CC 2016-10-25_11a Adopt Ordinance POA CalPERS Cost Sharing
MEMORANDUM
TO: CITY COUNCIL
FROM: DEBORAH MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES
BY: KAREN SISKO, HUMAN RESOURCES MANAGER
SUBJECT: ADOPTION OF ORDINANCE AMENDING THE CALIFORNIA PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM CONTRACT FOR LOCAL
POLICE MEMBERS OF THE ARROYO GRANDE POLICE OFFICERS’
ASSOCIATION
DATE: OCTOBER 25, 2016
RECOMMENDATION:
It is recommended the City Council adopt an Ordinance of the City Council of the City of
Arroyo Grande authorizing an amendment to the contract between the City and the
Board of Administration of the California Public Employee’s Retirement System
regarding cost sharing by local police members of the Arroyo Grande Police Officers’
Association.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The retirement contract amendment will have an estimated $41,000 in savings to the
City for future annual costs as the employees will be picking up a portion of the
“employer share” of their retirement cost.
BACKGROUND:
The attached Ordinance was introduced, without modification, at the City Council
meeting on September 27, 2016. The Ordinance and contract change will implement
GC Section 20516 (Employees Sharing Additional Cost) for local police members of the
Arroyo Grande Police Officers’ Association. The City contracts with the California
Public Employees’ Retirement System (CalPERS) to provide retirement benefits to
employees. The retiree benefits are based on the number of years of service, the
employee earnings, and the benefit provision of the contract.
In the most recent contract negotiations with the Arroyo Grande Police Officers’
Association, the membership agreed to participate in cost sharing for their CalPERS
retirement benefit. In addition to the “employee portion” that the members currently pay,
the classic local police members will pick up an additional 2.0% of the “employer
contribution” and the new local police members will pick up 0.5% of the “employer
contribution”. This agreement for cost sharing is contained in the Memorandum of
Understanding (MOU).
Item 11.a. - Page 1
CITY COUNCIL
ADOPTION OF ORDINANCE AMENDING THE CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM CONTRACT FOR LOCAL POLICE MEMBERS OF THE
ARROYO GRANDE POLICE OFFICERS’ ASSOCIATION
OCTOBER 25, 2016
PAGE 2
ANALYSIS OF ISSUES:
This current contract change for cost sharing went into effect on August 12, 2016 and
the City has been withholding the agreed upon contributions from employee paychecks,
however, they cannot be reported to CalPERS until a contract amendment has been
executed. The contributions are processed in accordance with IRC 414(h)(2).
The contract amendment is scheduled to go into effect on December 2, 2016, which is
the first day of the new payroll period following the November 24, 2016 effective date of
the Ordinance.
ADVANTAGES:
By amending the contract with CalPERS, local police members will be contributing more
to their retirement costs and the contributions will be made on a pre-tax basis.
DISADVANTAGES:
There are no disadvantages to the City in local police members of the Arroyo Grande
Police Officers’ Association sharing in the cost of the “employer” portion of the CalPERS
contribution.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
- Adopt the Ordinance to amend the CalPERS contract;
- Do not adopt the Ordinance, which would require staff to renegotiate the
approved Memorandum of Understanding with the Arroyo Grande Police
Officers’ Association; or
- Provide direction to staff.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
An Ordinance summary was published in The Tribune on October 19, 2016 in
accordance with State law. The Agenda was posted at City Hall and on the City’s
website in accordance with Government Code Section 54954.2.
Item 11.a. - Page 2
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE AND THE BOARD OF ADMINISTRATION OF
THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT
SYSTEM
THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES ORDAIN AS
FOLLOWS:
SECTION 1: That an amendment to the contract between the City Council of the City
of Arroyo Grande and the Board of Administration, California Public Employees’
Retirement System is hereby authorized, a copy of said amendment being attached
hereto, marked Exhibit, and by such reference made a part hereof as though herein
set out in full.
SECTION 2: The Mayor of the City of Arroyo Grande is hereby authorized,
empowered, and directed to execute said amendment for and on behalf of said
Agency.
SECTION 3: This Ordinance shall take effect thirty (30) days after the date of its
adoption, and
SECTION 4: A summary of this Ordinance shall be published in a newspaper
published and circulated in the City of Arroyo Grande at least five (5) days prior to the
City Council meeting at which the proposed Ordinance is to be adopted. A certified
copy of the full text of the proposed Ordinance shall be posted in the office of the City
Clerk. Within fifteen (15) days after adoption of the Ordinance, the summary with the
names of those City Council members voting for and against the Ordinance shall be
published again, and the City Clerk shall post a certified copy of the full text of such
adopted Ordinance.
On motion of Council Member , seconded by Council Member
, and on the following roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this _____ day of ____________, 2016.
Item 11.a. - Page 3
ORDINANCE NO.
PAGE 2
JIM HILL, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
_______
ROBERT McFALL, INTERIM CITY MANAGER
APPROVED AS TO FORM:
HEATHER WHITHAM, CITY ATTORNEY
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