Two Noteworthy 2 March 2010 City Council Agenda Items

ABSTRACT: Two noteworthy 2 March 2010 City Council Agenda Items, namely Receive report on the election process and a Resolution urging the Governor and the State Legislature to approve CalPERS pension reform in 2010, are presented. Selected excerpts from the Agenda Item Summaries, Resolution and Memorandum are presented.

AGENDA
Regular Meeting
Tuesday, March 2, 2010
4:30 p.m., Open Session

Live and archived video streaming

City Hall
East side of Monte Verde Street between Ocean and Seventh Avenues

V. Announcements from Closed Session, from City Council Members and the City Administrator

C. Announcements from City Administrator
1. Receive report on the election process.

CITY OF CARMEL-BY-THE-SEA
City Council Agenda -- AMENDED
Regular Meeting
Tuesday, November 3, 2009
4:30 p.m., Open Session

X. Resolutions
D. Consideration of a Resolution authorizing the City Administrator to enter into a contract with Martin & Chapman, Co. to provide election services for the April 13, 2010 General Municipal Election in an amount not to exceed $23,000.

Council Member ROSE moved approval of a Resolution authorizing the City Administrator to enter into a contract with Martin & Chapman. Co. to provide election services for the April 13,2010 Gcneral Municipal Election in an amount not to exceed $23.000, seconded by Council Member HAZDOVAC and carried by the following roll call:

AYES: COUNCIL MEMBERS: HAZDOVAC; ROSE; SHARP; TALMAGE & McCLOUD
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
ABSTAIN: COUNCIL MEMBERS: NONE

Important Considerations: It is anticipated that the City will save a substantial amount by contracting with an outside consultant for conducting the April 2010 election. The Monterey County Office of Elections quoted the City costs from approximately $40,000 up $20 per voter to conduct the April 2010 election; at 2,381 registered voters, this totals $56,620 on the high end of the estimate.

VII. Consent Calendar
These matters include routine financial and administrative actions, which are usually approved by a single majority vote. Individual items may be removed from Consent by a member of the Council or the public for discussion and action.

F. Consideration of a Resolution urging the Governor and the State Legislature to approve CalPERS pension reform in 2010.

Description: The cost of retirement benefits is estimated to escalate at an alarming rate in the next two years. The future funding of public employee retirement benefits will divert funding away from essential City services and programs. Carmel-by-the-Sea is just one public agency among many statewide that will face this significant financial challenge.

The Monterey Bay Area Managers’ Group has developed “Guiding Principles” (see attached) that was presented to the Monterey County Mayors’ Group. Public agencies statewide also are in different stages of adopting guidelines/principles to deal with pension reform. It is for this reason that public agencies throughout California are participating by adopting resolutions urging pension reform in 2010.

Overall Cost:
City Funds: Undetermined, but significant.
Grant Funds: N/A

Staff Recommendation: Adopt the Resolution.

Important Considerations: The future cost of the CalPERS retirement benefit is not fiscally sustainable as structured today. A reform is needed to protect the abilities of local communities to provide basic public services and programs.

CITY COUNCIL
CITY OF CARMEL-BY-THE-SEA
RESOLUTION 2010-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA URGING THE GOVERNOR AND STATE LEGISLATURE TO APPROVE CALPERS PENSION REFORM IN 2010

WHEREAS, CalPERS is responsible for retirement, health, and related financial programs for more than 1.6 million public employees, retirees, and their families for more than 2,500 public agencies; and

WHEREAS, CalPERS’ rules and regulations are restrictive and prevent agencies and their employees from negotiating solutions other than the established retirement formulas; and

WHEREAS, CalPERS requires that any lower retirement formula be applied to new hires only; and

WHEREAS, CalPERS requires that an improved retirement formula must be applied to all past employee service time, which increases agency unfunded liability and the cost of retirement; and

WHEREAS, local governments throughout California are facing severe financial challenges due to the worst economic downturn since the Great Depression; and

WHEREAS, it is the fiscal responsibility of agencies and their employees to address these financial challenges together;

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Carmel-by-the-Sea that:

SECTION 1. CalPERS reform is necessary to approve new retirement formulas that encourage retirement at a later age.

SECTION 2. CalPERS reform is needed to authorize lower retirement formulas to be negotiated for all employees immediately.

SECTION 3. CalPERS reform is needed to authorize lower retirement formulas to be negotiated for future service time only.

SECTION 4. CalPERS reform is needed to place a cap on the maximum dollar amount that can be paid to any retiree after January 1, 2011.

BE IT FURTHER RESOLVED that local governments and their employees need additional choices and options from CalPERS. Basic pension reform to CalPERS must be a priority in 2010 in order to save jobs and preserve public services.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA on this 2nd day of March 2010 by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:

MEMORANDUM
Date: December 17, 2009
To: Monterey Bay Area Managers’ Group
From: Ray Corpuz, City Manager
Subject: Revised Pension Reform

Guiding Principles (Selected excerpts, as follows):
Provide fiscal policies that preserve local government’s ability to meet community needs while attracting competent and motivated employees to public service.

Provide adequate retirement benefits to attract and retain public employees.

Current retirement benefit formulas are not fiscally sustainable. The costs are rising beyond our ability to fund them and diverting limited resources from direct service delivery to our communities. In addition, current pension benefits exceed what private sector employees receive and what is reasonably needed to attract public employees.

...cities support implementation of a reduced and sustainable level of retirement benefits for all new employees of cities in the County of Monterey.

Every city is committed to moving toward a two-tier system for all new contracts.

Any new system or tier should be fair to employees, sustainable for taxpayers and employers, and based on objective actuarial data.

Guiding Principles supported by the Monterey Bay Area Managers’ Group and the Monterey County Mayors’ Association.

ADDENDUM:
Calpers Confronts Cuts to Return Rate
Trimming 7.75% Could Add to California's Woes; BlackRock to Board—'You'll Be Lucky to Get 6%'
GINA CHON, WSJ, MARCH 1, 2010