HomeMy Public PortalAbout96-1104U O� `RgON,
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ORDINANCE NO. 96-1104U
AN URGENCY ORDINANCE OF THE CITY OF CARSON,
CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF
CARSON AND THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
THE CITY COUNCIL OF THE CITY OF CARSON DOES ORDAIN AS FOLLOWS:
Section 1. An amendment to the contract between the City Council of the City
of Carson 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 Council of the City of Carson is hereby
authorized, empowered, and directed to execute said amendment for and on behalf of
said Agency.
Section 3. The City's existing labor agreements with its employees expired
June 30, 1996, and their renewal has been the subject of negotiations between the City
and its employees for several months. The City and its employees' representatives
have reached tentative accords to amend and renew these agreements. The
amendment to the contract with the Board of Administration is a key element in the
City's tentative labor accords. In order to successfully implement these tentative labor
accords, the amendment to the contract with the Board of Administration must be
effective no later than December 31, 1996. If the tentative accords are not successfully
implemented, the City could face possible disruption of vital City services. The City
Council finds that there is a current and immediate threat to public health, safety and
welfare created by the expiration of the labor agreements with its employees which can
best be rectified by amending the contract with the Board of Administration. Therefore,
this Ordinance is necessary for the immediate preservation of the public health, safety
and welfare and shall take effect immediately.
[Continued on page 2.]
CITY OF CARSON Page 1 of 2 ORDINANCE NO. 96-1104U
96-219 961209 C1380 00900 ddo 0203325 0
PASSED, APPROVED AND ADOPTED this 17' day of December, 1996.
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ATTEST:
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CITY ULERK
J
APPROV
ASSISTANT ATTORNEY
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ss.
CITY OF CARSON
I, Helen S. Kawagoe, City Clerk of the City of Carson, California, do hereby certify that the
whole number of members of the City Council of said City is five; that the foregoing ordinance,
being Ordinance No. 96-1104U, was duly and regularly adopted by the City Council of said City on
an urgency basis at a regular meeting of said Council, duly and regularly held on December 17,
1996, and that the same was passed and adopted by the following roll call vote:
AYES: COUNCIL MEMBERS: Mayor Mitoma; Calas, Olaes, O�Neal, and Fajardo
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
City Clerk, City of Carsoo9 California
r
CITY OF CARSON Page 2 of 2 ORDINANCE NO. 96-1104U
96-219 961209 C1380 00900 ddv 0203326 0
EXHIBIT
AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE `
CITY COUNCIL
OF THE
CITY OF CARSON
The Board of Administration, Public Employees' Retirement System, hereinafter referred to as
Board, and the governing body of above public agency, hereinafter referred to as Public Agency,
having entered into a contract effective May 15, 1969, and witnessed April 30, 1969, and as
amended effective January 16, 1971, August 7, 1976, June 13, 1977, July 21, 1979, September
26, 1981, November 6, 1982, June 18, 1983 and February 22, 1996 which provides for
participation of Public Agency in said System, Board and Public Agency hereby agree as
follows:
A. Paragraphs 1 through 11 are hereby stricken from said contract as executed effective
February 22, 1996, and hereby replaced by the following paragraphs numbered 1 through
12 inclusive:
I. All words and terms used herein which are defined in the Public Employees'
Retirement Law shall have the meaning as defined therein unless otherwise
specifically provided. "Normal retirement age" shall mean age 55 for local
miscellaneous members.
2. Public Agency shall participate in the Public Employees' Retirement System from
and after May 15, 1969 making its employees as hereinafter provided, members of
said System subject to all provisions of the Public Employees' Retirement Law
except such as apply only on election of a contracting agency and are not provided
for herein and to all amendments to said Law hereafter enacted except those,
which by express provisions thereof, apply only on the election of a contracting
agency.
3. Employees of Public Agency in the following classes shall become members of
said Retirement System except such in each such class as are excluded by law or
this agreement:
a. Employees other than local safety members (herein referred to as local
miscellaneous members).
PLEASE DO NOT SIGN "EXHIBIT ONLY'
4. In addition to the classes of employees excluded from membership by said
Retirement Law, the following classes of employees shall not become members of
said Retirement System:
a. SAFETY EMPLOYEES; AND
b. PERSONS COMPENSATED ON AN HOURLY BASI i-
5. The percentage of final compensation to be provided for each year of credited
prior and current service as a local miscellaneous member shall be determined in
accordance with Section 21354 of said Retirement Law (2% at age 55 Full) for
those local miscellaneous members entering membership on or prior to the
effective date of this amendment to contract.
6. The percentage of final compensation to be provided for each year of credited
prior and current service as a local miscellaneous member shall be determined in
accordance with Section 21251.13 of said Retirement Law(2% at age 60 Full) for
those local miscellaneous members entering membership after the effective date
of this amendment to contract.
7. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21573 (Third Level of 1959 Survivor Benefits).
b. Section 20042 (One-Year Final Compensation) for local miscellaneous
members entering membership on or prior to the effective date of this
amendment to contract.
C. Section 21024 (Military Service Credit as Public Service), Statutes of
1976.
d. Section 20690, Statutes of 1978, (Reduction of Normal Member
Contribution Rate). From July 21, 1979 and until September 26, 1981, the
normal local miscellaneous member contribution rate shall be 3.5%.
Legislation repealed said Section effective September 29, 1980.
e. Section 20690, Statutes of 1980, (To Prospectively Revoke Section 20690,
Statutes of 1978).
PLEASE DO NOT SIGN "EXHIBIT ONLY"
f. Section 20903 (Two Years Additional Service Credit).
g. Section 20475 (Different Level of Benefits). Sections 21354 (2% @ 55
Full formula) and 20042 (One-Year Final Compensation) are not
applicable to local miscellaneous members entering membership after the
effective date of amendment to contract.
8. Public Agency, in accordance with Government Code Section 20790, ceased to be
an "employer" for purposes of Section 20834 effective on August 7, 1976.
Accumulated contributions of Public Agency shall be fixed and determined as
provided in Government Code Section 20834, and accumulated contributions
thereafter shall be held by the Board as provided in Government Code Section
20834.
9. Public Agency shall contribute to said Retirement System the contributions
determined by actuarial valuations of prior and future service liability with respect
to local miscellaneous members of said Retirement System.
10. Public Agency shall also contribute to said Retirement System as follows:
a. Public Agency shall contribute $1.50 per member, per month on account
of the liability for the 1959 Survivor Benefits provided under Section
21573 of said Retirement Law. (Subject to annual change.) In addition,
all assets and liabilities of Public Agency and its employees shall be
pooled in a single account, based on term insurance rates, for survivors of
all local miscellaneous members.
b. A reasonable amount, as fixed by the Board, payable in one installment
within 60 days of date of contract to cover the costs of administering said
System as it affects the employees of Public Agency, not including the
costs of special valuations or of the periodic investigation and valuations
required by law.
C. A reasonable amount, as fixed by the Board, payable in one installment as
the occasions arise, to cover the costs of special valuations on account of
employees of Public Agency, and costs of the periodic investigation and
valuations required by law.
11. Contributions required of Public Agency and its employees shall be subject to
adjustment by Board on account of amendments to the Public Employees'
Retirement Law, and on account of the experience under the Retirement System
as determined by the periodic investigation and valuation required by said
Retirement I,aw.
12. Contributions required of Public Agency and its employees shall be paid. by
Public Agency to the Retirement System within fifteen days after the end of the
period to which said contributions refer or as may be prescribed by Board
regulation. If more or less than the correct amount of contributions is paid for any
period, proper adjustment shall be made in connection with subsequent
remittances. Adjustments on account of errors in contributions required of any
employee may be made by direct payments between the employee and the Board.
B. This amendment shall be effective on the day of ' 19
BOARD OF ADMINISTRATION Al CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT 4TEM OF THE
Q CITY OF CARSON
BY ° BY
KENNETH W. MARZION, F PRESIDING OFFICER
ACTUARIAL & EMPLCTIREMENT SERVICES DIVISION
PUBLIC EMPLOYE F� SYSTEM ��
Q Witness Date
,cam
Attest.Q��;�
Clerk
AIM F.N NIA UNT
I'ERS-CON-702A(Rev.8\96)
Actuarial and Employer Services Division -
P.O. Box 942709
Sacramento, CA 94229-2709
Telecommunications Device for the Deaf- (916) 326-3240
(916) 326-3420 FAX- (916) 658-1586
May 21, 1996 Employer Code#0771 eo
C5
Ms. Melanie-Dawn Bawolski Re: Contract Amendment , ,
Personnel Analyst Cost Analysis V"C'
rn
City of Carson w
P.O. Box 6234
Carson, CA 90749
Dear Ms. Bawolski:
A contract amendment cost analysis for each actuarial valuation requested and related information are
enclosed.
Effective January 1, 1996,the Public Employees' Retirement Law was recodified. The code sections
referenced in the enclosed material reflect the recodification.
The benefit provided and any change in the member contribution rate will be effective as of the effective
date of the Amendment to Contract. Any change in the employer contribution rate is discussed on the
Contract Amendment Cost Analysis enclosed herein.
To initiate an amendment to the contract, the Anticipated Schedule of Agency Actions must be
completed and returned to this office. If you have any questions regarding the cost analysis, please
contact me at(916) 326-3137. Questions concerning the contract amendment process should be directed
to Nancy Seegmiller at (916) 326-3614.
Sincerely,
4,
Stephen P. Young lJ
Associate Pension Actuary
SPY:jm
Enclosures
cc: Los Angeles Area Office
o ••
PERS-CON-28.var (Rev. 5196)
EXIi[BIT NO.2
California Public Employees' Retirement System
Lincoln Plaza - 400 P Street-Sacramento, CA 95814
CONTRACT AMENDMENT COST ANALYSIS- JUNE 30,1994 INFORMATION
MISCELLANEOUS PLAN FOR CARSON CITY
EMPLOYER NUMBER 0771
Benefit Description: Section 21354: 2% @ 55 full formula
Current CalPERS policy is to Implement rate changes due to plan amendments on the second July 1
following the effective date of the change In plan benefits. This means, for example,that plan amendment
effective dates on or between July 1, 1995 and June 30, 1996, would Increase rates commdhcing July 1, 1997.
Plan amendment effective dates on or between July 1, 1996 and June 30, 1997 would increase rates
Commencing July 1, 1998,
We have provided the estimated increase in rates for both scenarios below. However, CalPERS is strongly
considering changing the current policy to one that would implement rate changes due to plan amendments
much sooner,as early as the effective date of the plan amendment. Some brief transition period would
certainly be considered.
CalPERS will be conducting surveys on this issue in the near future to solicit your thoughts. Please be aware
of the potential change in policy.
Estimated Increase In Contribution Rate for
Amendment Effective Amendment Effective
by June 30,1996; after June 30,1996;
Rate Change on Rate Change on
Amortization of Unfunded Liability July 1,1997 July 1,1998
by June 30, 2000 Normal Cost 1.531% 1.531%
Unfunded Cost - $,176% 11,639%
Total Change 9,707% 13.170%
by June 30, 2011 Normal Cost 1.531% 1.531%
Unfunded Cost 2.648% 3.033%
Refinancing Old Overfunded 2.8Q3% 3,065%
Total Change 6.982% 7.629%
by June 30, 2016 Normal Cost 1.531% 1.531%
Unfunded Cost 2.159% 2.431%
Refinancing Old Overfunded 3.050% 3.279%
Total Change 6.740% 7.241%
Estimated Increase in Unfunded Liability $ 3,333,000 $ 3,788,000
Employer costs for your retirement plan have two basic components. These are the NORMAL COST and the
UNFUNDED COST.
NORMAL COST is a permanent increase to the employer contribution rate and is expected to continue as
long as the contract is in effect. This cost will be the same regardless of the funding period.
UNFUNDED COST is a temporary increase to the employer contribution rate based upon the current or
extended funding period. This portion of the employer rate is based upon service performed prior to the
contract amendment. This rate is expected to become zero at the end of trhe funding period indicated.
The above cost analysis displays the estimated employer contribution rate increase for the current funding
s/13ros
period and, in addition, estimated rate increases if the funding period is extended to the year 2011 or2016.
REFINANCING OLD OVERFUNDED is the change in the cost for the existing overfunded liability before
the contract amendment,due to an extension of the funding period. This liability was provided to you in
the most recent actuarial valuation report. A copy of the pertinent page from that report is enclosed.
Your current rate is reduced as a result of your assets exceeding liabilities(bverfunding"). Extending
the funding period spreads that overfunded amount over a longer period of time and results in an
increase to the contribution rate. This increase is shown as Refinancing Old Overfunded on the above
analysis.
The valuations have been based upon participants of the retirement system, actuarial assumptions,and
assets as of June 30, 1994. The adjusted employer contribution rate to be effective July 1, 1997 will use such
information as of June 30,4995,while the contribution rate effective July 1, 1998 will use such information as
of June 30, 1996. Because of these changes in demographic data and asset amounts,and potential
changes in actuarial assumptions,the sum of your current employer contribution rate and the estimated rate
increases noted above will not equal your new employer rate effective July 1, 1997 or July 1, 1998(whichever
is applicable).
5113196
CITY OF CARSON
CHANGE IN CALPERS CONTRIBUTION RATES
Contribution Rates
7/1/96 Change 711/98
Normal cost 5.314 1.531 " 6.845
Unfunded cost 0.000 3.033 a 3.033
Refinance old overfunded (4.062) 3.065 ° (0.997)
Totals 1.252 7.629 8.881
A) Permanent increase in.the employer contribution rate for 2%at 55.
B) Temporary increase(through the year 2011) in the employer contribution
rate due to service performed prior to the contract amendment.
C) Change in the overfunded liability. For fiscal years 1996/97 through
1999/00, if no contract amendments were made, the City would be
receiving a 4.062%credit toward our rate due to the amortization of
our overfunded liability. Since the City is making a contract amendment
and extending the funding period until the year 2011, the overfunded
liability now gets amortized over that extended period and so becomes
only a credit of.997% per year. This credit will continue through the
year 2011 (the extended funding period).
EXHIBIT NO. 3