RTC 25-0902:
Paying and Reporting the Value of CalPERS
Employer Paid Medical Contribution & Increasing
the Salary Ranges for Department Directors
October 28,2025
2 • The City participates in CalPERS which provides employees with a defined benefit pension upon retirement.
• Two overarching pension categories – pensions for “Safety” employees and pensions for “Miscellaneous” employees.
• Pensions are funded by contributions from both the employee and the City.
• The City currently pays a portion of Classic employees’ CalPERS contribution (“Employer Paid Member Contribution” or “EPMC”) for all groups except the Public Safety Officers Association
Background
3 More About EPMC
Classic Member – two tiers
(hired 2012 or earlier)
• Member contribution
Misc: 7% (Tier 1), 8% (Tier 2)
Safety: 9%
• City pays:
Misc: 4%
Safety: 6%
• Employee pays remaining %
PEPRA Member – single tier
(hired 2013 or later)
• Member contribution (adjusted
annually by CalPERS)
Misc: 7.5%
Safety: 12.75%
• City is prohibited from paying
any share
• Employee pays: Full share
4 • City originally agreed to pay EPMC in
exchange for salary increases,
• Disparity in pay for the same person
completing the same duties
• PSOA negotiated removal of EPMC
effective July 2025
• City in discussions with other labor
groups;
• Overall City workforce now 61%
PEPRA and rising
Organizational Context
Why the Change?
• Equity
• Transparency
• Consistency
5 • Effective December 21, 2025, for Category F and City Manager Note: City Manager follows Category F for benefits as outlined in the employment agreement
• Classic Category F employees will pay the full CalPERS employee share (7% – 9%) with the first pay period in 2026
• No change to PEPRA employees (already paying 7.5% - 12.75%) Impact of EPMC Removal for Directors & City Manager
6 • Pay philosophy (2017):
Maintain equity by aligning Category F increases with PSMA Does not apply to the City Manager; pay range determined by the Council • This year (2025):
PSMA = 11.02% → Staff instead recommends 6.75%
Lower salary range adjustment will lead to compaction between PSMA and Category F Directors
• Note: Increased salary ranges do not mean automatic increase for incumbents
Salary Range Adjustments
7 • Council to consider:
1. Remove EPMC for Category F and City Manager effective December 21, 2025 (first pay period in 2026)
2. Revise salary ranges for Category F with a 6.75% increase Recommendation