April 7, 2026
TO: City Council
REQUESTED BY: Tom Prill, Deputy City Manager
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Second Reading of Ordinance No. 26-03 to Amend the City's CalPERS Retirement Contract
RECOMMENDATION:
Staff recommends that the City Council conduct the second reading and adopt Ordinance No. 26- 03 entitled:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN
JACINTO AUTHORIZING AN AMENDMENT TO THE CONTRACT
BETWEEN THE CITY COUNCIL OF THE CITY OF SAN JACINTO AND
THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM.
BACKGROUND:
Ordinance No. 26-03 amends the contract between the City of San Jacinto and the California Public Employees’ Retirement System.
The Ordinance was originally introduced on March 17, 2026. Following staff presentation, public comment, and Council discussion, the City Council introduced Ordinance No. 26-03 on a 5-0 vote.
The Ordinance presented for second reading is unchanged from the version introduced on March 17, 2026.
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.
Following final adoption of this Ordinance and receipt of a “clean” copy of the Amendment, 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:
Ordinance No 26-03
Proposed Amendment to Contract (Exhibit)