City Council
MEETING DATE: 7/22/2015
TITLE:
Title
Resolution for Paying & Reporting the Value of Employer Paid Member Contributions (“EPMC”) with all Costs Paid by the members of the Cathedral City Fire Management.
End
FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
Staff recommends that the City Council adopt a resolution for paying and reporting the value of Employer Paid Member Contributions via a cost sharing arrangement between the City and “Classic” members of the Cathedral City Fire Management Association. The City would pay and report the value of 7% normal member contribution, otherwise known as EPMC, and for the member/employee to cost share an additional 12% towards the employer costs.
Body
BACKGROUND:
Adopting the current resolution is one step in the CalPERS process whereby Council has to formally adopt this resolution to pay and report the member contribution. There will also be a resolution amending the City’s contract with CalPERS and the City’s Ordinance.
This benefit shall apply to all Classic employees of the Cathedral City Fire Management Association.
This benefit shall consist of paying 7% (Percent) of the normal contributions as EPMC, and reporting the same percent (value) of compensation earnable {excluding Government Code Section 20636(c)(4)} as additional compensation.
The effective date of this Resolution shall be September 13, 2015.
DISCUSSION:
For over 20 years, a benefit provided to certain labor 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. During contract negotiations with Police Management last summer and fall, much discussion took place about the restoration of this benefit at a cost to the employee, not a cost to the City. Recent discussions with Cathedral City Fire Management ("CCFMA") have concluded the same. This resulted in a commitment by the City to investigate this possibility with CalPERS. After discussions with CalPERS, it has been determined that this is possible and available to CalPERS “Classic” members, on a pre-tax basis to the employee. CalPERS has completed contract amendments with other member organizations that accomplish the same by agreeing to a cost sharing arrangement with the employee (“member”). This is accomplished by the following: the City will agree to pay and report 7% member contribution for CalPERS “classic” members of CCFMA.
This is a benefit the members gave up and the City committed to restore if there was no cost to the City. The members impacted are those employees designated as CalPERS “Classic” members. In Cathedral City’s case, all 11 members of CCFMA are CalPERS "Classic" employees. It is estimated the affected employees will be retired in the next 5 to 20 years.
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 strictly 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:
Resolution