March 17, 2026
TO: City Council
REQUESTED BY: Tom Prill, Deputy City Manager
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Resolution and Ordinance Amending the City's CalPERS Contract RECOMMENDATION:
Staff recommends that the City Council:
1. Discuss the proposed amendment to the City's contract with the California Public Employees' Retirement System (CalPERS) to formally incorporate Public Employees' Pension Reform Act of 2013 (PEPRA) language;
2. Introduce for first reading, by title only, the proposed Ordinance amending the agreements with CalPERS for Local Miscellaneous and Local Safety members;
3. Schedule second reading and adoption of the Ordinance at a regular City Council meeting during Regular Business, not less than 20 days following this meeting, in compliance with Government Code Section 20471; and
4. Adopt CalPERS' Resolution of Intention to Approve an Amendment to Contract.
DISCUSSION:
The purpose of this item is to present to the City Council a proposed administrative update to the City's contract with CalPERS. Since the enactment of PEPRA in 2013, CalPERS has administratively applied the new statutory benefit formulas and retirement ages (2% at 62 for miscellaneous employees, 2.7% at 57 for safety employees) to all "new members" as defined by the law. However, the City's formal, signed contract with CalPERS (originally effective December 31, 1970) predates these statutory changes and does not explicitly reference the PEPRA-mandated provisions for new members.
In January 2026, CalPERS contacted staff regarding this issue, which was an issue faced by entities contracted with CalPERS. While the City was already in full compliance with PEPRA administratively, amending the contract to explicitly include this language is considered a best practice for the following reasons, as outlined in the attached CalPERS guidance:
Legal Compliance and Clarity: Amending the contract ensures that all legal requirements are clearly documented in the foundational agreement, eliminating any potential for confusion or misinterpretation regarding the benefits and eligibility rules for members hired under PEPRA.
Administrative Consistency: The amendment will align the formal contract terms with CalPERS' current administrative practices. This consistency simplifies benefit administration for both City staff and CalPERS.
Transparency: By explicitly stating the applicable formulas for both "classic" and "new" members in the contract, the City provides clear and transparent information to current and future employees, as well as other stakeholders.
Risk Mitigation: Updating the contract reduces the potential for disputes regarding the applicable benefit formulas for newer hires, mitigating a source of legal or financial risk.
The proposed amendment does not change any current benefit formulas, retirement ages, or contribution rates for any existing employee classifications (Classic Local Miscellaneous) or for the New Local member classifications established by PEPRA. It simply codifies the PEPRA provisions that are already in effect.
Amending a CalPERS contract requires a specific statutory process. Government Code Section 20471 requires a minimum of 20 days between the adoption of the Resolution of Intention and the final action on the ordinance authorizing the amendment. Accordingly, staff recommends that the City Council take the following actions:
1. Adopt the Resolution of Intention: This resolution formally notifies the public and CalPERS of the City's intent to amend the contract.
2. Introduce the Ordinance for First Reading: Introduce the proposed Ordinance by title only, authorizing the amendment to the CalPERS contract.
3. Schedule Second Reading: Schedule the second reading and adoption of the Ordinance for a regular City Council meeting not less than 20 days from today, consistent with state law.
1. Following final adoption, the executed documents will be submitted to CalPERS for their execution, making the amendment official.
FISCAL IMPACT:
There is no fiscal impact associated with this contract amendment. It is an administrative update to codify existing statutory requirements and does not change any benefit formulas or contribution rates. There are no costs associated with CalPERS for processing this type of amendment.
ATTACHMENTS:
Letter from CalPERS outlining process and requirements
PEPRA Language FAQ Memo (CalPERS Guidance)
CalPERS Resolution of Intention to Approve an Amendment to Contract Ordinance No 26-03
Proposed Amendment to Contract (Exhibit)