05 Staff Report - Compensation Account BalancepW H
IpSGCOUNCIL AGENDA REPORT
DATE: July 24, 2008
MEETING DATE: August 4, 2008
ITEM NO.
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT A RESOLUTION APPROVING AN AMENDMENT TO THE TOWN OF LOS
GATOS' DEFERRED COMPENSATION PLAN TO PERMIT LOANS FROM THE
PARTICIPANT'S DEFERRED COMPENSATION ACCOUNT BALANCE
RECOMMENDATION:
Adopt resolution approving an amendment to the Town of Los Gatos' deferred compensation plan to permit loans
from the participant's deferred compensation balance and authorizing the Town Manager to execute the necessary
plan documents.
BACKGROUND:
The Town of Los Gatos currently sponsors a section 457 deferred compensation plan administered by the ICMA
Retirement Corporation (ICMA-RC). Employees may participate in the deferred compensation plan on a
voluntary basis as a supplement to the CalPERS retirement. There is no fee charged to the Town for sponsoring
the ICMA-RC plan.
DISCUSSION:
The proposed amendment amends the Town's current 457 deferred compensation plan to allow loans. The plan
documents will specify that loans are available only to active employees for up to 50% of their account balance.
CONCLUSION:
The ability to take a loan will benefit participants by allowing access to funds for solar panel installations, other
home improvements, hardships, or as otherwise allowed in this plan loan program. The repayment provisions
ensure that participants replenish their accounts, thereby preserving their retirement savings.
FISCAL IMPACT:
This amendment is at no cost to the Town.
Attachments:
1. Resolution Approving an Amendment to the Town of Los Gatos' Deferred Compensation Plan to Permit
Loans from the Participant's Compensation Account Balance
2. Letter from Akeena Solar
F
PREPARED BY: RUNII PORTILL
Human Resources D' for
Revie d by: Assistant Town Manager Cj-, Town Attorney Clerk Administer
Finance Community Development Revised: 07/31/2008 9:21 AM
N:11\4GR1AdminWorkFiles12048 Council ReportsliCMA Council Report for 08-04-08.doe
RESOLUTION NO. 2008-
RESOLUTION OF THE TOWN OF LOS GATOS
APPROVING AN AMENDMENT TO THE TOWN OF LOS GATOS' DEFERRED
COMPENSATION PLAN TO PERMIT LOANS FROM THE PARTICIPANT'S DEFERRED
COMPENSATION ACCOUNT BALANCE
WHEREAS, the Town of Los Gatos (Employer) has employees rendering
valuable services; and
WHEREAS, the Employer has established a retirement plan (the "Plan") for such
employees which serves the interest of the Employer by enabling it to provide reasonable
retirement security for its employees, by providing increased flexibility in its personnel
management system, and by assisting in the attraction and retention of competent personnel; and
WHEREAS, the Employer has determined that permitting participants in the
retirement plan to take loans from the Plan will serve these objectives; and
WHEREAS, the Employer is not charged a cost for employee loans from the
Plan.
RESOLVED, that the Plan will permit loans under specified conditions as terms
provided through the Plan as approved by the Town Manager.
PASSED AND ADOPTED at a regular meeting of the Town Council of the
Town of Los Gatos, California, held on the 4th day of August, 2008 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: Isl Barbara Spector
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
Is/ Jackie Rose
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTACHMENT 1
=s : Akeenao
fT Sour
c°y
July 30, 2008
The Honorable Barbara Spector
Los Gatos Town Council
Town of Los Gatos
Los Gatos, CA
RE: Los Gatos Solar Employee Benefit Program-SUPPORT
Dear Mayor Spector:
On behalf of Akeena Solar, we are writing to support the town's proposed program to enable its
employees to borrow from their own deferred compensation funds to purchase residential solar
systems. We believe that this innovative program will lead the way for Los Gatos and other
communities to take steps to reduce greenhouse gas emissions and protect the environment. We
commend Town Manager Greg Larson's diligent work to develop this program and we hope it
will serve as a model for other cities in the state and nation.
As you know, Akeena Solar is headquartered in Los Gatos and is one of the nation's leading
solar power installers. As a company we strive to educate the community on the benefits of solar
power and give them the ability to decrease their energy use. By promoting clean and renewable
solar power, we protect the environment and enhance our local economy.
We look forward to continuing to work with you and the Town Council on this program.
Sincer y,
Barry Cinnamon
Chief Executive Officer
Akeena Solar
cc: The Honorable Members of the Los Gatos Town Council
Greg Larson, Town Manager
ATTACHMENT 2