Item 12 - PERS
PREPARED BY: Lisa Velasco
Human Resources Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 08/06/2019 ITEM NO: 12
DATE: July 31, 2019
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: a. Adopt a Resolution of Intention between the Board of Administration
California Public Employees’ Retirement System and the Town Council of
the Town of Los Gatos to add Government Code Section 20516, Employees
Sharing Additional Cost, for Classic Local Police Members in the Los Gatos
Police Officers’ Association
b. Introduce an Ordinance by title only between the Board of Administration
California Public Employees’ Retirement System and the Town Council to
add Government Code Section 20516, Employees Sharing Additional Cost,
for Classic Local Police Members in the Los Gatos Police Officers’
Association
RECOMMENDATION:
Staff recommends that the Town Council:
a. Adopt a Resolution of Intention (Attachment 1) between the Board of Administration
California Public Employees’ Retirement System and the Town Council of the Town of Los
Gatos to add Government Code Section 20516, Employees Sharing Additional Cost, for
Classic Local Police Members in the Los Gatos Police Officers’ Association.
b. Introduce an Ordinance (Attachment 2) by title only between the Board of Administration
California Public Employees’ Retirement System and the Town Council to add Government
Code Section 20516, Employees Sharing Additional Cost, for Classic Local Police Members in
the Los Gatos Police Officers’ Association.
BACKGROUND:
On October 16, 2018, the Town Council approved a labor agreement between the Town of Los
Gatos and the Police Officers’ Association (POA). A provision of the agreement was to
implement a cost-sharing provision of the California Public Employees’ Retirement System
PAGE 2 OF 3 SUBJECT: a. Adopt a Resolution of Intention between the Board of Administration California
Public Employees’ Retirement System and the Town Council of the Town of Los
Gatos to add Government Code Section 20516, Employees Sharing Additional
Cost, for Classic Local Police Members in the Los Gatos Police Officers’
Association.
b. Introduction of an Ordinance by title only between the Board of Administration
California Public Employees’ Retirement System and the Town Council to add
Government Code Section 20516, Employees Sharing Additional Cost, for Classic
Local Police Members in the Los Gatos Police Officers’ Association. DATE: July 31, 2019
(CalPERS) by increasing the employee pension contribution 3%, for a total employee
contribution of 12% effective October 1, 2019 or as soon as administratively feasible following
that date. CalPERS categorizes cost-sharing as Section 20516 (Employees Sharing Additional
Cost) within the Optional Benefits listing available and applicable to retirement contracts. This
contribution change will apply to employees within the POA bargaining group that are
categorized as Classic members of CalPERS.
DISCUSSION:
A formal amendment (Attachment 3) to the retirement contract between the Town of Los
Gatos and CalPERS is required to implement Section 20516 (Employees Sharing Additional
Cost). The amendment process includes Town Council adoption of a Resolution of Intention, a
first reading to introduce an Ordinance, a secret ballot election of the employees impacted by
the change resulting in a majority approval, and a second reading to formally adopt the
Ordinance. The second reading and recommendation to adopt the Ordinance will be placed on
the September 3, 2019 Council meeting agenda if Council approves the recommendations on
August 6. The effective date of the amendment and the commencement of the additional 3%
contribution will be October 6, 2019.
CONCLUSION:
Town Council previously approved the proposal to increase POA Classic members pension
contribution to a total of 12% (after the 3% cost-sharing increase is applied) in October 2018 as
part of the new Memorandum of Understanding (MOU) between the POA and the Town of Los
Gatos. CalPERS requires a formal retirement contract amendment process before the pension
contribution change can be implemented. It is recommended that the Resolution of Intention
be adopted, and the Ordinance introduced as the first steps in the amendment process to
comply with the provisions of the current POA MOU.
FISCAL IMPACT:
There is no fiscal impact related to the recommended actions because the Town is complying
with the provisions of the existing POA MOU and the related CalPERS procedures necessary to
implement the pension contract amendment. The overall fiscal impact related to the approval
PAGE 3 OF 3 SUBJECT: a. Adopt a Resolution of Intention between the Board of Administration California
Public Employees’ Retirement System and the Town Council of the Town of Los
Gatos to add Government Code Section 20516, Employees Sharing Additional
Cost, for Classic Local Police Members in the Los Gatos Police Officers’
Association.
b. Introduction of an Ordinance by title only between the Board of Administration
California Public Employees’ Retirement System and the Town Council to add
Government Code Section 20516, Employees Sharing Additional Cost, for Classic
Local Police Members in the Los Gatos Police Officers’ Association. DATE: July 31, 2019
of the POA MOU was outlined in the staff report presented at the October 16, 2018 Town
Council meeting and is expected to be cost neutral.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Resolution of Intention Between the Board of Administration of the California Public
Employees’ Retirement System and the Town Council
2. Ordinance Between the Town Council and the Board of Administration of the California
Public Employees’ Retirement System
RESOLUTION OF INTENTION
TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
TOWN COUNCIL
TOWN OF LOS GATOS
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 20516 (Employees Sharing Additional Cost) of
3% for classic local police members in the Los Gatos Police
Officers’ Association.
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.
By: _________________________________
Presiding Officer
_________________________________
Title
________________________________
Date adopted and approved
(Amendment) CalPERS ID#
CON-302 (Rev. 6/12/19)
1 of 2
Ordinance Council Meeting Date
ORDINANCE ______
AN 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.
NOW, THEREFORE, THE PEOPLE OF THE TOWN OF LOS GATOS AND THE TOWN
COUNCIL DO HEREBY ORDAIN AS FOLLOWS:
SECTION I
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 II
The Mayor of the Town Council is hereby authorized, empowered, and directed to execute said
amendment for and on behalf of said Agency.
SECTION III
This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los
Gatos on the 6th day of August 2019, and adopted by the following vote as an ordinance of the
Town of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on the
3rd day of September 2019. This ordinance takes effect 30 days after it is adopted. In lieu of
publication of the full text of the ordinance within fifteen (15) days after its passage a summary
of the ordinance may be published at least five (5) days prior to and fifteen (15) days after
adoption by the Town Council and a certified copy shall be posted in the office of the Town
Clerk, pursuant to GC 36933(c)(1).
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
2 of 2
Ordinance Council Meeting Date
DATE: __________________
ATTEST:
TOWN CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: __________________