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REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />August 28, 2017 <br /> <br />SUBJECT <br />Adoption of ordinance Authorizing an Amendment to the Contract Between the Board of <br />Administration of the California Public Employees' Retirement System (CalPERS) and <br />the City Council of the City of Redwood City and Adoption of resolution to tax-defer <br />employee-paid CalPERS contributions under Internal Revenue Code (IRC) 414(h)(2) <br /> <br />RECOMMENDATION <br />1. Waive the second reading and adopt the ordinance to amend the contract <br />between the City Council of the City of Redwood City and the Board of <br />Administration 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 Chief Officers Association (COA) bargaining unit; and <br />2. Adopt a resolution to tax-defer employee-paid CalPERS contributions under <br />Internal Revenue Code (IRC) 414(h)(2) <br /> <br />BACKGROUND <br />At the regular City Council meeting on June 26, 2017, City Council approved <br />Resolution #15602, Resolution of Intention to Approve an Amendment to Contract <br />Between the Board of Administration of the California Public Employees' Retirement <br />System and the City Council of the City of Redwood City. <br /> <br />This contract amendment will increase the employee member contribution from 9% of <br />salary to 12% of salary for “classic” CalPERS members (Pension tiers 1 and 2) in the <br />Chief Officers Association (COA), consistent with the terms of the current Memorandum <br />of Understanding (MOU). Following Council approval of the resolution of intention, staff <br />administered an employee election from June 27, 2017 to July 18, 2017, pursuant to <br />CalPERS requirements. The results of the employee election secured approval for the <br />contract amendment. <br /> <br />In addition, a resolution implementing tax deferment of CalPERS member <br />contributions under Internal Revenue Code 414(h)(2) was adopted by Council on <br />August 14, 1990. An updated resolution was adopted on August 17, 2011 upon the <br />implementation of pension cost-sharing agreements with all City labor groups, in <br />order to include the tax-deferred status of employee-paid City contributions. In recent <br />years, the City has negotiated changes in cost-sharing agreements, including <br />contract amendments, to increase the employee contribution to CalPERS. An <br />8.A. - Page 1