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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