City Council
MEETING DATE: 4/22/2015
TITLE:
Title
Ordinance First Reading Amending the Contract with the California Public Employees' Retirement System.
End
FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
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:
At the April 8, 2015 meeting, Council adopted a Resolution of Intention to Amend its 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 Police Management Association (CCPMA), and all Classic Safety and Miscellaneous employees in the Non-Represented Executive, Administration, Professional and Confidential group. 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 Police Management and Non-Represented employees at no cost to the City. Specifically, CalPERS "Classic" Safety members of CCPMA and the Non-Represented group will increase their member contribution by 12% while "Classic" Miscellaneous members of CCPMA and the Non-Represented group will increase their member contribution by 9% in order to restore a 7% EPMC at no cost to the City.
Upon Council's approval of the attached Ordinance, a second reading will be presented to Council on May 13, 2015 as the last step in amending the City's contract with CalPERS. The resulting amendment becomes effective July 5, 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