City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00178 3/14/2023 Consent Item 1.
Adopting Amended Resolutions Approving an Amendment to Contract Between the Board of Administration California Public Employees’ Retirement System and the Board of Commissioners Sacramento Housing Authority
File ID: 2023-00178
Location: Citywide
Recommendation: Adopt: 1) an amended City Council Resolution to approve a contract amendment with California Public Employee’s Retirement System in Section 20503 (Removal of the Contract Exclusion of “Hourly Rated or Hourly Basis Employees,” and to provide for the exclusion of Student Interns, prospectively from the effective date of this amendment to contract) and to provide Section 21118 Partial Service Retirement and adopt: 2) an amended Housing Authority Resolution to approve a contract amendment with California Public Employee’s Retirement System in Section 20503 (Removal of the Contract Exclusion of “Hourly Rated or Hourly Basis Employees,” and to provide for the exclusion of Student Interns, prospectively from the effective date of this amendment to contract) and to provide section 21118 Partial Service Retirement Contact: Tracy Knighton, Human Resources Manager, [email protected], (916) 440-1359, James Shields, Deputy Executive Director of Administration, [email protected], (916) 440-1319, Sacramento Housing and Redevelopment Agency
Presenter: None
Attachments:
1. Description/Analysis
2. Housing Authority Resolution
3. City Council Resolution
4. Amendment to Contract
5. CalPERS Resolution Authorizing an Amendment to the Contract
6. Certification of Final Action of Governing Body
Additional Description/Analysis
Issue Detail: Resolutions of Intention which gave the required 20-day public notice to authorize the Agency to amend the retirement contract were approved on December 13, 2022 by the City Council and Housing Authority. On January 10, 2023 the City Council and Housing Authority passed adopting resolutions to approve a contract amendment with California Public Employee’s Retirement System in Section 20503 (Removal of the Contract Exclusion of “Hourly Rated or Hourly Basis Employees,”
File ID: 2023-00178 3/14/2023 Consent Item 1.
and to provide for the exclusion of Student Interns, prospectively from the effective date of this amendment to contract) and to provide Section 21118 Partial Service Retirement. PERS is now requiring revised wording in the adopting resolutions. The revised wording does not change the recommended actions or approvals.
Contract Exclusion (Section 20503):
CalPERS completed a Public Agency Review (PAR) of the
Sacramento City Housing Authority in March of 2021 in regards to how the Sacramento Housing and Redevelopment Agency (Agency) interpreted which type of employees were excluded from CalPERS membership.
Based on their review, PERS recommended, and the Agency agrees to amend its contract with PERS to properly designate which classification can be “excluded” from membership. Currently, “Temporary Employees” are listed as excluded from CalPERS membership.
The only classification of employees that can be excluded from membership is Student Interns. The Agency can still continue to require temporary employees to meet the minimum qualification for membership pursuant to a statute which is (six months of continuous employment or 1,000 hours of compensated service in a fiscal year).
This report recommends that the City Council and Housing Authority of the City of Sacramento authorize SHRA to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System to add the student intern as the classification that is excluded from CalPERS membership.
Partial Service Retirement (Section 21118):
The Agency would like to amend its contract to add
partial service retirement benefits to those who meet the normal retirement age and service requirements. This change will enable the member to be able to reduce work time, continue working, and receive a “partial” service retirement allowance with partial service retirement.
Policy Considerations: Approval of this action by the City Council and Housing Authority is consistent with the Agency’s legal obligation under the Meyers-Milias-Brown Act, adheres to the Agency’s positive labor-management relations concept, and provides labor stability.
Resolutions of Intention which gave the required 20-day public notice to authorize the Agency to amend the retirement contract were approved on December 13, 2022 by the City Council and Housing Authority.
Economic Impacts: N/A
Environmental Considerations:
California Environmental Quality Act (CEQA): The proposed actions consist of governmental fiscal activities which do not involve a commitment to any specific project, and as such, does not constitute a “project” under the California Environmental Quality Act (CEQA) Guidelines Section 15378 (b)(4).
National Environmental Policy Act (NEPA): The proposed administrative and management activity
File ID: 2023-00178 3/14/2023 Consent Item 1.
National Environmental Policy Act (NEPA): The proposed administrative and management activity is an exempt activity under the National Environmental Policy Act (NEPA), 24 CFR (a)(3).
Commission Action: Not applicable.
Rationale for Recommendation: The CalPERS’ Office of Audit Services (OFAS) conducted and provided a Public Agency Review (PAR) of the Sacramento City Housing Authority (Agency) in March 2021. The PAR reviewed and identified how the Agency applies its retirement contract exclusion for all hourly rated or hourly basis employees (Exclusion). The Membership and Post-Retirement Employment Determinations Team (MAPD) reviewed OFAS’ documentation to determine if the exclusion is compliant with Government (Gov.) Code section 20502 and if it has been superseded by Gov. Code section 20305(b).
MAPD determined that the manner in which the Agency is applying their Exclusion to temporary employment is superseded by Gov. Code section 20305(b).
To prevent misapplication or potential adverse administrative decisions by CalPERS, it was advised by CalPERS that the Agency should work with CalPERS to remove the Exclusion from the Agency’s retirement contract.
Under the Partial Service Retirement Program (PSRP), partial service retirement will allow employees the opportunity to reduce their work time and ease into retirement. This program offers voluntary partial service retirement to eligible employees where feasible. PSRP employees are considered to be “active” employees with a reduced time base. The appointing authority has the discretion to approve or deny an employee’s request to reduce their work time for partial service retirement to the extent that necessary work at the department will continue to be performed.
Financial Considerations:
There is no cost associated with the amendment to the contract.
LBE - M/WBE and Section 3 requirements:
The items discussed in this report have no M/WBE or Section 3 impact; therefore, M/WBE and Section 3 considerations do not apply.
RESOLUTION NO. 2023 -
Adopted by the Housing Authority of the City of Sacramento on date of
AUTHORIZING AN AMENDMENT TO THE CONTRACT
BACKGROUND
A. The Board of Administration of the California Public Employees' Retirement System and the Board of Commissioners of the Sacramento City Housing Authority entered into a contract effective on December 1, 1968, providing for the participation of said public agency in the California Public Em ployees' Retirement System.
B. It is now desirable to take advantage of certain benefits provided under said Retirement System and not included in said contract.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO RESOLVES AS FOLLOWS:
Section 1. Said governing body is authorized, and it does hereby authorize, an amendment to said contract, a copy of said amendment attached hereto and by such reference made a part hereof as though herein set out in full.
Section 2. The presiding officer of said governing body is hereby authorized, empowered and directed to execute said amendment for and on behalf of said public agency.
Table of Contents:
Exhibit A: Contract
RESOLUTION NO. 2023 -
Adopted by the Sacramento City Council
on date of
AUTHORIZING AN AMENDMENT TO THE CONTRACT
BACKGROUND
A. The Board of Administration of the California Public Employees' Retirement System and the Board of Commissioners of the Sacramento City Housing Authority entered into a contract effective on December 1, 1968, providing for the participation of said public agency in the California Public Em ployees' Retirement System.
B. It is now desirable to take advantage of certain benefit s provided under said Retirement System and not included in said contract.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. Said governing body is authorized, and it does hereby authorize, an amendment to said contract, a copy of said amendment attached hereto and by such reference made a part hereof as though herein set out in full.
Section 2. The presiding officer of said governing body is hereby authorized, empowered and directed to execute said amendment for and on behalf of said public agency.
Table of Contents:
Exhibit A: Contract
EXHIBIT
California
Public Employees’ Retirement System
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees’ Retirement System
and the
Board of Commissioners
Sacramento City Housing Authority
The Board of Administration, California Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective December 1, 1968, and witnessed October 16, 1968, and as amended effective June 11, 1983, January 17, 1987, January 9, 1992, September 30, 1992, July 1, 2001, and September 1, 2004, which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective September 1, 2004 , and hereby replaced by the following paragraphs numbered 1 through 15 inclusive:
1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age” shall mean age 55 for classic local miscellaneous members and age 62 for new local mis cellaneous members.
2. Public Agency shall participate in the Public Employees' Retirement System from and after December 1, 1968 , making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency.
3. Public Agency agrees to indemnify, defend and hold harmless the California Public Employees’ Retirement System (CalPERS) and its trustees, agents and employees, the CalPERS Board of Administration, and the California Public Employees’ Retirement Fund from any claims, demands, actions, losses, liabilities, damages, judgments, expenses and costs, including but not limited to interest, penalties and attorney fees that may arise as a result of any of the following:
(a) Public Agency’s election to provide retirement benefits, provisions or formulas under this Contract that are different than the retirement benefits, provisions or formulas provided under the Public Agency’s prior non-CalPERS retirement program.
(b) Any dispute, disagreement, claim, or proceeding (including without limitation arbitration, a dministrative hearing, or litigation) between Public Agency and its employees (or their
representatives) which relates to Public Agency’s election to amend this Contract to provide retirement benefits, provisions or formulas that are different than such em ployees’ existing retirement benefits, provisions or formulas.
(c) Public Agency’s agreement with a third party other than CalPERS to provide retirement benefits, provisions, or formulas that are different than the retirement benefits, provisions or formu las provided under this Contract and provided for under the California Public Employees’ Retirement Law.
4. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement:
a. Employees other than local safety members (herein referred to as local miscellaneous members).
5. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System:
a. SAFETY EMPLOYEES; AND
b. STUDENT INTERNS PROSPECTIVELY FROM THE EFFECTIVE
DATE OF THIS AMENDMENT TO CONTRACT.
6. Removal of the exclusion of “ Hourly Rated Or Hourly Basis Employees, ” pursuant to Section 20503, is declarative of agency’s previous interpretation and does not mandate any new classes of employees into membership.
7. This contract shall be a continuation of the contract of the Redevelopment Agency of the City of Sacramento , her einafter referred to as "Former Agency". The accumulated contributions, assets and liability for prior and current service under the Former Agency's contract shall be merged pursuant to Section 20508 of the Government Code. Such merger occurred July 1, 2001.
8. The percentage of final compensation to be provided for classic lo cal miscellaneous members for each year of credited prior service is 0% and the percentage of final compensation to be provided for each year of credited current service is 100% and determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Modified).
9. The percentage of final compensation to be provided for each year of credited prior and current service as a new local miscellaneous member shall be determined in accordance with Section 7522.20 of said Retirement Law (2% at age 62 Supplemental to Federal Social Security).
10. Public Agency elected and elects to be subject to the following optional provisions:
a. Sections 21624, 21626 and 21628 (Post -Retirement Survivor Allowance).
b. Section 20965 (Credit for Unused Sick Leave).
c. Section 20903 (Two Years Additional Service Credit). d. Section 20042 (One-Year Final Compensation) for classic members only.
e. Section 21024 (Military Service Credit as Public Service). f. Section 20503 (To Remove the Exclusion of "Hourly Rated Or Hourly Basis Employees ,” prospectively from the effective date of this amendment to contract).
g. Section 21118 (Partial Service Retirement).
11. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on June 11, 1983. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834.
12. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members of said Retirement System.
13. Public Agency shall also contribute to said Retirement System as follows:
a. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law.
b. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law.
14. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amen dments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law.
15. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by dir ect payments between the employee and the Board.
B. This amendment shall be effective on the _____ day of _______________, ______.
BOARD OF ADMINISTRATION BOARD OF COMMISSIONERS
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM SACRAMENTO CITY HOUSING
AUTHORITY
BY____________________________________ BY______________________________
MELODY BENAVIDES, CHIEF PRESIDING OFFICER
PENSION CONTRACTS AND PREFUNDING
PROGRAMS DIVISION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
________________________________
Witness Date
Attest:
________________________________
Clerk
AMENDMENT CalPERS ID #6390332398
PERS-CON-702A
Housing Authority
City of Sacramento
March 14 2023
City Clerk