Resolution No. 2017-023RESOLUTION NO. 2017-23
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON ESTABLISHING AN OTHER POST -EMPLOYMENT
BENEFITS (OPEB) TRUST WITH THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM (CALPERS), APPROVING
AND AUTHORIZING THE EXECUTION OF AN AGREEMENT AND
ELECTING TO PREFUND OPEB THROUGH CALPERS
WHEREAS, the City of Vernon (City) is a municipal corporation
and a chartered city of the State of California organized and existing
under its Charter and the Constitution of the State of California; and
WHEREAS, the City manages a retiree health benefit program
(Program) that pays some or all of the health insurance premium for
retired City employees who meet the eligibility requirements of the
program; and
WHEREAS, it is in the City's interests to comply with
Governmental Accounting Standards Board Statement 45 (GASB 45), which
requires annual payments on unfunded portions of the actuarial costs of
retiree benefits and disclosure in the City's Comprehensive Annual
Financial Report of unfunded annual required contributions; and
WHEREAS, GASB 45 requires that reserve balances the City has
dedicated to funding the accrued liability of the Program be placed in
an irrevocable trust dedicated to paying the costs of the program and
investing funds needed in future years; and
WHEREAS, the California Public Employees Retirement System
(CalPERS) has created the California Employers' Retiree Benefit Trust
Fund (Trust) to assist public agencies' compliance with GASB 45 and to
manage investment of contracting agency reserves set aside to fund the
costs of post -employment (retiree medical) benefits; and
WHEREAS, CalPERS requires the governing body of a public
agency, by resolution, to approve entering into an agreement with
CalPERS to participate in the Trust and elect to prefund other post
employment benefits through CalPERS; and
WHEREAS, by memorandum dated June 6, 2017, the Finance
Director has recommended the City establish the Other Post -Employment
Benefits (OPEB) Trust for the purpose of setting aside funds to offset
the City's unfunded retiree OPEB liability, and approve and authorize
the execution of an agreement to prefund OPEB through CalPERS; and
WHEREAS, the City Council desires to establish the OPEB
Trust, and approve and authorize the execution of the agreement to
prefund OPEB through CalPERS.
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 hereby
finds and determines that the above recitals are true and correct.
SECTION 2: The City Council of the City of Vernon finds
that this action is exempt from California Environmental Quality Act
("CEQA") review, in accordance with Section 15378, because it is a
government fiscal activity that will not result in direct or indirect
physical changes in the environment, and therefore does not constitute
a "project" as defined by CEQA guidelines.
SECTION 3: The City Council of the City of Vernon hereby
establishes an Other Post -Employment Benefits (OPEB) Trust with the
California Public Employees' Retirement System (CalPERS).
SECTION 4: The City Council of the City of Vernon hereby
approves the Agreement with CalPERS, in substantially the same form as
the copy which is attached hereto as Exhibit A.
SECTION 5: The City Council of the City of Vernon hereby
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authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for,
and on behalf of, the City of Vernon and the City Clerk, or Deputy City
Clerk, is hereby authorized to attest thereto.
SECTION 6: The City Council of the City of Vernon hereby
instructs the City Administrator, or his designee, to take whatever
actions are deemed necessary or desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
transactions herein approved or authorized, including but not limited
to, any non -substantive changes to the Agreement attached herein.
SECTION 8: The City Council of the City of Vernon hereby
directs the City Clerk, or the Deputy City Clerk, to send a fully
executed Agreement to Ca1PERS.
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SECTION 9: The City Clerk, or Deputy City Clerk, of the
City of Vernon shall certify to the passage, approval and adoption of
this resolution, and the City Clerk, or Deputy City Clerk, of the City
of Vernon shall cause this resolution and the 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 6th day of June, 2017.
RF/a/MmAyn/j. W.
Title: Mayor / *� Te- .-
ATTEST:
--A `�' (2 Jw-�
aria E.�*yala
City Clerk /
APPROVED AS TO FORM:
Zayrjal J V. "Moussa, Senior Deputy City Attorney
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Maria E . Ayala, City Clerk / the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 2017-23, 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, June 6, 2017, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this of of June, 2017, at Vernon, California.
(SEAL)
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Maria V. Ayala
Cit Clerk
EXHIBIT A
CALIFORNIA EMPLOYERS' RETIREE BENEFIT TRUST PROGRAM ("CERBT")
AGREEMENT AND ELECTION
OF
City of Vernon
(NAME OF EMPLOYER)
TO PREFUND 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)
City of Vernon
(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 defined benefit plan as defined in
Governmental Accounting Standards Board (GASB) Statements for Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single -employer plans, with pooled
administrative and investment functions;
Rev 08/24/2016 Page 1 of 10 CATIT6
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 CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS
CERBT (OPEB)
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to:
CalPERS Mailroom
CERBT (OPEB)
400 Q Street
Sacramento, CA 95811
(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 08/24/2016 Page 2 of 10
UITTRS
C. Other Post -Employment Benefits (OPEB) Cost Reports and Employer Contributions
(1) Employer shall provide to the Board an OPEB cost 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, and shall be prepared at least as often as the
minimum frequency required by applicable GASB OPEB Standards. This OPEB cost
report may be prepared as an actuarial valuation report or, if the employer is qualified
under GASB OPEB Standards, may be prepared as an Alternative Measurement
Method (AMM) report.
(a) Unless qualified under GASB OPEB Standards, to provide an AMM
report, Employer shall provide to the Board an actuarial valuation report.
Such report shall be for the Board's use in financial reporting, and shall be
prepared at least as often as the minimum frequency required by GASB
OPEB Standards, and shall be:
1) 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;
2) prepared in accordance with generally accepted actuarial practice and
GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions
for the valuation period or as otherwise required by the Board.
(b) If qualified under GASB OPEB Standards, Employer may provide to the
Board an AMM report. 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 OPEB Standards, and shall be:
1) affirmed by Employer's external auditor, or 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, to be consistent with the
AMM process described in GASB OPEB Standards;
2) prepared in accordance with GASB OPEB Standards; and,
3) 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 OPEB cost report for financial reporting purposes
submitted to it, but shall not unreasonably do so. In the event that the Board
Page
Rev 08/24/2016 3 of 10 A
c,IMC,
determines, in its sole discretion, that the OPEB cost report is not suitable for use in the
Board's financial statements or if Employer fails to provide a required OPEB cost report,
the Board may obtain, at Employer's expense, an OPEB cost report that meets the
Board's financial reporting needs. The Board may recover from Employer the cost of
obtaining such OPEB cost report 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 OPEB cost report for financial reporting purposes 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 OPEB Standards. 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) No contributions are required. Contributions can be made at any time following the
effective date of the Agreement provided that Employer has first complied with the
requirements of Paragraph C.
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 are maintained for each
employer so that the Employer's assets will provide benefits only under the Employer's
post -employment benefit plan(s).
(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 participating employers and posted to
Employer's Prefunding Account as determined by the Board but no less frequently than
annually.
Rev 08/24/2016 Page 4 of 10
CA Ri
(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 OPEB Standards.
(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.
(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)
will be processed monthly.
(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.
Page 5 o
Rev 08/24/2016 f 10
t:"IFT.RC
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.
(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 the Employer's participation in the Prefunding Plan terminates, the governing
body of the Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer's Prefunding
Account; provided that the Board shall have no obligation to make such
transfer unless the Board determines that the transfer will satisfy
applicable requirements of the Internal Revenue Code, other law and
accounting standards, and the Board's fiduciary duties. If the Board
determines that the transfer will satisfy these requirements, the Board
shall then have one hundred fifty (150) days from the date of such
determination to effect the transfer. The amount to be transferred shall be
the amount in the Employer's Prefunding Account as of the date of the
transfer (the "transfer date") and shall include investment earnings up to
an investment earnings allocation date preceding the transfer date. In no
event shall the investment earnings allocation date precede the transfer
date by more than 150 days.
(b) A disbursement of the assets in Employer's Prefunding Account; provided
that the Board shall have no obligation to make such disbursement unless
the Board determines that, in compliance with the Internal Revenue Code,
other law and accounting standards, and the Board's fiduciary duties, 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. If the Board
determines that the disbursement will satisfy these requirements, the
Page 6 of 10
Rev 08/24/2016
Board shall then have one hundred fifty (150) days from the date of such
determination to effect the disbursement. The amount to be disbursed
shall be the amount in the Employer's Prefunding Account as of the date
of the disbursement (the "disbursement date„) and shall include
investment earnings up to an investment earnings allocation date
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement date by more than 150
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 that term is used in GASB OPEB Standards), 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
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.
I. 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
Page 7 of 10
Rev 08/24/2016 CaIF f.RC
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, CalPERS, 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, CalPERS, 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:
Personal delivery. When personally delivered to the recipient.
Notice is effective on delivery.
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
Rev 08/24/2016 Page 8 of 10 CIflIfps
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.
(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) 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.
(5) 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
Rev 08/24/2016 Page 9 of 10 C"ITTT6
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.
(6) 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.
A majority vote of Employer's Governing Body at a public meeting held on the 6th
day of the month of June in the year 2017 , authorized entering
into this Agreement.
Signature of the Presiding Officer:
Printed Name of the Presiding Officer: Melissa Ybarra
Name of Governing Body: City Council
Name of Employer: City Of Vernon
Date:
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY
JOHN SWEDENSKY
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is:
Rev 08/24/2016 Page 10 of 10
offf [ S
TRANSMITTAL COMMUNICATION
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: June 15, 2017
TO: William Fox, Director of Finance
FROM: Deborah Juarez, Records Management Assistant
RE: Resolution No. 2017-23 — A Resolution of the City Council of the City of Vernon
Establishing an Other Post -Employment Benefits (OPEB) Trust with the California Public
Employees' Retirement System (CALPERS), Approving and Authorizing the Execution
of an Agreement and Electing to Prefund OPEB through CALPERS
Resolution No. 2017-24 — Delegation of Authority to Request Disbursements
(CALPERS)
Please find attached for your transmittal to CALPERS along with the partially executed agreements, one
certified copy of Resolution No. 2017-23 and an original of Resolution No. 2017-24 referenced above,
which were approved by the City Council of the City of Vernon on June 6, 2017.
Please ensure that I receive a set of the fully executed originals and transmittal correspondence for the
file.
Thank you.
Attachment
c: Resolution No. 2017-23
Resolution No. 2017-24
DELEGATION OF AUTHORITY
TO REQUEST DISBURSEMENTS
Ca1PERS
RESOLUTION
OF THE
City Council
(GOVERNING BODY)
OF THE
City of Vernon
(NAME OF EMPLOYER)
The City Council delegates to the incumbents
(GOVERNING BODY)
in the positions of City Administrator and
(TITLE)
Director of Finance and/or
(TITLE)
Deputy Treasurer authority to request on
(TITLE)
behalf 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.
Witness �-
Mar a E. Ay , City Clerk
Date Ola o 8 -;Lo 1
By Melissa Ybarra
A�4,4,#?w"
Title Mayor
APPROVED AS TO FORM:
Zayn �Mdussa,
Senih %Deputy City Attorney
OPEB Delegation of Authority (1/13)
CERTIFICATE
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES)
I, Maria E. Ayala, 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. 2017-23 - A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF VERNON ESTABLISHING AN OTHER POST -EMPLOYMENT
BENEFITS (OPEB) TRUST WITH THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM (CALPERS), APPROVING AND AUTHORIZING THE
EXECUTION OF AN AGREEMENT AND ELECTING TO PREFUND OPEB
THROUGH CALPERS
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official Seal of the City of Vernon, County of Los Angeles,
State of California, on this J�*- day of June 2017.
SEAL:
Maria `Aya a
City C erk
CONTRACT/AMENDMENT SIGNATURE ROUTING FORM
CONTRACTOR: CaIPERSs
CONTRACT PURPOSE: To establish an Other Post -Employment Benefits (OPEB) Trust with Ca1PERS. The nature of
the agreement is to allow the City to make annual payments to fund the OPEB Trust. The minimum annual contribution is
$1 059 320 million The City, can at its election pay more into the trust based upon City Council approval and availabilityoof
funds. Future transfers of funds from the OPEB Trust back to the City for payment of OPEB obligations will be brought to
City Council for review and approval. The contract being approved is the standard template provided by Ca1PERS for their
member agencies. This provides consistency in application. This standard form agreement was approved as to form by the
City Attorney's Office.
CONTRACT IS: ❑ FEDERAL ❑ PREVAILING WAGE ❑ COMPETITIVE SELECTION & NOTICED RFP
❑ COMPETITIVE BID & NOTICED INVITATION TO BID
q EXEMPT FROM COMPETITIVE PROCESS (APPROVAL ATTACHED)
❑ SERVICES ❑ MATERIALS ❑ BUDGETED ❑ NOT BUDGETED
TOTAL CONTRACT VALUE: $1,059,320 Charge Acct. No(s) Human Resources -Account #502096
Amendment Value $ ❑ Contract is an Amendment to Contract No. (if applicable)
RESPONSIBLE DEPARTMENT PERSON: Bill Fox PHONE: ext. 849
AUTHORIZATION: XRApproved by Council on: 06/06/2017
(Check One) Resolutions Numbers: 2017-23 and 2017-24
❑ Approved by City Administrator on
Note: Attach supporting documentation
❑Amendment Approved by (if applicable)
ROUTING SEQUENCE: (Please Follow In Order — Do not use N/A) Initials Date
(1) Responsible Department Person 1
Checks substance of contract and assembles two (2) copies of contract, insurance
& bond documents, certifies compliance with Competitive Bidding and Purchasing
Ordinance
(2) Liability and Claims
Approves insurance and sureties if bonds required - Not Applicable
PP � 9 PP
(3) Finance (Purchasing)
Checks compliance with Competitive Bidding & Crying Wage Ordinances
and reflected in current budget
(4) City Attorney
Approves to form, bonds insurance included
contract as verifies and
(5) City Signatory
Signs all copies on behalf of City
41qr-!r
(6) City Clerk
Attests signatures, numbers, files contract, insurance and bonds, and
transmits duplicate original to contractor, notifies IT to remove related RFP/bid
4
notice, notifies any "consultant" of duties to file Form 700, if applicable
Rev. 1 /27/ 14
PARTIALLY EXECUTED
AGREEMENT
CALIFORNIA EMPLOYERS' RETIREE BENEFIT TRUST PROGRAM ("CER137)
AGREEMENT AND ELECTION
OF
City of Vernon
(NAME OF EMPLOYER)
TO PREFUND 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) City of Vernon
(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 defined benefit plan as defined in
Governmental Accounting Standards Board (GASB) Statements for Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single -employer plans, with pooled
administrative and investment functions;
Rev 08/24/2016 Page 1 of 10 c
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 CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS
CERBT (OPEB)
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to:
CalPERS Mailroom
CERBT (OPEB)
400 Q Street
Sacramento, CA 95811
(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 08/24/2016 Page 2 of 10 (
C. Other Post -Employment Benefits (OPEB) Cost Reports and Employer Contributions
(1) Employer shall provide to the Board an OPEB cost 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, and shall be prepared at least as often as the
minimum frequency required by applicable GASB OPEB Standards. This OPEB cost
report may be prepared as an actuarial valuation report or, if the employer is qualified
under GASB OPEB Standards, may be prepared as an Alternative Measurement
Method (AMM) report.
(a) Unless qualified under GASB OPEB Standards, to provide an AMM
report, Employer shall provide to the Board an actuarial valuation report.
Such report shall be for the Board's use in financial reporting, and shall be
prepared at least as often as the minimum frequency required by GASB
OPEB Standards, and shall be:
1) 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;
2) prepared in accordance with generally accepted actuarial practice and
GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions
for the valuation period or as otherwise required by the Board.
(b) If qualified under GASB OPEB Standards, Employer may provide to the
Board an AMM report. 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 OPEB Standards, and shall be:
1) affirmed by Employer's external auditor, or 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, to be consistent with the
AMM process described in GASB OPEB Standards;
2) prepared in accordance with GASB OPEB Standards; and,
3) 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 OPEB cost report for financial reporting purposes
submitted to it, but shall not unreasonably do so. In the event that the Board
Rev 08/24/2016 Page 3 0( 10 C
determines, in its sole discretion, that the OPEB cost report is not suitable for use in the
Board's financial statements or if Employer fails to provide a required OPEB cost report,
the Board may obtain, at Employer's expense, an OPEB cost report that meets the
Board's financial reporting needs. The Board may recover from Employer the cost of
obtaining such OPEB cost report 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 OPEB cost report for financial reporting purposes 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 OPEB Standards. 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) No contributions are required. Contributions can be made at any time following the
effective date of the Agreement provided that Employer has first complied with the
requirements of Paragraph C.
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 are maintained for each
employer so that the Employer's assets will provide benefits only under the Employer's
post -employment benefit plan(s).
(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 participating employers and posted to
Employer's Prefunding Account as determined by the Board but no less frequently than
annually.
Rev 08/24/2016 Page 3 of 10UIFIRS
(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 OPEB Standards.
(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.
(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)
will be processed monthly.
(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 CaIPERS' 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.
Page 5
Rev O8124/2016 of 10 (.. iA
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.
(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 the Employer's participation in the Prefunding Plan terminates, the governing
body of the Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer's Prefunding
Account; provided that the Board shall have no obligation to make such
transfer unless the Board determines that the transfer will satisfy
applicable requirements of the Internal Revenue Code, other law and
accounting standards, and the Board's fiduciary duties. If the Board
determines that the transfer will satisfy these requirements, the Board
shall then have one hundred fifty (150) days from the date of such
determination to effect the transfer. The amount to be transferred shall be
the amount in the Employer's Prefunding Account as of the date of the
transfer (the "transfer date") and shall include investment earnings up to
an investment earnings allocation date preceding the transfer date. In no
event shall the investment earnings allocation date precede the transfer
date by more than 150 days.
(b) A disbursement of the assets in Employer's Prefunding Account; provided
that the Board shall have no obligation to make such disbursement unless
the Board determines that, in compliance with the Internal Revenue Code,
other law and accounting standards, and the Board's fiduciary duties, 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. If the Board
determines that the disbursement will satisfy these requirements, the
Rev 08/24/2016 Page 8 of 10 0
Board shall then have one hundred fifty (150) days from the date of such
determination to effect the disbursement. The amount to be disbursed
shall be the amount in the Employer's Prefunding Account as of the date
of the disbursement (the "disbursement date") and shall include
investment earnings up to an investment earnings allocation date
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement date by more than 150
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 that term is used in GASB OPEB Standards), 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
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.
I. 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 CaIPERS 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
Page 7 of 10
Rev 08124/2016
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, CalPERS, 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, CalPERS, 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:
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
Page 8 of 10 AN
Rev 08/24/2016 CS
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.
(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) 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.
(5) 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
Rev 08/2412016 Page 9 of 10
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.
(6) 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.
A majority vote of Employer's Governing Body at a public meeting held on the 6th
day of the month of June in the year 2017 , authorized entering
into this Agreement.
Signature of the Presiding Officer: b
Printed Name of the Presiding Officer: eIISSa Yba ra
Name of Governing Body:
Name of Employer:
City Council
City of Vernon
Date: ��, �i t/�� ATTEST
/ / Maria E. Ayala, City Cleric
BOARD OF ADMINISTRATION APPROVED AS TO FORM:
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Za n IT Moussa, Senior
BY Deputy City Attorney
JOHN SWEDENSKY
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is:
Rev 08124/2016 Page 10 of 10
u,1w xs
FULLY EXECUTED AGREEMENT
CALIFORNIA EMPLOYERS' RETIREE BENEFIT TRUST PROGRAM ("CERBT")
AGREEMENT AND ELECTION
OF
City of Vernon
(NAME OF EMPLOYER)
TO PREFUND 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)
City of Vernon
(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 defined benefit plan as defined in
Governmental Accounting Standards Board (GASB) Statements for Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single -employer plans, with pooled
administrative and investment functions;
Rev 08/24/2016 Page 1 of 10 zti
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 CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS
CERBT (OPEB)
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to:
CaIPERS Mailroom
CERBT (OPEB)
400 Q Street
Sacramento, CA 95811
(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 08/24/2016 Page 2 of 10
c.rixs
C. Other Post -Employment Benefits (OPEB) Cost Reports and Employer Contributions
(1) Employer shall provide to the Board an OPEB cost 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, and shall be prepared at least as often as the
minimum frequency required by applicable GASB OPEB Standards. This OPEB cost
report may be prepared as an actuarial valuation report or, if the employer is qualified
under GASB OPEB Standards, may be prepared as an Alternative Measurement
Method (AMM) report.
(a) Unless qualified under GASB OPEB Standards, to provide an AMM
report, Employer shall provide to the Board an actuarial valuation report.
Such report shall be for the Board's use in financial reporting, and shall be
prepared at least as often as the minimum frequency required by GASB
OPEB Standards, and shall be:
1) 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;
2) prepared in accordance with generally accepted actuarial practice and
GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions
for the valuation period or as otherwise required by the Board.
(b) If qualified under GASB OPEB Standards, Employer may provide to the
Board an AMM report. 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 OPEB Standards, and shall be:
1) affirmed by Employer's external auditor, or 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, to be consistent with the
AMM process described in GASB OPEB Standards;
2) prepared in accordance with GASB OPEB Standards; and,
3) 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 OPEB cost report for financial reporting purposes
submitted to it, but shall not unreasonably do so. In the event that the Board
Rev 08/24/2016 Page 3 of 10 �_
determines, in its sole discretion, that the OPEB cost report is not suitable for use in the
Board's financial statements or if Employer fails to provide a required OPEB cost report,
the Board may obtain, at Employer's expense, an OPEB cost report that meets the
Board's financial reporting needs. The Board may recover from Employer the cost of
obtaining such OPEB cost report 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 OPEB cost report for financial reporting purposes 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 OPEB Standards. 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) No contributions are required. Contributions can be made at any time following the
effective date of the Agreement provided that Employer has first complied with the
requirements of Paragraph C.
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 are maintained for each
employer so that the Employer's assets will provide benefits only under the Employer's
post -employment benefit plan(s).
(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 participating employers and posted to
Employer's Prefunding Account as determined by the Board but no less frequently than
annually.
Rev 08/24/2016 Page 4 of 10 ,
�",PJR.
(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 OPEB Standards.
(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.
(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)
will be processed monthly.
(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 CaIPERS' 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.
Rev 08/24/2016 Page 5 of 10
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.
(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 the Employer's participation in the Prefunding Plan terminates, the governing
body of the Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer's Prefunding
Account; provided that the Board shall have no obligation to make such
transfer unless the Board determines that the transfer will satisfy
applicable requirements of the Internal Revenue Code, other law and
accounting standards, and the Board's fiduciary duties. If the Board
determines that the transfer will satisfy these requirements, the Board
shall then have one hundred fifty (150) days from the date of such
determination to effect the transfer. The amount to be transferred shall be
the amount in the Employer's Prefunding Account as of the date of the
transfer (the "transfer date") and shall include investment earnings up to
an investment earnings allocation date preceding the transfer date. In no
event shall the investment earnings allocation date precede the transfer
date by more than 150 days.
(b) A disbursement of the assets in Employer's Prefunding Account; provided
that the Board shall have no obligation to make such disbursement unless
the Board determines that, in compliance with the Internal Revenue Code,
other law and accounting standards, and the Board's fiduciary duties, 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. If the Board
determines that the disbursement will satisfy these requirements, the
Rev 08/24/2016 Page 6 of 10 ,
Board shall then have one hundred fifty (150) days from the date of such
determination to effect the disbursement. The amount to be disbursed
shall be the amount in the Employer's Prefunding Account as of the date
of the disbursement (the "disbursement date") and shall include
investment earnings up to an investment earnings allocation date
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement date by more than 150
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 that term is used in GASB OPEB Standards), 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
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.
I. 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
Rev 08/24/2016 Page 7 of 10 C5
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, CalPERS, 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, CalPERS, 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:
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
Rev 08/24/2016 Page 8 of 10 AA.
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.
(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) 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.
(5) 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
Rev 08/24/2016 Page 9 of 10 AA,
c.,.i•i Rs
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.
(6) 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.
A majority vote of Employer's Governing Body at a public meeting held on the 6th
day of the month of
into this Agreement.
June
in the year 2017 , authorized entering
Signature of the Presiding Officer:
Printed Name of the Presiding Officer: eIISSa Yb ra
Name of Governing Body:
Name of Employer:
City Council
City of Vernon
Date: Z
ATTEST:
f
Maria E. Ayala, City Clerk
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY
NJOHN EDENSKY
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is: JUN 2 3 2017
Rev 08/24/2016 Page 10 of 10
APPROVED AS TO FORM:
Za Moussa, Senior
Deputy City Attorney
STAFF REPORT
RECEIVED
��« M.J•4J� JUN 01 2017
STAFF REPORT CITY ADMINISTRATION
FINANCE DEPARTMENT �
DATE: June 6, 2017
TO: Honorable Mayor and City Council r
FROM: William Fox, Finance Director /
RE: A resolution establishing an Other Post -Employment Benefits (OPEB) Trust
with the California Public Employees' Retirement System (Ca1PERS),
approving and authorizing the execution of an agreement and electing to
prefund OPEB through Ca1PERS; and
A resolution authorizing the delegation of authority to the City Administrator,
Finance Director, and the Deputy City Treasurer to request disbursements from
the OPEB trust.
Recommendation
A. Find that approvals of the proposed resolutions are exempt under the California
Environmental Quality Act (CEQA) in accordance with Section 15378, because it is a
government fiscal activity that will not result in direct or indirect physical changes in the
environment, and therefore does not constitute a "project" as defined by CEQA guidelines;
and
B. Adopt a resolution establishing an Other Post -Employment Benefits (OPEB) Trust with
Ca1PERS for the purpose of setting aside funds to offset the City's unfunded retiree OPEB
liability, approving and authorizing the execution of an agreement, in substantially the same
form as submitted herewith, to prefund OPEB through Ca1PERS; and
C. Adopt a resolution approving a delegation of authority that authorizes the City
Administrator, Finance Director, and the Deputy City Treasurer to request disbursements
from the OPEB trust.
Backy-round
On May 2, 2017, the City Administrator presented to City Council the 2017 Budget Study Session
Overview to provide a framework of the City's financial strengths, weaknesses, and actions that
will be taken to maintain and improve financial stability. This presentation was devoted to the
discussion of the City Budget Process; Historical Budget Overview; Surviving the Fiscal Challenge;
Historical Budget Comparison; Fiscal Policy; and Next Steps. One of the key budget challenges
identified was that, as of June 30, 2016, the City has an unfunded OPEB liability of $55.6 million.
The City has historically funded OPEB costs on a "pay as you go" basis, which is budgeted each
year. However, as a result of the changes mandated by the Government Accounting Standards
Board (GASB) for financial reporting requirements, effective with the City's publishing of its June
30, 2017 financial statements, it will become mandatory to report the amount of the OPEB liability
on the face of the financial statements. Prior to this fiscal year, the OPEB liability was provided as a
disclosure in supplementary information, as per previous GASB financial reporting requirements.
The new GASB reporting requirements will provide increased transparency for readers of the
financial statements. This reporting change was illustrated by the City Administrator as part of the
May 2, 2017 Budget Study Session to demonstrate the impact on the overall financial position of
the City.
Government Accounting Standards Board (GASB
As mentioned above, the City is required to follow GASB requirements for financial reporting. The
GASB is an independent organization that establishes accounting and financial reporting standards
for United States state & local governments that follow Generally Accepted Accounting Principles
(GAAP). As a local government, the City must be in compliance. GASB Standards numbers 74 &
75 were designed to improve the information reported on OPEB liabilities for decision -making,
accountability purposes, comparability across various government entities, and greater
transparency.
The new GASB OPEB reporting standards, like the Pension Standards which previously became
effective in fiscal year 2016, are intended to bring about fundamental changes in how OPEB is
accounted for and reported on the financial statements. Similar to the changes made to the pension
standards, the new OPEB standards provide a more comprehensive picture of what state & local
governments have promised to their employees and the associated costs which are now going to be
reported. The standards address three important issues:
• Changes that affect how the long-term obligation and the annual costs of OPEB are accounted
for,
• A requirement to recognize the net OPEB liability on the face of the financial statements, and
• A requirement to present more extensive footnote disclosures and related detail schedules.
The GASB believes that a government has an obligation to pay OPEB based on the level of
retirement benefits promised to an employee in exchange for his or her services. By making the
OPEB liability readily apparent, the GASB enables users of governmental financial statements to
have access to this information that provides a more comprehensive, easily understandable snapshot
of a government's financial position at a given moment in time.
Discussion
The City provides health, dental, and vision coverages to active employees and their qualifying
dependents. Retired City employees, through their various employee affiliated groups, have entered
into various memorandums of understanding with the City at different points in time. In these
agreements, benefits become vested upon reaching certain milestone dates of services. Below is a
summary of the current benefits that were negotiated for the three major employee group categories
and the related OPEB obligations.
Summary of Current Retiree Benefit Provisions
Applies to
Minimum
Minimum
Group
Retirees:
Age
Service
Monthly Benefit
Term of Benefit
20 years of
VPMA
service as a
Lifetime of
and
Retired after
50
Peace Officer, 10
Medical and dental for retiree & spouse, up to
retiree and
VPOBA
6/30/12
years with the City
$1,100/month
spouse
20 years
VFA
Retired after
continuous service
Any HMO medical and dental plan for retiree &
Lifetime of
and
6/30/12
50
with the City
spouse, up to $1,100/month
retiree and
VFMA
spouse
100% of the retiree's medical and dental premiums
Lifetime of
60
20
up to the employee only premiums under the lowest
retiree'
All Miscellaneous
cost HMO plans
100% paid by retiree until age 60, then City pays
Begins at age
Employees (Including
Retired after
City Council)
6/30/14
Under
100% of medical and dental premiums up to the
continues for
Age 60
30
employee only premiums under the lowest cost
retiree's lifetime`
HMO plans
'For retirees in these categories, the spouse of the retiree is not permitted to continue coverage, except under COBRA.
Benefits for current retirees who retired under other prior resolutions are summarized below:
Group
Applies to
Minimum
Minimum
Monthly Benefit
Term of Benefit
Retirees:
Age
Service
All Employees
Retired before
100% of the retiree's medical and dental premiums
Lifetime of
(Including City
7/1/2012 or, for
60
20
up to the employee only premiums under any HMO
retiree`
Council)
Miscellaneous
plan
Except VPMA and
Employees
(Including City
100% paid by retiree until age 60, then City pays
Begins at age 60;
VPOBA Retirees who
Council), after6/30/2013
100% of medical and dental premiums up to the
continues for
retired on or after
and prior
Under age 60
30
employee only premiums under any HMO plan
retiree's lifetime`
7/6/2008.
to 7/1/14
Begins at retiree's
50
(If retired at
100% paid by retiree until age 50, then City pays
age continues
earlier age,
medical and dental premiums for retiree and eligible
P 9
r lifetime
for lifetime,
retiree pays
20
dependents, up to
retiree, spouse, and
Miscellaneous
100% until
$1,000/month before age 65 and up to
eligible dependent
Employees
age 50)
$500 per month after age 65
children.
(Including City
Date of
Medical and dental for retiree & eligible
Council);
retirement in
fiscal year
Minimum of 10 but
dependents, as follows:
Lifetime of retiree,
Optional for VPMA,
2012/2013
less than 20 years
Before age 65: (a) up to $500/month plus
spouse, and eligible
VPOBA, VFMA and
50
of service with the
$50 (5% of $1,000) for each full year of service in
dependent children.
VFA
City
excess of 10 years, but not more than $1,000 per
month.
Age 65 & over: up to $500 per month
20 years of
VPMA
Retired on or
after 7/6/2008
service as a sworn
safety officer, 10
Any HMO medical and dental for retiree
Lifetime of
and
and before
50
such years with the
& spouse
retiree and
VPOBA
7/1 /2012
City
spouse
*For retirees in these categories, the spouse of the retiree is not permitted to continue coverage, except under COBRA.
Currently, the City recognizes and only pays for premiums billed by insurance companies during
the fiscal year. This method is referred to as "pay as you go". There is currently $20.7 million
recognized on the City's books of substantive OPEB obligations. However, under the new GASB
Standards #74 and #75 the City must recognize all substantive OPEB obligations for financial
reporting purposes regardless of its legal standing, binding or not, if there is a historical practice of
making the "pay as you go" payments. The establishment of an OPEB Trust is to fund these
additional OPEB liabilities. In essence, payments are made each year into the Trust Account, which
is a savings account, established to pay for future OPEB costs when they become due at future
points in time to make the "pay as you go" payments as they rise into the future, due to increased
life expectancies and rise in healthcare costs. The City's actuarially annual required payment to
fully fund the OPEB costs is $4.2 million. Based upon the various programs and services in place,
the City will not be able to address this annual funding requirement over the next two years and
possibly longer, unless the City is able to raise sufficient taxes, reduces costs, or both. It will
therefore likely not be possible to immediately commit sufficient resources to paying down the
OPEB liability as directly as desired. However, the initial commitment of regular contributions from
the operating budget of $1.0 million is a good first step in saving for the future healthcare costs.
Establishing an OPEB Trust with Ca1PERS
At the City Administrator's direction, City staff looked at the options available of various profit and
non-profit entities that can set up an OPEB Trust on behalf of the City. The program offered by
CaIPERS had the lowest initial set up fee and the lowest ongoing maintenance fees surveyed of only
0.1 %. It was determined that since the City had an ongoing relationship with Ca1PERS, as they
provide pensions to the City's employees, that this was a positive and synergistic dynamic.
The Ca1PERS OPEB Trust program is officially named the California Employers' Retiree Benefit
Trust (CERBT). The CERBT was first established in March 2007 for public employers to prefund
their retiree health and other post -employment benefit obligations. Since its inception, the CERBT
has grown to now serve 516 California public agencies, including 133 cities, 14 counties, 57 school
districts, 22 court districts, and 290 special districts. Some of the Los Angeles County cities that are
participating include Huntington Park, Burbank, Monterey Park, Arcadia, and Santa Fe Springs.
The CERBT currently contains $6.4 billion in assets covering some 400,000 active and retired
employees.
Investment Strategies
Under the CERBT program there are three investment strategies offered. The majority of the
public agencies participating in the CERBT program have selected Strategy #1, which has an
expected long-term rate of return of 7.28% and is the most aggressive option offered. There are two
other more conservative investment strategies which are available with expected long-term rates of
6.73% or 6.12% respectively. Under the CERBT program, all the assets are invested in five
common assets classes listed below:
• Fixed Income Securities
• Global Equity Securities
• Commodities
• Global Public Real Estate Investment Trusts (REITs)
• Treasury Inflation Protected Securities (TIPS)
Each of the three investment strategies offer a distinctly different long-term expected rate of return
and related market volatility. These strategies all rely on the same underlying set of five asset
classes with different percentage mixes of the underlying assets. It should be noted that investing in
the CERBT fund is somewhat different than the traditional Ca1PERS investments used to fund
employee pensions. Some of the pension assets have under -performed during recent years when
compared to their expected rates of return. The differences for this is that the investing done
through the CERBT program is not burdened with underperforming assets due to certain poor
investment selections that were made many years ago. Since CERBT is such a new program they
were able to design and invest in asset classes that will produce results in line with expectations.
City staff recommends selecting strategy #1, which is in line with the majority of the 516 other
participating government agencies.
Mechanics of the Annual OPEB Fundin
On an annual basis the City Council is requested to approve a budget request as recommended by
the City Administrator. The expected contribution will be a minimum of $1 million per year.
Additional contributions can be made based upon the City accumulating surpluses or through a
greater budget request being made. Upon approval of the budgeted amount, a transfer will be made
to the City's CERBT account. City staff will review quarterly earnings statements and report
results to City Council as part of the quarterly financial update. Distributions will only be made for
purposes of paying OPEB obligations that are due and payable. At the point the City's OPEB
obligation is fully funded no additional contributions will be made until the balance falls below the
full funding level. Distributions can only be made by the City Administrator, Finance Director, or
Deputy City Treasurer for the sole purpose of paying OPEB obligations that are due and payable.
Any distributions made during the year will be reported to City Council and will be part of the
financial statement disclosure as part of ensuring maximum transparency.
Conclusion
The City's participation in the CERBT Program is a positive and proactive measure that will help in
the funding of employee OPEB obligations. The funding approach of Strategy 1 will, over time,
provide the greatest rate of return and ultimately allow the City to reach the goal of funding the
OPEB obligations.
The proposed CERBT agreement with Ca1PERS has been reviewed and approved by the City
Attorney's office.
Fiscal Imaact
There is no direct fiscal impact by the approval of the resolution to establish an OPEB Trust. To the
extent that the City makes voluntary contributions in to the OPEB Trust the interest earnings on
those funds on hand will over time decrease the City's required contributions to cover its OPEB
obligations. The City has already budgeted $1 million for fiscal year ending June 30, 2017 for the
funding of the OPEB obligation. The same amount of $1 million has been requested in the 2017-18
budget. The funds contributed and the interest earnings remain on the City's books as an asset that
has been set aside to fund future employee OPEB obligations.
Attachments
1. Resolution approving the establishment of an Other Post -Employment Benefits (OPEB) trust
with the California Public Employees' Retirement System (Ca1PERS)
2. Resolution authorizing Delegation of Authority to Request Disbursements
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON ESTABLISHING AN OTHER POST -EMPLOYMENT
BENEFITS (OPEB) TRUST WITH THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM (CALPERS), APPROVING
AND AUTHORIZING THE EXECUTION OF AN AGREEMENT AND
ELECTING TO PREFUND OPEB THROUGH CALPERS
WHEREAS, the City of Vernon (City) is a municipal corporation
and a chartered city of the State of California organized and existing
under its Charter and the Constitution of the State of California; and
WHEREAS, the City manages a retiree health benefit program
(Program) that pays some or all of the health insurance premium for
retired City employees who meet the eligibility requirements of the
program; and
WHEREAS, it is in the City's interests to comply with
Governmental Accounting Standards Board Statement 45 (GASB 45), which
requires annual payments on unfunded portions of the actuarial costs of
retiree benefits and disclosure in the City's Comprehensive Annual
Financial Report of unfunded annual required contributions; and
WHEREAS, GASB 45 requires that reserve balances the City has
dedicated to funding the accrued liability of the Program be placed in
an irrevocable trust dedicated to paying the costs of the program and
investing funds needed in future years; and
WHEREAS, the California Public Employees Retirement System
(CalPERS) has created the California Employers' Retiree Benefit Trust
Fund (Trust) to assist public agencies' compliance with GASB 45 and to
manage investment of contracting agency reserves set aside to fund the
costs of post -employment (retiree medical) benefits; and
WHEREAS, CalPERS requires the governing body of a public
agency, by resolution, to approve entering into an agreement with
CalPERS to participate in the Trust and elect to prefund other post
employment benefits through CalPERS; and
WHEREAS, by memorandum dated June 6, 2017, the Finance
Director has recommended the City establish the Other Post -Employment
Benefits (OPEB) Trust for the purpose of setting aside funds to offset
the City's unfunded retiree OPEB liability, and approve and authorize
the execution of an agreement to prefund OPEB through CalPERS; and
WHEREAS, the City Council desires to establish the OPEB
Trust, and approve and authorize the execution of the agreement to
prefund OPEB through CalPERS.
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 hereby
finds and determines that the above recitals are true and correct.
SECTION 2: The City Council of the City of Vernon finds
that this action is exempt from California Environmental Quality Act
("CEQA") review, in accordance with Section 15378, because it is a
government fiscal activity that will not result in direct or indirect
physical changes in the environment, and therefore does not constitute
a "project" as defined by CEQA guidelines.
SECTION 3: The City Council of the City of Vernon hereby
establishes an Other Post -Employment Benefits (OPEB) Trust with the
California Public Employees' Retirement System (CalPERS).
SECTION 4: The City Council of the City of Vernon hereby
approves the Agreement with CalPERS, in substantially the same form as
the copy which is attached hereto as Exhibit A.
SECTION 5: The City Council of the City of Vernon hereby
- 2 -
authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for,
and on behalf of, the City of Vernon and the City Clerk, or Deputy City
Clerk, is hereby authorized to attest thereto.
SECTION 6: The City Council of the City of Vernon hereby
instructs the City Administrator, or his designee, to take whatever
actions are deemed necessary or desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
transactions herein approved or authorized, including but not limited
to, any non -substantive changes to the Agreement attached herein.
SECTION 8: The City Council of the City of Vernon hereby
directs the City Clerk, or the Deputy City Clerk, to send a fully
executed Agreement to CalPERS.
- 3 -
SECTION 9: The City Clerk, or Deputy City Clerk, of the
City of Vernon shall certify to the passage, approval and adoption of
this resolution, and the City Clerk, or Deputy City Clerk, of the City
of Vernon shall cause this resolution and the 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 6th day of June, 2017.
Name:
Title: Mayor / Mayor Pro-Tem
ATTEST:
City Clerk / Deputy City Clerk
APPROVED AS TO FORM:
Zayr4ah) V. 'Moussa, Senior Deputy City Attorney
- 4 -
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, , City Clerk / Deputy City Clerk of the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. , 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, June 6, 2017, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this day of June, 2017, at Vernon, California.
(SEAL)
- 5 -
City Clerk / Deputy City Clerk
EXHIBIT A
CALIFORNIA EMPLOYERS' RETIREE BENEFIT TRUST PROGRAM ("CERBT")
AGREEMENT AND ELECTION
OF
City of Vernon
(NAME OF EMPLOYER)
TO PREFUND 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)
City of Vernon
(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 defined benefit plan as defined in
Governmental Accounting Standards Board (GASB) Statements for Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single -employer plans, with pooled
administrative and investment functions;
Rev 08/24/2016 Page 1 of 10 G
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 CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS
CERBT (OPEB)
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to
CalPERS Mailroom
CERBT (OPEB)
400 Q Street
Sacramento, CA 95811
(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 08/24/2016 Page 2 of 10 A
c:,ier[s
C. Other Post -Employment Benefits (OPEB) Cost Reports and Employer Contributions
(1) Employer shall provide to the Board an OPEB cost 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, and shall be prepared at least as often as the
minimum frequency required by applicable GASB OPEB Standards. This OPEB cost
report may be prepared as an actuarial valuation report or, if the employer is qualified
under GASB OPEB Standards, may be prepared as an Alternative Measurement
Method (AMM) report.
(a) Unless qualified under GASB OPEB Standards, to provide an AMM
report, Employer shall provide to the Board an actuarial valuation report.
Such report shall be for the Board's use in financial reporting, and shall be
prepared at least as often as the minimum frequency required by GASB
OPEB Standards, and shall be:
1) 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;
2) prepared in accordance with generally accepted actuarial practice and
GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions
for the valuation period or as otherwise required by the Board.
(b) If qualified under GASB OPEB Standards, Employer may provide to the
Board an AMM report. 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 OPEB Standards, and shall be:
1) affirmed by Employer's external auditor, or 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, to be consistent with the
AMM process described in GASB OPEB Standards;
2) prepared in accordance with GASB OPEB Standards; and,
3) 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 OPEB cost report for financial reporting purposes
submitted to it, but shall not unreasonably do so. In the event that the Board
Rev 08/24/2016 Page 3 of 10
GJPLRS
determines, in its sole discretion, that the OPEB cost report is not suitable for use in the
Board's financial statements or if Employer fails to provide a required OPEB cost report,
the Board may obtain, at Employer's expense, an OPEB cost report that meets the
Board's financial reporting needs. The Board may recover from Employer the cost of
obtaining such OPEB cost report 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 OPEB cost report for financial reporting purposes 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 OPEB Standards. 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) No contributions are required. Contributions can be made at any time following the
effective date of the Agreement provided that Employer has first complied with the
requirements of Paragraph C.
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 are maintained for each
employer so that the Employer's assets will provide benefits only under the Employer's
post -employment benefit plan(s).
(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 participating employers and posted to
Employer's Prefunding Account as determined by the Board but no less frequently than
annually.
Rev 08/24/2016 Page 4 of 10 A,
WiF.FS
(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 OPEB Standards.
(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.
(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)
will be processed monthly.
(5) CaIPERS 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 CaIPERS' 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.
Rev 08/24/2016 Page 5 of 10
CaIf7R5
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.
(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 the Employer's participation in the Prefunding Plan terminates, the governing
body of the Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer's Prefunding
Account; provided that the Board shall have no obligation to make such
transfer unless the Board determines that the transfer will satisfy
applicable requirements of the Internal Revenue Code, other law and
accounting standards, and the Board's fiduciary duties. If the Board
determines that the transfer will satisfy these requirements, the Board
shall then have one hundred fifty (150) days from the date of such
determination to effect the transfer. The amount to be transferred shall be
the amount in the Employer's Prefunding Account as of the date of the
transfer (the "transfer date") and shall include investment earnings up to
an investment earnings allocation date preceding the transfer date. In no
event shall the investment earnings allocation date precede the transfer
date by more than 150 days.
(b) A disbursement of the assets in Employer's Prefunding Account; provided
that the Board shall have no obligation to make such disbursement unless
the Board determines that, in compliance with the Internal Revenue Code,
other law and accounting standards, and the Board's fiduciary duties, 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. If the Board
determines that the disbursement will satisfy these requirements, the
Rev 08/24/2016 Page 6 of 10 A,
C41F FS
Board shall then have one hundred fifty (150) days from the date of such
determination to effect the disbursement. The amount to be disbursed
shall be the amount in the Employer's Prefunding Account as of the date
of the disbursement (the "disbursement date") and shall include
investment earnings up to an investment earnings allocation date
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement date by more than 150
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 that term is used in GASB OPEB Standards), 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
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.
I. 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 offices) 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
Page 7
Rev 08/24/2016 of 10 A
GOBS
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, CalPERS, 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, CalPERS, 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:
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
Rev 08/24/2016 Page 8 of 10
C i TTS
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.
(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) 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.
(5) 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
Rev 08/24/2016 Page 9 of 10
0IMPs
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.
(6) 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.
A majority vote of Employer's Governing Body at a public meeting held on the 6th
day of the month of
into this Agreement.
June
Signature of the Presiding Officer:
Printed Name of the Presiding Officer:
Name of Governing Body:
Name of Employer:
Date:
in the year 2017 , authorized entering
Melissa Ybarra
City Council
City of Vernon
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY
JOHN SWEDENSKY
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is:
Rev 08/24/2016 Page 10 of 10
calpf rs
Ca1PERS
DELEGATION OF AUTHORITY
TO REQUEST DISBURSEMENTS
RESOLUTION
OF THE
City Council
(GOVERNING BODY)
OF THE
City of Vernon
(NAME OF EMPLOYER)
The City Council delegates to the incumbents
(GOVERNING BODY)
in the positions of City Administrator and
(TITLE)
Director of Finance and/or
(TITLE)
Deputy Treasurer authority to request on
(TITLE)
behalf 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 Melissa Ybarra
Title Mayor
Witness
Maria E. Ayala, City Clerk
Date
APPROVED AS TO FORM:
Zayrf Mdussa,
SenitDeputy City Attorney
OPEB Delegation of Authority (1/13)