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sr-072412-3ec7® City of Santa Monica To: Mayor and City Council City Council Report City Council Meeting: July 24, 2012 Agenda Item: 3 —E From: Donna Peter, Director of Human Resources Subject: Resolution Authorizing the City Manager to Execute a Side Letter of Agreement with the City's Miscellaneous (Non- Safety) Bargaining Units Pertaining to Retirement Benefits Recommended Action Staff recommends that City Council adopt the attached Resolution authorizing the City Manager to execute a Side Letter of Agreement regarding the setting of the terms and conditions of employee -paid California Public Employees' Retirement System (CalPERS) optional benefits between the City and the Coalition of Santa Monica Employees representing Executive Pay Plan participants and the bargaining units that represent the City's miscellaneous (non- safety) employees. Executive Summary The City has negotiated with the Coalition of City of Santa Monica Employees, which represents miscellaneous non- safety employees. As a result, a Side Letter of Agreement has been ratified by the membership of the Coalition that modifies the cost sharing of certain existing retirement benefits making the employee reimbursements payable on a pre -tax basis. There is no cost to the City associated with this agreement. Discussion The side letter agreement modifies both the Memorandum of Understanding between the parties, executed on November 3, 2006 and Contract No. 9495 (CCS), executed on December 1, 2011 and sets forth a modification to the terms and conditions pertaining to non -sworn miscellaneous employees. Currently non -sworn miscellaneous employees reimburse the City through payroll deductions on a post -tax basis for costs associated with existing optional retirement benefits including the Fourth Level of 1959 Survivor Benefit as set forth in Section 21574 of the California Government Code, the 1 Pre - Retirement Optional Settlement 2 Death Benefit as set forth in Section 21548 of the California Government Code, and Employer Paid Member contribution (for employees hired prior to July 1, 2012). This cost sharing shall continue; however, effective with the adoption of the Side Letter, the reimbursements made to the City through payroll deductions would change from a post -tax deduction to a pre -tax basis deduction. Financial Impacts and Budget Actions There are no financial impacts or budget actions required. Prepared by: Donna C. Peter, Director of Human Resources Approved: Donna C. Peter Director, Human Resources Department Attachments: A. Resolution 6 Forwarded to Council: Y Rod Gould City Manager Reference Resolution No. 10697 (CCS)