04 Staff Report - California Employer's Retiree Benefit TrustN 0~ MEETING DATE: 6/15/2009
ITEM NO:
•.µu
os autos COUNCIL AGENDA REPORT
DATE: JUNE 10, 2009
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT A RESOLUTION AUTHORIZING PARTICIPATION IN THE CALIFORNIA
EMPLOYER'S RETIREE BENEFIT TRUST (CERBT) THROUGH AN AGREEMENT
OF ELECTION AND ESTABLISHING AUTHORIZED REPRESENTATIVES OF
THE TOWN TO CERBT TO REQUEST EMPLOYER DISBURSEMENTS FROM THE
OTHER POST EMPLOYMENT PREFUNDING PLAN
RECOMMENDATION:
It is recommended that Council adopt the attached resolution authorizing participation in the California
Employer's Retiree Benefit Trust (CERBT) through an Agreement of Election and establishing
authorized representatives of the Town to CERBT to request employer disbursements from the Other
Post Employment Prefunding Plan.
BACKGROUND:
On June 21, 2004, the Governmental Accounting Standards Board (GASB) approved Statement No. 45
(GASB 45), the Accounting Standards for Other Post Employment Benefits (OPEB). OPEB refers to
benefits provided to retirees other than pensions. The most common and largest of these benefits is the
partial funding of retiree medical costs. GASB 45 requires government employers to report the costs
and financial obligations that governments incur when they provide OPEB benefits as part of the
compensation for services rendered by their employees.
GASB 45 specifies when governments must value and report the liability for other post employment
benefits (OPEB). The Town is a Tier II governmental entity and was required to report OPEB
beginning this fiscal year (FY2008/09). To meet this reporting requirement, the Town completed an
actuarial analysis to determine its OPEB expense and liability. Per GASB 45 requirements, this analysis
must be updated a minimum of every two fiscal years. The firm of Bartel and Associates completed the
Town's required analysis in January 2008, which covered FY 2008/09 and FY 2009110.
PREPARED BY; STEPHE 4N)W&, ANCE/ADMINISTRATIVE SERVICES DIRECTOR
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Reviewed by: Assistant Town Manager
Clerk Administrator Finance
`T'own Attorney
Community Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION AUTHORIZING PARTICIPATION IN THE CALFIORNIA
EMPLOYER'S RETIREE BENEFIT TRUST (CERBT) THROUGH AN AGREEMENT
OF ELECTION AND ESTABLISHING AUTHORIZED REPRESENTATIVES OF
THE TOWN TO CERBT TO REQUEST EMPLOYER DISBURSEMENTS FROM THE
OTHER POST EMPLOYMENT PREFUNDING PLAN
June 10, 2009
GASB 45 does not require that the OPEB annual required contribution be fully funded, but the net
OPEB obligation must be reported on the Town's financial statements. In the past, the Town life most
other cities, followed the accepted government accounting principle which budgeted and paid retiree
OPEB benefits on the "pay as you go" basis. This approach recognized only the current cost of
payments to actual retirees and understated the actual current cost of active employees whose liability is
deferred until the employees retire. Recognizing the need to fund potential future OPEB liability in
FY2008/09, the Town budgeted $400,000 for the first year of a planned ten year "phase in" approach for
the annual required contribution (ARC) based on the "pre-funding" method. Phased "pre-funding" aids
in matching the cost of funding the OPEB to the period in which the services are rendered versus the
"pay-as-you-go" method. The annual amount of ARC not "pre-funded" or paid in actual current year
retiree benefit payments will be added to the annual other post employment benefit cost (termed the
"AOC" which is an actuarial calculation based on current service costs) to become the net OPEB
obligation that will be reported on the Town's financial statements. Rating agencies will monitor the net
OPEB obligation from year to year. It is important that the Town continues to make funding progress
over time to fully fund the ARC.
OPEB Trusts are a funding vehicle used by employers to "pre-fund" the future costs of their retiree
OPEB benefits as the employee services are rendered. Once funds are deposited in these irrevocable
trusts, they may not be withdrawn for any purpose other than funding the costs of the employer's retiree
OPEB benefits, similar to the way that pension trusts operate. The funds can be transferred to another
irrevocable trust dedicated for OPEB benefits, or transferred back to the Town upon demonstration that
all OPEB benefits obligations by the Town have been satisfied.
OPEB Trusts provide agencies with a fiscally sound option for ensuring they are able to meet their
future OPEB liability. There are two primary benefits to entering a trust. First, the "prefunding" plan
allows employers to make periodic contributions to the trust which are invested over the long terra to
generate greater earnings than would normally be expected to achieve. In future years, the Town could
use these investment earnings to pay for retiree OPEB benefits, similar to the way the CALPERS
pension plan operates. Over the long term the Town's retiree OPEB costs are anticipated to be reduced.
Second, GASB 45 rules require that until the funds are transferred to an irrevocable trust, the Town
would not be allowed under GASB 45 rules to reduce the net OPEB liability by the "pre-funding"
contribution amount. By placing the funds in an irrevocable OPEB trust, the GASB 45 allows a
reduction to the Town's net OPEB liability that is reported on the Town's financial statements.
Following the implementation of the new GASB 45 requirement, CALPERS created the California
Employers' Retiree Benefit Trust Fund (CERBT), a new trust fund which permits agencies to "prcfund"
the future cost of their retiree OPEB benefits. A number of other financial institutions have created
similar trusts in response to the GASB 45 requirement. After reviewing the available options, staff
believes that CERBT provides the best overall benefit to the Town for the following reasons:
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION AUTHORIZING PARTICIPATION IN THE CALFIORNIA
EMPLOYER'S RETIREE BENEFIT TRUST (CERBT) THROUGH AN AGREEMENT
OF ELECTION AND ESTABLISHING AUTHORIZED REPRESENTATIVES OF
THE TOWN TO CERBT TO REQUEST EMPLOYER DISBURSEMENTS FROM THE
OTHER POST EMPLOYMENT PREFUNDING PLAN
June 10, 2009
■ As the largest public pension system in the United States, CALPERS has significant experience
in administering employer-sponsored plans.
Earnings from trust fund investments help reduce future costs. Recent negative returns in the
Fall 2008 not withstanding, CALPERS has a history of outstanding investment performance,
with investment rate of returns paying 75% of CalPERS pension benefits. It is expected that the
new trust fund for OPEB benefits will have similar returns and will generate significant revenues
to apply to future benefit costs.
"Pre-funding" cities report lower liabilities and lower annual required contributions (ARC) than
non "pre-funding" cities. Establishing a trust allows the use of a higher rate of return in the
actuarial calculations under GASB 45. Using the CALPERS Trust allows the actuaries to use the
CalPERS higher expected investment rate of return (currently approximately 5%), as opposed to
the Town's current portfolio rate of less than 3%, The difference in investment earnings
(discount rate) used in these calculations makes a significant difference lowering the liability and
annual required contribution (ARC) amounts,
Administrative costs are expected to be significantly lower with CALPERS than with other trust
options.
■ Establishing the trust will contribute to maintaining the Town's favorable credit rating (Standard
and Poors AA+) which is anticipated to influence more favorable interest rates for future Town
debt issuances. Creditors and rating agencies are aware of these obligations and the related
liabilities. How an agency chooses to manage them has a direct impact on their decisions on the
credit worthiness of a borrower.
The CALPERS CERBT is approximately two years old, but has been the choice of more 161
California governmental agencies with approximately $922 million under trust.
Based on the strategic investment asset allocation for CERBT, which follows the same investment
management guidelines as the pension trust, CALPERS is projecting a long term expected rate of return
of 7.75%. The Town strategically delayed its investment in the CERBT from the Fall 2009 until late
Spring 2009 due to the dramatic downturn in the market. Staff believes the timing for investment in
CERBT has improved and recommends that the Town make its contribution to the CERBT trust at or
close to the bottom of the current economic cycle.
CONCLUSION:
To legally join the CERBT, the Town must adopt the attached resolution, authorizing the execution of
an Agreement and Election to Prefund Other Post Employment Benefits through CALPERS and
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT A RESOLUTION AUTHORIZING PARTICIPATION IN THE CALFIORNIA
EMPLOYER'S RETIREE BENEFIT TRUST (CERBT) THROUGH AN AGREEMENT
OF ELECTION AND ESTABLISHING AUTHORIZED REPRESENTATIVES OF
THE TOWN TO CERBT TO REQUEST EMPLOYER DISBURSEMENTS FROM THE
OTHER POST EMPLOYMENT PREFUNDING PLAN
June 10, 2009
designate authorized representatives to transact business with CERBT. Once the Town has joined
CERBT and funds have been transferred, the Town may use CERBT as its investment vehicle and
requests disbursements on an as needed basis to reimburse the Town for the cost of retiree health
insurance benefits. PERS invests the balance in a manner similar to the techniques used for the pension
trust with the income allocated to each individual agency. While management of the funds is similar to
the pension trust, the two trusts are entirely separate. The Town provides the contribution amount based
on its recommended ten year "phasing in" of the ARC and will manage the funding schedule, while
CERBT staff manages the investment of the funds under trust. Legally, the Town must remain in the
CERBT for three years, to keep the trust stable. However, as the total investments in CERBT are nearly
$922 million, the CERBT agreement includes a provision for withdrawal by request of the Town earlier
than the three year minimum. The request for early withdrawal is at the CERBT Board's discretion.
However, given the size of the fund, CERBT staff advised an early withdrawal would likely be approved
barring some unforeseen economic catastrophe.
FISCAL IMPACT:
Sufficient funds are available for the FY 2008109 contribution of $400,000. The investment of the
OPEB funds in the CERBT is expected by CERBT staff to trend with the historical 70 plus year trend of
CALPERS, which is approximately 7.75%. If the CALPERS historical return trends are repeated, the
Town can expect that over time it will be required to contribute progressively lower amounts of
operating funds for post retirement benefit costs (once the 100% level of ARC contribution is achieved,
which is anticipated to be by FY 201812019).
Attachments:
Resolution authorizing participation in the California Employer's Retiree Benefit Trust (C11RBT)
through an Agreement of Election and establishing authorized representatives of the Town to CERBT to
request employer disbursements from the Other Post Employment Prefunding Plan.
RESOLUTION NO.
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
AUTHORIZING PARTICIPATION IN THE CALIFORNIA EMPLOYER'S RETIREE BENEFIT
TRUST (CERBT) THROUGH AN AGREEMENT OF ELECTION AND ESTABLISHING AUTHORIZED
REPRESENTATIVES OF THE TOWN TO CERBT TO REQUEST EMPLOYER DISBURSEMENTS FROM
THE OTHER POST EMPLOYMENT PREFUNDING PLAN
WHEREAS, the Town of Los Gatos provides health insurance benefits to retirees (OPEB); and
WHEREAS, the Town of Los Gatos believes it to be in its best interests to prefund the benefit during the
employees years of employment; and
WHEREAS, it is in the best interest of the Town that the funds set aside for this benefit are held in a safe
manner while earning the highest possible investment return; and
WHEREAS, the California Public Employee Retirement System has established the California Employer's
Retiree Benefit Trust (CERBT) to manage funds OPEB funds for pubic agencies; and
WHEREAS, the Town if desirous of participating the CERBT.
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California,
that the Town of Los Gatos:
Section 1. That the Town Council authorizes the Mayor to execute the Agreement and Election of
the Town of Los Gatos to Prefund Other Post Employment Benefits through CalPERS (Exhibit A).
Section 2. That the Town Manager, Assistant Town Manager, and Finance Director are designated
to be the authorized representatives of the Town to the CERBT to request employer disbursements
from the Other Post Employment Prefunding Plan (Exhibit B).
Section 3. This resolution shall become effective immediately upon its passage and adoption.
PASSED AND ADOPTED at a
held on the day of
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
200 by the following vote:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST;
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
meeting of the Town Council of the Town of Los Gatos, California,
NAIMGRIADMINWORKPILEM2009 COUNCIL R-EPORTSI6-15.09 CERBT.DOC
CALIFORNIA EMPLOYER'S RETIREE BENEFIT TRUST PROGRAM ("CERBT")
AGREEMENT AND ELECTION
OF
TOWN OF LOS GATOS
(NAME OF EMPLOYER)
TO PREFUN® OTHER POST EMPLOYMENT
BENEFITS THROUGH CaIPERS
WHEREAS (1) Government Code Section 22940 establishes in the State Treasury the
Annuitants' Health Care Coverage Fund for the prefunding of health care coverage for
annuitants (Prefunding Plan); and
WHEREAS (2) The California Public Employees' Retirement System (CaIPERS) Board
of Administration (Board) has sole and exclusive control and power over the
administration and investment of the Prefunding Plan (sometimes also referred to as
CERBT), the purposes of which include, but are not limited to (i) receiving contributions
from participating employers and establishing separate Employer Prefunding Accounts
in the Prefunding Plan for the performance of an essential governmental function (ii)
investing contributed amounts and income thereon, if any, in order to receive yield on
the funds and (iii) disbursing contributed amounts and income thereon, if any, to pay for
costs of administration of the Prefunding Plan and to pay for health care costs or other
post employment benefits in accordance with the terms of participating employers'
plans; and
WHEREAS (3)
TOWN OF LOS GATOS
(NAME OF EMPLOYER)
(Employer) desires to participate in the Prefunding Plan upon the terms and conditions
set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by
the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund
Other Post Employment Benefits (Agreement) as provided in the terms and conditions
of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an
essential governmental function within the meaning of Section 115 of the Internal
Revenue Code as an agent multiple-employer plan as defined in Governmental
Accounting Standards Board (GASB) Statement No. 43 consisting of an aggregation of
single-employer plans, with pooled administrative and investment functions;
Rev 12/1712008
EXHIBIT A
NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE
FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND
EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:
A. Representation and Warranty
Employer represents and warrants that it is a political subdivision of the State of
California or an entity whose income is excluded from gross income under Section 115
(1) of the Internal Revenue Code.
B. Adoption and Approval of the Agreement; Effective Date; Amendment
(1) Employer's governing body shall elect to participate in the Prefunding Plan by
adopting this Agreement and filing with the CaIPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS
Constituent Relations Office
CERBT (OPEB)
P.O. Box 942709
Sacramento, CA 94229-2709
Filing in person, deliver to:
CalPERS Mailroom
Attn: Employer Services Division
400 Q Street
Sacramento, CA 95814
(2) Upon receipt of the executed Agreement, and after approval by the Board, the
Board shall fix an effective date and shall promptly notify Employer of the effective date
of the Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement
of both CalPERS and Employer, except as otherwise provided herein. Any such
amendment or modification to this Agreement shall be adopted and executed in the
same manner as required for the Agreement. Upon receipt of the executed amendment
or modification, the Board shall fix the effective date of the amendment or modification.
(4) The Board shall institute such procedures and processes as it deems necessary to
administer the Prefunding Plan, to carry out the purposes of this Agreement, and to
maintain the tax exempt status of the Prefunding Plan. Employer agrees to follow such
procedures and processes.
Rev 12117/2008 2
C. Actuarial Valuation and Employer Contributions
(1) Employer shall provide to the Board an actuarial valuation report on the basis of the
actuarial assumptions and methods prescribed by the Board. Such report shall be for
the Board's use in financial reporting, shall be prepared at least as often as the
minimum frequency required by GASB Statement No. 43, and shall be:
(a) prepared and signed by a Fellow or Associate of the Society of Actuaries
who is also a Member of the American Academy of Actuaries or a person
with equivalent qualifications acceptable to the Board;
(b) prepared in accordance with generally accepted actuarial practice and
GASB Statement Nos. 43 and 45; and,
(c) provided to the Board prior to the Board's acceptance of contributions for
the valuation period or as otherwise required by the Board.
(2) The Board may reject any actuarial valuation report submitted to it, but shall not
unreasonably do so. In the event that the Board determines, in its sole discretion, that
the actuarial valuation report is not suitable for use in the Board's financial statements or
if Employer fails to provide a required actuarial valuation, the Board may obtain, at
Employer's expense, an actuarial valuation that meets the Board's financial reporting
needs. The Board may recover from Employer the cost of obtaining such actuarial
valuation by billing and collecting from Employer or by deducting the amount from
Employer's account in the Prefunding Plan.
(3) Employer shall notify the Board of the amount and time of contributions which
contributions shall be made in the manner established by the Board.
(4) Employer contributions to the Prefunding Plan may be limited to the amount
necessary to fully fund Employer's actuarial present value of total projected benefits, as
supported by the actuarial valuation acceptable to the Board. As used throughout this
document, the meaning of the term "actuarial present value of total projected benefits"
is as defined in GASB Statement No. 45. If Employer's contribution causes its assets in
the Prefunding Plan to exceed the amount required to fully fund the actuarial present
value of total projected benefits, the Board may refuse to accept the contribution.
(5) The minimum Employer contribution will be at least $5000 or be equal to Employer's
Annual Required Contribution, whichever is less, as that term is defined in GASB
Statement No. 45. Contributions can be made at any time following the seventh day
after the effective date of the Agreement provided that Employer has first complied with
the requirements of Paragraph C.
Rev 12/1712€)08 3
D. Administration of Accounts, Investments, Allocation of Income
(1) The Board has established the Prefunding Plan as an agent plan consisting of an
aggregation of single-employer plans, with pooled administrative and investment
functions, under the terms of which separate accounts will be maintained for each
employer so that Employer's assets will provide benefits only under employer's plan.
(2) All Employer contributions and assets attributable to Employer contributions shall be
separately accounted for in the Prefunding Plan (Employer's Prefunding Account).
(3) Employer's Prefunding Account assets may be aggregated with prefunding account
assets of other employers and may be co-invested by the Board in any asset classes
appropriate for a Section 115 Trust.
(4) The Board may deduct the costs of administration of the Prefunding Plan from the
investment income or Employer's Prefunding Account in a manner determined by the
Board.
(5) Investment income shall be allocated among employers and posted to Employer's
Prefunding Account as determined by the Board but no less frequently than annually.
(6) If Employer's assets in the Prefunding Plan exceed the amount required to fully fund
the actuarial present value of total projected benefits, the Board, in compliance with
applicable accounting and legal requirements, may return such excess to Employer.
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and
containing the information prescribed by the Board.
(2) The Board shall prepare and provide a statement of Employer's Prefunding Account
at least annually reflecting the balance in Employer's Prefunding Account, contributions
made during the period and income allocated during the period, and such other
information as the Board determines.
F. Disbursements
(1) Employer may receive disbursements not to exceed the annual premium and other
costs of post employment healthcare benefits and other post employment benefits as
defined in GASB 43.
(2) Employer shall notify CalPERS in writing in the manner specified by CalPERS of the
persons authorized to request disbursements from the Prefunding Plan on behalf of
Employer.
Rev 12/17/2008 4
(3) Employer's request for disbursement shall be in writing signed by Employer's
authorized representative, in accordance with procedures established by the Board.
The Board may require that Employer certify or otherwise establish that the monies will
be used for the purposes of the Prefunding Plan.
(4) Requests for disbursements that satisfy the requirements of paragraphs (2) and (3)
that are received on or after the first of a month will be processed by the 15t' of the
following month. (For example, a disbursement request received on or between March
1st and March 31st will be processed by April 15th; and a disbursement request
received on or between April 1st and April 30th will be processed by May 15th.)
(5) CalPERS shall not be liable for amounts disbursed in error if it has acted upon the
written instruction of an individual authorized by Employer to request disbursements. In
the event of any other erroneous disbursement, the extent of CalPERS' liability shall be
the actual dollar amount of the disbursement, plus interest at the actual earnings rate
but not less than zero.
(6) No disbursement shall be made from the Prefunding Plan which exceeds the
balance in Employer's Prefunding Account.
G. Costs of Administration
Employer shall pay its share of the costs of administration of the Prefunding Plan, as
determined by the Board.
H. Termination of Employer Participation in Prefunding Plan
(1) The Board may terminate Employer's participation in the Prefunding Plan if:
(a) Employer gives written notice to the Board of its election to terminate;
(b) The Board finds that Employer fails to satisfy the terms and conditions of
this Agreement or of the Board's rules or regulations.
(2) If Employer's participation in the Prefunding Plan terminates for any of the foregoing
reasons, all assets in Employer's Prefunding Account shall remain in the Prefunding
Plan, except as otherwise provided below, and shall continue to be invested and accrue
income as provided in Paragraph D.
(3) After Employer's participation in the Prefunding Plan terminates, Employer may not
make contributions to the Prefunding Plan.
Rev 12/17/2008
(4) After Employer's participation in the Prefunding Plan terminates, disbursements
from Employer's Prefunding Account may continue upon Employer's instruction or
otherwise in accordance with the terms of this Agreement.
(5) After thirty-six (36) months have elapsed from the effective date of this Agreement
or at such earlier date as may be approved by the Board in its sole discretion:
(a) Employer may request a trustee to trustee transfer of the assets in
Employer's Prefunding Account. Upon satisfactory showing to the Board
that the transfer will satisfy applicable requirements of the Internal
Revenue Code and the Board's fiduciary duties, then the Board shall
effect the transfer within one hundred twenty (120) days. The amount to
be transferred shall be the amount in the Employer's Prefunding Account
as of the disbursement date and shall include investment earnings up to
the investment earnings allocation date immediately preceding the
disbursement date. In no event shall the investment earnings allocation
date precede the transfer by more than 120 days.
(b) Employer may request a disbursement of the assets in Employer's
Prefunding Account. Upon satisfactory showing to the Board that all of
Employer's obligations for payment of post employment health care
benefits and other post employment benefits and reasonable
administrative costs of the Board have been satisfied, then the Board shall
effect the disbursement within one hundred twenty (120) days. The
amount to be disbursed shall be the amount in the Employer's Prefunding
Account as of the disbursement date and shall include investment
earnings up to the investment earnings allocation date immediately
preceding the disbursement date. In no event shall the.investment
earnings allocation date precede the disbursement by more than. 120
days.
(6) After Employer's participation in the Prefunding Plan terminates and at such time
that no assets remain in Employer's Prefunding Account, this Agreement shall
terminate.
(7) If, for any reason, the Board terminates the Prefunding Plan, the assets in
Employer's Prefunding Account shall be paid to Employer after retention of (i) amounts
sufficient to pay post employment health care benefits and other post employment
benefits to annuitants for current and future annuitants described by the employer's
current substantive plan (as defined in GASB 43), and (ii) amounts sufficient to pay
reasonable administrative costs of the Board.
(8) If Employer ceases to exist but Employer's Prefunding Plan continues to exist and if
no provision has been made by Employer for ongoing payments to pay post
employment health care benefits and other post employment benefits to annuitants for
current and future annuitants, the Board is authorized to and shall appoint a third party
Rev 12/17/2008 6
administrator to carry out Employer's Prefunding Plan. Any and all costs associated
with such appointment shall be paid from the assets attributable to contributions by
Employer.
(9) If Employer should breach the representation and warranty set forth in Paragraph
A., the Board shall take whatever action it deems necessary to preserve the tax-exempt
status of the Prefunding Plan.
1. General Provisions
(1) Books and Records.
Employer shall keep accurate books and records connected with the performance of
this Agreement. Employer shall ensure that books and records of subcontractors,
suppliers, and other providers shall also be accurately maintained. Such books and
records shall be kept in a secure location at the Employer's office(s) and shall be
available for inspection and copying by CalPERS and its representatives.
(2) Audit.
(a) During and for three years after the term of this Agreement, Employer
shall permit the Bureau of State Audits, CaIPERS, and its authorized
representatives, and such consultants and specialists as needed, at all
reasonable times during normal business hours to inspect and copy, at the
expense of CalPERS, books and records of Employer relating to its
performance of this Agreement.
(b) Employer shall be subject to examination and audit by the Bureau of State
Audits, CaIPERS, and its authorized representatives, and such
consultants and specialists as needed, during the term of this Agreement
and for three years after final payment under this Agreement. Any
examination or audit shall be confined to those matters connected with the
performance of this Agreement, including, but not limited to, the costs of
administering this Agreement. Employer shall cooperate fully with the
Bureau of State Audits, CaIPERS, and its authorized representatives, and
such consultants and specialists as needed, in connection with any
examination or audit. All adjustments, payments, and/or reimbursements
determined to be necessary by any examination or audit shall be made
promptly by the appropriate party.
(3) Notice.
(a) Any notice, approval, or other communication required or permitted under
this Agreement will be given in the English language and will be deemed
received as follows:
Rev 12/17/2008 7
Personal delivery. When personally delivered to the recipient.
Notice is effective on delivery.
2. First Class Mail. When mailed first class to the last address of the
recipient known to the party giving notice. Notice is effective three
delivery days after deposit in a United States Postal Service office
or mailbox.
3. Certified mail. When mailed certified mail, return receipt requested.
Notice is effective on receipt, if delivery is confirmed by a return
receipt.
4. Overnight Delivery. When delivered by an overnight delivery
service, charges prepaid or charged to the sender's account, Notice
is effective on delivery, if delivery is confirmed by the delivery
service.
5. Telex or Facsimile Transmission. When sent by telex or fax to the
last telex or fax number of the recipient known to the party giving
notice. Notice is effective on receipt, provided that (i) a duplicate
copy of the notice is promptly given by first-class or certified mail or
by overnight delivery, or (ii) the receiving party delivers a written
confirmation of receipt. Any notice given by telex or fax shall be
deemed received on the next business day if it is received after
5:00 p.m. (recipient's time) or on a nonbusiness day.
6. E-mail transmission.. When sent by e-mail using software that
provides unmodifiable proof (i) that the message was sent, (ii) that
the message was delivered to the recipient's information processing
system, and (iii) of the time and date the message was delivered to
the recipient along with a verifiable electronic record of the exact
content of the message sent,
Addresses for the purpose of giving notice are as shown in Paragraph B.(1) of this
Agreement.
(b) Any correctly addressed notice that is refused, unclaimed, or
undeliverable because of an act or omission of the party to be notified
shall be deemed effective as of the first date that said notice was refused,
unclaimed, or deemed undeliverable by the postal authorities, messenger
or overnight delivery service.
(c) Any party may change its address, telex, fax number, or e-mail address by
giving the other party notice of the change in any manner permitted by this
Agreement.
Rev 12/17/2008 8
(d) All notices, requests, demands, amendments, modifications or other
communications under this Agreement shall be in writing. Notice shall be
sufficient for all such purposes if personally delivered, sent by first class,
registered or certified mail, return receipt requested, delivery by courier
with receipt of delivery, facsimile transmission with written confirmation of
receipt by recipient, or e-mail delivery with verifiable and unmodifiable
proof of content and time and date of sending by sender and delivery to
recipient. Notice is effective on confirmed receipt by recipient or 3
business days after sending, whichever is sooner.
(4) Modification
This Agreement may be supplemented, amended, or modified only by the mutual
agreement of the parties. No supplement, amendment, or modification of this
Agreement shall be binding unless it is in writing and signed by the party to be charged.
(6) Survival
All representations, warranties, and covenants contained in this Agreement, or in any
instrument, certificate, exhibit, or other writing intended by the parties to be a part of
their Agreement shall survive the termination of this Agreement until such time as all
amounts in Employer's Prefunding Account have been disbursed.
(6) Waiver
No waiver of a breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this Agreement shall be effective unless it is in writing and
signed by the party waiving the breach, failure, right, or remedy. No waiver of any
breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure,
right, or remedy, whether or not similar, nor shall any waiver constitute a continuing
waiver unless the writing so specifies.
(7) Necessary Acts, Further Assurances
The parties shall at their own cost and expense execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Agreement.
Rev 12/17/2008 9
A majority vote of Employer's Governing Body at a public meeting held on the 15TH
day of the month of JUNE in the year 2009 , authorized entering
into this Agreement.
Signature of the Presiding Officer:
Printed Name of the Presiding Officer:
Name of Governing Body:
Name of Employer:
MIKE WASSERMAN, MAYOR
TOWN OF LOS GATOS
TOWN OF LOS GATOS
Date: 6/16/2009
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY
KENNETH W. MARZION
ACTUARIAL AND EMPLOYER SERVICES BRANCH
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is:
Rev 12/17/2008 10
Ca1PERS
DELEGATION OF AUTHORITY
TO REQUEST DISBURSEMENTS
RESOLUTION
OF THE
TOWN OF LOS GATOS
(GOVERNING BODY)
OF THE
TOWN OF LOS GATOS
(NAME OF EMPLOYER)
The TOWN OF LOS GATOS delegates to the incumbents in
(GOVERNING BODY)
the positions of Director of Finance and
(TITLE)
Town/Assistant Town Manager authority to request on behalf
(TITLE)
of the Employer disbursements from the Other Post Employment Prefunding
Plan and to certify as to the purpose for which the disbursed funds will be used.
By
Witness
Date
OPEB Delegation of Authority (2107)
Mike Wasserman
Title Mayor
EXHIBIT B