B. Carpooling
A carpool is defined by the AQMD as “a vehicle occupied by two to six people traveling together between their residences and their worksites or destinations for the majority of the total trip distance. Employees who work for different employers as well as non-employed people are included within this definition as long as they are in the vehicle for the majority of the total trip distance.” In order to receive carpooling incentives, an employee must travel to their respective worksite with at least one other individual licensed driver in their vehicle for the majority of the trip. Carpooling with another City of Glendora employee is encouraged however not required to take advantage of the carpooling daily cash incentive. Employees must travel with at least one other legally licensed driver for the majority of their trip in order to receive Altcom incentives.
For each day an employee chooses to carpool to the worksite, a payroll incentive will be given based on the amount of miles traveling from home to the worksite.
Payroll incentives are as follows:
Daily cash incentives - Paid in bi-weekly paychecks
If you live within a …5 - mile radius of the worksite…..................$1.50 $2.50 …5 - 10-mile radius….......................................$1.75 $2.75 …10 - 15-mile radius.........................................$2.00 $3.00 …15 - 20-mile radius.....................................$2.25 $3.25 …20+ mile radius…..........................................$2.50 $3.50 Extras:
Employees who carpool on average three (3) days a week per year can also receive a certificate for Smog Check Reimbursement worth up to $50.00. Limit one (1) reimbursement per 24-month period.
All employees who choose to carpool with another legally licensed driver as an alternative means to arrive at the worksite will receive one lotto entry for each day they choose to carpool to work. Those travelling with minors or unlicensed drivers will receive one lotto entry for every two days they choose to carpool to work.
Lotto drawings occur once every quarter.
Beginning January 2017, all those carpooling with unlicensed drivers will no longer be eligible for any Altcom benefits.
C. Public Transit
An employee who chooses to use public transit as an alternative means of arriving at the worksite is eligible for reimbursement based on the annual amount specified in the Employers Tax Guide to Fringe Benefits to pay for transit tickets or passes. Public transit includes any bus or rail line an employee travels on for a substantial portion of the trip to the worksite. This transit benefit Item #11. Page 4
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is non-taxable and is given through reimbursement at the end of each month.
Receipts for tickets and passes must be turned in to the ETC by the first Friday of each month with the appropriate Public Transit Reimbursement Form in order to receive this benefit.
Please note that reimbursement rates may change upon annual publication of the Employers Tax Guide to Fringe Benefits.
Employees who utilize public transit will also receive a payroll incentive as follows:
Quarterly Bonus
2 days/week average…..........................................................$20.00 3 days/week average…..........................................................$40.00 4+ days/week average… .......................................................$60.00 All employees who use public transit as an alternative means to arrive at the worksite will also receive one lotto entry for each day they choose to ride the bus or rails to work. Lotto drawings occur once every quarter.
D. Electric Vehicles
There are two main types of plug-in electric vehicles:
• All-electric vehicles (EVs) only use electric power from the grid; they do not have an internal combustion engine and do not use any type of liquid fuel.
• Plug-In hybrid electric vehicles (PHEVs) are powered by a combination of grid electricity and liquid fuel. A PHEV runs on battery power until the battery charge is exhausted, and then it switches over to its internal combustion engine.
For each day an employee chooses to drive a single occupancy EV or PHEV to the worksite, a payroll incentive will be given based on the amount of miles traveling from home to the worksite. Payroll incentives are as follows:
Daily cash incentives - Paid in bi-weekly paychecks
If you live within a …5-mile radius of the worksite…....................$1.50 $2.50 …5 - 10-mile radius….......................................$1.75 $2.75 …10 - 15-mile radius.........................................$2.00 $3.00 …15 - 20-mile radius.........................................$2.25 $3.25 …20+ mile radius…..........................................$2.50 $3.50 Item #11. Page 5
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For each day an employee chooses to drive an EV or PHEV as well as carpool with another legally license driver to the worksite, a payroll incentive will be given based on the amount of miles traveling from home to the worksite. Payroll incentives are as follows:
Daily cash incentives - Paid in bi-weekly paychecks
If you live within a …5-mile radius of the worksite…....................$2.00 $3.00 …5 - 10-mile radius….......................................$2.25 $3.25 …10 - 15-mile radius.........................................$2.50 $3.50 …15 - 20-mile radius.........................................$2.75 $3.75 …20+ mile radius…..........................................$3.00 $4.00 Participants in this category are eligible for one incentive or the other based on how the participants choose to Altcom on any particular day.
E. Biking / E-Bike / Personal E-Mobility Services*
Employees who choose to bike, e-bike, scooter, or use other personal emobility transportation as an alternative means of arriving at the worksite, will receive a payroll bonus as follows:
*Personal E-Mobility devices are defined as electric power-assisted motorized vehicles for transporting one person.
Paid in bi-weekly paychecks
Daily cash incentives - Paid in bi-weekly paychecks
If you live within a ½ mile radius of the worksite...........................$1.50 $2.50 1 mile radius ......................................................$1.75 $2.75 3-5 mile radius…...............................................$2.50 $3.50 5-7 mile radius…...............................................$2.75 $3.75 7+ mile radius ....................................................$3.00 $4.00 Employees who bike to work will also receive a payroll incentive as follows:
Quarterly Bonus (those who live outside a ¼ mile radius of the worksite) 2 days/week average….....................................................................$20.00 3 days/week average….....................................................................$40.00 4+ days/week average… ..................................................................$60.00 Extras:
1. E-mobility subsidy up to $300 is available to those that purchase a qualifying device. Proof of purchase is required to qualify for reimbursement. A minimum participation of 2 days/week is required to qualify for the subsidy. The ETC will keep track of participation based on monthly payroll.
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2. Free Helmet upon request (with a 1.5+ day/week average over one month) Limit of one helmet per twelve-month period.
3. Active San Gabriel Valley (SGV) has partnered with the San Gabriel Valley Council of Governments to launch a regional e-bike share program. The GoSGV program offers affordable, long-term sharing of good quality electric bicycles to give SGV residents an opportunity to become more familiar with this mobility. For more information about the program, or to sign up, please
visit www.goSGV.com.
All employees who bike/e-bike/scooter/other personal e-mobility device as an alternative means to arrive at the worksite will also receive one lotto entry for each day they choose to bike to work. Lotto drawings occur once every quarter.
F. Walking
Employees who choose to walk as an alternative means of arriving at the worksite will receive a payroll bonus as follows:
Paid in bi-weekly paychecks
Daily cash incentive.......................................................................$1.50 $2.50 Quarterly Bonus (those who live outside a ¼ mile radius of the worksite) 2 days/week average… ....................................................................$20.00 3 days/week average….....................................................................$40.00 4+ days/week average… ..................................................................$60.00 All employees who walk as an alternative means to arrive at the worksite will also receive one lotto entry for each day they choose to walk to work. Lotto drawings occur once every quarter.
G. Quarterly Lotto
In addition to cash reimbursements and payroll incentives, all employees who participate in the Altcom program will be entered into a quarterly drawing for seven (7) ten (10) $100 cash prizes and six (6) ten (10) $50 cash prizes for a total of $1000 $1,500 in prizes each quarter. Winners are determined by assigning lotto numbers to Altcommers based on the total number of days altcommed for the quarter. A computer program is used to randomly select a series of winning numbers from the pre-assigned lotto numbers. There is a limit of one (1) prize per employee per drawing. Employees need not be present for the drawing to win a prize.
H. Guaranteed Ride Home
In the event of an emergency or if unscheduled overtime is required, registered Altcommers will be offered a guaranteed ride home.
Item #11. Page 7
Meeting Date: 9/27/2022 / Packet Page #: 466
Options:
o Ride with fellow City employee (employee giving the ride will be reimbursed for mileage)
o City Vehicle
o Reimbursement for Taxi or other rideshare service
o Rental Car
While there is no limit, to the amount of rides an employee can take advantage of the Guaranteed Ride Home benefit however only applies to emergency situations or in the case where an employee is required to stay at work beyond their typical work schedule. If an employee chooses to work late by their own volition, they are not eligible to utilize the Guaranteed Ride Home benefit.
I. Other Services
Ride Matching
Any employee that would like to start a carpool, but isn’t sure who they could share a ride with should contact the ETC to help locate another co-worker who lives in the employee’s area. There may be an existing carpool that the employee could join.
Transit Route Planning
Contact your ETC for options on how to get from home to the worksite using public transportation. The Transportation Center has materials for both bus and rail lines. Google Transit and Metro’s trip planner at www.metro.net are also good resources.
J. Things to remember…
• Altcommers are not entitled to use City Vehicles to run personal errands of any kind during the workday. For rules regarding City Vehicle use, please refer to the City’s Vehicle Policy 1.10.
• Altcommers are responsible for updating the ETC of any information changes or if they no longer wish to participate in the program. Notification should occur no later than one pay period following any change. • All Altcom hours reported on your timecard are subject to review. Any falsification is subject to discipline up to and including termination. • If any Altcom submittal is late, incentives or reimbursement will be paid out on the next reasonable pay day.
• Funding for this program does NOT come from the City’s General Fund.
This program is funded strictly through AB2766 funds (a portion of vehicle registration fees) distributed to the City by the South Coast Air Quality Management District (SCAQMD). The SCAQMD mandates that these funds be used to implement programs that reduce air pollution from motor vehicles.
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What is Altcom?
Altcom is short for “Alternative Commute” and is a program that rewards employees who choose to come to work using a mode of travel that represents an alternative to a single-occupant vehicle. Any City of Glendora employee, full or part time, is eligible! Just choose one of the options below and you can start earning extra cash incentives throughout the year. Get in touch with your Employee Transportation Coordinator (ETC) at extension 208 or [email protected].
Incentive Breakdown
Carpool Take Public Transit
Earn daily cash incentives (taxable) paid in your biweekly paychecks:
If you live within a:
…5 mile radius of the worksite…….$1.50 $2.50
…5-10 mile radius………………………….$1.75 $2.75
…10-15 mile radius ……………………….$2.00 $3.00
…15-20 mile radius…………….………….$2.25 $3.25
…20+ mile radius…………………..$2.50 $3.50
Bike / E-Bike/ Personal E-Mobility Service
Earn daily cash incentives (taxable) paid in your biweekly paychecks:
If you live within a:
1/2 - 1 mile radius of the worksite…$1.50 $2.50
1-3 mile radius………………………………$1.75 $2.75
3-5 mile radius………………………………$2.50 $3.50
5-7 mile radius………………………………$2.75 $3.75
7+ mile radius……………………………….$3.00 $4.00
You can also earn a quarterly bonus by consistently
choosing to bike to work:
(Only those who live outside a ¼ mile radius)
2 days/week average ................................$20.00 3 days/week average ................................$40.00 4+ days/week average ..............................$60.00 Get reimbursed up to $255 per month of non-taxable
monies to pay for transit tickets or passes
You can also earn a quarterly bonus by consistently
choosing to come to work on transit:
2 days/week average........................ $20.00
3 days/week average........................ $40.00
4+ days/week average...................... $60.00
Walk
Earn daily cash incentives (taxable) paid in your biweekly paychecks:
Daily cash incentive .......................... $1.50 $2.50 You can also earn a quarterly bonus by consistently
choosing to walk to work
2 days/week average........................ $20.00
3 days/weeks average ...................... $40.00
4+ days/week average...................... $60.00
Electric Vehicle
Earn daily cash incentives (taxable) paid in your biweekly paychecks. If you live within a… 5 mile radius of the worksite............ $1.50 $2.50
5-10 mile radius................................ $1.75 $2.75 10-15 mile radius.............................. $2.00 $3.00 15-20 mile radius.............................. $2.25 $3.25 20+ mile radius................................. $2.50 $3.50 Electric Vehicle + Carpool
Earn daily cash incentives (taxable) paid in your biweekly paychecks. If you live within a… 5 mile radius of the worksite............ $2.00 $3.00
5-10 mile radius................................ $2.25 $3.25 10-15 mile radius.............................. $2.50 $3.50 15-20 mile radius.............................. $2.75 $3.75 20+ mile radius................................. $3.00 $4.00 Altcom Program
Have you signed up yet?!
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Meeting Date: 9/27/2022 / Packet Page #: 468
Extras!
• Carpool on average three (3) days a week per year and receive a certificate for Smog Check reimbursement worth up to $50.00. Limit one (1) reimbursement per twenty-four (24) month period.
• E-mobility subsidy up to $300 is available to those that purchase a qualifying device.
Proof of purchase is required in order to qualify for reimbursement. A minimum participation of 2 days/week is required to qualify for the subsidy. The ETC will keep track of participation based on monthly payroll.
• Employees who bike to work an average of 1.5+ days a week over a one month period can receive a free helmet up to $50.00 upon request. Limit one (1) helmet per twelve (12) month period.
Quarterly Lotto
All employees who Altcom will be entered into a quarterly lotto drawing where they will have the chance to win a cash prize. All lottery winnings are taxable and will be paid out on your paycheck.
For each day that an employee altcoms, they will receive one (1) lotto entry for that day. “Guaranteed Ride Home” – You’ll never be stranded!
Many people like the idea of ridesharing or choosing public or active transportation to commute but are afraid of being stranded without a car. What if I become ill during the day? What if a family emergency occurs? This is where the Guaranteed Ride Home benefit comes in to save the day.
Any employee registered for Altcom is guaranteed a ride home in the event that an emergency arises, or unexpected overtime comes your way. There’s never any cost to you and we will find a way to get you to where you need to go. Rides can come in the form of a friend or co-worker, Transportation Staff, or in some cases we will reimburse you for the cost of a taxi or rideshare service.
Let us know as early in the day as possible if you will need a ride home. Just pick up the phone and call your ETC at extension 208.
Register now and do your part to help reduce congestion in our region! If you have any questions or need clarification on any of the Altcom incentives or policies, don’t hesitate to call or visit your ETC at ext. 208 or the Transportation Center at 410 E. Dalton Avenue.
Once you have registered with the Altcom program, make sure to code your commuting mode on your timesheets before turning them in.
Item #11. Page 10
Meeting Date: 9/27/2022 / Packet Page #: 469
Altcom Program Policy Update
(16-EEDR)
Community Development
City Council
September 27, 2022
Vanessa Mikhail, Management Analyst CityOfGlendora.org
Item #11. Page 11
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2 OVERVIEW
• Background
• Survey
• Next Steps
• Funding
Item #11. Page 12
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3 BACKGROUND
• Altcom or “alternative commute”
program rewards employees for
alternative forms of commuting
• Goal is to reduce traffic congestion
and improve air quality
• Funding is provided by the Air Quality
Management District (AQMD) through
AB2766
Item #11. Page 13
Meeting Date: 9/27/2022 / Packet Page #: 472
4 SURVEY
• Staff sent out a survey early 2022 to
gain feedback and suggestions for
program improvement
• Many employees are not taking
advantage of Altcom
• Those in Altcom most participate an
average of 3+ times/week
Item #11. Page 14
Meeting Date: 9/27/2022 / Packet Page #: 473
5 SURVEY
• Participants and non-participants
both agreed that higher daily
incentives would encourage more
participation and registration
• Modal benefits and increased
quarterly drawings were also popular
Item #11. Page 15
Meeting Date: 9/27/2022 / Packet Page #: 474
6 NEXT STEPS
• Staff proposes to update its Altcom
program
• Increase all cash incentives by
$1.00
• Include up to $300 subsidy for emobility device
• Add more winners to quarterly
lottery drawings
Item #11. Page 16
Meeting Date: 9/27/2022 / Packet Page #: 475
7 FUNDING
• Funding provided by AQMD that sets
aside a portion of vehicle registration
fees for local jurisdictions
• City receives roughly $66,000 annually
• New program updates will amount to
$4,000 of new funding
Item #11. Page 17
Meeting Date: 9/27/2022 / Packet Page #: 476
8 That the City Council:
1. Approve amendments to and update of the citywide Alternative Commute (Altcom) Program.
2. Authorize the supplemental budget appropriations in the amount of $4,000 to the Air Quality Improvement Fund (Fund 215).
Item #11. Page 18
Meeting Date: 9/27/2022 / Packet Page #: 477
STAFF REPORT
TO: MAYOR AND COUNCIL MEMBERS DATE: SEPTEMBER 27, 2022
FROM: CITY CLERK DISTRICT(S): CITYWIDE
SUBJECT: ADOPTION OF A CITY COUNCIL RESOLUTION ESTABLISHING AND FUNDING A SECTION 115 TRUST FOR POST-EMPLOYMENT BENEFITS
RECOMMENDATION
That the City Council:
1. Adopt a City Council Resolution entitled, “A Resolution of the City Council of the City of Glendora, California, Approving the Adoption of the Public Agencies Post-Employment Benefits Trust Administered by Public Agency Retirement Services (PARS)”; and
2. Adopt the Post-Employment Benefits Management Policy; and
3. Authorize the City Manager or their designee to be the City’s Plan Administrator and authorize the City Manager to execute all necessary documents to establish the Section 115 Trust.
EXECUTIVE SUMMARY
The City provides its full-time employees with a defined benefit pension through the California Public Employee’s Retirement System (CalPERS) and makes a contribution towards employees’ health benefits after retirement (OPEB). Both the pension and OPEB benefits create a liability for the City as employees accumulate years of service with the City.
Establishing an IRS Section 115 Post-Employment Benefits Trust (115 Trust) with PARS is the next step the City can take to help mitigate future economic volatility and/or changes in CalPERS actuarial assumptions and to proactively address the City’s OPEB liability. CalPERS preliminary investment return as of June 30, 2022, was -6.1% resulting in a total preliminary investment loss of -12.9% when considering the 6.8% discount rate. The City’s latest OPEB actuarial valuation for the fiscal year ended June 30, 2021, reported total OPEB liabilities just above $12 million.
The benefits of establishing the 115 Trust with PARS are summarized below:
Assets in the trust will address future unfunded pension liabilities and offset OPEB liabilities on the City’s financial statement.
City maintains oversight of investment management and controls risk tolerance level of the portfolio.
Allows for greater investment flexibility and risk diversification. Flexible access to assets to pay pension obligation to CalPERS or City OPEB expenses. o Emergency funds in difficult budgetary or economic times for pension/OPEB obligations. Potential to improve an agency's bond rating which may lower borrowing costs in consideration of future significant infrastructure projects.
Item #12. Page 1
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Staff Report Page 2 of 4
The City has already issued Pension Obligation Bonds (POBS) to address unfunded pension debt that would have continued to be a problem related to annual costs. A Section 115 Trust mitigates the budgetary impact of the variability of the City’s contribution amount towards pension & OPEB liabilities for the future.
The City continues to look at long term strategies for both post-retirement benefits and infrastructure funding to reduce costs to taxpayers and better manage operating cash flows.
LEGISLATIVE HISTORY / PREVIOUS ACTIONS
During 2009 the City issued Pension Obligation Bonds to refinance a liability created by CalPERS pooling the City Safety pension plans.
The City established a second tier of reduced pension benefits for both miscellaneous and safety employees during 2012.
On June 26, 2019, the City Council adopted the Fiscal Year (FY) 2019-2021 Two-Year Budget which included updates to the General Fund Reserve Policy requiring 30% of the remaining available resources after the City has met it’s 45% contingency reserve to be placed in a pension stabilization fund.
Subsequently, on August 13, 2019, City Council authorized the issuance of Pension Obligation Bonds to refinance its unfunded accrued pension liability which resulted in annual savings of $1 million over the life of the bond for a total net savings of $24 million.
DISCUSSION
The City has previously taken significant steps to continually address pension funding challenges. In September 2019 the City issued Pension Obligation Bonds resulting in annual savings of $1 million and total net savings of $24 million. Further, with the adoption of the Fiscal Year (FY) 2019-2021 Two Year Budget Glendora updated the General Fund Reserve Policy to require 30% of the remaining available resources after the City has met it 45% contingency reserve to be placed in a pension stabilization fund.
With voter approval of Measure E in March 2020, the City is able to continue to evaluate longer term strategies for both post-retirement benefits management and infrastructure funding to reduce costs to taxpayers and better manage operating cash flows. The following policy and 115 Trust discussions continue the City’s active approach to addressing future Pension and OPEB liabilities.
Post-Employment Benefits (Pension/OPEB) Management Policy:
The objective of the policy is to deploy a variety of strategies to manage ongoing/future pension and OPEB liabilities/contributions. These objectives will be achieved using the following actions:
The City will strive to make the annual pre-payment of the CalPERS UAL to recognize interest savings over the monthly installments; and
Any budgetary savings available within and after the Adopted Budget Fund Balance Reserve Policies have been met will be evaluated to make contributions to the 115 Trusts; and Appropriation of unanticipated onetime revenues or settlements among other potential needs to contribute to the Pension Stabilization Fund, 115 Trusts and/or CalPERS; and Reallocation of maturing General Fund debt obligations and realized savings from the refinancing of existing debt obligations to contribute to the Pension Stabilization Fund, 115 Trusts and/or CalPERS.
As such, City staff will review the policy for implementation of any new best practices and will provide to Council for adoption on an as needed basis.
Item #12. Page 2
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Staff Report Page 3 of 4
Pension and OPEB Section 115 Trust:
Section 115 Trusts are the next step for the City to continue its proactive approach to mitigate volatility in pension costs and to smooth annual cash flows. Tthe Government Finance Officers Association (GFOA, a national association) identifies establishment of 115 Trusts as an industry best practice. Funds deposited into a Section 115 Trust are irrevocable and can only be used for the specific purposes for which the trust was created (payment of pension costs or OPEB costs). The advantage of a Section 115 Trust is that the funds deposited may be invested in higher-yielding instruments than the City's current investments, such as LAIF.
The benefits of establishing the 115 Trust include:
Assets in the trust will address future unfunded pension liabilities and offset OPEB liabilities on the City’s financial statement.
City maintains oversight of investment management and controls risk tolerance level of the portfolio.
Allows for greater investment flexibility and risk diversification (see discussion below on PARS rate of return on investments.
Flexible access to assets to pay pension obligation to CalPERS or City OPEB expenses. o Emergency funds in difficult budgetary or economic times for pension/OPEB obligations. Potential to improve an agency's bond rating which may lower borrowing costs in consideration of future significant infrastructure projects.
The Administrative Services Department evaluated 2 options, PARS and CalPERS, to establish an IRS Section 115 Trust and continue the City’s active approach in addressing both pension and OPEB liabilities. After careful evaluation, staff concluded PARS is the better choice for the following reasons:
Anticipated returns based on past performance are greater than CalPERS. o The City could opt for either the Balanced or the Moderate PARS investment strategy and exceed the net returns compared to CalPERS similar investment options. There is potential for reduced fees as the value of the Trust assets grow. Establishing a 115 Trust with PARS allows the City to diversify from CalPERS. With PARS, an agency only must adopt ONE 115 Combination Trust to prefund both OPEB and Pension.
o CalPERS requires two separate trusts and has two separate fee structures.
Many surrounding cities have created Section 115 Trusts with PARS to prefund pension liabilities (Alhambra, Chino Hills, Claremont, Covina, Monrovia, Pasadena, Rancho Cucamonga, Riverside, West, Covina, and Upland).
Staff recommends the PARS Balanced or Moderate portfolio options based on investment rate of return, related risk and because this is a long-term strategy. PARS average gross rate of return as of June 30, 2022, for the Balanced and Moderate Portfolios (compared to the Local Agency Investment Fund (LAIF)) are as follows:
Strategy Equity (%) 1 Year 3 Years 5 Years 10 Years
PARS-Balanced 50-70% -13.63% 4.28% 5.51% 6.90%
PARS-Moderate 40-60% -12.97% 3.51% 4.77% 6.01%
LAIF 0% 0.39% 1.00% 1.37% 0.88%
The rates of return above are gross of administration and investment management fees, which are 0.25% for PARS, plus an additional 0.35% for US Bank/HighMark Capital Management (0.60% total) for deposits under $5 million. The fees are reduced at higher deposit amounts. It is important to note there are no Item #12. Page 3
Meeting Date: 9/27/2022 / Packet Page #: 480
Staff Report Page 4 of 4
startup fees, no minimum contributions, and no minimum fees to establish and administer the Trust beyond City staff time. Fees are only incurred once the trusts are funded.
Implementation Process with PARS:
City Council adopts resolution authorizing City to join PARS & appoints Plan Administrator o City Manager as Plan Administrator will execute required documents. City Staff, PARS & Highmark Capital Management to discuss investment options/strategy PARS works with Trustee/U.S. Bank to establish account o PARS notifies City account is ready and includes Contribution Instructions o City makes Contribution using Transmittal Form
City Staff will evaluate current cash & reserve balances as well as cash flow to determine appropriate initial/future contribution amounts. PARS and Highmark conduct annual reviews (may be more frequently, as required by City)
FISCAL IMPACT
The City is presently in a strong position with an established Pension Stabilization Fund. Additionally, we are signaling to debt rating agencies and the public our dedication to cost-effectively manage this debt.
There is no initial cost for establishing the PARS Trust. However once an initial contribution is made fees are assessed at an annual rate of 60 basis points (0.60%) of the total invested funds and charged monthly from plan assets. Fees may decrease as the City invests additional assets into the PARS Trust (total assets much reach $5 million to reach the first reduced fee tier of 50 basis points (0.50%). Staff anticipates the investment earnings to exceed the fees, as discussed earlier.
ENVIRONMENTAL DETERMINATION
Not applicable.
Prepared By Kyle Johnson, Assistant Director-Finance
Concurs With Not Applicable
Reviewed By Marie Ricci, Administrative Services Director/City Treasurer Certified to Availability of Funds Marie Ricci, Administrative Services Director/City Treasurer Approved By Adam Raymond, City Manager
Legal Review William W. Wynder, City Attorney
CEQA Review Not Applicable
ATTACHMENTS:
A. Resolution
B. Agreement for Administrative Services
C. Post-Employment Benefits Management Policy
D. Presentation
Item #12. Page 4
Meeting Date: 9/27/2022 / Packet Page #: 481
RESOLUTION CC 2022-____
A RESOLUTION OF THE CITY COUNCIL APPROVING THE
ADOPTION OF THE PUBLIC AGENCIES POST-EMPLOYMENT
BENEFITS TRUST ADMINISTERED BY PUBLIC AGENCY
RETIREMENT SERVICES (PARS)
THE CITY COUNCIL
City of Glendora, California
WHEREAS, PARS has made available the PARS Public Agencies Post-Employment Benefits Trust (the “Program”) for the purpose of prefunding pension obligations and/or OPEB obligations; and
WHEREAS, the City of Glendora (“City”) is eligible to participate in the Program, a taxexempt trust performing an essential governmental function within the meaning of Section 115 of the Internal Revenue Code, as amended, and the Regulations issued there under, and is a taxexempt trust under the relevant statutory provisions of the State of California; and WHEREAS, the City’s adoption and operation of the Program has no effect on any current or former employee’s entitlement to post-employment benefits; and WHEREAS, the terms and conditions of post-employment benefit entitlement, if any, are governed by contracts separate from and independent of the Program; and WHEREAS, the City’s funding of the Program does not, and is not intended to, create any new vested right to any benefit nor strengthen any existing vested right; and WHEREAS, the City reserves the right to make contributions, if any, to the Program.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GLENDORA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby adopts the PARS Public Agencies PostEmployment Benefits Trust, effective September 27, 2022; and SECTION 2. City Council hereby appoints the City Manager, or his/her successor or his/her designee as the City’s Plan Administrator for the Program; and SECTION 3. The City’s Plan Administrator is hereby authorized to execute the PARS legal and administrative documents on behalf of the City and to take whatever additional actions are necessary to maintain the City’s participation in the Program and to maintain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City’s Program.
APPROVED and PASSED this __ day of ________, 2022.
City Council of Glendora, CA
Item #12. Page 5
Meeting Date: 9/27/2022 / Packet Page #: 482
Resolution CC 2022-_____ Page 2 of 2
BY:
KAREN K. DAVIS
Mayor
APPROVED AS TO FORM:
Aleshire & Wynder, LLP
WILLIAM W. WYNDER
City Attorney
CERTIFICATION
I, Kathleen R. Sessman, City Clerk of the City of Glendora, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Glendora at a regular meeting held on the ___ day of ______, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
KATHLEEN R. SESSMAN
City Clerk/Communications Director
Item #12. Page 6
Meeting Date: 9/27/2022 / Packet Page #: 483
AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement (“Agreement”) is made this _____ day of __________, _____, between Phase II Systems, a corporation organized and existing under the laws of the State of California, doing business as Public Agency Retirement Services and PARS (hereinafter “PARS”) and the City of Glendora, a general law city & municipal corporation (“Agency”).
WHEREAS, the Agency has adopted the PARS Public Agencies Post-Employment Benefits Trust for the purpose of pre-funding pension obligations and/or Other Post-Employment Benefits (“OPEB”) obligations (“Plan”) and is desirous of retaining PARS as Trust Administrator to the Trust, to provide administrative services.
NOW THEREFORE, the parties agree:
1. Services. PARS will provide the services pertaining to the Plan as described in the exhibit attached hereto as “Exhibit 1A” (“Services”) in a timely manner, subject to the further provisions of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as described in the exhibit attached hereto as “Exhibit 1B”.
3. Payment Terms. Payment for the Services will be remitted directly from Plan assets unless the Agency chooses to make payment directly to PARS. In the event that the Agency chooses to make payment directly to PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS within forty-five (45) days of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless PARS has previously received written communication disputing the subject invoice that is signed by a duly authorized representative of the Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will be billed to the Agency at the rates indicated in the PARS’ standard fee schedule in effect at the time the services are provided and shall be payable as described in Section 3 of this Agreement. Before any such services are performed, PARS will provide the Agency with a detailed description of the services, terms, and applicable rates for such services. Such services, terms, and applicable rates shall be agreed upon in writing and executed by both parties.
5. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency providing PARS the information specified in the exhibit attached hereto as “Exhibit 1C” (“Data”). It shall be the responsibility of the Agency to certify the accuracy, content, and completeness of the Data so that PARS may rely on such information without further audit. It shall further be the responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a reasonable amount of time for the Services to be performed. Unless specified in Exhibit 1A, PARS shall be under no duty to question Data received from the Agency, to compute contributions made to the DocuSign Envelope ID: B237DBCD-4E49-4C6B-9D07-05C13F5746A1 Item #12. Page 7
Meeting Date: 9/27/2022 / Packet Page #: 484
Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable for nonperformance of Services to the extent such nonperformance is caused by or results from erroneous and/or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1C, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency.
6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS’ fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law.
7. Confidentiality. Without the Agency’s consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law.
8. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees, or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers’ compensation, and similar matters.
9. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless, including their respective elected and appointed officials, officers, directors, and employees, from any claim, loss, demand, liability, or expense, including reasonable attorneys’ fees and costs, incurred by the other as a consequence of, to the extent, PARS’ or Agency’s, as the case may be, negligent acts, errors or omissions with respect to the performance of their respective duties hereunder.
10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan.
PARS shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement.
DocuSign Envelope ID: B237DBCD-4E49-4C6B-9D07-05C13F5746A1 Item #12. Page 8
Meeting Date: 9/27/2022 / Packet Page #: 485
11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Los Angeles, State of California. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Central District of California, in the County of Los Angeles, State of California.
12. Force Majeure. When a party’s nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that its performance is prevented by such cause. Such cause shall include, but not be limited to:
any incidence of fire, flood, acts of God or unanticipated communicable disease, acts of terrorism or war commandeering of material, products, plants or facilities by the federal, state or local government, a material act or omission by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state or local government, or any agency thereof, which becomes effective after the date of this Agreement that delays or renders impractical either party’s performance under the Agreement.
13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency.
14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement.
15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660; Attention: President
(B) To Agency: City of Glendora; 116 East Foothill Boulevard, Glendora, CA 91741- 3380; Attention: City Manager & Administrative Services Director Notices shall be deemed given on the date received by the addressee.
16. Term(s) of Agreement. This Agreement shall remain in effect for the period beginning September 13, 2022 and ending December 31, 2025 (“Term”). This Agreement may be terminated at any time by giving thirty (30) days advance written notice to the other party of the intent to terminate. Absent a thirty (30) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve-month periods following the expiration of the Term or any Extended Term(s).
DocuSign Envelope ID: B237DBCD-4E49-4C6B-9D07-05C13F5746A1 Item #12. Page 9
Meeting Date: 9/27/2022 / Packet Page #: 486
17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by both parties hereto.
18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement.
In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions, and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition.
19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to recover its reasonable attorney’s fees and costs incurred therein.
20. Counterparts. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart.
21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed.
AGENCY:
BY:
Adam Raymond
TITLE: City Manager
DATE:
CERTIFY AVAILABIILTIY OF FUNDS ATTEST
BY: BY:
Marie Ricci Kathleen Sessman
TITLE: Administrative Services Director TITLE: City Clerk & Communications Director DATE: DATE:
PARS:
BY:
Tod Hammeras
TITLE: Chief Financial Officer
DATE:
DocuSign Envelope ID: B237DBCD-4E49-4C6B-9D07-05C13F5746A1 Sep 14, 2022 | 8:44 AM PDT
Sep 15, 2022 | 6:54 AM PDT
Item #12. Page 10
Meeting Date: 9/27/2022 / Packet Page #: 487
EXHIBIT 1A
SERVICES
PARS will provide the following services for the City of Glendora Public Agencies PostEmployment Benefits Trust:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting, and submission requirements for contributions/reimbursements/distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and approved by Agency legal counsel. Resulting final Plan documentation must be approved by the Agency prior to the commencement of PARS Plan Administration Services outlined in Exhibit 1A, paragraph 2 below.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Public Agencies Post-Employment Benefits Trust (“Trustee”), based upon information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and investment activity, based upon information received from the Agency and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.
3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice.
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Meeting Date: 9/27/2022 / Packet Page #: 488
EXHIBIT 1B
FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit 1A based upon the following schedule:
An annual asset fee shall be paid from Plan assets based on the following schedule:
For Plan Assets from: Annual Rate:
$1 to $10,000,000 0.25%
$10,000,001 to $15,000,000 0.20%
$15,000,001 to $50,000,000 0.15%
$50,000,001 and above 0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included.
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Meeting Date: 9/27/2022 / Packet Page #: 489
EXHIBIT 1C
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the following information. Agency is solely responsible for ensuring that all information and documentation provided to PARS is true, correct, and authorized:
1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust (C) Trustee Investment Forms
2. Contribution – completed Contribution Transmittal Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)
3. Distribution – completed Payment Reimbursement/Distribution Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator (or authorized Designee)
4. Other information pertinent to the Services as reasonably requested by PARS and Actuarial Provider.
DocuSign Envelope ID: B237DBCD-4E49-4C6B-9D07-05C13F5746A1 Item #12. Page 13
Meeting Date: 9/27/2022 / Packet Page #: 490
SECTION or POLICY NO:
Policy No. <<XXXX>>
ORIGINATING DEPT:
Administrative Services
POST-EMPLOYMENT BENEFITS
(PENSION/OPEB) MANAGEMENT
POLICY
Reference:
Administrative Policy
SUPERSEDES:
<< date of previous policy>>
NEW EFFECTIVE DATE:
August 23, 2022 PAGE 1 of 6
APPROVED BY:
City Council approved resolution No 2022-XX
Prepared by: Finance Page 1 of 4
Policy Objective:
The City’s Post-Employment Benefits (Pension/OPEB) Management Policy documents the method the City will use to manage its pension liability and to determine and fund the actuarially determined contributions related to the long-term cost of health care benefits provided to City employees and retirees. The policy:
Demonstrates prudent financial management practices;
Promotes long-term and strategic thinking;
Provides guidance in making annual budget decisions;
Reassures bond rating agencies; and
Demonstrates to employees and the public how Pension and OPEB will be funded to ensure adequate funding for negotiated benefits.
Authority:
This policy is approved by the City Council and carried out by the Administrative Services Director. (GMC section 2.20.050 (2)).
Assigned Responsibility:
The Administrative Services Finance Division will:
Coordinate prepayment of the annual UAL by July 30 of each year. Upon final close of the fiscal year end identify any budgetary savings in accordance with the Fund Balance Reserve Policies in the Adopted Budget and make a recommendation during the annual budget process through the Administrative Services Director to the City Manager and the City Council as to allocation of savings among other potential needs to the Pension Stabilization Fund, CalPERS or the Post-Employment Benefits Section 115 Trust (Section 115 Trust). When appropriate, make recommendations through the Administrative Services Director to the City Manager and the City Council as to appropriation of unanticipated onetime revenues or settlements among other potential needs to the Pension Stabilization Fund, CalPERS or the Section 115 Trust.
Coordinate through the budget process to identify any impending General Fund debt obligations maturing and make recommendations through the Administrative Services Director to the City Manager and the City Council as to reallocation of debt service payments to the Pension Stabilization Fund, CalPERS or the Section 115 Trust.
Item #12. Page 14
Meeting Date: 9/27/2022 / Packet Page #: 491
Pension/OPEB Management Policy – August 23, 2022
Definitions:
Pension Related:
Pension Costs and Liabilities. To fund its employees’ pension benefits, the City is required to make contributions (a portion of which may come from the employees) to CalPERS. CalPERS then invests these contributions to generate returns to help fund the pension benefits. The regular required contributions, known as the “normal cost,” are calculated as a percent of salaries and represent the annual cost of service accrual for the upcoming fiscal year for active employees. If, for any reason, the actual Pension Plan experience and investment performance fall short of the actuarial assumptions, the Pension Plan can become underfunded (i.e., the Pension Plan’s Normal Accrued Liability exceeds the Plan’s market value of assets). This shortfall is known as the Unfunded Accrued Liability (the “UAL”) and usually has to be covered by the City through a series of UAL Payments, which are above and beyond the “normal cost” contributions.
UAL is Debt. The UAL can be caused by multiple factors, including but not limited to, changes to CalPERS’ actuarial amortization policy, retroactive pension benefit enhancements, investment underperformance, actuarial assumption changes, demographic factors, and discount rate reductions.
The UAL balance at any given point in time is a debt of the City owed to CalPERS which is amortized over a set period of time with interest accruing at the then current CalPERS discount rate (the “Discount Rate”). However, this debt can be prepaid at any time without penalties. Recognizing the UAL as debt helps the City identify proper steps to address it and minimize the associated financing costs.
OPEB Related:
OPEB Cost and Liabilities. The City provides continuation of medical coverage to qualifying retirees.
The qualifications are negotiated within each bargaining units memorandum of understanding (MOU).
The City’s OPEB funding policy affects the calculation of liabilities by impacting the discount rate used to develop the plan liability and expense. “Prefunding” is a term used when an agency consistently contributes an amount based on an actuarially determined contribution (ADC) each year.
OPEB Actuarially Determined Contribution (ADC). The City will engage an OPEB actuary to determine the City’s ADC based on biennial actuarial valuations. The City will review the actuarial valuations to validate the completeness and accuracy of the employee census data and the reasonableness of the actuarial assumptions. Actuarial valuations involve estimates and assumptions about the probability of occurrence of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future.
Policy/Procedure:
Strategic Options
To achieve the policy objectives, the City will deploy resources in the following manner:
The City shall maintain the established Pension Stabilization Fund. The Pension Stabilization Fund will be funded as defined in the Fund Balance Reserve Policies included in the City’s adopted budget document as well as by any other funds deposited into it at the discretion of the City Council, based on recommendations made by the City staff. Funds in the Pension Stabilization Fund should only be used to manage the City’s pension benefits costs as set forth in this Policy.
Item #12. Page 15
Meeting Date: 9/27/2022 / Packet Page #: 492
Pension/OPEB Management Policy – August 23, 2022
Establish a Section 115 Trust to realize greater investment returns than what is currently available through the City’s cash pool investments. An outside investment advisor shall be hired to administer the trust.
o City staff shall recommend with the annual budget process an amount to be deposited into the Section 115 Trust.
Pre-pay the City’s annual pension Unfunded Accrued Liability (UAL) payment to save on interest costs. On July 1 of each year, the City receives its annual CalPERS UAL invoice. The City has two payments options. The invoice can be paid in 1/12 increments or pre-paid at the beginning of the fiscal year by July 31. By pre-paying the entire balance due by July 31 the City can save over 3% annually compared to the monthly payments. As such, every effort should be made to pre-pay the UAL upon receipt of the annual invoice. Unanticipated one-time revenues or settlements shall be considered alongside other critical needs to make one-time payments to CalPERS to pay-off a portion of the City’s UAL to save on interest payments, reduce annual payments, and lower annual operating expenses. Payments would be incorporated into the City’s annual budget for City Council consideration and will only be utilized if the General Fund is not projected to end the year at a deficit. City staff shall work with its financial and other advisors to refinance its debt obligation bonds when it can achieve savings consistent with the City’s Debt Management Policy and shall consider redirecting any savings to the Pension Stabilization Fund, CalPERS or the Section 115 Trust.
Upon maturity of General Fund Debt Obligations, staff shall consider reallocating all or a portion of debt service payments that have matured to the Pension Stabilization Fund, CalPERS or the Section 115 Trust as long as there is no General Fund deficit at the time of debt maturity. Fiscal Hardship.
o In the event of a Fiscal Hardship (means an economic hardship, or other unanticipated fiscal emergency, that has been declared by resolution of the City Council), the Pension Stabilization Fund and/or Section 115 may be utilized to cover budget shortfalls in accordance with relevant rules and regulations until the Fiscal Hardship is no longer in effect.
Transparency and Reporting. Funding of the City’s Post-Employment Benefits should be transparent to all stakeholders, including plan participants, City Employees, the City Council, and City residents.
To achieve this Policy objective the following information shall be available:
Copies of the actuarial valuation reports for each of the City’s pension plans are available to the public on the CalPERS website.
Copies of the biennial actuarial valuations for the City’s OPEB plan shall be made available to the City Council.
The City’s Annual Comprehensive Financial Report shall be published on its website. This report includes information on the City’s post-employment benefits including but not limited to, contributions to the Section 115 Trust, contributions to CalPERs and the funded status of the plans.
Item #12. Page 16
Meeting Date: 9/27/2022 / Packet Page #: 493
Pension/OPEB Management Policy – August 23, 2022
Annual Budget to Contain Policy Directed Information. The City shall consider the items specified in this Policy for inclusion in each annual budget.
Review of Policy. Funding post-employment benefits requires a long-term horizon planning approach.
This Policy is intended to provide general objectives and guidelines, which will require periodic review and constant update to consider changes in the City’s financial position and post-employment benefits funded status over time. As such, City staff will review the policy for implementation of new best practices and will provide to Council for adoption on an as needed basis.
Item #12. Page 17
Meeting Date: 9/27/2022 / Packet Page #: 494
ESTABLISHMENT & FUNDING OF A
SECTION 115 TRUST FOR
POST-EMPLOYMENT BENEFITS
ADMINISTRATIVE SERVICES/FINANCE
City Council Meeting
September 27, 2022
Kyle Johnson, Assistant Director-Finance
CityOfGlendora.org
Item #12. Page 18
Meeting Date: 9/27/2022 / Packet Page #: 495
2 Overview
• City Post-Employment Benefits
• Pension & Medical (OPEB)
• Approach to Post-Employment Benefits Management
• Post-Employment Benefits Management Policy
• PARS as Section 115 Trust Provider
• Next Steps
Item #12. Page 19
Meeting Date: 9/27/2022 / Packet Page #: 496
3 City Post-Employment Benefits
The City provides its full-time employees with a pension and makes a contribution towards employees’ health benefits after retirement (OPEB).
Both the pension and OPEB benefits create a liability for the City as employees accumulate years of service with the City.
Item #12. Page 20
Meeting Date: 9/27/2022 / Packet Page #: 497
4 Overview
• History of the City’s active approach to addressing Pension Liabilities. • 2009 - POBS issued to address liability created by CalPERS pooling of Safety plans. • 2012 - Established 2nd Tier of reduced pension benefits for both Miscellaneous & Safety • 2019 - General Fund Reserve Policy (30% placed in the pension stabilization fund) • 2019 - POBs issued to refinance its pension liability • Annual savings of $1 million, total net savings of $24 million.
Item #12. Page 21
Meeting Date: 9/27/2022 / Packet Page #: 498
5 Post-Employment Benefits Management Policy Objectives The policy documents the method the City will use to manage its pension liability and OPEB liability. The policy:
• Demonstrates prudent financial management practices;
• Promotes long-term and strategic thinking;
• Provides guidance in making annual budget decisions;
• Reassures bond rating agencies; and
• Demonstrates to employees and the public how Pension and OPEB will be funded to ensure adequate funding for negotiated benefits.
Item #12. Page 22
Meeting Date: 9/27/2022 / Packet Page #: 499
6 Post-Employment Benefits Management Policy Objectives These objectives of the policy will be achieved using the following actions:
• Establish a Section 115 Trust.
• Make the annual pre-payment of the CalPERS UAL.
• Usage of available budgetary savings after following the Adopted Budget Fund Balance Reserve Policies.
• Usage of unanticipated onetime revenues or settlements. • Evaluation of reallocations of maturing General Fund debt obligations and/or realized savings from the refinancing of existing debt obligations.
Item #12. Page 23
Meeting Date: 9/27/2022 / Packet Page #: 500
7 Establishment of a Section 115 Trust
• A Section 115 Trust addresses both Pension and OPEB Liabilities:
• POB and Section 115 Trust achieve different objectives • POB = past problem solving/mitigation
• Section 115 Trust = future problem solving/mitigation. • A Section 115 Trust mitigates the budgetary impact of the variability of the City’s contribution amount towards pension & OPEB liabilities.
Item #12. Page 24
Meeting Date: 9/27/2022 / Packet Page #: 501
8 Section 115 Trust
• A Section 115 Trust:
• Continues mitigation of unfunded pension and OPEB liabilities • Smooths annual cash flows
• Is irrevocable, must be used for Pension or OPEB costs. • Contributions may be invested in higher-yielding instruments Many cities in California have established PARS Section 115 Trusts to prefund pension liabilities (Alhambra, Chino Hills, Claremont, Covina, Monrovia, Pasadena, Rancho Cucamonga, Riverside, West, Covina, and Upland).
Item #12. Page 25
Meeting Date: 9/27/2022 / Packet Page #: 502
9 Section 115 Trust Analysis
Evaluated 2 options, PARS and CalPERS, for Section 115 Trust for both pension and OPEB.
PARS is the better choice for the following reasons:
• Anticipated returns based on past performance are greater than CalPERS. • There is potential for reduced fees as the value of the Trust assets grow. • Establishing a 115 Trust with PARS allows the City to diversify from CalPERS. • Only need to adopt ONE 115 Combination Trust to prefund both OPEB and Pension. • CalPERS requires two separate trusts and has two separate fee structures.
Item #12. Page 26
Meeting Date: 9/27/2022 / Packet Page #: 503
10 Section 115 Trust: PARS Next Steps
1 City Council adopts resolution authorizing City to join PARS Combo Trust & appoints Plan Administrator 2 City sends signed copy of resolution to PARS
3 PARS sends set of signature-ready documents to City
4 Meeting with City, PARS & Highmark Capital Management to discuss investment options/strategy 5 City signs documents and returns to PARS
6 PARS works with Trustee/U.S. Bank to establish account 7 PARS notifies City account is ready and includes Contribution Instructions 8 City makes Contribution using Transmittal Form
9 PARS and Highmark conduct annual reviews (unless more frequently desired) Item #12. Page 27
Meeting Date: 9/27/2022 / Packet Page #: 504
11 RECOMMENDATIONS
1. Adopt Resolution Approving PARS Post-Employment Benefits Trust
2. Adopt the Post-Employment Benefits Management Policy
3. Authorize the City Manager as Plan Administrator & execute all necessary documents That the City Council:
Item #12. Page 28
Meeting Date: 9/27/2022 / Packet Page #: 505
STAFF REPORT
TO: MAYOR AND COUNCIL MEMBERS DATE: SEPTEMBER 27, 2022
FROM: CITY CLERK DISTRICT(S): CITYWIDE
SUBJECT: 2022 HOLIDAY SEASON AND DISCUSSION OF CANCELLATION AND/OR POSSIBLE
RESCHEDULING OF CITY COUNCIL REGULAR JOINT MEETINGS
RECOMMENDATION
That the City Council:
1. Review and provide direction on what, if any, City Council meeting(s) should be cancelled due to the holiday season.
EXECUTIVE SUMMARY
Due to the upcoming holiday season and expected increase in holiday leave by both the public and staff during this time period a review of the holiday and City Council meeting schedule is requested in order to provide direction on which, if any, City Council meeting(s) should be cancelled due to the holiday season.
LEGISLATIVE HISTORY / PREVIOUS ACTIONS
Historically, the City Council has reviewed the City’s holiday schedule in order to provide direction on cancellation of City Council meeting that may be affected by the Holiday Season.
DISCUSSION
Section § 2.04.010 of the Glendora Municipal Code designates the second and fourth Tuesday of each month as regularly scheduled meeting days of the Glendora City Council, Successor Agency to the former Community Redevelopment Agency (CRA), and Housing Authority. 2022 City Council Meeting and Holiday Schedule
Tuesday, November 8, 2022 City Council Meeting
Friday, November 11, 2022 Veteran’s Day (City Hall Closed) Tuesday, November 22, 2022 City Council Meeting
Thursday, November 24, 2022 Thanksgiving (City Hall Closed November 24, and 25) Tuesday, December 13, 2022 City Council Meeting
December 23 & December 26 City Hall Closed for Christmas Eve & Christmas Day Holiday (City Hall Closed)
Tuesday, December 27, 2022 City Council Meeting
December 30, 2022 & January 2, 2023 City Hall Closed for New Year’s Eve & New Year’s Day Holiday (City Hall Closed)
Item #13. Page 1
Meeting Date: 9/27/2022 / Packet Page #: 506
Staff Report Page 2 of 2
Due to the expected increase in holiday leave by both the public and staff during this time period, a review of the holiday and meeting schedule is requested to determine which, if any, City Council meeting should be cancelled due to the holiday season.
Staff reviewed business items for both November and December (Attachment A). Staff is not recommending the cancellation of the December 13, 2022 meeting per Resolution CC 2022-11 staff will be agendizing the reorganization and/or selection of Mayor and Mayor Pro Tem.
However, since the November 22, 2022 and December 27, 2022 City Council meeting occur the same week as Thanksgiving, Christmas and New Year’s, staff anticipates an increase in holiday leave by both the public and staff during the week.
At this time, staff does not anticipate significant impacts, or that two council meetings in the months of November and December would be required. If a business item(s) should arise requiring immediate action, the City Council has the ability to call a special meeting to address the item(s).
OPTIONS:
Option 1: Direct staff to cancel the City Council meetings of November 22, 2022 and December 27, 2022.
Option 2: Direct staff to cancel the City Council meeting of November 22, 2022 as it falls on the same week of the Thanksgiving holiday or the meeting of December 27, 2022 as it falls on the same week as Christmas.
Option 3: Take no action and conduct regular scheduled City Council meetings as scheduled.
FISCAL IMPACT
There is no CEQA impact associated with the recommendation in this report.
ENVIRONMENTAL DETERMINATION
There is no fiscal impact associated with the recommendation in this report.
Prepared By Lorena Cordova, City Clerk Specialist
Concurs With Not Applicable
Reviewed By Kathleen Sessman, City Clerk/Communications Director Certified to Availability of
Funds
Marie Ricci, Administrative Services Director/City Treasurer Approved By Adam Raymond, City Manager
Legal Review William W. Wynder, City Attorney
CEQA Review Not Applicable
ATTACHMENTS:
A. Tentative Agenda Items November and December 2022
B. PowerPoint
Item #13. Page 2
Meeting Date: 9/27/2022 / Packet Page #: 507
Glendora City Council
Tentative Agenda Items
Tuesday, November 8, 2022
Item(s) Agenda Section
Minutes Consent
Warrants Consent
Tuesday, November 22, 2022
Item(s) Agenda Section
Minutes Consent
Investment Reports Consent
Student Reports Special Items
Tuesday, December 13, 2022
Item(s) Agenda Section
Minutes Consent
Warrants Consent
Election Certification New Business
Reorganization Special Items
Glendora Police Department Update Special Items
Tuesday, December 27, 2022
Item(s) Agenda Section
Minutes Consent
Warrants Consent
Investment Reports Consent
Student Reports Special Items
Item #13. Page 3
Meeting Date: 9/27/2022 / Packet Page #: 508
2022 Holiday Season Discussion
Cancellation of City Council
Meetings
City Clerk’s Department
City Council
September 27, 2022
Lorena Cordova, City Clerk Specialist CityOfGlendora.org Item #13. Page 4
Meeting Date: 9/27/2022 / Packet Page #: 509
2 DISCUSSION
2022 City Council Meeting and Holiday Schedule
Scheduled Council Meetings
• November 8, 2022
• November 22, 2022
• December 13, 2022
• December 27, 2022
Holiday Schedule (City Hall Closed)
• November 11, 2022 - Veteran’s Day
• November 24, 2022 - Thanksgiving (Closed November 24th and 25th) • December 24, 2022 - Christmas Eve (Observed December 23rd) • December 25, 2022 - Christmas (Observed December 26th) • December 31, 2022 - New Years Eve (Observed December 30th) • January 1, 2023 - New Years Day (Observed January 2, 2023) Item #13. Page 5
Meeting Date: 9/27/2022 / Packet Page #: 510
OPTIONS
Option 1: Direct staff to cancel the City Council meetings of November 22 and December 27, 2022.
Option 2: staff Direct
22, 2022 as it falls on the same week of the Thanksgiving holiday or the meeting of December 27, 2022 as it falls on the same week as Christmas.
Option 3: Take no action and conduct regularly City Council meetings in November and December as scheduled.
3 Item #13. Page 6
Meeting Date: 9/27/2022 / Packet Page #: 511
4 RECOMMENDATIONS
1. Review and provide direction on what if any City
Council meeting should be cancelled due to the
holiday season.
That the City Council:
Item #13. Page 7
Meeting Date: 9/27/2022 / Packet Page #: 512