I

PERSONNEL DEPARTMENT

(831) 454-2600 FAX: (831) 454-241 1 TDD: (831) 454-2123 DANIA TORRES WONG, DIRECTOR

701 OCEAN STREET, SUITE 31 0, SANTA CRUZ, CA 95060-4073

May 14,2003

Agenda Date: May 20,2003

Board of Supervisors County of Santa Cruz 701 Ocean Street Santa Cruz, California 95060

ADOPT RESOLUTION OF INTENTION AND CONSIDER ORDINANCE TO INITIATE CONTRACT AMENDMENT WITH THE PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

TO PROVIDE TWO YEARS ADDITIONAL SERVICE CREDIT PURSUANT TO GOVERNMENT CODE $20903

Dear Members of the Board:

Introduction

On April 1, 2003 your Board directed the Personnel Department to work with the Public . Employees Retirement System (PERS) to implement an amendment to the County’s contract for Golden Handshake (Government Code 920903). As you are aware,- the contract amendment process could not begin until the contract amendment to provide 3%@ 50 Safety for Local Sheriffs was completed. That process was finalized on May I O , 2003, we received the attached contract amendment documents from PERS on May 14, and we are now able to begin the amendment process to provide two additional years of service credit for eligible employees.

PERS Golden Handshake 520903

As previously discussed with your Board in our February 4 and April 1, 2003 reports (See Attachments 1 and 2) the PERS golden handshake program allows your Board to offer two years of additional PERS service credit to employees as an incentive to retire, provided they are in classifications that are slated for layoff in affected departments. The program has many management limitations. The affected employees must be at least 50 years old, have at least 5 years of service credit and retire within a window period. PERS guidelines require that the golden handshake can only be offered to classes that are actually affected by layoff and a position in the County must be eliminated as a requirement of the program.

Board of Supervisors Agenda Date: May 15,2003 Page 2 of 5

Board Agenda: May 20,2003 I

Under current statutes, (See Attachment 3, PERS contract amendment processing letter dated May 13, 2003, page 2) the economic value of the additional service credit must be paid for within the first two years of the offering. PERS will notify the County of the actual costs and payment options available after all eligible members have received the additional service credit. The regulations require that the County cannot limit the number of employees within a designated department and classification who take advantage of the. program once it is made available to that classification and department by the Board.

PERS regulations require that at a minimum of two weeks prior to the opening of a window period, the costs associated with the early retirement option be made public at a public meeting of your Board. The estimated cost of the program is calculated by the following PERS formula:

= determine all individuals who meet the minimum eligibility for retirement (at least age 50 and at least 5 years of service credit) who are employed in the designated classification, department or organizational unit

= determine the annual pay rate for each person determine the age for each person multiply the annual pay rate by a PERS cost factor and then by .95

520903 of the PERS guidelines also requires that after the costs are made public the County must establish a window period of at least 90 days and no more than 180 days to solicit interested potential retirees to receive the two-year service credit.

These factors necessitate that the program be carefully managed to ensure that the option is only offered in instances where a financial justification exists. If that is not the case, the County could be in a situation where additional layoffs are needed to pay for early retirements.

PERS Golden Handshake Contract Amendment

In order to adopt the PERS golden handshake contract option, PERS requires that your Board adopt the attached ordinance approving the contract amendment and that the amendment be applicable to all County employees who are Miscellaneous and County Peace Officer members in PERS. The PERS contract amendment process requires the County to adopt the attached Resolution of Intention as well as an Ordinance amending the PERS contract. The California Government Code requires at least a twenty (20) day waiting period between the adoption of the Resolution of Intention and the adoption of the final ordinance. The effective date of the Ordinance is 31 days after the final reading. The effective date of the stated above this is positions are slated

amendment is the day following the ordinance effective date. As only the first step in the process. Once the Board decides what for layoffs, the County must then comply with the requirement to

3

Board of Supervisors Agenda Date: May 15, 2003 Page 3 of 5

Board Agenda: May 20,2003

publish the costs at least two weeks prior to the opening of a window period which must be at least 90 days and no more than 180 days.

It should be noted that given the program limitations and the Board’s budget hearing schedule, that the PERS program will not in itself satisfy the County’s goal of avoiding layoffs.

Golden Handshake - Legislative Program .

For the past- two years the County’s legislative package has included a request for modifications of Government Code 520903. The requirements of the current law are cumbersome, requiring the County to pay the costs for the program up front, not allowing for program flexibility to limit the number of offerings to the number of layoffs slated to occur, requiring unworkable timeframes and limiting the usefulness of the early separation program for management.

The County and Union have been working with Assemblymember John Laird’s office to address these issues. The County has also identified areas of concern to be:

. Excessive window period - minimum of 90 days - would be more helpful if that time period was reduced to 10 days so that the program could be flexibly implemented; Costs are calculated after the close of the window period and must be paid within two years - it would be more helpful in times of budget constraints to pay as you go through the annual rate adjustment process; The lack of flexibility in designation of number of positions to offer the retirement benefit - if the law allowed the County to pick the number of positions in a specific classification and allowed offerings in alternative positions in order to avoid a layoff there would be a better control of costs and more success in avoiding layoffs; . And the need to publish the cost of the program in a public Board meeting . .

for all positions in the class offered at least two weeks prior to opening the window period - if the two week prior publication requirement were changed to allow the County to publish the costs within the resolution when opening the window period the program could be offered in a more timely manner.

Public Agency Retirement System (PARS) Retirement Options

As reported earlier to your Board, PARS is the third largest multiple employer public retirement system in California. They have been operating since 1983 and assist public agencies in plan designs and implementation of retirement programs in conjunction with already existing PERS retirement programs.

$5- I

Board of Supervisors Agenda Date: May 15,2003 Page 4 of 5

Board Agenda: May 20,2003

The PARS early retirement program goes far beyond the limitations of the PERS option and it is far more flexible. The PARS program can be structured to provide years of service credit or years of age credit, the terms of the payment of the benefit can be defined and eligibility can be structured to meet County and employee needs.

Unlike PERS, the PARS program allows the County to determine the number of positions by classification and department, thereby minimizing economic risk. Also, once your Board determines a need for a separation incentive program, the plan administrator can implement the program and can offer early retirement incentives as necessary as broadly or as narrowly as necessary.

PARS offers the flexibility of providing structured payments to the employee including: lump sum payments, monthly payments for life, or a monthly payment for 5, 10, or 15 years. The PARS early retirement option could be offered as a supplement to PERS and can be structured to complement PERS and social security eligibility.

The cost for the PARS retirement option program is calculated based upon the number of early retirements offered plus an administrative fee of 6% based upon cost of the retirements. It is considered a fee-for-service plan. Rather than paying for the cost within the first two years, costs are paid as expended. Most importantly, if your Board approves the PARS retirement option it can be utilized during these budget hearings.

Conclusion

We believe it appropriate to consider both the PERS and the PARS programs as possible tools to address our local budget shortfalls since it appears that the PERS golden handshake will not be sufficiently flexible to address all of the budget reductions associated with the 2003-04 budget .

The Union and the Personnel Department met on May 13, 2003 to discuss both of these options. The Union has raised questions related ’ to both options. The Personnel Department is working with PERS and PARS representatives to clarify issues. We will return to your Board on June 3, 2003 with a further report on early retirement and the PARS retirement option, in particular.

Therefore, it is RECOMMENDED that your Board:

1. Adopt the attached Resolution of Intention to amend the County’s contract with the Public Employees’ Retirement System pursuant to Government Code s20903 to provide for the possibility of offering an early retirement;

2. Conduct the reading of the ordinance to amend the County’s contract with the Public Employees’ Retirement System;

Board of Supervisors Agenda Date: May 15,2003 Page 5 of 5

Board Agenda: May 20,2003

3. Direct the Clerk of the Board to immediately forward to the Public Employees’ Retirement System a certified copy of the Resolution of Intention and Certification on Government Board’s Action;

4. Direct that the final reading and adoption of the ordinance together with final documents to execute the contract be placed on your agenda for June 10,2003;

5. Direct the Personnel Director to return on June 3, 2003, with a further report on early retirement.

Very truly yours,

&\ &!-& RECOMMENDED:

a Dania Torres Wong SUSAN A: MAUl%lELLO Personnel Director County Administrative Officer

DTW:JM/jm

Attachments

cc: Auditor-Payroll All Department Heads SElU Local 41 5 Management Association District Attorney/Child Support Attorney Association Health Care Professionals Unit DA Inspectors Unit Correctional Officers Unit Personnel (3)

I I

14 COUNTY OF SANTA CRUZ

PERSONNEL DEPARTMENT RISK MANAGEMENT

701 OCEAN STREET, SUITE 3 10, SANTA a U Z , CA 95060-4073

JANET M C m L E Y , RISK MANAGER (831).454-2600 FAX: (83 1) 454-2245 TDD: (831) 454-2123

March 27,2003

AGENDA: April 1,2003

BOARD OF SUPERVISORS County of Santa Cruz ,70 1 Ocean-Street Santa Cruz, CA 95060

Dear Members of the Board:

EARLY RETIREMENT

In February your Board directed the Personnel Department to conduct a survey of County employees who meet certain age and years of service criteria as to their interest into an early retirement option either through PERS or through alternative programs. (Previous letter provided as Attachment 1).

' The survey was sent to approximately 564 current employees who are at least age 49 with a minimum of 5 years of County service. The following groups were not 'included in the survey: Department Heads, Department of Public Works employees, and law enforcement. The County received 235 responses to the survey, a response rate of 42%. A s u m m a r y of the survey . .

responses is provided as Attachment 2.

PERS Golden Handshake Program

Government Code Section 20903 allows your Board to offer two years of additional PERS service credit to employees as an incentive to retire who are in classifications that are slated for layoff in affected departments. Section 20903 allows PERS local agencies to amend their contract to offer the two years of additional service credit to retiring employees who are at least 50 years old and have at least 5 years of service credit and retire within a window period specified by County resolution. PERS guidelines.require that the golden handshake can only be offered to classes that are actually affected by layoff and the position must be eliminated as a requirement of the program.

During the budget process, the Board will make decisions on positions and staffing within County Departments. Given the County's difficult financial position resulting fiom the escalating costs of doing business and the downturn in the economy, coupled with the historic deficits facing the State of California, there is a high likelihood that the Board will be- confronting service reductions and associated staff reductions. The Golden Handshake Program

Board of Supervisors - 2 - March 27,2003

offers an opportunity to the Board and potentially affected employees to reduce layoffs by offering service credit to employees as an incentive to leave the workforce. '

As stated in our earlier letter to the Board on this matter, under certain circumstances, staff believes the early retirement option could be a cost effective tool to address upcoming budget shortfalls. You will recall, under current statutes, the economic value of the additional service credit must be paid for up fiont and the program regulations require that the County cannot limit the number of employees within a department and, classification who take advantage of the program once it is made available to that classification and department by the Board. These factors necessitate that the program, if implemented, be carefully managed to ensure that the option is only offered in instances where a financial justification exists. Lf that is not d e case, the CounQ could be in a situation where layoffs are needed to pay for early retirements, which would certainly defeat the purposes of the program.

Since the Board will be considering the Budget in June, at that time or soon thereafter, the Board could select the classifications where layoffs are slated to occur and extend the option for early retirement to minimize the number of individuals who are laid off.

PERS guidelines require that the County establish a window period of at least 90 days and no more than 180 days to solicit interested potential retirees to receive the two-year service credit. Once position classifications by department have been established, all those who are eligile and apply to receive the retirement credit would be granted the additional credit and retire. A window period can be opened at any time by Board resolution.

Under the P,ERS golden handshake early retirement option, it is difficult to determine the cost of the early retirements prior to deciding affected departments and classifications and opening a

take advantage of this benefit as long as the employees opting far the benefit fall within the classification in an affected department that is offered.the benefit.

- - * . , . window period. This is because the County cannot limit the number of eligible employees who

Pub=lic Agency Retirement System (PARS) Retirement Options

PARS is the third largest multiple employer public retirement system in California. They contract with over 200 agencies and offer over 500 retirement plan options. They have been operating since 1983 and assist public agencies in plan designs and implementation of retirement programs in conjunction with already existing PERS retirement programs.

PARS has a program similar to the PERS golden handshake program. However, the PARS program goes far beyond the limitations of the PERS options. In addition, it is far more flexible. Under PARS, the program can be structured to provide years of service credit or years of age credit, the terms of the payment of the benefit can be d e b e d &d eligibility can be structured to meet County and employee needs. In the final analysis, it is a question of whether an early .

9 Board of Supervisors

i

- 3 - March 27,2003

retirement incentive makes sense in a given department and class. Unlike P E E , the PARS programs allows you to determine the number of positions by classification and department, thereby minimizing economic risk. Also, once your Board determines a need for a separation incentive program, the plan administrator can implement the program and can offer early retirement incentives as necessary as broadly or as narrowly as necessary.

The PARS program offers the flexibility of providing structured payments to the employee including: lump sum payments, monthly payments for life, or a monthly payment for 5, 10, or 15 years, for example. This early retirement option could be used as supplement to PERS and be structured to complement PERS and social security eligibility. Under the PARS retirement option program, employees are not required to actually retire from the PERS system. They have the option of receiving a PARS monthly allotment and maintaining their retirement balances in

. the PERS retirement system.

The cost for the PARS retirement option program is calculated based upon the number of early retirements offered plus an administrative fee of 6% based upon cost of the retirements. It is considered a fee-for-service plan. Rather than paying costs up front, the program is a pay as you go system.

We believe it would be appropriate to consider both the PERS and the PARS programs as possible tools to address our local budget shortfalls and those that are expected due to the historic state deficit.

Next Steps

In order to have the PERS program available for use in conjunction with Budget hearings, the County needs to request a contract amendment and adopt a resolution approving the amendment. Once approved, the Board will need to complete budget hearings, determine departments and classifications where layoff is slated to occur, determine whether to offer the early retirement to a particular department and class, open the window period, and implement the retirement and .

res'u=iting layoff(s), if any.

Action recommended today will commence the amendment process, but will not require your Board to make the program available. It will only make the tool available for future use. As you are aware, PERS only permits one contract amendment to be processed from a contract agency at a time. Since staff is expected to return to your Board shortly for consideration of a change in retirement for Local Sheriffs, staff would suggest that this contract amendment follow any action your Board may direct on the Local Sheriff Plan.

For the PARS program, the next steps would be to develop a proposed plan and agreement with PARS for your Board's consideration. Unlike PERS, such a plan could be effective immediately

Board of Supervisors -4- March 27,2003

and the timeline would be much more responsive to our budget needs. Again it would be necessary for the Board to complete budget hearings, determine departments and classifications where layoff is slated to occur, determine whether to offer the early retirement to a particular department and class, open the window period, and implement the retirement and resulting layoff(s), if any.

It is, therefore, RECOMMENDED that your Board direct the Personnel Department to work with the PERS Retirement System and develop an amendment to the County’s Contract for Early Retirement for Consideration by the Board and to work with PARS to evaluate other retirement programs and strategies that may be of benefit for review by the Board and return at budget hearings with the necessary documents to have the PARS retirement option available for possible use in conjmction with budget reductions.

Very truly yours, APPROVED:

GD:JM/jm County Administrative Officer

Acting Personnel Director v

GD:JM/jm County Administrative Officer

cc: All Department Heads SEW Local 41 5 Middle Management Association District Attomey/Child Support Attorneys Association Sheriffs Units. Health Care Professionals Unit Personnel - (3) _-

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COUNTY -OF .SANTA CRUZ -.

PERSONNEL DEPARTMENT , . I . .

701 OCEAN STREET, SUITE 310, SANTA CRUZ, CA 95060-4073 (831) 454-2600 FAX: (831) 454-241 1 TDD: (831) 454-2123

DANIA TORRES WONG, DIRECTOR . .

January 29,2003

Agenda Date: February 4,2003

Board of Supervisors County of. Santa Cruz ‘701 Ocean Street Santa Cruz, California 95060 I

REPORT ON THE P-UBLIC EMPK WEES RETIREMENT SYSTEM (PERS “GOLDEN-HANDSHAKE PROGRAM”

I .

Dear Members of the Board:

Background:

OiJanuary 14, 2003, your Board requested a report regarding the Public Employe& Retirement System (PERS) “Golden Handshake”.retirement option (G,overnment Code Section 20903). County staff and SEIU Local 415 have discussed this PERS option and believe it may be a beneficial tool given the likelihood of upcoming budget reductions and possible layoffs.

. . . .

What is th’e PERS Golden Handshake Program and How Does It Work

Government Code Section 20903 allows your Board to elect to offer two years of additional PERS service credit to employees eligible to retire who are in position classifications that are slated for layoff in affected departments. Section 20903 allows . -

PERS.local agencies to amend their contract to--offerthe two-ye-arsof additional service : credit to retiring employees who are at least 50 years old and have at least 5 years of .

service credit and retire within a window period specified,by the county in a resolution.

Before the County can offer the two years additional sewice credit, it must, initiate the process to amend our PERS contract. This process takes approximately threemonths and only one PERS amendment can proceed at any time. This is relevant because the County is currently working on receiving an actuarial for the 3% at 50-retirement option for the Local Sheriffs option.

Next, the number of positions and classifications by department slated for layoff would need to be established. PERS guidelines require that the golden handshake can only be offered to positions classes that are affected by layoff.. This will occur at the conclusion of- the budget process. After the amendment is complete and layoffs have been identifed, the

. ' Board of Supervisors Page 2 I !

county could select classifications where layoffs would occur which meet PERS guidelines and may offer eligible employees in those classifications two years of service credlt in exchange for a retirement on the part of qualified employee. PERS guidelines require that the County establish a window period' of at least 90 days to solicit interested potential retirees to receive the two-year credit Once position classifications by department have been established, all those who are eligible and apply to receive the retirement credit would be granted the additional credit and retire. Window periods can be opened at any time by Board resolution.

It should be noted that it is difficult to determine the cost of the early retirements prior to opening a window period. The difficulty is that the County cannot limit the number of

. eligible employees who take advantage of this benefrt as long a s the employees opting for the benefit fall within the classification in a.n affected department that is offered t h e benefit. .For example, if the suwey determines that only one person in the classification in a department the benefit is offered ta replied that, he/she would retire, but other eligible employeesactually do opt for retirement once the window period is opened, the County must allow all of the eligible employees to retire with the'benefit.

Under cukent.law, when employees retire under Section 20903, the County -must -pay an amount actuarially determined which is the difference between the allowance t h e member does receive because of two years additional service credit and the amount he/she . would have received without the additional service credit. With other PERS contract amendments, if there is an employer cost, the cost is amortized over a number of years. Wrth Section 20903, however, the employer's contribution rate is not affected; the County must pay a iump sum in one to four installments to PERS within two years. These sections of the law may change the manner of payment Assembly Bill 67 which was introduced by Assembly Member Negrete McLeod will amend Section 20903 so that the added cost will b e included in the contracting agency's employer contribution rate rather than. paid as a lump sum. Similar provisions have also been added to the State Budget Bill.

. Next Steps: Employee Survey Recommended . . . .

.In an effort to investigate how this option might be received, staff recommends .

surveying all employees, with the exception of sworn personnel in the Sheriffs Department, Correctional Officers, Public Works Department personnel, and Department Heads, who are '

at least50 years old and have at least 5 years of service credit with the County to identrfy . the interest of county employees. The County will use this informatidn to help ident'rfy areas where layoffs may be.mitigated through the use of retirement instead of layoff. Those listed as exceptions are areas where layoffs are not likely to occur. If it becomes appropriate to expand the survey to include these groups, this could occur at a later date.

In addition to the survey, we would suggest that staff commence the process to seek a PERS contract amendment at the conclusion of the Board's decision making process on changes to the retirement benefits for Local Sheriffs.

1131/03 12:09 PM

. . Board of Supervisors

It is RECOMMENDED that your Board authorize the Personnel Department to (a) 1.

initiate a survey to determine employee interest in retiring early in exchange for two years additional service credit, and (b) initiate. Section 20903 contract amendment proceedings with PERS so that the benefit, if aEproved by t h e Board, could be available to a s s i s t with layoffs which may be necessary at the conclusion of this years County’s budget process .

Very truly yaitrs, - RECOMMENDED:

SUSAN A. MAUR ()Acting Personnel Director

~~

County Administrative Officer

GLD:ls

cc: Auditor-Payroll SElU - Local 415 I

Physicians Unit Middle Management Association District Attorney/Child Support Attorneys Association Sheriffs Units

. Personnel (3) . .

, - 1-

COUNTY OF SANTA CiXl.JP. Personnel Department .

-

701 OCEAN STREET, SUITE 310 . TELEPHONE: (831 ) ‘454-2600 SANTA CRUZ, CA 95060 FAX: (831) 454-241 1

TDD: (831) 454-2123

TO Selected Employees FROM Gerald L. Dunbar, Acting Personnel Director .

DATE February 17,2003 ..

The County is investigating possible ways to address what we expect will be an unprecedented budget deficit due to the downturn. in our local economy, escalating costs of business h d the extraordinary $30 billion State deficit. One tool, which is under review, is to consider whether to induce eady retirements b y offering a “Golden Handshake Program”. It is in that regard that we are writing you h i s letter.

The Public Employees Retirement System (PERS), as well as others; offer Counties the option of implementing early retirement incentives to avoid layoffs and reduce payroll costs. Under the PERS program; Counties may elect to offer employees who are eligible for retirement (50 years of age or older with 5 years of service credit) two additional years of service credit under certain circumstances: Not all classifications would be eligible for the-early retirement option. PERS rcquires that the County designate classifications within departments where positions are actually slated for layoff within a particular class and a permanent position reduction would occur. While providing an additional benefit to the retiring employee, this program would-also provide the’county with necessary budget savings by not filling vacant positions. Any decisions on offering early retirement service ?edit to specific employees will not occur until the Board . has acted on the budget and position reductions are actually identified and the County hplements the program:

If you are not interested in retiring within the next nine (9) months, please disregard this memo.

RE . . Retirement Survey

. . . I

. .

In order &evaluate the early retirement option, we are attempting to determine how many employees by department and classification may be interested in participating in this or a similar progiam. It is important to note that receipt of this memo does not imply that the County will in fact offer this benefit or that positions in your department and classification will be slated for layoff.. Rather, we are trying to determine if an eirly retirement incentive program would benefit interested employees and the County.

We have attached a brief questionnaire for your use, If you respond to the questionnaire, your name will be kept on the mailing list for future.information on early retirement. If you do not respond, we will assume YOU

are not interested in considering retirement during the next 9 months, even with the possibility of retirement incentives, which may become available; .. .

Thank you for your continued service to the County.

cc: Department Heads, Santa Cruz County Management Association, SED3 Local 415, District

______I_____________________I__ __ ____----_--__ _______-______-____________________-------- AttorneyKhild Support Attorney -Association

5 6 1 1

COUNTY OF SANTA CRUZ Personnel Department

701 OCEAN STREET, SUITE 310 SANTA CRUZ, CA 95060

TELEPHONE: (831) 454-2600 FAX: (831) 454-24 11

Santa Cruz County Early Retirement Questionnaire

PLEASE RETURN THIS FORM TO: Lee Ann Shenkman, Personnel Dept., 701 Ocean Street, .Room 510, Santa Cruz 95060 by March 7,2003.

I have read the information regarding the possibility that the County may establish a n early retirementincentive program and I may be interested.

-Employee Name: 564 Surveys Distributed to E l i g i b l e Employees

Current Home Address: 235 Respondents

Work Telephone Number:

If you use e-mail, your address:

Department Name:

'Your Job Title:

Please Check All That Apply: # of Responses

. . - . 138.- .

65 - c1 159 - 0 _- 161 - cl 200 ' - c1

I Am Definitely' Interested

I Am Thinking of Retiring (NontWYear) I Am Considering When to Retire I Need More Information About Early Retirement Keep Me On The Mailing List For More Information As It Develops

Other Comments you have regarding early retirement:

PLEASE RETURN THIS FORM. BY March 7,2003

CalPERS

Actuarial & Employer Services Division P.O. Box 942709 Sacramento, CA 94229-2709 Telecommunications Device for the Deaf - (916) 326-3240

f;; F i; xc- i ; ; L-

(916) 326-3420 FAX (916) 326-3005 - - I 0' L [-I

May 13,2003 Employer Code #0138

Reply to Section 105 Ms. Lee Ann Shenkman Employee Benefits Manager County of Santa Cruz 701 Ocean Street, Room310 Santa Cruz, CA 95060

Dear Ms. Shenkman:

Enclosed are two copies of the Resolution of Intention to amendthe agency's contract to provide Section 20903 (Two Years~Additional Service Credit) for local miscellaneous members and county peace officers only.

Also enclosed are the following documents:

1. Form'CON-12, Certification of Governing Body's Action.

2. Form CON-I2A, Certification of Compliance With Government Code Section 7507.

3. Certification of Compliance With Government Code Section 20903.

4. Form CON-29, Two Years Additional Service Credit information, Section 20903.

5. Form CON-3, Procedures for Calculation of Estimated Employer Cost.

6. Form CON-1 IA , Sample Ordinance.

The sample Ordinance is a guide only and is included to allow sufficient time to prepare the Ordinance for a first and final reading. The Resolution of Intention and accompanying documents should not be held pending final reading of the Ordinance.

Government Code Section 7507 requires that the future annual costs of the proposed contract amendment be made public at a public meeting at least two weeks prior to the adoption of the final Ordinance. The agency is to certify compliance on the enclosed Certification of Compliance with Government Code Section 7507.

1 1

California Public Employees' Retirement System Lincoln Plaza - 400 P Street - Sacramento, CA 95814

~~~ ~~

County of Santa Cruz May 13,2003

Although Section 20903 does not increase the employer contribution rate, there is a dollar cost for this benefit. The enclosed cost factors can be used to calculate the approximate cost to the agency for each employee who will be eligible for the additional service credit. The total dollar amount for all eligible employees is the cost required to be made public at least two weeks prior to the adoption of the final Ordinance. After the expiration of the 90-180 day designated period, the agency will need to submit a list of members eligible to receive the additional service credit who retired during the designated period ,and also certify the agency has checked against those reported to have applied for unemployment insurance payments. The agency will be notified of the actual costs and payment options available after all eligible members have received the additional service credit. The CalPERS BoaTd of Administration permits up to two years for payments with the minimum requirement of annual installments.

All accounts, except lump sum payments remitted within 30 days of billing, will be subject to-interest assessment at the current employer crediting -rate. Payment sh-ould not be submitted prior to receipt of the invoice.

When forwarding the Certification of Compliance with Government .Code Section 20903, if eligibility is limited to specific job classifications, departments or other organizational units, please provide a listing.

In summary, the following documents must be returned to this office before we can forward the actual contract and other final documents necessary to complete the proposed amendment. DO NOT HOLD THESE DOCUMENTS PENDING ADOPTION OF THE FINAL ORDINANCE.

ORIGINAL SIGNATURES ARE REQUIRED

1. Resolution of Intention, original or certified copy.

2. Certification of Governing Body's Action (CON-12), original.

3. Certification of Compliance with Government Code Section 7507, (CON-I2A), original or certified copy.

4. Certification of Compliance with Government Code Section 20903 original or certified copy.

5. Listing of job classifications, departments or other organizational units eligible for the additional service credit, if applicable.

. .

County of Santa Cruz -3- May 13,2003

There must be a 20 day period between the adoption of the Resolution of Intention.and the adoption of the final Ordinance pursuant to Government Code Section 20471. THERE ARE NO EXCEPTIONS TO THIS LAW.

The effective date of this amendment may be as early as the day following the effective date of the final Ordinance.

Please do not retype the Amendment to Contract andlor agreement documents. Only documents provided by this office will be accepted. If you have a problem with any of the documents, please contact this office prior to presenting to your governing body for adoption. Another contract amendment cannot be started until this amendment is completed or cancelled.

If you have any questions regarding this letter or the enclosed material, please do not hesitate to--contactme-at(916) 341-2488.

Sincerely,

Danielle Brooks Employer Representative Public Agency Contract Services

DB:pmc

Enclosures

cc: Mountain View Regional Office

ORDINANCE NO.

ORDINANCE AUTHORIZING AMENDMENT TO THE CONTRACT BETWEEN THE COUNTY OF SANTA CRUZ AND THE BOARD OF ADMINISTRATION OF THE

CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

The Board of Supervisors of the County of Santa Cruz do ordain as follows:

Section I

That an amendment to the contract between the Board of Supervisors of the County of Santa Cruz and the Board of Administration, California Public Employees’ Retirement System, to provide Section 20903 (Two Years Additional Service Credit) for Local Miscellaneous members and County Peace Officers only, is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit “A”, and by such reference made a part hereof as though herein set out in full.

Section 11

The Chairperson of the Board of Supervisors is hereby authorized, empowered, and directed to execute said amendment for and on behalf of the County of Santa Cruz.

Section III

The initial reading of this ordinance took place on May 20,2003, more than 20 days prior to the enactment of this ordinance.

Section IV

This Ordinance shall take effect on the 3lSt day after the date of its final passage.

PASSED AND ADOPTED this day of ,2003, by the Board of Supervisors of the County of Santa Cruz by the following vote:

AYES: SUPERVISORS NOES: SUPERVISORS ABSENT: SUPERVISORS

ADDroved As To Form:

Assistant County Counsel

ELLEN PIRIE, Chairperson

Attest:

Clerk of the Board

Distribution: Personnel (3)

CalPERS EXHIBIT ‘x

California Public Employees’ Retirement System

The Board of Administration, California Public Employees’ Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective January 1 , 1947, and witnessed December 23, 1946, and as amended effective February 1 , 1958, August 22, 1964, December 24, 1966, August 1; 1968, October 12, 1968, February 13, 1969, March 6, 1969, January 1 , 1972, September 1 , 1973, October 1 , 1974, December 16, 1976, July I , 1978, October IO, 1981 , July 14, 1984, April 15, 1989, July 18, 1992, January 1 , 1994, May 17, 19-97, April 13, 2000, November IO, 2001 , March 30, 2002, February 8, 2003 and May I O , 2003 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows:

Pursuant to Government Code sections 20460.1, 20469.1, subdivision (b), and 71624, this contract is hereby amended to add the Trial Court of Santa Cruz County, hereinafter referred to as Trial Court, as a contracting party. Trial Court shall participate in the Public Employees’ Retirement System from and after the implementation date of the Trial Court Employment Protection and Governance Act pursuant to the terms and conditions of this contract, making its employees members of said System subject to all provisions of the Public Employees’ Retirement Law except such as apply only on election of a contracting agency and are not provided for in this contract and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency.”

A. Paragraphs 1 through 14 are hereby stricken from said contract as executed effective May 10, 2003, and hereby replaced by the following paragraphs i numbered 1 through 14 inclusive:

1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age'' shall mean age 55 for local miscellaneous members and age 50 for local safety members.

2. Public Agency shall participate in the Public Employees' Retirement System from and after January 1 , 1947 making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to ail amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency.

3. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement:

a. Local Fire Fighters (herein referred to as local safety members);

b. Local Sheriffs (included as local safety members);

c. County Peace Officers (included as local safety members);

d. Employees other than local safety members (herein referred to as local miscellaneous members).

4. In addition to the classes of employees excluded from membership,by said Retirement Law, the following classes of employees shall not become members of said Retirement System:

a. ASSESSMENT APPEALS BOARD MEMBERS HIRED ON OR AFTER AUGUST 1,1968; AND

b. COMMUNITY ACTION PROGRAM PERSONNEL HIRED ON OR AFTER MARCH 6, 1969 WHOSE SALARIES ARE FUNDED BY

452, THE ECONOMIC OPPORTUNITY ACT OF 1964, AND AMENDMENT THERETO.

GRANTS OR CONTRIBUTIONS PURSUANT TO PUBLIC LAW 88-

5. Prior to January I , 1975, those members who were hired by Public Agency on a temporary and/or seasonal basis not to exceed 6 months were excluded from PERS membership by contract. Government Code Section 20336 superseded this contract provision by providing that any such temporary and/or seasonal employees are excluded from PERS membership subsequent to January 1, 1975. Legislation repealed and replaced said Section with Government Code Section 20305 effective July 1 , 1994.

6. The percentage of final compensation to be provided for each year -of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law subject to the reduction provided therein for Federal Social Security (2% at age 55 Modified and Full).

7. The percentage of final compensation to be provided for each year of credited prior and current service as a local fire member and local county peace officer shall be. determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full).

8. The percentage of final compensation to be provided for each year of credited prior and current service as a 'local sheriff member shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full).

9. - Public Agency elected and elects to be subject to the following optional provisions:

a.

b.

C.

d.

e.

f.

9-

h.

Section 20437 ("County Peace Officer" shall include constables, deputy constables, marshals and deputy marshals as described in Government Code Section 20437).

Section 21222.1 (One-Time 5% Increase - 1970). Legislation repealed said Section effective January I , 1980.

Section 21222.2 (One-Time 5% Increase - 1971). Legislation repealed said Section effective January 1 , 1980.

Section 21319 (One-Time 15% Increase for Local Miscellaneous Members Who Retired or Died Prior to July 1, 1971). Legislation repealed said Section effective January I, 2002.

Section 21571 (Basic Level of 1959 Survivor Benefits) for local fire members only.

Section 21573 (Third Level of 1959 Survivor Benefits) for county peace officers and local sheriff members only.

Section 20439 ("County Peace Officer" shall include county jail, detention or correctional facility employees as described in Government Code Section 20439).

Section 20438 ("County Peace Officer" shall include probation officers, deputy and assistant probation officers, juvenile hall employees, and persons employed as peace officers pursuant to Section 830.5 of the Penal Code as described in Government Code Section 20438).

I Section 21583 (Additional Opportunity to Elect 1959 Survivor Benefits) for county peace officers only.

j. Section 21024 (Military Service Credit as Public Service), Statutes of 1976.

k. Section 20042 (One-Year Final Compensation).

I . Section 21023.5 (Public Service Credit for Peace Corps, AmeriCorps VISTA, or AmeriCorps Service).

m. Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit) for local miscellaneous members only.

n. Section 20432 ("Local Sheriff" shall include any officer or employee of a sheriffs office as. described in Government Code Section 20432).

IO.

11.

12.

0. Section 20903 (Two Years Additional Service Credit) for local miscellaneous members and county peace officers only.

Pubic Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on December 16, 1976. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834.

Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System.

Public Agency shall also contribute to said Retirement System as follows:

a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 21573 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local sheriff members and county peace officers.

b. A reasonable amount, a s fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law.

a3

13.

c. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law.

Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law.

14. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made .by direct payments between the employee and the Board.

B. This amendment e on the day of 1

BOARD OF BOARD OF SUPERVISORS COUNTY OF SANTA CRUZ

BY BY PRESIDING OFFICER

AMENDMENT ER# 138 PERS-CON-702A (Rev. 8\02)

c "4 c

W

CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM A' Actuarial and Employer Services Division Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229-2709 (916) 326-3420

CERTIFICATION OF GOVERNING BODY'S ACTION

I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the

of the (governing body)

(public agency)

on (date)

PERS-CON-12 (rev. 1/96)

ClerWSecretary

Title

RESOLUTION OF INTENTION

TO APPROVE AN AMENDMENT TO CONTRACT

BETWEEN THE

BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM

AND THE

BOARD OF SUPERVISORS COUNTY OF SANTA CRUZ

WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System

. by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and

WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agency of a resolution giving notice of its intention to approve an amendment to said contract, which resolution shall contain a summary of the change proposed in said contract; and

WHEREAS, the following is a statement of the proposed change:

To provide Section 20903 (Two Years Additional Service Credit) for local miscellaneous members and county peace officers only.

NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby give notice of intention to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof.

By: Presiding Officer

Date adopted and approved

(Amendment) CON-302 (Rev. 4/96)

Title

CalPERS EXHIBIT

California Public Employees’ Retirement System

Between the Board of Administration

Calihmia Public ]Employees’ Retirement System and the

Board of Supervisors County of Santa Cmz

The Board of Administration, California Public Employees’ Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective January 1, 1947, and witnessed December 23,1946, and as amended effective February 1, 1958, August 22, 1964, December 24, 1966, August I, 1968, October 12, 1968; February 13, 1969, March 6, 1969, January 1, 1972, September 1, 1973, October 1, 1974, December 16, 1976, July 1, 1978, October IO, 1981, July 14, 1984, April 15, 1989, July 18, 1992, January I , 1994, May 17, 1997, April 13, 2000, November IO, 2001, March 30, 2002, February 8, 2003 and May IO, 2003 which provides for participation of Public Agency-in said System, Board and Public Agency hereby agree as follows:

Pursuant to Government Code sections 20460.1, 20469.1, subdivision (b), and 71624, this contract is hereby amended to add the Trial Court of Santa Cruz County, hereinafter referred to as Trial Court, as a contracting party. Trial Court shall participate in the Public Employees’ Retirement System from and after the implementation date of the Trial Court Employment Protection and Governance Act pursuant to the terms and conditions of this contract, making its employees members of said System subject to all provisions of the Public Employees’ Retirement Law except such as apply only on election of a contracting agency and are not provided for in this contract and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency.”

A. Paragraphs 1 through 14 are hereby stricken from said contract as executed effective May 10, 2003, and hereby replaced by the following paragraphs numbered 1 through 14 inclusive:

1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age" shall mean age 55 for local miscellaneous members and age 50 for local safety members.

2. Public Agency shall participate in the Public Employees' Retirement System from and after January 1 I 1947 making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions

:- thereof, apply only on the election of a contracting agency.

3. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement:

a. Local Fire Fighters (herein referred to as local safety members);

b. Local Sheriffs (included as local safety members);

c. County Peace Officers (included as local safety members);

d. Employees other than local safety members (herein referred to as local miscellaneous members).

4. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System:

a. ASSESSMENT APPEALS BOARD MEMBERS HIRED ON OR AFTER AUGUST 1,1968; AND

b. COMMUNITY ACTION PROGRAM PERSONNEL HIRED ON OR AFTER MARCH 6, 1969 WHOSE SALARIES ARE FUNDED BY

452, THE ECONOMIC OPPORTUNITY ACT OF 1964, AND AMENDMENT THERETO.

GRANTS OR CONTRIBUTIONS PURSUANT TO PUBLIC LAW 88-

5. Prior to January 1, 1975, those members who were hired by Public Agency on a temporary and/or seasonal basis not to exceed 6 months were excluded from PERS membership by contract. Government Code Section 20336 superseded this contract provision by providing that any such temporary and/or seasonal employees are excluded from PERS membership subsequent to January I, 1975. Legislation repealed and replaced said Section with Government Code Section 20305 effective July 1, 1994.

6.

7.

8.

9.

The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law subject to the reduction provided therein for Federal Social Security (2% at age 55 Modified and Full).

The percentage of final compensation to be provided for each year of credited prior and current service as a local fire member and local county peace officer shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full).

The percentage of final compensation to be provided for each year of credited prior and current service as a local sheriff member shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full).

Public Agency elected and elects to be subject to the following optional provisions:

a.

b.

C.

d.

e.

f.

g.

h.

Section 20437 ("County Peace Officer" shall include constables, deputy constables, marshals and deputy marshals as described in Government Code Section 20437).

Section 21222.1 (One-Time 5% Increase - 1970). Legislation repealed said Section effective January 1 , 1980.

Section 21222.2 (One-Time 5% Increase - 1971). Legislation repealed said Section effective January 1, 1980.

Section 21319 (One-Time 15Y0 Increase for Local Miscellaneous Members Who Retired or Died Prior to July 1, 1971). Legislation repealed said Section effective January 1, 2002.

Section 21571 (Basic Level of 1959 Survivor Benefits) for local fire members only.

Section 21573 (Third Level of 1959 Survivor Benefits) for county peace officers and local sheriff members only.

Section 20439 ("County Peace Officer" shall include county jail, detention or correctional facility employees as described in Government Code Section 20439).

Section 20438 ("County Peace Officer" shall include probation officers, deputy and assistant probation officers,. juvenile hall employees, and persons employed as peace officers pursuant to Section 830.5 of the Penal Code as described in Government Code Section 20438).

I Section 21 583 (Additional Opportunity to Elect 1959 Survivor Benefits) for county peace officers only.

j. Section 21024 (Military Service Credit as Public Service), Statutes of 1976.

k. Section 20042 (One-Year Final Compensation).

I . Section 21023.5 (Public Service Credit for Peace Corps, AmeriCorps VISTA, or AmeriCorps Service).

m. Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit) for local miscellaneous members only.

n. Section 20432 ("Local Sheriff' shall include any officer or employee of a sheriffs office as described in Government Code Section 20432).

0. Section 20903 (Two Years Additional Service Credit) for local miscellaneous members and county peace officers only.

I O . Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on December 16, 1976. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834.

11. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System.

12. Public Agency shall also contribute to said Retirement System as follows:

a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 21573 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local sheriff members and county peace officers.

b. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law.

c. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of : the periodic investigation and valuations required by law.

13. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law.

14. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by direct payments between the employee and the Board.

. \\ B. This amendment shall be q.€f.$he on the day of I

BOARD OF BOARD OF SUPERVISORS PUBLIC EMPLOYEE

BY BY PRESIDING OFFICER

EMPLOYER SERVICES DIVISION RETIREMENT SYSTEM

AMENDMENT ER# 138 PERS-CONJOZA (Rev. 8\02)