06 Staff Report - Public Employees Retirement SystemMEETING DATE: 5-5-2008
t w N 0 AGENDA ITEM: 6
' .L COUNCIL AGENDA REPORT
DATE: MAY 1, 2008
TO: MAYOR AND TOWN COUNCIL
FROM: ORRY P. KORB, TOWN ATTORNE)&
SUBJECT: ADOPT AN ORDINANCE OF THE TOWN OF LOS GATOS APPROVING AN
AMENDMENT TO CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM AND THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt the ordinance introduced by Council on April 7, 2008.
DISCUSSION:
On April 7, 2008, Council voted to introduce an ordinance (Attachment 1) amending section
2.10.710 of the Town Code to approve an amendment to the contract between the Town and the
California Public Employees' Retirement System ("CALPERS"). On April 23, 2008, a majority
of the Town's miscellaneous employees voted to approve a change in their rate of contribution as
would be required by the contract amendment (Attachment 2.) Adoption of the ordinance is the
final step to implement the contract amendment. Should Council adopt the ordinance as
introduced, it will become effective 30 days thereafter. The contract amendment will take effect
on July 1, 2008.
FISCAL IMPACT:
This contract amendment results in a net savings of .451% of total miscellaneous payroll for FY
2008109.
Attachments:
1. Introduced Ordinance
2. Results of Secret Ballot Election
PREPARED BY: ORRY P. KORB, TOWN ATTORNEY
NA MGRIAdminWorkFiles\Town AttanwylCouncil Reportsl5-5.48 PERS Contract Amendment.wpd]
Reviewed by: own Manager Assistant Town Manager Clerk
,6inance Community Development
Rev: 5/1/08 5:3 pin
Reformatted: 7/19/99 Fild 301-05
ORDINANCE
ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE TOWN COUNCIL OF THE TOWN OF
LOS GATOS AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM
The Town Council of the Town of Los Gatos does ordain as follows:
Section 1
That an amendment to the contract between the Town Council of the Town of Los Gatos
and the Board of Administration, California Public Employees' Retirement System is hereby
authorized. a copy of said amendment being attached hereto, marked Exhibit, and by such
reference made a part hereof as though herein set out in full.
Section 2
The Mayor of the Town of Los Gatos is hereby authorized, empowered, and directed to
execute said amendment for and on behalf of said Agency
Section 3
Section 2.10 710 of Article lll, Division 5 of Chapter 2 of the Los Gatos Town Code is
hereby amended to add the following:
(d) Amendment. An amendment to the contract between the Town Council and the
Board of Administration, State Public Employees' Retirement System is hereby
authorized, a copy of such amendment being attached to the original of
Ordinance No. , marked "Exhibit A," and by such reference made part
hereof as though herein set out in full. The Mayor of the Town Councii is hereby
authorized empowered, and directed to execute such amendment for and on
behalf of such agency
Section 4
This Ordinance shall take effect 30 days after the date of its adoption and prior to-the
expiration of 15 days from the passage thereof shall be published at least once in the Los Gatos
VleeKly-Times a newspaper of general circulation, published and circulated in the Town of Los
Gatos and therceforth and thereafter the same shall be in full force and effect
ATTACHMENT 1
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos. California held on the 7"` day of April, 2008 by the following vote
COUNCIL MEMBERS
AYES:
NAYS:
ABSENT:
ABSTAI N:
ATTEST:
SIGNED: ts/ Barbara Spector
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
Isl Jackie Rose
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
Jtk,~
Ca1PERS
EXHIBIT
California
Public Employees' Retirement System
40.
AM NDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
Town Council
't'own of Los Gatos
The Board of Administration, California Public 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 April 1,
1972, and witnessed March 1, 1972, and as amended effective August 2, 1972, June 1,
1976, July 1, 1976, October 1, 1976, January 4, 1990; December 16, 1992, August 6,
1997 and June 24, 2001 which provides for participation of Public Agency in said
System, Board and Public Agency hereby agree as foliows-
A. Paragraphs 1 through 14 are hereby stricken from said contract as executed
effective June 24, 2001, and hereby replaced by the following paragraphs
numbered 1 through 15 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 55 for local miscellaneous members and age 50 for local safety
members.
Public Agency shall participate in the Public Employees' Retirement
System from and after April 1, 1972 making its employees as hereinafter
orovided, 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
;o said Law hereafter enacted except those, which by express provisions
thereof, apply only on the election of a contracting agency
FXHiBI"C A
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:
Local 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 employees excluded frorn membership by
said Retirement Law, the following classes of employees shall not become
members of said Retirement System:
a. ALL PERSONS EMPLOYED ON OR PRIOR TO CONTRACT
DATE WHO WERE MEMBERS OF THE LOCAL SYSTEM
EXCEPT THOSE IN EMPLOYMENT ON CONTRACT DATE WHO
WAIVED THEIR RIGHTS UNDER THE LOCAL SYSTEM AND
THOSE PERSONS WHO WAIVED THEIR RIGHTS BETWEEN
MARCH 1 BAND MARCH 26, 1976.
5. Prior to January 1, 1975, those members who were hired by Public
Agency on a temporary andlor seasonal basis not to exceed 6 months
were excluded from PERS membership by contract. Government Code
Section 20336 superseded this contract provision by providing that any
such temporary and/or seasonal employees are excluded from PERS
membership subsequent to January 1, 1975. Legislation repealed and
replaced said Section with Government Code Section 20305 effective July
1, 1994.
6. Assets heretofore accumulated with respect to members under the local
retirement system who waived their rights under that system have been
transferred to the Public Employees' Retirement System on April 1, 1972
or between March 18, and March 26, 1976 and applied against the liability
for prior service incurred thereunder. That portion of assets so transferred
which represent the accumulated contributions (plus interest thereof)
required of the employees under said local system have been credited to
the individual membership account of each such employee under the
Public' Employees' Retirement System.
The percentage of final compensation to be provided for each year of
credited prior and current service for local miscellaneous members in
employment before and not on or after the effective date of this
amendment to contract shall be determined in accordance with Section
21354 of said Retirement Law, subject to the reduction provided therein
for service prior to June 30, 1976, termination of Social Security, for
members vihose service has been included in Federal Social Security
i2% at age 55 l=ull and Modified).
f it DO UT SIG "BA'HIBIT ONI T'
SE N 8. The percentage of final compensation to be provided for each year of
credited prior and current service for focal miscellaneous members in
employment on or after the effective date of this amendment to contract
shall be determined in accordance with Section 21354.4 of said
Retirement Law, subject to the reduction provided therein for service prior
to June 30, 1976, termination of Social Security, for members whose
service has been included in Federal Social Security (2.5% at age 55 Full
and Modified).
9. 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 21362.2 of said Retirement Law
(3% at age 50 Full).
10_ Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21536 (Locai System Service Credit Included in Basic
Death Benefit).
b_ Sections 21624 and 21626 (Post-Retirement Survivor Allowance).
C. Section 21574 (Fourth Level of 1959 Survivor Benefits).
d. Section 20042 (One-Year Final Compensation).
e. Section 21024 (Military Service Credit as Public Service).
11. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
July 1, 1976. Accumulated contributions of Public Agency shall be fixed
and determined as provided in Government Cade Section 24834, and
accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20834.
12_ 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 and local safety members of said
Retirement System.
-13. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959
SurAvor Benefits provided under Section 21574 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 al[
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.
14. 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.
15. 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 subsegge`ht remittances. Adjustments on account of
errors in contributions i(qq 'ired of any employee may be made by direct
payments betweeM b employee and the Board.
B. This amendment a [,be effective on the day of
BOARD OF ADMIN ST. ATION TOWN COUNCIL
PUBLIC EMPi,Q,
*~S' RETIREMENT SYSTEM TOWN OF LOS GATOS
BY BY
LOI GARTLAN 3, CHIEF PRESIDING OFFICER
EMPLOYER SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
0"
Witness Date
Attest:}
~ Ey
Clerk
AML:N[imE`1T ::R4 370
PERs-ccn€-7021A. 'Rov 10E05)
STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
MEDIATION AND CONCILIATION SERVICE
RESULTS OF SECRET BALLOT ELECTION
CaIPERS Enhanced Retirement Election
EMPLOYER: The Town of Los Gatos
EMPLOYEE
ORGANIZATIONS: All miscellaneous employees including the Town Employees
Association (TEA) and the American Federation of State County and Municipal Employees
(AFSCME), Management, Confidential and any eligible part-time/hourly employees
enrolled in CalPERS of the Town of Los Gatos
The following are the results of balloting held in the Town of Los Gatos. The election was held on the
question:
" Shall the contribution rate of miscellaneous employees of the Town of Los Gatos be changed to 8% of
reportable earnings to provide the 2•.5% @ 55 formula?"
1. Total number of eligible voter's 3
2. Total number of ballots deposited in the ballot box
3. Total number of ballots challenged
4. Total number of challenges upheld
5. Total number of ballots rejected other than challenges
6. Total number of valid ballots _
(Add lines 3 and 4, then subtract from line 1) Q f
7. Total number voting: "YES" U r
8. Total number voting. "NO"
The ab is a tr a statement of the election returns.
❑ate: J , "0
CA RNIA STATE MEDIATION AND CONCILIATION SERVICE
The undersigned acted as authorized observers in the countin6 and tabulating of ballots indicated above. We hereby
certify that the counting and tabulation were fairly and accurately done, that the secrecy of the ballots was maintained,
and that the results were as indicated above. We also acknowledge service of this count.
Date:
A
Date:
~
(TEA)
lown VEmployees Association (TEA)
Date_
Tow of Los Gatos
ATTACHMENT 2