HomeMy WebLinkAboutCC AG PKT 2003-09-22 #U AGENDA REPORT /
DATE: September 22, 2003 / 09)
TO: Honorable Mayor and City Council
vi, 0
FROM: John B. Bahorski, City Manager ®1 � o Q�
SUBJECT: (Lifeguard / Police Safety - PERS Contract Amendmen 10 U
SUMMARY OF REQUEST:
That City Council adopt the attached Resolution of Intention to amend the California
Public Employees' Retirement System contract to provide Section 21362.2 (3% @ 50
formula) to the Lifeguard Safety unit and introduce the Ordinance authorizing the
amendment.
BACKGROUND:
Prior to the recent contract amendment for the Police Safety unit under the PERS system,
the Lifeguard Safety and the Police Safety units received the same benefits. To restore
equality to the Lifeguard Safety unit under the CalPERS retirement system with that of
the Police Safety Unit and to address potential liability concerns with a Lifeguard Safety
unit comprised of only two active employees, the City has merged the two plans. By
enacting this merge, the liability is spread over a larger pool of employees, will be more
cost effective in the long term and restores equality between the two units.
While a contract amendment is not required for the merge, it is required to provide
Section 21362.2 (3% @ 50 formula) to the Lifeguards. Ca1PERS requires a resolution of
intention be adopted giving notice of the City's intention to approve an amendment to the
PERS contract adopting the 3% @ 50 formula. In addition to the resolution of intention,
the City must pass an ordinance authorizing an amendment to the contract between City
of Seal Beach and CalPERS. The adoption of the final ordinance shall occur no earlier
than 20 days after adoption of the resolution of intention. Therefore, the City Council is
also requested to introduce the Ordinance at its September 22, 2003 meeting and adopt
_ the final ordinance at its October 13, 2003 meeting.
FISCAL IMPACT:
Government Code 7507 requires that the future annual costs of the proposed contract
amendment be made known. Currently, the City is contributing 39.582% of each Police
safety employees' salary into the PERS retirement system. With the contract
amendment, that contribution will change by .013% to 39.595 %. The annual cost for the
first year contribution will increase by $33,798 and will expect to increase by
Item U
3% @ 50 Lifeguard Report — Page 2
September 22, 2003
approximately 3.75% for the next 20 years. The total cost on a present value basis for the
20 -year period is $254,316.
With the 3 % @50 in place, the Lifeguard Chief is expected to retire and the City would
fill the two full -time positions with a Lifeguard Captain and a Marine Yearly Lifeguard
with subsequent salary savings equal to the cost of the amendment.
Included with this report is the PERS disclosure of contract amendment costs.
RECOMMENDATION:
That City Council shall:
1) Adopt "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL
BEACH, CALIFORNIA STATING ITS INTENTION TO APPROVE AN
AMENDMENT TO CONTRACT BETWEEN THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE
CITY OF SEAL BEACH"
2) Introduce "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SEAL BEACH, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF SEAL
BEACH AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM."
d •
illi allf
Jo i:.: orski, City Manager
Attachments:
1. PERS Disclosure of Contract Amendment Costs
2. Resolution Approving an Amendment to PERS Retirement System
3. Ordinance Authorizing the Amendment to PERS Retirement System
Agenda Item
3% @ 50 Lifeguard Report — Page 2
September 22, 2003
PERS DISCLOSURE OF CONTRACT AMENDMENT COSTS
1) Change in the Prevent Value of Benefits $2,405,217
2) Changed in the Accrued Liability $2,203,379
3) Change in the Total Employer Rate .013%
Agenda Item
PERS DISCLOSURE OF CONTRACT AMENDMENT COSTS
1) Change in the Present Value of
Benefits $2,405,217
2) Change in the Accrued Liability $2,203,379
3) Change in the Total Employer Rate 0.013%