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REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />June 26, 2017 <br /> <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 between <br />the Board of Administration of the California Public Employees' Retirement System <br />(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 to <br />the contract between the City Council of Redwood City and the Board of Administration <br />of the California Public Employees' Retirement System to provide Section 20516(a) <br />"Employee Sharing Cost of Additional Benefits" for Tier 1 and Tier 2 members of the <br />Chief Officers Association (COA) bargaining unit; and <br />(3) Set the proposed ordinance for a second reading and adoption at the City Council <br />meeting of August 28, 2017 <br /> <br />BACKGROUND <br />In order the address the City’s escalating CalPERS pension costs, in recent years the <br />City has negotiated agreements with labor groups for increased employee pension <br />contributions. In February, 2017, the City Council approved a Memorandum of <br />Understanding between the City and the Chief Officers Association (COA) for October <br />1, 2016 – September 30, 2018, which continues a provision whereby employees make <br />additional contributions toward their pension benefits. Currently, COA members pay a <br />member contribution of 9% of salary, and also pay a portion of the City’s required <br />contributions, in the amount of 10% of salary, for a total contribution of 19% of their <br />salary toward pension benefits. Under the new MOU, the total contribution will be <br />reduced to 18% of salary in October 2017, in order to ensure equity with other labor <br />groups. This reduction was granted in lieu of an additional 1% cost-of-living salary <br />adjustment that had been provided to other groups. <br /> <br />In addition, the MOU provides for a change in the method for implementing the cost- <br />sharing agreement. In the past, cost-sharing had been implemented by MOU <br />agreement under Government Code 20516(f). The new agreement stipulates that a <br />6.4.A. - Page 1