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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />FEBRUARY 4, 2002 <br />ULEKK OF GUUNGIL USE UNLY: <br />TITLE: APPROVE Dom' <br />AMEND THE CITY'S CONTRACT PAs Recommended <br />WITH THE PUBLIC EMPLOYEE'S ❑ 9s Amended <br />5a <br />RETIREMENT SYSTEM FOR `Ordinanceon1"Reading.��7"62 <br />❑ Ordinance on 2nd Reading <br />MILITARY SERVICE AND CREDIT [-lrrnplementing Resolution <br />FOR UNU Eb CK L E�Aet Public Hearing For 6 2— <br />CONTINUED TO <br />"Gp FILE NUMBER A-2002_014 <br />CITY MANAGER Resn--:X0a wo, US--7-tt,11CJ <br />RECOMMENDED ACTION <br />1. Adopt a Resolution of Intention to approve an amendment to the <br />contract between the Public Employees' Retirement System and the <br />City of Santa and to provide Military Service Credit as Public <br />Service and Credit for Unused Sick Leave for local miscellaneous <br />members. <br />2. Adopt an Ordinance authorizing an amendment to the contract between <br />City of Santa Ana and Public Employees' Retirement System. <br />DISCUSSION <br />The current Memorandum of Understanding between the City of Santa Ana and <br />the Santa Ana City Employees Association requires the City to provide both <br />the Military Service Credit As Public Service and the Credit For Unused <br />Sick Leave benefits for local miscellaneous members as soon as it is <br />practical. The Military Service Credit allows a member to purchase up to <br />four years of service credit for any continuous active military or merchant <br />marine service prior to employment. This benefit adds years of service to <br />a member's retirement calculation and ultimately results in an improved <br />retirement benefit. The cost to purchase this credit is borne entirely by <br />the employee. <br />The Unused Sick Leave Credit Benefit allows unused accumulated sick leave <br />at the time of retirement to be converted to additional service credit <br />pursuant to a formula established by the Public Employee's Retirement <br />System. Over time, the actuarial additional cost necessary of this <br />benefit for all existing miscellaneous employees is $1.6 million. <br />However, the balance of thq excess assets currently held in the City's <br />PERS account is sufficient tp maintain the employer's current rate cost at <br />zero percent for approximately 35 years, barring unfavorable market <br />returns. <br />Page 17 12A <br />