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REQUEST FOR COUNCIL ACTION CITY COUNCIL AGENDA DATE may 21, 1984 TITLE PROPOSED AMENDMENT TO THE CITY'S CONTRACT WITH THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) ,/4� -eV CITY N. DATE OF • '.Ak CLERK OF THE COU CIL Ci RECOMMENDED ACTION 1. Adopt the attached Resolution declaring Council's intention to approve an amendment to the.City's contract with the Public Employees' Retirement System to provide Section 20024.2 benefit option (One-year final compensation) for local fire safety members only. 2. In order to comply with the public disclosure requirements of Section 7507 of the. Government Code, request the Clerk of the Council to reflect in the Minutes of this meeting that the estimated cost of the proposed contract amendment is as follows: a. The City's cost rate will increase 1.409% percentage points from 25.891% to 27.300% of the applicable fire safety payroll effective July 1, 1984. This percentage increase is the projected actuarial rate to the year 2000 subject to change with future amendments and/ or experience and other factors. b. During Fiscal Year 1984-85 the estimated cost of the rate increase will be approx- imately $95,000 based on current and projected fire safety payroll figures. EXECUTIVE SUMMARY In accordance with the provisions of the current labor agreement between the City of Santa Ana and the Fireman's Benevolent Association (FBA) executed on December 19, 1983, the City agreed to amend its contract with PERS to provide the "one-year final compensation" benefit option for all fire safety members effective July 1, 1984. This benefit option provides that final compensation, an average monthly rate used in the formula to determine a retiree's monthly retirement allowance, will be computed on the basis of the last consecutive 12 months of work instead of the last 36 months as is currently provided in our contract with PERS. The contract amendment process specified in the PERS Law requires that the above actions be taken 20 days prior to adoption of the Ordinance which will authorize the actual amend- ment of the contract to provide the new benefit option. The results of a required valuation study which had to precede this phase of the amendment process was held in abeyance by PERS until they completed their annual system-wide.actuarial reevaluation studies. Consequently, we have been thrownfiveweeks behind schedule even though we initiated the process back in January. In order to complete the process before the June 30th deadline as specified by our labor agreement with the F.B.A., we will now be required to adopt the Ordinance amending our contract with PERS as an emergency measure at the first regular, adjourned regular or special meeting of the Council that will be held subsequent to June 10, 1984.