HomeMy WebLinkAboutAgenda Statement 1987/05/26 Item 11 COUNCIL AGENDA STATEMENT
Item No. 11
Meeting Date 5-26-87
ITEM TITLE: Amendment to the City' s PERS Contract to Provide for the Merger
of the Montgomery Fire Protection District' s Retirement Contract
with that of the City
a. Resolution /; 2t6 - Of intention to approve amendment to
contract between the Board of Administrations of the Public
Employees Retirement System and the City Council of Chula Vista
b. Resolution /30/7 - Approving agreement authorizing the merger
of the Montgomery Fire Protection District PERS contract
with that of the City
c. Ordinance , 63- Authorizing an amendment to the contract
between the City Council of the City of Chula Vista and
the Board of Administrations of the California Public Employees
Retirement System {,G 'c ;,_ !,,) AND ,O}; f ,,
SUBMITTED BY: Assistant City Manager
REVIEWED BY: City Manager 4/5ths Vote: Yes No X
On November 12, 1986, the City Council took action to amend the PERS contract
so that it would reflect the merger of the Montgomery Fire Protection District
employeees with that of the City. The initial action taken by the City
Council back in November 1986 included documents provided by the PERS system
that did not recognize the City' s intention that Montgomery fire personnel ,
after the merger, were to be treated as City employees for retirement benefits
in the future as though they were Chula Vista fire fighters from the start
of their employment with the Montgomery Fire Protection District. As a
result of that error, PERS had to conduct a new actuarial study to establish
what the new rates would be if the merger reflected the City' s intention.
A great deal of time has elapsed, but finally the City can adopt the necessary
resolutions and ordinances to effectuate that merger.
RECOMMENDATION: Adopt resolutions declaring our intent to approve an amendment
to the contract and providing for the agreement to merge,
and place ordinance on first reading, authorizing an amendment
to the PERS contract.
BOARDS/COMMISSIONS RECOMMENDATION: N.A.
DISCUSSION:
The Public Employees Retirement law sets forth procedures by which public
agencies may elect to make amendments to their contracts providing retirement
benefits to their employees. The first step in that procedure is to adopt
a resolution of intention giving notice of the proposed amendment and a
summary of the changes that are to occur. In this instance, the City, in
adopting a resolution of intention, will be giving notice to amend their
contract to provide for the merger of the Montgomery Fire Protection District
with the City' s in accordance with the appropriate Government Code sections.
No changes in benefits will occur.
Item No. 11
Meeting Date 5-26-87
Certain other procedural steps are required, including the need to make
public at least two weeks prior to the adoption of the final ordinance
any changes in benefits or costs that will be experienced as a result of
the amendment. In our case, this report, which is a public document, meets
the requirements of Government Code Section 7507 and provides the public
the required notice of changes that we expect will occur as a result of
the amendment and the financial impact of the amendment. The amendment
will result in a reduction in our current PERS rate of 26.621% to 25.874%,
or a reduction of .074% by reason of the merger. This percentage (25.874%)
is a projected actuarial rate to the year 2011 but our contract reads that
the employer rate is subject to change with future amendments and/or experience
and other factors. Based upon our current safety member payroll , our annual
cost at 25.874% of payroll is approximately $1 ,821 ,335. The amendment creates
no additional miscellaneous employee costs, and therefore the financial
impact is nil .
FINANCIAL IMPACT:
The first 12 months' savings in retirement costs for the City will be approximately
$52,580 as a result of the merger amendment.
ERA:mab
by the City Council of by the City Council of
Chula Vista, California Chutla Vista; California
Dated -5 ori Dated ' �' -f