Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: ADOPT AN ORDINANCE TO AMEND THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM CONTRACT WITH THE CITY OF
COTATI
Date: September 13, 2022
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council adopt an ordinance amending the CalPERS contract with the City of Cotati to remove the exclusion language for persons compensated on an hourly basis.
Background
The City is required to administer the retirement plan in accordance with the Public Employees’ Retirement Law (PERL). The contract provision excluding “persons compensated on an hourly basis” does not reflect the City’s current practice, predated current laws, and is inconsistent with PERL, and has resulted in confusion over previous years. Therefore, CalPERS has recommended that the City amend its contract to remove this contract provision. The recommendation to remove the exclusion language is intended as clean up and to simplify administration of the retirement plan by removing language that is obsolete.
On August 23, 2022, the City Council adopted a resolution of intent to amend the City’s agreement with CalPERS to remove the contract exclusion for persons compensated on an hourly basis, approved the certification of compliance with Government Code Section 7507, and held the first reading of the proposed ordinance amending the CalPERS agreement.
Analysis/Discussion
The City of Cotati has contracted with CalPERS since January 1, 1969. The City administers the retirement plan for all employees appointed to regular status positions. The current contract contains a provision excluding from CalPERS membership “persons compensated on an hourly basis.” The provision was originally included in the contract to exclude those extra help employees working in a temporary or seasonal capacity, therefore not eligible for the City’s benefit programs.
The City is required to administer the retirement plan in accordance with the PERL. Government Code section 20305 outlines the administration of the plan as it applies to Part Time employees and identifies conditions requiring immediate enrollment and those excluded. Section 20305(b) states that this section “shall supersede any contract provision excluding persons in any temporary or seasonal employment basis and shall apply only to persons entering employment on and after January 1, 1975. Section 20305b also states that “no contract or contract amendment entered into after January 1, 1981, shall contain any provision excluding person on an irregular employment basis.”
The City’s current practice regarding hourly employees complies with Government Code section 20305 and the City ensures employees hired on a part time basis are enrolled in CalPERS membership when they meet eligibility requirements. CalPERS performed an audit of the application of the provision and has recommended that the City amend the contract to remove the contract provision excluding “persons compensated on an hourly basis” from membership.
Government Code section 20503 permits an agency contracting with CalPERS to amend its contract to remove exclusions prospectively.
Financial Considerations
As outlined in the Exhibit Amendment to Contract, Item 6, removal of the exclusion does not mandate any new classes of employees into membership. Therefore, approval of the recommendation to approve the amendment to the contract and remove the exclusion is not anticipated to have any fiscal impact.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.