HomeMy WebLinkAboutReso 2010-238RESOLUTION NO. 2010-238
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING PENSION REFORM, WHICH
REFORM SHALL REQUIRE THE MAYOR,
COUNCILMEMBERS, THE CITY MANAGER, THE CITY
ATTORNEY, THE CITY CLERK, AND EMPLOYEES IN THE
EXECUTIVE, SENIOR MANAGER, MID-MANAGER
UNCLASSIFIED, MID-MANAGER CONFIDENTIAL,
PROFESSIONAL UNCLASSIFIED, PROFESSIONAL
CONFIDENTIAL AND CONFIDENTIAL EMPLOYEE
GROUPS TO MAKE CONTRIBUTIONS, WHICH WILL BE
APPLIED TO THE CITY'S CONTRIBUTION TO CALPERS
FOR OPTIONAL BENEFITS, TO SHARE PENSION COSTS
WITH THE CITY; DIRECTING THE CITY MANAGER TO
ESTABLISH A SECOND TIER CALPERS RETIREMENT
PLAN FOR THE MAYOR, COUNCILMEMBERS, THE CITY
MANAGER, THE CITY ATTORNEY, THE CITY CLERK, AS
THEY ARE NEWLY ELECTED OR APPOINTED, AND NEW
EMPLOYEES IN THE AFOREMENTIONED EMPLOYEE
GROUPS; AND PROVIDING AUTHORIZATION TO THE
CITY MANAGER TO TAKE ALL NECESSARY ACTIONS TO
EFFECTUATE PENSION REFORMS STATED HEREIN
WHEREAS, a significant budget shortfall for the 2011/2012 Fiscal Year for the City of
Chula Vista exists, specifically a 12.5 million dollar deficit (which may grow lazger), and afive-
year forecast which shows that budget deficits for upcoming Fiscal Years will likely continue;
and
WHEREAS, the City currently bears the full costs of funding the City employees'
Ca1PERS Retirement Plan, including making "employee contributions" to Ca1PERS in the
statutory amounts of eight percent (8%) for employees in the "miscellaneous" Ca1PERS member
category and nine percent (9%) for employees in the "local police" 'and "local firefighter"
Ca1PERS member categories; and
WHEREAS, pension reform, including the requirement that employees share in the costs
of their pension and the adoption of a Second Tier Ca1PERS Retirement Plan for new City
employees, would assist the City in its effort to reduce the budget shortfall and would promote
the long term sustainability of pension benefits and the City desires to implement such pension
reform; and
WHEREAS, the City would benefit by creating a Second Tier Ca1PERS Retirement Plan
for the Mayor, Councilmembers, the City Manager, the City Attorney, the City Clerk, as they aze
newly elected or appointed, and new employees in the Executive, Senior Manager, Mid-Manager
Unclassified, Mid-Manager Confidential, Professional Unclassified, Professional Confidential,
and Confidential employee groups by reducing the City's cost to fund the retirement plan for
those new employees, which, in turn promotes the City's fiscal ability to fund the retirement plan
for all employees and to provide services to the public; and
Resolution No. 2010-238
Page 2
WHEREAS, the Mayor, Councilmembers, the City Manager, the City Attorney, the City
Clerk, and employees in Executive, Senior Manager, Mid-Manager Unclassified, Mid-Manager
Confidential, Professional Unclassified, Professional Confidential, and Confidential employee
groups, recognizing the City's dire fiscal situation and showing a willingness to assist in the
solution of the City's budget shortfall, have expressed an agreement to share in the costs of their
pension by making contributions, which will be applied to the City's contributions to CaIPERS
for optional benefits, in the amounts of eight percent (8%) for employees in the "miscellaneous"
Ca1PERS member category and nine percent (9%) for employees in the "local police" and "local
firefighter" CaIPERS member categories, effective January 14, 2011, and the City wishes to
implement that agreement; and
WHEREAS, the pension cost shazing by the Mayor, Councilmembers, the City Manager,
the City Attorney, the City Clerk, employees in the Executive, Senior Manager, Mid-Manager
Unclassified, Mid-Manager Confidential, Professional Unclassified, Professional Confidential,
and Confidential Employee Groups will save the City approximately $426,140 in the current
Fiscal Yeaz, $852,280 in Fiscal Yeaz 2011/2012, and such savings will continue into the future.
NOW, THEREFORE, BE IT RESOLVED that:
1. The Mayor, Councilmembers, the City Manager, the City Attorney, the City Clerk and
employees in the Executive, Senior Manager, Mid-Manager Unclassified, Mid-Manager
Confidential, Professional Unclassified, Professional Confidential, and Confidential employee
groups shall make contributions toward sharing in the costs of their Ca1PERS Retirement Plan as
follows:
a. The aforementioned employees shall make contributions, which will be applied to
the City's contribution to Ca1PERS for optional benefits, in the amounts of eight
percent (8%) for employees in the "miscellaneous" CaIPERS member category
and nine percent (9%) for employees in the "local police" and "local firefighters"
Ca1PERS member categories, effective January 14, 2011; and
b. The aforementioned contributions will be made on a pre-tax basis, to the extent
permitted by the Internal Revenue Code, but the employee will remain ultimately
and solely responsible for any tax consequences of such contributions.
2. A Second Tier Ca1PERS Retirement Plan shall be established for the Mayor,
Councilmembers, the City Manager, the City Attorney, the City Clerk, as they are newly elected
or appointed, and new employees in the Executive, Senior Manager, Mid-Manager Unclassified,
Mid-Manager Confidential, Professional Unclassified, Professional Confidential, and
Confidential employee groups, which shall encompass the following:
a. The current Ca1PERS Retirement Plan benefits for the aforementioned employees
in the "miscellaneous" Ca1PERS member category shall be amended to require
(1) a two percent (2%) @ 60 calculation; (2) that the employees make one
hundred percent (100%) of the statutory employee contribution to Ca1PERS,
currently eight percent (8%); (3) that there be no final year concession of said
payments to compensation for CalPERS benefit calculation purposes; (4) the use
of average highest three years calculation; and (5) the City will no longer provide
for subsidized retiree health care rates by offering a blended health Gaze rate for
employees hired under the Second Tier Ca1PERS Retirement Plan; and
Resolution No. 2010-238
Page 3
b. The current Ca1PERS Retirement Plan benefits for the aforementioned employees
in the "local police" and "local fire" Ca1PERS member categories shall be
amended to require (1) a two percent (2%) @ 50 calculation; (2) that the
employees make one hundred percent (] 00%) of the statutory employee
contribution to Ca1PERS, currently nine percent (9%); (3) no final year
concession of said payments to compensation for Ca1PERS benefit calculation
purposes; (4) the use of average highest three yeazs calculation; and (5) the City
will no longer provide for subsidized retiree health care rates by offering a
blended health care rate for employees hired under the Second Tier Ca1PERS
Retirement Plan; and
c. For the aforementioned employees in the "miscellaneous" Ca1PERS member
category, the Second Tier Ca1PERS Retirement Plan will be effective at the
earliest possible date after mutual agreement to the Second Tier CalPERS
Retirement Plan by all the Bargaining Units representing employees in the
"miscellaneous" Ca1PERS member category or after utilization and completion of
the impasse procedures stated in the City's Employee Relations Policy with those
Bargaining Units; and
d. For the aforementioned employees in the "local police" Ca1PERS member
category, the Second Tier Ca1PERS Retirement Plan will be effective at the
earliest possible date after mutual agreement to the Second Tier CaIPERS
Retirement Plan by the Bargaining Unit representing employees in the "local
police" Ca1PERS member category or after utilization and completion of the
impasse procedures stated in the City's Employee Relations Policy with the
Bargaining Unit; and
e. For the aforementioned employees in the "local firefighters" CaIPERS member
category, the Second Tier CaIPERS Retirement Plan will be effective at the
earliest possible date after mutual agreement to the Second Tier Ca1PERS
Retirement Plan by the Bargaining Unit representing employees in the "local
firefighter" Ca1PERS member category or after utilization and completion of the
impasse procedures stated in the City's Employee Relations Policy with the
Bargaining Unit.
3. The City Manager is directed and authorized to take all necessary actions to effectuate
the Pension Reforms set forth in this Resolution.
Resolution No. 2010-238
Page 4
Presented by
Ke eyBcn
Director of Human Resources
Approved as to form by
Bart
City
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 5th day of October 2010 by the following vote:
AYES: Councilmembers: Bensoussan, McCann, Ramirez and Cox
NAYS: Councilmembers: None
ABSENT: Councilmembers: Castaneda
l~ u
Cheryl Cox, M or
ATTEST:
~.( ~ /I~UlA"
Donna R. Noms, M ,City Clerk
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2010-238 was duly passed, approved, and adopted by the City Council at a
regulaz meeting of the Chula Vista City Council held on the 5th day of October 2010.
Executed this 5th day of October 2010.
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Donna R. Norris, CMC, ity Clerk