REPORT TO COUNCIL
SUBJECT
Title
Action to Waive Second Reading and Adopt Ordinance No. 2055, Adding Section 2.05.100 to the City Code, Amending the Contract Between the Board of Administration of the California Public Employees’ Retirement System and the City Council of the City of Santa Clara to Eliminate a Clause Relating to Temporary Employees
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
At the October 18, 2022 Council meeting, proposed Ordinance No. 2055 was passed for the purpose of publication. Pursuant to City Charter Sections 808 and 812, a summary of proposed Ordinance No. 2055 was published to the Santa Clara Weekly on October 26, 2022, and copies were posted in three public places.
The City of Santa Clara Municipal Code Section 2.05.090 authorizes the City Council of the City and the Board of Administration, Public Employees’ Retirement System to provide retirement benefits for its employees. The City Council of the City of Santa Clara and the Board of Administration of the California Public Employees’ Retirement System (CalPERS) entered into a contract effective September 1, 1943, which was last amended on December 27, 2006, and provides for participation of the City of Santa Clara in CalPERS.
In April 2022, CalPERS reviewed the City of Santa Clara’s application of the California Public Employees’ Retirement System (“CalPERS”) Retirement Contract exclusion that became effective April 1, 1959 which excluded certain classes of employment from CalPERS coverage (“Exclusion”). CalPERS determined that the Exclusion is superseded by Gov. Code section 20305(b) because temporary employment is already excluded from membership by Gov. Code section 20305 (until membership requirements) are met and therefore does not need to be specifically excluded in the Agreement.
CalPERS informed the City that this provision is no longer in compliance and that the contract between the City and CalPERS must be amended to remove this provision. CalPERS provided the required steps to remove the exclusion from the City’s contract and an amendment to the CalPERS contract to remove the above exclusion. CalPERS requires that the City adopt a Resolution and Ordinance memorializing the Amendment, and that the City use the particular forms provided by CalPERS. The adoption of the final ordinance cannot be earlier than 20 days after the adoption of the Resolution of Intention, which was approved by the City Council in conjunction with the first reading of the proposed ordinance on October 18, 2022.
DISCUSSION
The proposed Ordinance authorizes an amendment to the contract between the City Council of the City of Santa Clara and the Board of Administration of CalPERS, as required by CalPERS. The Amendment will remove the following exclusion, which was effective April 1, 1959 and is no longer valid:
CROSSING GUARDS AND EMPLOYEES OF THE RECREATION DEPT. AND CITY LIBRARY WHO NORMALLY ARE EMPLOYED ON A LESS THAN ONE-HALF TIME BASIS NOT WITHSTANDING THE FACT THAT THEY MAY AT TIMES BE EMPLOYED TEMPORARILY ON A GREATER THAN ONE-HALF TIME BASIS.
To effectuate this amendment, the City Council must first adopt a Resolution of Intention (which it did on October 18, 2022) and, second, adopt an Ordinance approving the Amendment.
In addition to the elimination of the Exclusion, which is the primary reason for CalPERS requiring the Amendment, some additional modifications are also being made because the City’s contract has not had any updates since 2006 (which predated the changes to the retirement system rules under PEPRA). The retirement ages have been increased by seven years for new members; the City agrees to defend and indemnify CalPERS against liability arising from the City’s decisions regarding its own retirement benefits; the benefit calculation formulas have been updated to include the formulas applicable to new employees.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no fiscal impact to amend the City’s CalPERS agreement.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
A summary of proposed Ordinance No. 2055 was published to the Santa Clara Weekly on October 26, 2022, and copies were posted in three public places and made available for public inspection at the City Clerk’s Office.
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Waive Second Reading and Adopt Ordinance No. 2055, Adding Section 2.05.100 to the City Code, Amending the Contract Between the Board of Administration of the California Public Employees’ Retirement System and the City Council of the City of Santa Clara to Eliminate a Clause Relating to Temporary Employees
Staff
Reviewed by: Aracely Azevedo, Director of Human Resources
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. Ordinance No. 2055 (Intro), with CalPERS Contract Amendment