City Council
MEETING DATE: 7/22/2015
TITLE:
Title
Introduction and First Reading of an Ordinance Amending the Contract with the California Public Employees' Retirement System.
End
FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
Staff recommends the City Council approve the First Reading of the Ordinance amending the Contract between the City Council of the City of Cathedral City and the Board of Administration of the California Public Employees' Retirement System.
Body
BACKGROUND:
The proposed Ordinance under consideration would amend the City's contract with CalPERS to provide a cost sharing arrangement for designated employees. The amendment allows for increasing the member/employee contribution of all Classic Safety and Miscellaneous employees in the Cathedral City Fire Management Association (CCFMA). The increased Member contribution will provide for restoration of the Employer Paid Member Contribution (EPMC) at no cost to the City. This Resolution of Intention represents the next step required by CalPERS to implement a cost sharing arrangement to accomplish this purpose.
DISCUSSION:
For over 20 years, a benefit provided to certain employee groups was that of the City paying the employee’s (Member) CalPERS contribution and reporting such contribution as earnings. During the time of fiscal emergency, the employees gave up this benefit and contributed their own member contribution. Successor negotiations with Police Management in late 2014 resulted in the City investigating with CalPERS the possibility of restoring this benefit on a pre-tax cost basis to the employee, with no cost to the City.
The attached Ordinance represents the next step required to implement a cost sharing arrangement that will provide for restoration of the EPMC for Fire Management employees at no near term cost to the City. Specifically, CalPERS “Classic” Safety members of CCFMA will increase their member contribution in order to restore a 7% EPMC.
Upon Council’s approval of the attached Ordinance, a second reading will be presented to Council on August 12, 2015 as the last step in amending the City’s contract with CalPERS. The resulting amendment becomes effective September 13, 2015.
FISCAL IMPACT:
Although the members of each group are paying the City’s cost and a premium, essentially reducing today’s CalPERS cost to the City, the future rates imposed on the City by CalPERS can vary due to CalPERS investing strategies and resulting asset valuations. The employees are covering 100% of today’s costs while mitigating the impact of potential future costs to the City.
ATTACHMENTS:
Ordinance to Amend Contract