City of South Lake Tahoe

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1 City of South Lake Tahoe NEW BUSINESS c ' making a positive difference now" STAFF REPORT CITY COUNCIL MEETING OF JULY 21, 2015 TO: FR: RE: Nancy Kerry, City Manager Janet Emmett, Human Resources Manager Resolution of Intention to Approve An Amendment to the Contract Between the Board Of Administration of the Public Employees' Retirement System (CalPERS) and the City of South Lake Tahoe to Provide Section (Employees Sharing Additional Cost) of 3% for Classic Local Safety Members RECOMMENDATION Adopt the resolution. BACKGROUND On October 10, 2014 the City Council ratified Memorandum of Understandings between public safety bargaining units and the City. Contained in these contracts is the following statement: "Effective upon approval of the contract amendment by Ca/PERS, employees covered by this section shall pay, through payroll deduction, the 100% of the nine percent (9%) member contribution plus an additional three percent (3%) of PERSable compensation towards the employer's contribution, for a total contribution of twelve percent (12%) toward the normal cost of pension benefits as permitted by Government Code Section " ISSUE STATEMENT AND DISCUSSION The purpose of the Resolution is to enact the above contractual agreement. Staff has been working with CalPERS over the last several months to implement this contract agreement. The process requires several steps including this Resolution, an Ordinance (also included in this City Council consent agenda), followed by a voting process by impacted employees, and a second reading of the Ordinance at the August 18, 2015 City Council meeting. In accordance with the requirements of the Public Employees Retirement System and Government Code Section 7507, the following information must be reported: The classic local safety member contribution rate will be 12% of reportable earnings, as of the effective date of the amendment to the contract. Human Resources 1901 Airport Road, Suite 205 South Lake Tahoe, California (530) (530) FAX lf11ited ill Dntg-Free Work a1u/ Play

2 Resolution of Intention - Cal PERS July 21, 2015 Page 2 of 2 CITY COUNCIL WORKPLAN This action completes the implementation of the MOU's as agreed to on October 10, FINANCIAL AND/OR POLICY IMPLICATIONS: This action meets the City Council's previous agreement with the safety labor associations to implement cost sharing of 3% for classic safety members. Attachments: Resolution Contract Amendment

3 CITY OF SOUTH LAKE TAHOE RESOLUTION NO. """" RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL CITY OF SOUTH LAKE TAHOE (To provide Section (Employees Sharing Additional Cost) of 3% for classic local safety members.) 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 (Employees Sharing Additional Cost) of 3% for classic 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. PASSED AND ADOPTED by the City Council of the City of South Lake Tahoe at a meeting on July 21, 2015 by the following vote: AYES: NOES: ABSTAIN: ABSENT: Councilmembers Councilmembers Councilmembers Councilmembers ATTEST: Susan Alessi, City Clerk Hal Cole, Mayor

4 Cal PERS XHIB~T Public E T TO CT California a ration tirement tem Ci City of The Board of Administration, California Pub!lc Employees' Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency. having entered into a contract effective March 1, 1968, and witnessed January i 6, 1968, and as amended effective April 1, 1970, December 16, 1971, January 1, 1978, June 18, 1982, September 22, 1984, June 6, 1992, February 5, 1993, July 1, 1994, January 19, 1995, September 5, 2001, January , May 4, 2002, September 28, 2002, October 12, 2002, June 18, 2005, July 1, 2006, November 13, 2010 and April 21, 2012 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs i through 17 are hereby stricken from said contract as executed effective April 21, 2012, and hereby replaced by the fotlowing paragraphs numbered 1 through 17 inclusive: 1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifica!ly provided. "Normal retirement age" shall mean age 55 for local miscellaneous members; age 50 for local safety members entering membership!n the safety classification on or prior to November 13, 2010 and age 55 for local safety members entering membership for the first time in the safety classification after November i3, 2010.

5 2. Public Agency shall participate in the Public Employees' Retirement System from and after March 1, 1968 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. Public Agency agrees to indemnity, defend and hold harmless the California Public Employees' Retirement System (CalPERS) and its trustees, agents and employees, the CalPERS Board of Administration, and the California Public Employees' Retirement Fund from any claims, demands, actions, losses, liabilities, damages, judgments, expenses and costs, including but not limited to interest, penalties and attorneys fees that may arise as a result of any of the following: (a) (b) (c) Public Agency's election to provide retirement benefits, provisions or formulas under this Contract that are different than the retirement benefits, provisions or formulas provided under the Public Agency's prior non-calpers retirement program. Any dispute, disagreement, claim, or proceeding (including without limitation arbitration, administrative hearing, or litigation) between Public Agency and its employees (or their representatives) which relates to Public Agency's election to amend this Contract to provide retirement benefits, provisions or formulas that are different than such em pf oyees' existing retirement benefits, provisions or formulas. Public Agency's agreement with a third party other than CalPEAS to provide retirement benefits, provisions, or formulas that are different than the retirement benefits, provisions or formulas provided under this Contract and provided tor under the California Public Employees' Retirement Law. 4. 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).

6 5. 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. LIFEGUARDS, RECREATION LEADER I, 11, GATEKEEPER AND PARK ATTENDANT I HIRED ON OR AFTER FEBRUARY 5, Effective January 1, 1972 and prior to January 1, 1975, those members who were hired by Public Agency on a temporary and/or seasonal basis not to exceed 6 months were excluded from PERS membership by contract. Government Code Section superseded this contract provision by providing that any suc!l temporary and/or seasonal employees are excluded from PERS membership subsequent to January 1, Legislation repealed and replaced said Section with Government Code Section effective July I, i The percentage of final compen~.;ation to be provided for each year of credited prior and current se1vice for local miscellaneous members in employment before and no! on or after October 12, 2002 shall be determined in accordance with Section 354 of said Retirement Law, subject to the reduction therein for service prior to December 31, i 977, termination of Social Secm1ty, for members whose service has been included in Federal Social Security (2 6 at age 55 Full and Modified). 8. The percentage of final compensation to be provided for each year ot credited prior and current service for local miscellaneous members in employment on or after October 12, 2002 and not entering membership for the first time in the miscellaneous classification after April 21, 2012 shall be determined in accordance with Section of said Retirement Law, subject to the reduction provided therein for service prior to December 31, 1977, termination of Social Security, for members whose service has been included 1n Federal Social Security (2.7% at age 55 Furl and Modified). 9. The percentage of final compensation be provided for each year of credited current service as a local miscellaneous member entering membership for the first time in the miscellaneous classification after April 21, 2012 shall be determined in accordance with Section of said Retirement Law (2 /o at age 55 Full). 1 O. The percentage of tlna! compensation to be provided for each year of credited prior and current as a local safety member entering membership in the safety classification on or prior to November 13, 2010 shall be determined in accordance with Section of said Retirement Law (3 /o at age 50 Full).

7 11. The percentage of final compensation to be provided for each year of credited current service as a local safety member entering membership for the first time in the safety classification after November 13, 2010 shall be determined in accordance with Section of said Retirement Law (3% at age 55 Full). 12. Public Agency elected and elects to be subject to the following optional provisions: a. Sections and (Post~Retlrement Survivor Allowance). b. Section (Basic Level of 1959 Survivor Benefits) for local police members onfy. c. Section {Two Years Additional Service Credit). d. Section (Credit for Unused Sick Leave) for local fire members only. e. Section (Employees Sharing Cost of Additional Benefits): Section (Credit for Unused Sick Leave) From and after September 22, 1984 and until June 6, 1992 the fire employees of Public Agency shall be assessed an additional 0.250% of their compensation for a total contribution rate of 9.250% pursuant to Government Code Section f. Section (Military Service Credit as Pubtic Service). g. Section (One-Year Final Compensation) for local fire members entering membership on or prior to June 18, 2005 and local police members entering membership on or prior to July 1, h. Section (Indexed Level of 1959 Survivor Benefits) for local miscellaneous members and local fire members only. i. Section (Additional Opportunity to Elect 1959 Survivor Benefits) for local miscellaneous members only.

8 j. Section (Different Level of Benefits). Section (fhree~ Year Final Compensation) is applicable to local fire members entering membership for the first time in the fire classification after June 18, 2005 and to local police members entering membership for the first time in the police classification after July 1, Section Full formula) is applicable to local safety members entering membership for the first time in the safety classification after November 13, Section Full formula) is applicable to local miscellaneous members entering membership for the first time in the miscellaneous classification after April 21, k. Section (Employees Sharing Additional Cost): From and after the effective date of this amendment to contract, 3% for classic local safety members. 13. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834, effective on January 1, 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 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. 15. Public Agency shall also contribute to said Retirement System as follows: a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 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 fire 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.

9 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. 16. 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. 17. Contributions required of Public Agency and its employees shatl 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. ff 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 effeciive on Hie day of BOARD OF ADMINISTRATION PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY COUNCIL CITY OF SOUTH LAKE TAHOE~' \)~\; o..\\ BY BY -~~'v RENEE OSTRANDER, CHIEF - PRESIDING O~rCk~. Rl~----- EMPLOYER ACCOUNT MANAGEMENT DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM ~\)\ \)\) ~'1.5:-l?-~1tness Date Attest: c.,}\3 AMENDMENT CalPERS ID #710Hl39796 PERS CON 702A