SR-602-003 (8)
f:\person:misc/council/staffrpt/council51fire.doc Santa Monica, California
Council Meeting: October 9, 2001
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Resolution of Intention to Amend Contract Between the California Public
Employees' Retirement System and the City of Santa Monica and a Public
Hearing and First Reading of an Ordinance to Amend Said Contract
INTRODUCTION
This report requests that Council adopt the attached resolution stating its intent to
approve an amendment to the contract between the California Public Employees?
Retirement System (CalPERS) and the City of Santa Monica to provide Section 21363.1
(3% @ 55 full formula) for local fire members. The attached resolution and agreement
comply with the procedure required by CalPERS. This report also requests that Council
hold a public hearing and first reading of the ordinance to amend said contract as
indicated. The ordinance is also attached.
DISCUSSION
The City of Santa Monica contracts with CalPERS to provide retirement plans for
permanent employees. As a contracting agency, the City may amend its contract(s) to
provide various optional benefits offered by CalPERS. Santa Monica fire members are
currently covered by a 2% @ 50 full formula. As a part of the most recent Memorandum
of Understanding (MOU) negotiated between the City of Santa Monica and the Santa
Monica Firefighters Local 1109 IAFF and approved by City Council on January 9, 2001,
the City agreed to amend its contract with CalPERS to provide Section 21363.1 (3% @
55 full formula) for local fire members.
Section 21363.1 (3% @ 55 full formula) is a CalPERS service retirement formula which
provides to local fire members at age 55, or older, 3% of pay for each year of service.
For members who retire earlier than age 55, the percentage of pay is less than 3% of
pay for each year of service. The formula is not modified because of Social Security.
BUDGET/FISCAL IMPACT
This change to the fire retirement plan increases the present value of the retirement
plan benefits by $5,301,880 and increases the unfunded liability of the plan by
$1,840,878. This, in turn, will increase the City?s contribution rate by 4.578%. As a
result, the net impact on the City?s contribution rate will be to increase it from 1.058% to
5.636%. Sufficient funds are available in the FY2001-2002 budget to finance this cost.
The ongoing costs will be reflected in the annual budgets adopted by the City Council.
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution indicating its
intent to approve an amendment to the contract between CalPERS and the City of
Santa Monica to provide Section 21363.1 (3% @ 55 full formula) for local fire members.
It is further recommended that there be a first reading of the Ordinance to amend said
contract.
Prepared By: Karen Bancroft, Director of Personnel
Attachments: Resolution of Intention with Exhibit
Ordinance Authorizing an Amendment to the CalPERS Contract
RESOLUTION NUMBER _______ (CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE BOARD OF ADMINISTRATION
OF THE CALIFORNIA PUBLIC EMPLOYEES? RETIREMENT SYSTEM
AND THE CITY COUNCIL OF THE CITY OF SANTA MONICA
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 21363.1 (3% @ 55 Full Formula) for local fire
members.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE
CITY OF SANTA MONICA 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.
The City Clerk shall certify to the adoption of this Resolution, and thenceforth and
thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
_________________________
MARSHA JONES MOUTRIE
City Attorney
ORDINANCE NUMBER
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AUTHORIZING AN AMENDMENT TO THE CONTRACT
BETWEEN THE CITY COUNCIL OF THE CITY OF SANTA MONICA AND
THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES? RETIREMENT SYSTEM
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES ORDAIN AS FOLLOWS:
SECTION 1. That an amendment to the contract between the City Council of the
City of Santa Monica 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 City Manager is hereby authorized, empowered, and directed
to execute said amendment for and on behalf of the City.
SECTION 3. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, are hereby repealed or modified to that extent necessary
to affect the provisions of this Ordinance.
SECTION 4. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of any competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance, and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional without regard to whether any portion
of the Ordinance would be subsequently declared invalid or unconstitutional.
SECTION 5. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the
official newspaper within 15 days after its adoption. This Ordinance shall become
effective 30 days from its adoption.
APPROVED AS TO FORM:
____________________________
Marsha Jones Moutrie
City Attorney