Public Employees' Retirement System, hereinafter referred to as Board, and
the gewerning 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 and April 1, 1991, which provides for participation of Public
Agency in said System, Board and Public Agency aereby agree as follows:
A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective April 1, 1991,
and hereby replaced by the following paragraphs numbered 1 through 14 inclusive:
1. All words and terms used herein which are defined in the Public Employees' Retirement Law
shall hava 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.
Employees of Public Agency in the fallowing 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. iocal Police Officers (herein referred to as local safety members);
Employees other than local safety members (herein referred to as local miscellaneous
members).
4. In addition to the classes of empiuy+ees 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, 1%6 OR THEREAFTER; AND
b. ELECTIVE OFFICIALS.
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 thereot) required of the employees under said local
system has been credited to the individual membership account of each such employee under
the PuNic 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 20520 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.
7. The percentage of final compensation to be provided for local miscellaneous members for each
year of credited prior and current service shalt 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
21252.01 of said Retirement Law (2% at age 50 Full).
9. Public Agency elected to be subject to the following optional provisions:
a. Section 21361.5 (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 21263 and 21263.1 (Post -Retirement Survivor Allowance) for local
miscellaneous members only.
d. Sections 21380-21387 (1959 Survivor Benefits) including Section 21382.4 (Third Level
of 1959 Survivor Benefits) for local safety members.
e. Sections 21380-21387 (1959 Survivor Benefits) including Section 21382.2 (Increased
1959 Survivor Benefits) and Section 21382.4 (Mird Level of 1959 Survivor Benefits)
fc,r local miscellaneous members.
Section 21298 (improved Non -Industrial Disability Allowance) for local miscellaneous
members only.
g. Section 20024.2 (One -Year Final Compensation) for local fire members only.
Section 20818 (rwo Years Additional Service Credit) for local miscellaneous members
and local fire members only.
10. Public Agency, in accordance with Government Code Section 20740, ceased to be an
"employer" for purposes of Section 20759 effective on July 1, 1977. Accumulated
contributions of Public Agency shall be fixed and determined as provided in Government Code
Section 20759, and accumulated contributions thereafter shall be held by the Board as provided
in Government Code Section 20759.
11. Public Agency shall contribute to said Retirement System the contributions determined by
actuarial valuations of prior and future service liability with respect to local miscellaneous
members and local safety members of said Retirement System.
12. Public Agency shall also contribute to said Retirement System as follows:
a. Public Agency shall contribute $2.50 per employee, per month on account of the
liability for the 1959 Survivor Benefits provided under Section 21382.4 of said
Retirement Lay. (Subject to annual change,) In addition, all assets a.: ± liabilities of
Public Agency and its employees shall be pooled in a .single account, based on term
insurance rates, for survivors of a:l local miscellaneous members and local safety
members.
b. A reasonable amount. = 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 amoum, as fixed by the Board, payable in one installment as the occasions
arise, to cora 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 Retiremen! 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 pef iod to which said
contributions refer or as may be prescribed by Board regulation. If more or less than the
correct amount of docs 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 day of
.19
BOARD OF ADMINISTRATION
PUBLIC EMPLOYEES' RE'IiRE I NT SYSTEM
BY
CHIEF, CONTRACT SERVICES DIVISION
PUBLIC EMPLOYEES' RP-TWEMENT SYSTEM
PERS-CON-702 (AMENDMEND
(Rev. 1192)
CITY COUNCIL
OF THE
CITY OF LODI
BY
Presiding Officer
Witness Date
Attest:
Clerk