12 Staff Report - Public Employees Retirement System~owN o,~ MEETING DATE: 04/07/08
ITEM NO.
cos o~os COUNCIL AGENDA REPORT
DATE: April 2, 2008
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD
OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND THE TOWN COUNCIL OF THE TOWN OF
LOS GATOS
A. ADOPT RESOLUTION OF INTENTION TO AMEND CONTRACT
B. INTRODUCE ORDINANCE APPROVING AMENDMENT
RECOMMENDATION:
1. Adopt resolution of intention to amend contract
2. Instruct Clerk to read title of Ordinance
3. Move to waive reading of full text of Ordinance
4. Move to introduce Ordinance
BACKGROUND:
The current Memoranda of Understanding (MOU) with the Town Employees' Association (T.E.A.)
and the American Federation of State, County and Municipal Employees (AFSCME) provides that
the Town will amend its contract with the Public Employees Retirement System (PERS) to change
the retirement formula from 2% at 55 to 2.5% at 55 at no cost to the Town. To implement the
contract amendment in accordance with PERS law, this report recommends the adoption of a
Resolution of Intention and the First Reading of Ordinance.
DISCUSSION:
The following values have been identified in the actuarial valuation for the adoption of the contract
amendment:
Change in Present Value of Benefits $2,591,638
Change in the Accrued Liability $1,317,547
Change in the Employer Rate 2.541%
PREPARED BY:
RUMI PORTILLO : _TMe
Human Resources Director
Reviewed by: V- >J Assistant Town Manager _ Town Attorney Clerk Administer
inance Community Development Revised: 04/02/2008 2:02 PM
Reformatted: 5/30/02
N:AMGR\AdminWorkFiles\2008 Council Reports\PERS Council Report for 04-07-08.doc
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: APPROVE AN AMENDMENT TO CONTRACT BETWEEN "THE BOARD OF
ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM AND THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
APRIL 2, 2008
To offset the change in the employer rate, the nonswom employee groups have waived a 3% cost
of living adjustment for FY 2008/09, resulting in a net savings of .459% to the Town. In addition
to the change in the employer rate, a change in the employee contribution rate from 7% to 8% will
be fully paid by employees on an ongoing basis.
Government Code Section 20474 requires a secret ballot election by the employees affected
whenever the contract is amended to provide a benefit which changes the employees' rate of
contribution. The election is scheduled for April 23rd, which will be after the adoption of the
resolution of intention and the first reading of the ordinance. The contract shall not be amended if a
majority of the affected members vote to disapprove the proposed plan.
In accordance with PERS statutes, the contract amendment will apply to all local miscellaneous
(nonsworn) members and is available only to employees who are employed on or after the contract
amendment effective date.
CONCLUSION:
The Town has provided PERS Public Agency Contract Services with the required Schedule of
Agency Actions. This report recommends the adoption of a Resolution of Intention to amend the
PERS contract and the First Reading of Ordinance. The adoption of this contract amendment will
implement a provision agreed to in the MOUs for TEA and AFSCME and will apply to all
miscellaneous employees in accordance with PERS law.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
This contract amendment results in a net savings of .451 % of total miscellaneous payroll for FY
2008/09.
Attachments:
1. Resolution of Intention to Approve an Amendment to Contract between the Board of
Administration California Public Employees' Retirement System and the Town Council of the
Town of Los Gatos
2. Ordinance to Amend Section 2.310.710 Contract with Public Employees' Retirement System,
includes Exhibit A, Amendment to Contract between the Board of Administration California
Public Employees' Retirement System and the Town Council of the Town of Los Gatos
RESOLUTION NO. 2008-
ADOPT RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND THE TOWN COUNCIL OF THE 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 21354.4 (2.5% @ 55 Full and Modified formula) for local miscellaneous members.
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town Council 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 at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 7th day of April, 2008 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: /s/ Barbara Spector
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
/s/ Jackie Rose
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTACHMENT 1
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 III, 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 Council 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
Weekly-Times, a newspaper of general circulation, published and circulated in the Town of Los
Gatos and thenceforth and thereafter the same shall be in full force and effect.
ATTACFIMENT 2
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 7th day of April, 2008 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: /s/ Barbara Spector
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
/s/ Jackie Rose
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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