Resolution No. 2013-047RESOLUTION NO. 2013-47
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON DECLARING ITS INTENTION TO APPROVE AN
AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY
OF VERNON
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 20965 (Credit for Unused Sick
Leave) for local safety members only.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon does
hereby give notice of its intention to approve an amendment to the
contract between the City Council of the City of Vernon and the Board
of Administration of the Public Employees' Retirement System, a copy
of said amendment being attached hereto, as an "Exhibit".
/ / /
SECTION 2: The City Council of the City of Vernon hereby
directs the City Clerk, or the City Clerk's designee, to send a
certified copy of this resolution together with a completed original
"Certification of Governing Body's Action" and "Certification of
Compliance with Government Code Section 7507" to:
Danielle Brooks
Employer Representative Public Agency Contract Services
Customer Account Services Division,
Retirement Account Services Section
P.O. Box 942709
Sacramento, CA 94229-2709
SECTION 3: The Interim City Clerk, or Deputy City Clerk of
the City of Vernon shall certify to the passage, approval and adoption
of this resolution, and the Interim City Clerk, or Deputy City Clerk,
of the City of Vernon shall cause this resolution and the Interim City
Clerk's, or Deputy City Clerk's, certification to be entered in the
File of Resolutions of the Council of this City.
APPROVED,AND ADOPTED this 16th day of April, 2013.
Name: W. Michael McCormick
Title: Mayor /
Dana Reed
Interim City Clerk
APPROVED AS TO FORM:
Zaynak Moussa, Deputy City Attorney
- 2 -
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Dana Reed , Interim City Clerk / rV—of
the City of Vernon, do hereby certify that the foregoing Resolution,
being Resolution No. 2013-47, was duly passed, approved and adopted by
the City Council of the City of Vernon at a regular meeting of the City
Council duly held on Tuesday, April 16, 2013, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this qql day of April, 2013, at Vernon, California.
(SEAL)
Li Dana Reed -
Interim City Clerk / ,Arr>»tt c' * C�
- 3 -
CaIPERS
California
Public Employees' Retirement System
EXHIBIT
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Vernon
The Board of Administration, California Public Employees' Retirement System,
hereinafter referred to as Board, and the governing body of the above public agency,
hereinafter referred to as Public Agency, having entered into a contract effective
November 1, 1948, and witnessed October 23, 1948, and as amended effective April 1,
1956, October 1, 1960, July 1, 1966, October 1, 1972, May 1, 1974, November 1, 1975,
December 1, 1976, March 1, 1979, July 6, 1986, October 17, 1986, September 7, 1990,
January 19, 1991, September 21, 1991, December24, 1993, October 30, 1994, July 18,
1997, June 30, 2002, February 3, 2007, May 27, 2007 and June 22, 2008 which
provides for participation of Public Agency in said System, Board and Public Agency
hereby agree as follows:
A. Paragraphs 1 through 13 are hereby stricken from said contract as executed
effective June 22, 2008, and hereby replaced by the following paragraphs
numbered 1 through 14 inclusive:
1. All words and terms used herein which are defined in the Public
Employees' Retirement Law shall have the meaning as defined therein
unless otherwise specifically provided. "Normal retirement age" shall
mean age 55 for local miscellaneous members and age 50 for local safety
members.
2. Public Agency shall participate in the Public Employees' Retirement
System from and after November 1, 1948 making its employees as
hereinafter provided, members of said System subject to all provisions of
the Public Employees' Retirement Law except such as apply only on
election of a contracting agency and are not provided for herein and to all
amendments to said Law hereafter enacted except those, which by
express provisions thereof, apply only on the election of a contracting
agency.
3. Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the CaIPERS Board of Administration,
and the California Public Employees' Retirement Fund from any claims,
demands, actions, losses, liabilities, damages, judgments, expenses and
costs, including but not limited to interest, penalties and attorneys fees
that may arise as a result of any of the following:
(a) Public Agency's election to provide retirement benefits,
provisions or formulas under this Contract that are different than
the retirement benefits, provisions or formulas provided under
the Public Agency's prior non-CaIPERS retirement program.
(b) Any dispute, disagreement, claim, or proceeding (including
without limitation arbitration, administrative hearing, or litigation)
between Public Agency and its employees (or their
representatives) which relates to Public Agency's election to
amend this Contract to provide retirement benefits, provisions or
formulas that are different than such employees' existing
retirement benefits, provisions or formulas
(c) Public Agency's agreement with a third party other than
CaIPERS to provide retirement benefits, provisions, or formulas
that are different than the retirement benefits, provisions or
formulas provided under this Contract and provided for under
the California Public Employees' Retirement Law.
4. Employees of Public Agency in the following classes shall become
members of said Retirement System except such in each such class as
are excluded by law or this agreement:
a. Local Fire Fighters (herein referred to as local safety members);
b. Local Police Officers (herein referred to as local safety members);
C. Employees other than local safety members (herein referred to as
local miscellaneous members).
5. In addition to the classes of employees excluded from membership by
said Retirement Law, the following classes of employees shall not become
members of said Retirement System:
NO ADDITIONAL EXCLUSIONS
6. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member in
employment before and not on or after June 22, 2008 shall be determined
in accordance with Section 21354 of said Retirement Law (2% at age 55
Full).
7. The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneous member in
employment on or after June 22, 2008 shall be determined in accordance
with Section 21354.5 of said Retirement Law (2.7% at age 55 Full).
8. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member shall be
determined in accordance with Section 21362.2 of said Retirement Law
(3% at age 50 Full).
9. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21571 (Basic Level of 1959 Survivor Benefits) for local
police members only.
b. Sections 21624, 21626 and 21628 (Post -Retirement Survivor
Allowance).
c.. Section 21024 (Military Service Credit as Public Service).
d. Section 20042 (One -Year Final Compensation).
e. Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members only.
f. Section 21548 (Pre -Retirement Option 2W Death Benefit) for local
miscellaneous members and local fire members only.
g. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local fire
members only.
h. Section 20965 (Credit for Unused Sick Leave) for local safety
members only.
10. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
November 1, 1975. Accumulated contributions of Public Agency shall be
fixed and determined as provided in Government Code Section 20834,
and accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20834.
11. Public Agency shall contribute to said Retirement System the contributions
determined by actuarial valuations of prior and future service liability with
respect to local miscellaneous members and local safety members of said
Retirement System.
12. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21573 of said Retirement
Law. (Subject to annual change.) In addition, all assets and
liabilities of Public Agency and its employees shall be pooled in a
single account, based on term insurance rates, for survivors of all
local miscellaneous members.
b. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21574 of said Retirement
Law. (Subject to annual change.) In addition, all assets and
liabilities of Public Agency and its employees shall be pooled in a
single account, based on term insurance rates, for survivors of all
local fire members.
C. A reasonable amount, as fixed by the Board, payable in one
installment within 60 days of date of contract to cover the costs of
administering said System as it affects the employees of Public
Agency, not including the costs of special valuations or of the
periodic investigation and valuations required by law.
d. A reasonable amount, as fixed by the Board, payable in one
installment as the occasions arise, to cover the costs of special
valuations on account of employees of Public Agency, and costs of
the periodic investigation and valuations required by law.
13. Contributions required of Public Agency and its employees shall be
subject to adjustment by Board on account of amendments to the Public
Employees' Retirement Law, and on account of the experience under the
Retirement System as determined by the periodic investigation and
valuation required by said Retirement Law.
14. Contributions required of Public Agency and its employees shall be paid
by Public Agency to the Retirement System within fifteen days after the
end of the period to which said contributions refer or as may be prescribed
by Board regulation. If more or less than the correct amount of
contributions is paid for any period, proper adjustment shall be made in
connection with subsequent remittances. Adjustments on account of
errors in contributions required of any employee may be made by direct
payments between the employee and the Board.
B. This amendment shall be effective on the day of
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF VERNON
BY BY
KAREN DE FRANK, CHIEF PRESIDING OFFICER
CUSTOMER ACCOUNT SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT CaIPERS ID#3431795727
PERS-CON-702A
OFFICE OF THE CITY CLERK
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
April 22, 2013
Danielle Brooks
Employer Representative
Public Agency Contract Services
California Public Employees' Retirement System
Customer Account Services Section
P.O. Box 942709
Sacramento, CA 94229-2709
Re: Proposed Change to Provide Section 20965 (Credit for Unused Sick Leave) for Local Safety
Members Only
Dear Ms. Brooks:
In accordance with your requirement, enclosed please find the following documents:
Certified copy of Resolution No. 2013-47, together with a completed original "Certification of
Governing Body's Action."
2. Completed original "Certification of Compliance with Government Code Section 7507."
If you have any questions regarding this matter, please call Teresa McAllister at (323) 583-8811 Ext. 239.
Very truly yours,
Deborah R. Juarez
Records Management Assistant
Enclosures
c: Teresa McAllister
Mark Whitworth
Resolution No. 2013-47
E Ccfusivefy Industnaf
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CaIPERS (225-7377)
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
By signing below, I hereby certify that in accordance with Section 7507 of the
Government Code statements 1, 2, and 3 are true; and that statement 4 is applicable
and is true if I have placed my initials beside the statement:
1. Services of an actuary were secured to provide a statement of the actuarial
impact upon future annual costs before authorizing changes in retirement plan
benefits.
2. The actuary prepared a statement of the actuarial impact of the proposed
changes in benefits upon future annual costs, including normal cost and any
additional accrued liability. The statement of the actuarial impact for the increase
in benefits was made public on April 16, 2013 at a public meeting
(date)
of the City Council of the
(governing body)
City of Vernon
(public agency)
which is at least two weeks prior to the adoption of the final Resolution /
Ordinance.
3. Adoption of the retirement benefit increase will not be placed on the consent
calendar.
4. [INITIAL HERE IF THIS STATEMENT APPLIES]
An actuary was present to provide information as needed at the public meeting at
which the adoption of the benefit change was considered. (The presence of an
actuary is required if future cc s of the benefit anges exceed 1 /2 of 1 % of the
future annual costs of the existi q beifJefit�
Dana Reed
Print Name of Authorized Signer
Interim City Clerk
Title
Date " � G 13
PERS-CON-12AA (rev. 6/09)
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
City Council of the
(governing body)
City of Vernon
(public agency)
on April 16, 2013
(date)
Dana Reed
Interim City Clerk
Title
PERS-CON-12 (rev. 1/96)
CERTIFICATE
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES)
I, Dana Reed, Interim City Clerk of the City of Vernon,
County of Los Angeles, State of California, hereby certify that
the attached is a full and complete copy of:
RESOLUTION NO. 2013-47 - A Resolution of the City Council of
the City of Vernon Declaring Its Intention to Approve an
Amendment to the Contract Between the Board of Administration
of the California Public Employees' Retirement System and the
City Council of the City of Vernon
IN WITNESS WHEREOF,
affixed the official Seal of
Angeles, State of California,
SEAL:
I have hereunto set my hand and
the City (Vernon, County of Los
on this Y1- day of April 2013.
7
f
Dan Reed
Interim City Clerk
RECEIVED
MAR 2 5 2013 STAFF REPORT
CITY CLERK'S OFFICE CITY ADMINISTRATION
DATE: April 16, 2013
TO: Honorable Mayor and City Council
FROM: Mark-C. Whitworth, City Administrator—�/f�„�(, LM1v
RE: A_,RESOLUTION OF INTENTION AND ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF VERNON, CALIFORNIA, TO APPROVE
AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM AND THE CITY COUNCIL CITY OF VERNON
Recommendation
It is recommended that the City Council:
1) Find that approval of the proposed resolution of intention and ordinance amending the
contract between the Board of Administration of the California Public Employees'
Retirement System and the City Council City of Vernon is exempt under the California
Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3), the general
rule that CEQA only applies to projects that may have an effect on the environment.
2) Approve and adopt the attached Resolution of Intention and related certification of
compliance to amend the contract between the Board of Administration of the California
Public Employees' Retirement System (CalPERS) and the City Council City of Vernon
to add benefit 20965, Credit for Unused Sick leave to the safety plans.
3) Approve for first reading the proposed Ordinance to amend the contract between the
Board of Administration of the California Public Employees' Retirement System
(Ca1PERS) and the City Council City of Vernon to add benefit 20965, Credit for Unused
Sick leave to the safety plans.
Backeround
The City and the City of Vernon Safety groups concluded labor negotiations on June 18, 2012
regarding wages, benefits and working conditions for the 2012/2014 Memorandum of
Understanding. On June 19, 2012, the City Council approved changes to the benefits and
contract language incorporated into an agreement with the Public Safety Groups. One of these
benefits was that the City agrees to provide additional supplemental retirement benefits to the
Safety unit employees under PERS to include Government Code Section 20965, Credit for
Unused Sick Leave.
Simultaneous to the adoption of the MOU by City Council on June 19, 2012, a recommendation
regarding the CalPERS Unused Sick Leave Credit was also placed on the City Council agenda
by staff recommending that City Council forego amending the City's CalPERS contract to add
benefit Section 20965, Credit for Unused Sick leave. This benefit option was first offered as an
option by way of a Citywide Sick Leave Policy (Resolution No. 9267) on March 5, 2007 and
was never enacted thereafter. Staffs recommendation to forego the sick leave conversion option
was based upon the CalPERS Actuarial in which the City's rates would increase for 2012-2013
and 2013-2014 fiscal year. On June 19, 2012, the same day the Firefighter and Police Officer
MOUs' were adopted, the City Council also adopted the recommendation to forego
implementation of the CalPERS Unused Sick Leave benefit and amended the City's Sick Leave
Policy to remove same (Resolution No. 2012-111).
Subsequently, on December 10, 2012, and March 5, 2013, the City was notified through
representatives of the Fire and Police Groups respectively, that the City failed to amend its
contract with CalPERS to implement the benefit specified above which provides that unused sick
leave may be converted to service credit. Because the provision of that benefit is clearly set forth
in the Memorandum of Understanding between the Associations and the City, the Association's
legal representatives have demanded that the City Council promptly take all action necessary to
amend its contract with CalPERS to implement the specified benefit.
Consequently, Government Code Section 7507 requires that the future annual costs or benefit
change of the proposed contract be made public at a public meeting at least two weeks prior to
the adoption of the final ordinance.
The Unused Sick Leave conversion is for full-time vested employees. The benefit allows
employees to convert their unused sick leave to additional service credit upon retirement.
Disclosure of the cost of this Contact Amendment (Safety)
1) Change in the Present Value of Benefits $608,851
2) Change in the Accrued Liability $459,562
3) Change in the Total Employer Rate 13/14 .470% $53,035.00 estimate cost
4) Est. Change in the Total Employer Rate 14/15 1.498% $169,034.00 estimate cost
Government Code Section 20471 requires a 20 day period between the adoption of the
Resolution of Intention and the adoption of the final Ordinance. There are no exceptions to this
law.
Fiscal Impact
The anticipated cost related to the implementation of the CalPERS Benefit 20965, Unused Sick
Leave Conversion benefit is estimated to be $53,035.00 for fiscal year 2013/14 and $169,034.00
for fiscal year 2014/15.
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