CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
SR 2017-047
April 4, 2017
Public Hearing

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Maxine Gullo, Human Resources Manager

APPROVED BY: Chip Rerig, City Administrator

SUBJECT: 1. Adopt a Resolution of Intention to approve an amendment to the contract

between the Board of Administration of the California Public Employees Retirement
System (CalPERS) and the City of Carmel-by-the-Sea to include provisions pursuant
to Government Code 20516 Cost Sharing for Safety (Fire) and Safety (Police)
members. 2. Adoption of an Ordinance authorizing an amendment to the provisions of
municipal code section 2.56 (Retirement System) and approving an amendment to the
contract between the Board of Administration of the Public Employees Retirement
System and the City Council of the City of Carmel-by-the-Sea to provide section 20516
(employees sharing additional cost) of 3% for Safety (Police) and Safety (Fire)
members.

RECOMMENDATION

1. Adopt the Resolution of Intention to approve an amendment to the contract between the Board of
Administration of the California Public Employees Retirement System (CalPERS) and the City of
Carmel-by-the-Sea to include provisions pursuant to Government Code 20516 Cost Sharing for
Safety (Police) and Safety (Fire) members.

2. Waive reading in full and introduce on first reading an Ordinance authorizing an amendment to the
provisions of municipal code section 2.56 (Retirement System) and approving an amendment to the
contract between the Board of Administration of the Public Employees Retirement System and the City
Council of the City of Carmel-by-the-Sea to provide section 20516 (employees sharing additional cost)
of 3% for Safety (Police) and Safety (Fire) members.

BACKGROUND / SUMMARY

The California Public Employees Retirement System (CalPERS) is very specific in the requirements to any
changes in the PERS contract defining benefits for employees enrolled in the system. For example, in October
2016 the contract amendment was completed for miscellaneous members and CalPERS does not allow
contract amendments for two separate groups (Miscellaneous and Safety) to be processed simultaneously.
Therefore, now that the miscellaneous amendment has been fully implemented, CalPERS has processed the
Safety (Fire) and Safety (Police) paperwork. The following steps must be taken in order to complete the
contract amendment process.

Safety Police. Article7: Retirement includes the employees sharing additional cost of 3% per the
Memorandum of Understanding. (Completed and approved on April 7, 2015)
 Safety Fire. Section 3. Retirement Contributions includes the employees sharing additional cost of
3% per the Letter Agreement. (Completed and approved on December 8, 2016)

The City Council must adopt a Resolution of Intention. (April 04, 2017)

Government Code Section 20474 requires a secret ballot election by the employees affected whenever
the contract is amended to provide a benefit that changes the employees rate of contribution. This
election must be held for the contract group following the adoption of the Resolution of Intention, and
prior to the adoption of the Ordinance to amend the CalPERS contract. (no later than April 29, 2017 )

The City certified compliance under Government Section 7507 that the future annual costs of the
proposed CalPERS contract amendment are made public. (April 04, 2017)

Following the Resolution of Intention to amend the Citys contract with CalPERS, an Ordinance must be
adopted as follows:

The ordinance, which will be the First Reading Ordinance, and a City Council vote on adoption, must
occur no sooner than 20 days after the adoption of the Resolution of Intention. The First Reading
Ordinance is scheduled for adoption during the City Council meeting on April 4, 2017.

The ordinance which will be the approval of Second Reading: Adoption of an ordinance amending
provisions of municipal code section 2.56 (Retirement System) and approving an amendment to the
contract between the board of administration of the Public Employees Retirement System and the City
Council of the City of Carmel-by-the-Sea to provide section 20516 (employees sharing additional cost)
of 3% for Safety (Police) and Safety (Fire) members for adoption on May 2, 2017.

The effective date of the contract amendment must be the first day of a payroll period and may not be
earlier than the day following the effective date of the Ordinance. The contract amendment effective
date is June 16, 2017 and Safety (Police) and Safety (Fire) employees will begin paying the agreed
upon 3% of the Citys contribution.

FISCAL IMPACT

The City has been paying the approved upon employee cost sharing contribution which is approximately
$50,000 since November 2015. Moving forward, the City will be saving approximately $50,000 in the General
Fund per fiscal year for both Safety (Police) and Safety (Fire).

FISCAL IMPACT
PRIOR CITY COUNCIL ACTION

ATTACHMENTS

1. Resolution of Intention to Approve an Amendment to Contract between the Board of Administration

California Public Employees Retirement System (CalPERS) and the City of Carmel-by-the-Sea.
2. Ordinance authorizing an amendment to the provision of municipal code section 2.56 (Retirement
System) and approving an amendment to the contract between the Board of Administration of the
Public Employees Retirement System and the City Council of the City of Carmel-by-the-Sea to provide
section 20516 (employees sharing additional cost) of 3% for Safety (Police) and Safety (Fire) members.
3. Exhibit Amendment to Contract
 SR 2017-046
Attachment 1 will be issued under separate
cover
 CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL

ORDINANCE NO. 2017-___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA, AMENDING

PROVISIONS OF MUNCIPAL CODE SECTION 2.56 (RETIREMENT SYSTEM) AND APPROVING AN
AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC
EMPLOYEES RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA
TO PROVIDE SECTION 20516 (EMPLOYEES SHARING ADDITIONAL COST) OF 3% FOR SAFETY (FIRE)
AND SAFETY (POLICE) MEMBERS

WHEREAS, the California Public Employees Retirement Law permits the participation of public
agencies and their employees in the California Public Employees Retirement System by the execution of a
contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their
employees to amendments to said Law;

WHEREAS, the City of Carmel-by-the-Sea entered into its original contract with the Board of
Administration of the California Public Employees Retirement System, effective January 1, 1955.

WHEREAS, one of the requirements to amend said contract is the adoption by the governing body of
the public agency as resolution of its intent to adopt an ordinance to amend said contract;

WHEREAS, the City negotiated with its affected bargaining units to reduce personnel and benefit costs,
if the City Council approves the proposed contract amendment to implement the employees sharing additional
costs of 3% for safety (Fire) and safety (Police) members .

WHEREAS, an amendment to the CalPERS contract is needed in order to implement this new benefit.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-
THE-SEA DOES ORDAIN AS FOLLOWS:

Section 1.

The City Council of the City of Carmel-by-the-Sea hereby authorizes entering into the Amendment to
the Contract between the Board of Administration, California Public Employees Retirement System and
the City of Carmel-by-the-Sea (Amendment), a copy of which is attached hereto, marked as Exhibit 1,
and incorporated herein by reference as though set out in full

Section 2.

The City Administrator of the City of Carmel-by-the-Sea, or his designee, is hereby authorized,
empowered, and directed to execute the Amendment for and on behalf of the City of Carmel-by-the-
Sea.

Section 3.

The City Clerk has prepared and published, at least five days before the date of adoption, a summary
of this ordinance once in a newspaper of general circulation printed and published in Monterey County
and circulated in the City of Carmel-by-the-Sea and thenceforth and thereafter the same shall be full
force and effect.

Section 4. EFFECTIVE DATE

This ordinance shall take effect thirty (30) days after its second reading by the City Council.
 ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 4th day of April,
by the following roll call vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

SIGNED: ATTEST:

_______________________ ___________________________
Steve G. Dallas, Mayor Ashlee Wright, City Clerk
 SR 2017-046
Attachment 3 will be issued under separate
cover