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CITY COUNCIL AGENDA ITEM NO. 15

Meeting Date: May 27, 2003

Subject/Title: Resolution of Intention and first reading of an Ordinance of the City Council of the City of Brentwood authorizing an amendment to the contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Brentwood

Submitted by: John Stevenson, City Manager

Approved by: John Stevenson, City Manager

RECOMMENDATION
Adopt a resolution, which provides for the notice of intention to approve an amendment, and adopt an ordinance to approve amendment of the contract between the City of Brentwood and the Board of Administration of the California Public Employees’ System (CalPERS) as agreed during the meet and confer process.

PREVIOUS ACTION
The City of Brentwood amended its contract with CalPERS on September 16, 2000 to provide 3% @ 50 retirement benefits for local safety members.

BACKGROUND
Through the meet and confer process, bargaining units and employee groups that contain employees defined by CalPERS as “miscellaneous” and “safety” members requested that the City amend the CalPERS retirement benefit from 2% @ 55 formula for miscellaneous members to 2.7% @ 55 formula, as well as the addition of the 5% Annual Cost-of-Living Allowance Increase for both miscellaneous and safety members.

The 2.7% @ 55 formula and 5% Annual Cost-of-Living Allowance Increase contract amendments for miscellaneous members will result in the following changes: The Present Value of Benefits (PVB) which represents the total dollars needed today to fund future benefits for current members of the plan, results in a PVB of $6,582,365. The change in the Unfunded Accrued Liability is estimated at $2,931,569. A lump sum payment of $4,217,150 will be made to cover the Unfunded Accrued Liability, including contributions and interest that will have been reported to CalPERS from July 1, 2001 through June 30, 2003.

The 5% Annual Cost-of-Living Allowance Increase for safety members will result in the following changes: The PVB which represents the total dollars needed today to fund future benefits for current members of the plan, results in an estimated change in the amount of $1,749,871. The change in the Unfunded Accrued Liability is estimated at $951,758. A lump sum payment of $1,275,342 will be made to cover the Unfunded Accrued Liability, including contributions and interest that will have been reported to CalPERS from July 1, 2001 through June 30, 2003.

FISCAL IMPACT
Total costs for Fiscal Year 2003/04 are estimated at $9,519,724 including the lump sum payment of $5,492,492. By paying the Unfunded Accrued Liability, the City will save $3,877,372 in interest payments.

ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN CITY OF BRENTWOOD AND THE BOARD OF AMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM.

THE CITY COUNCIL OF THE CITY OF BRENTWOOD DOES ORDAIN AS FOLLOWS:

Section 1. That an amendment to the contract between the City Council of the City of Brentwood 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 Brentwood is hereby authorized, empowered, and directed to execute said amendment for and on behalf of said Agency.

Section 3. This Ordinance shall take effect 30 days after the date of its adoption, and prior to the expiration of 30 days from the passage thereof shall be published at least once in the Brentwood Press, a newspaper of general circulation, published and circulated in Contra Costa County and thenceforth and thereafter the same shall be in full force and effect.

The foregoing Ordinance was introduced, with full reading waived, by the City Council of the City of Brentwood.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the June 24, 2003, by the following vote:

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