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<br /> <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />February 22, 2016 <br />SUBJECT <br />Resolution and Ordinance to amend contract between the Board of Administration of <br />the California Public Employees' Retirement System (CalPERS) and the City of <br />Redwood City. <br /> <br />RECOMMENDATION <br />(1) Adopt a Resolution of Intention to approve an amendment to the contract <br />between the Board of Administration of the California Public Employees' <br />Retirement System (CalPERS) and the City Council of the City of Redwood City; <br />(2) Introduce and waive the first reading of an ordinance authorizing an amendment <br />to the contract between the City Council of Redwood City and the Board of <br />Adminstration of the California Public Employees' Retirement System to provide <br />Section 20516(a) "Employee Sharing Cost of Additional Benefits" for Tier 1 and <br />Tier 2 members of the International Association of Fire Fighters (I.A.F.F.) Local <br />2400 bargaining unit; and <br />(3) Set the proposed ordinance for a second reading and adoption at the City <br />Council meeting of March 28, 2016 <br /> <br />BACKGROUND <br />On February 9, 2015, the City Council approved a successor Memorandum of <br />Understanding (MOU) between the City of Redwood City and the International <br />Association of Fire Fighters (IAFF) Local 2400 with term dates of January 1, 2014 <br />through December 31, 2017. Consistent with other employee groups, the new MOU <br />increased the employee contributions to pension in order to address rising retirement <br />costs. <br /> <br />The agreement with IAFF raises the total employee retirement benefit contributions from <br />9% to 16% of salary incrementally over the course of four years. As a part of this <br />agreement, all employees (both Tier 3 “PEPRA” employees and Tier 1 and 2 “Classic” <br />employees) are required to contribute 4% toward the City’s required contribution to <br />CalPERS through Government Code Section 20516(f). This 4% cost sharing <br />arrangement is accomplished outside the City’s CalPERS contract. In addition, the <br />IAFF MOU requires the City to amend its contract with CalPERS to require additional <br />cost sharing by Tier 1 (3% at 50) and Tier 2 (3% at 55) retirement plan members. The <br />contract amendment will require these “Classic” members to contribute an additional 2% <br />of compensation toward the City’s required CalPERS contribution. The resolution and <br />ordinance are required to amend the City’s contract with CalPERS to implement the <br />cost sharing arrangement for Classic employees as required by the IAFF MOU. <br />6.4.B. - Page 1