Attachment 2Date: March 4, 2017
To: Mayor and other Members of Town Council
From : Terry Duryea (311 Oak Meadow Drive, Los Gatos, CA 95032)
Subject: March 7, 2017 Special Meeting—Study Session—Pending Legislation, League of California
Cities
RECOMMENDADTION:
During this Special Study Session, I ask the Town Council to explore with the Seth Miller from the League
of California Cities the possibility of the League filing a friend of a court brief when the California
Supreme Court addresses the appellate court rulings that “state lawmakers may alter retirement
benefits for current employees.”
If the Court’s ruling on the pending cases gives the governmental organizations greater flexibility to
negotiate with employee unions, there is an opportunity for the Town, as well as all California
governmental organizations, to begin to address the level future retirement benefits are earned.
Presumably this will not impact currently earned benefits, but it may be an opportunity to reduce the
rate of growth of the Town’s obligation for future post retirement benefits.
BACKGROUND:
Members of Town Council recognize the Town has a large unfunded liability for pension and other post-
retirement benefits.
A January 16, 2017 editorial in the San Jose Mercury News stated:
“The California Supreme Court has an opportunity to correct its mistakes and enable state leaders
to rein in excessive public-employee pension costs.
“Two appellate courts recently ruled that state lawmakers may alter retirement benefits for
current employees. They said workers’ pension rules may be changed during their careers so long
as they still receive “reasonable” benefits.
“That’s a radical departure from decades of rulings suggesting pension benefits could not be
reduced. Once granted higher accrual rates, workers were thought to be permanently entitled to
them.
“Whether the Supreme Court agrees will profoundly affect California lawmakers’ ability to slow
soaring retirement costs strangling state and local governments.
“It also might enable practical unions to negotiate changes for current employees, depending
upon how broad the decision is.
“The Supreme Court has said it will review that ruling and similar pending cases from Contra
Costa, Alameda and Merced counties.”
Thank you.
Terry Duryea