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HomeMy WebLinkAboutAgenda Statement 1984/07/10 Item 6a-b COUNCIL AGENDA STATEMENT Item 6 Meeting Date 7/10/84 ITEM TITLE: a) Resolution /rn, / of intention to approve an amendment to a contract between the Board of Administration of the Public Employees Retirement System and the City Council of the City of Chula Vista b) Resolution // 7'— of the City Council of the City of Chula Vista relating to mandatory retirement of local Safety members SUBMITTED BY: City Manager (4/5ths Vote: Yes No X ) The 1983-1987 Memorandum of Understanding between the City and Local 2180, International Association of Fire Fighters, AFL-CIO, and the 1983-1986 Memorandum of Understanding between the City of Chula Vista and the Chula Vista Police Officers Association contained a provision that the City would begin providing the 2% at 50 retirement plan for both groups effective October 1 , 1984. State law requires certain steps of the City Council and both employee groups prior to adoption of the 2% at 50 retirement plan. The first step that must be taken is that the City Council must adopt a resolution of intention to amend Chula Vista's contract with the Public Employees Retirement System. RECOMMENDATION: 1 . That City Council adopt a resolution of intention to approve an amendment to the contract between the Board of Administration of the Public Employees Retirement System and the City Council of the City of Chula Vista. 2. That City Council adopt a resolution relating to mandatory retirement of local Safety members. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: As indicated above, the Police and Fire employees' associations' MOUs indicated that the City would provide a change in the employees' retirement systems from the 1/2 at 55 currently in effect to the 2% at 50 plan beginning October 1 , 1984. Before the 2% at 50 retirement plan can be implemented, City Council and the employee groups must take certain steps as follows: • Page 2, Item 6 Meeting Date //10/84 1. The Council must adopt a resolution of intention to amend the contract between PERS and the City. 2. There must be an election by all Safety employees, including not only members of the two associations but also mid-management and executive positions that will be affected by the changeover from 1/2 at 55 to 2% at 50 retirement systems. 3. The Council must have the first reading of an ordinance to adopt the amendment to the PERS contract. 4. The Council must adopt the final ordinance (which has to be at least 20 days after signing the resolution of intention) . 5. The effective date of the amendment must be the beginning of a pay period after the effective date of the ordinance. The closest pay period to October 1 begins September 28 and the amendment will be effective on that date providing, of course, that the employees elect to ratify the change in retirement plans. The proposed schedule to accomplish all of the required steps is as follows: 1 . 7-10-84 Adoption of resolution of intention to amend contract with PERS. 2. 7-12 and 7-13-84 Employee election by secret ballot. 3. 7-24-84 First reading of ordinance to adopt the amendment to PERS contract. 4. 8-7-84 Adoption of final ordinance authorizing PERS contract amendment. 5. 9-11-84 Effective date of ordinance. 6. 9-28-84 Effective date of PERS amendment. The current 1/2 at 55 retirement plan has a mandatory retirement age of 65. The 2% at 50 plan has a mandatory retirement age of 60 and all local Safety members who are age 60 or over on the amendment date (9-28-84) will be compulsorily retired on the first of the month subsequent (10-1-84) to the effective date of the amendment. However, Section 20980.1 of the Government Code provides that upon adoption of a resolution by the contracting agency (City of Chula Vista) , members who have not completed 20 years of service as a local Safety member by age 60 will not be compulsorily retired until 20 years of service or age 65, whichever first occurs. This option will remain in effect for five years, after which the compulsory retirement age will be 60. Page 3, Item 6 Meeting Date //l0/84 FISCAL IMPACT: The increase in rates between the 1/2 at 55 plan compared to the 2% at 50 plan is the difference between what our retirement rate would have been under the old system ( .15630) and the new rate for the 2% at 50 Plan ( .26231 ) . However, the Memoranda of Understanding with both employee groups had a cap of .2589 for the City's contribution to PERS. Therefore, the difference between the old rate and the MOU cap will be used ( .1026) . The increased cost from September 28, 1984-June 30, 1985 for the changeover for both groups is $334,445. This money is budgeted in the 1984-85 budget. The cost on an annual basis would be $445,927, 7- (P/ 0 . 11- • Public Employees' Retirement System • Field & Contracts Services Division • Contracts Office, Section 900 Post Office Box 1953 Sacramento, CA 95809 Telephone (916) 445-6570 445-4900 (TDD Interpreter) CERTIFICATION OF GOVERNINGS BODY'S ACTION I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the CITY CAUNCIL - Resolution No. 11701 (Governing Body) of the City of Chula Vista, California (Name of Public Agency) July 10, 1984 on , appearing at Page 2 - Item #6a V (Date) Volumne No. 23 of the (Minutes) (Official Records) of the City Council . • (Governing Body) CITY CLERK or GQ�� Secretary of the Board PERS—CON-12 (5/84) C0600 COUNCIL AGENDA STATEMENT Item 6 Meeting Date 7/10/84 ITEM TITLE: a) Resolution ////70/1 of intention to approve an amendment to a contract between the Board of Administration of the Public Employees Retirement System and the City Council of the City of Chula Vista b) Resolution 11 7� of the City Council of the City of Chula Vista relating to mandatory retirement of local Safety members SUBMITTED BY: City Managers (4/5ths Vote: Yes No X ) The 1983-1987 Memorandum of Understanding between the City and Local 2180, International Association of Fire Fighters, AFL-CIO, and the 1983-1986 Memorandum of Understanding between the City of Chula Vista and the Chula Vista Police Officers Association contained a provision that the City would begin providing the 2% at 50 retirement plan for both groups effective October 1 , 1984. State law requires certain steps of the City Council and both employee groups prior to adoption of the 2% at 50 retirement plan. The first step that must be taken is that the City Council must adopt a resolution of intention to amend Chula Vista's contract with the Public Employees Retirement System. RECOMMENDATION: 1. That City Council adopt a resolution of intention to approve an amendment to the contract between the Board of Administration of the Public Employees Retirement System and the City Council of the City of Chula Vista. 2. That City Council adopt a resolution relating to mandatory retirement of local Safety members. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: As indicated above, the Police and Fire employees' associations' MOUs indicated that the City would provide a change in the employees' retirement systems from the 1/2 at 55 currently in effect to the 2% at 50 plan beginning October 1 , 1984. Before the 2% at 50 retirement plan can be implemented, City Council and the employee groups must take certain steps as follows: Page 2, Item 6 Meeting Date //10/84 1. The Council must adopt a resolution of intention to amend the contract between PERS and the City. 2. There must be an election by all Safety employees, including not only members of the two associations but also mid-management and executive positions that will be affected by the changeover from 1/2 at 55 to 2% at 50 retirement systems. 3. The Council must have the first reading of an ordinance to adopt the amendment to the PERS contract. 4. The Council must adopt the final ordinance (which has to be at least 20 days after signing the resolution of intention) . 5. The effective date of the amendment must be the beginning of a pay period after the effective date of the ordinance. The closest pay period to October 1 begins September 28 and the amendment will be effective on that date providing, of course, that the employees elect to ratify the change in retirement plans. The proposed schedule to accomplish all of the required steps is as follows: 1. 7-10-84 Adoption of resolution of intention to amend contract with PERS. 2. 7-12 and 7-13-84 Employee election by secret ballot. 3. 7-24-84 First reading of ordinance to adopt the amendment to PERS contract. 4. 8-7-84 Adoption of final ordinance authorizing PERS contract amendment. 5. 9-11-84 Effective date of ordinance. 6. 9-28-84 Effective date of PERS amendment. The current 1/2 at 55 retirement plan has a mandatory retirement age of 65. The 2% at 50 plan has a mandatory retirement age of 60 and all local Safety members who are age 60 or over on the amendment date (9-28-84) will be compulsorily retired on the first of the month subsequent (10-1 -84) to the effective date of the amendment. However, Section 20980.1 of the Government Code provides that upon adoption of a resolution by the contracting agency (City of Chula Vista) , members who have not completed 20 years of service as a local Safety member by age 60 will not be compulsorily retired until 20 years of service or age 65, whichever first occurs. This option will remain in effect for five years, after which the compulsory retirement age will be 60. tk- - Page 3, Item 6 Meeting Date (/10/84 FISCAL IMPACT: The increase in rates between the 1/2 at 55 plan compared to the 2% at 50 plan is the difference between what our retirement rate would have been under the old system ( .15630) and the new rate for the 2% at 50 Plan (.26231 ) . However, the Memoranda of Understanding with both employee groups had a cap of .2589 for the City's contribution to PERS. Therefore, the difference between the old rate and the MOU cap will be used ( .1026). The increased cost from September 28, 1984-June 30, 1985 for the changeover for both groups is $334,445. This money is budgeted in the 1984-85 budget. The cost on an annual basis would be $445,927, G� 0\1 t9 .