CITY COUNCIL STAFF REPORT
December 5, 2023 {{section.number}}b
SECOND READING AND ADOPTION OF AN “ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF CORONADO, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE CONTRACT
BETWEEN THE CITY COUNCIL OF THE CITY OF CORONADO AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM” RECOMMENDATION:
Adopt an Ordinance authorizing an Amendment to the Contract between the City of Coronado and the Board Of Administration of the California Public Employees’ Retirement System (CalPERS) for Fourth Level of 1959 Survivor Benefits.
BACKGROUND:
Current Memorandum of Understanding (MOU) for Fiscal Years 2022-23 through 2024-25 between the City of Coronado and the Coronado Police Officers’ Association (CPOA) and Coronado Firefighters’ Association (CFA) was previously approved by the City Council on October 4, 2022, and February 21, 2023, respectively.
One of the changes in the MOUs states for the City to provide eligible members with Fourth Level 1959 Survivor Benefits. Currently, eligible members of the CPOA and CFA are provided with the Second Level 1959 Survivor Benefits. The change will increase the monthly benefit levels depending on the number of eligible survivors, as shown below:
• One Survivor: $350 to $950 per month
• Two Survivors: $700 to $1,500 per month
• Three Survivors: $840 to $1,800 per month
Surviving spouses or registered domestic partners are entitled to the 1959 Survivor Benefits as long as they have care of an eligible child (unmarried, under age 22), or are at least age 60.
ANALYSIS:
The 1959 Survival Benefit Level change requires the City to amend its CalPERS retirement contract in sequence as listed below. Government Code Section 7507 also requires that the proposed contract amendment's future annual costs or benefit change be made public at a public meeting, and the adoption of the retirement benefit increase or change cannot be placed on the consent calendar.
Completed
1. Provided a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability. These actuarial valuations were conducted by CalPERS.
2. City Council took action on the following:
a. Adopted Resolution of Intention;
b. Authorized execution of Form CON-12, Certification of Governing Body’s Action; c. Authorized execution of Form CON-12A, Certification of Compliance with Government Code Section 7505; and
d. Introduced Ordinance No. 2023-04.
For City Council Consideration on December 5, 2023
3. City Council adopted the Resolution of Intention at the November 7, 2023, meeting and a minimum 20-day period has passed before Ordinance adoption pursuant to Government Code Section 20471, staff has returned with the following for Council action:
a. Adoption of Ordinance No. 2023-04
Should the required documents be adopted and approved, the effective date of the amended CalPERS retirement contract will be January 13, 2024, first pay period after the effective date of the Ordinance No. 2023-04.
FISCAL IMPACT:
For the Fourth Level of 1959 Survivor Benefits, the initial employer cost to join the 1959 Survivor program is the payment of the pool’s annual employer normal cost, $5.50 per covered member per month (subject to annual change), for a period of five years. Based on the current actuarialbased excess asset balances of the plan, as shown below, the first year’s employer cost will be zero. Agencies will be billed annually and the normal cost will be recalculated each year.
After the first five years, the employer is required to pay the net premium for the Fourth Level pool, which will vary from year to year due to investment returns and experiences by the pool.
Eligible members of CPOA and CFA covered by the 1959 Survivor Benefits will continue to contribute $2 per month.
ALTERNATIVE:
City Council may not adopt Ordinance No. 2023-04 and amendment of the CalPERS contract.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Ordinance No. 2023-04
Submitted By: Administrative Services Department / John Kim