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Councilman Bricken proposed a substitute motion, accounts 111, 131, 141 and 541 at the June 1978 motion was seconded by Councilman Ortiz. to maintain levels. The Following discussion, the foregoing motion was withdrawn with the consent of the second. Councilman Bricken moved to delete 1.2 million dollars from the contingency fund which had been allocated for salary increases. The motion was seconded by Councilman Brandt, and carried unan- imously 5:0. During the discussion on the motion prior to the vote, in response to Councilman Yamamoto's question, City Attorney Gow stated that the motion would not have any impact upon carrying out last Saturday's moratorium motion; that it does not impose any reduction in wages and salaries; and that the effect is to reduce the proposed expenditures by 1;2 million dollars; that it has no effect upon the course or scope of the meet and confer process; that Council will have to face any funding problem that would be raised at the conclusion of the meet and confer process; and the motion does not foreclose the meet and confer process. The Attorney's comments were in response to questions raised by Mr. John O'Malley, representing the Santa Aha City Employees Association. In summarizing the effect of his motion, Councilman Bricken stated that Council started out with a 66 million dollar proposed preliminary budget which they reduced by 2.46 million, and that the motion will further reduce it by 1.2 million dollars, which still leaves an imbalance of expenditure over income of approximately 6.3 million dollars. CA 65B RECESS members present. At 9:25 A.M. Vice Mayor Ward declared a recess. Council reconvened at 9:35 A.M., with the same RETIREMENT SYSTEM The City Manager called REFERRED TO STAFF Council's attention to the reports in their packets from the Director of Finance and the City Attorney dated June 23 and June 29, respectively, regarding rate changes in Public Employees Retire- ment System (PERS) effective July 1, and payment options and the possibilities of providing separate but equal retirement sys- tems for new hires under a recent Charter amendment. Councilman Brandt moved to refer the existing employees retire- ment system to Staff for further investigation and for negotia- tion purposes, and to instruct Staff to immediately look into what would be available to the City for future hires in the way of retirement benefits to save money from the existing system. The motion was seconded by Councilman Bricken and carried unani- mously 5:0. CA 50.20 PUBLIC SERVICE RETIREMENT City Manager Bruce Spragg SYSTEM - LUMP-SUM PAYMENT reported that the State APPROVED PERS (Public Employees Retirement System) has raised the City's retirement rates based on new actuarial assumptions and benefits currently provided employees; that the City has budgeted $263,000 for retirement purposes for fiscal year 1978-79; that the total PERS increase for that period of CITY COUNCIL MINUTES 269 JULY 1, 1978