For City Council Meeting November 15, 2022
TO: Honorable Mayor and City Council
APPROVAL: Marcus Fuller, City Manager
FROM: Katherine Stevens, Finance Director
Title
Request City Council to Adopt Resolution No. 8000 for Paying and Reporting Employer Paid Member Contributions (EPMC).
Body
BACKGROUND
The City of Rialto has contracted with the Board of Administration of the California Public Employees’ Retirement System (PERS) for pension benefits for City employees. Over time, certain benefits were modified pursuant to the various Memoranda of Understanding negotiated and approved by the City Council with the various bargaining units.
One of the benefits allowed by PERS and previously approved by the City Council is related to Employee Member Paid Contributions (EPMC) where the employee pays its normal contribution towards the City’s pension cost, and the equivalent value is reported to PERS as earned compensation.
On November 24, 2009, the City Council adopted Resolution No. 5771 approving the paying and reporting the value of EPMC on behalf of employees within the Rialto Professional Firefighters Local 3688 bargaining unit in accordance with their Memorandum of Understanding (MOU).
On December 7, 2009, the City Council adopted Resolution No. 5784 approving the paying and reporting the value of EPMC on behalf of employees within the City Government Management Association (CGMA) and Fire Management bargaining units in accordance with their MOUs.
On February 23, 2010, the City Council adopted Resolution No. 5803 approving the paying and reporting the value of EPMC on behalf of employees within the Police Management Bargaining Unit in accordance with the MOU.
Prior to November 21, 2010, the pension benefit formula was 2% at 55 for employees considered Miscellaneous Members of PERS and 2% at 50 for employees considered Safety Members of PERS. After November 21, 2010, the pension benefit formula was changed to 2.7% at 55 for employees considered Miscellaneous Members of PERS and 3% at 50 for employees considered Safety Members of PERS.
The employee normal contributions after November 21, 2010, were established at 8% for Miscellaneous Members of PERS and at 9% for Safety Members of PERS.
On July 1, 2020, the CGMA bargaining unit was effectively dissolved as the City Council moved all Executive Management employees to at-will status. The CGMA bargaining unit has been replaced by the unrepresented Executive Management (EXEC) group.
ANALYSIS/DISCUSSION
Currently, the MOUs approved by the City Council include the EPMC benefit for “Classic” employees in the following bargaining units:
• Rialto Professional Firefighters Local 3688
• Executive Management (EXEC) Group, formerly CGMA
• Rialto Fire Management Association
• Rialto Police Benefits Association - Management
In accordance with the actions taken by City Council effective November 21, 2010, and the MOUs or benefit programs approved with these groups, the EPMC is reported at 8% for Miscellaneous Members of PERS and at 9% for Safety Members of PERS. A resolution updating the EPMC benefit based on that action should have been adopted after that time.
PERS has requested the City Council adopt a resolution to clarify the EPMC benefit based on the current pension formula programs for “Classic” Miscellaneous and Safety Members. It should be noted that for the PEPRA or “New Members” the EPMC benefit is not available to them.
ENVIRONMENTAL IMPACT
This action is exempt from California Environmental Quality Act (CEQA) pursuant to Section 15378(b)(5) of the CEQA Guidelines because the preparation of a budget plan is a governmental administrative activity that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
General Plan Guiding Principle 3 - Rialto’s Economic Environment is Healthy and Diverse - specifically our City Government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens is a good place to do business
LEGAL REVIEW
The City Attorney has reviewed and recommends approval of this staff report and resolution.
FINANCIAL IMPACT
Operating Budget Impact
There is no impact to the Operating Budget. The cost of the EPMC benefit is an existing cost that is budgeted and appropriated annually as part of the fiscal year budget.
Capital Improvement Budget Impact
There is no impact to the Capital Improvement Budget.
RECOMMENDATION
Staff recommends that the City Council adopt the Resolution for Paying and Reporting Employer Paid Member Contributions (EPMC).