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HomeMy WebLinkAboutCC Resolution 13465 (Remove Disincentive for City Retirees)RESOLUTION 13465 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING A BENEFIT TO REMOVE THE DISINCENTIVE FOR CITY RETIREES TO SERVE AS AN ELECTED CITY OFFICIAL WHEREAS, since the City of San Rafael has adopted multiple pension tiers and multiple categories for retiree health care coverage, the level of benefits to which a City employee or elected official is entitled upon retirement is now determined in part by the employee or official's hire date as well as by his or her retirement date; and WHEREAS, the City participates in the Marin County Employees' Retirement Association ("MCERA"), a retirement system formed under the County Employees' Retirement Law of 1937 ("the '37 Act"); and WHEREAS, the '37 Act generally prohibits retirees from returning to full-time employment with a participating agency while simultaneously receiving retirement benefits; and WHEREAS, due to this prohibition and applicable City compensation rules, the unintended consequence of the City's new retirement tiers is that some City retirees returning to City service as an elected or appointed Mayor or City Council member --deemed by the City to be full-time employment positions --must agree not to participate actively in MCERA while receiving compensation for serving in office, or must give up their right to compensation and serve in office strictly as an unpaid volunteer, in order to avoid a significant diminution and/or loss of their vested pension and/or retiree health care benefits; and WHEREAS, if a returning retiree does choose not to participate actively in MCERA so as to merely suspend, but not lose, his or her vested pension and retiree health care benefits, then that individual also cannot receive employee health care benefits from the City while in office, since the State Public Employees' Medical and Health Care Act ("PEMHCK), which governs the City's provision of health care benefits to its employees, also prohibits the City from providing employee health care coverage to a City employee or official who is not participating in an employer-provided retirement plan; and WHEREAS, the combined effect of the foregoing laws and rules is to penalize certain retirees substantially for their willingness to return to serve the City as elected or appointed Mayor or City Council member; and WHEREAS, this disincentive can be mitigated where a retiree returning to serve as Mayor or City Council member chooses not to participate actively in MCERA, as PEMHCA would nevertheless allow the City to provide current employee health care benefits to such person while in office if the City were to contribute even a minimal amount towards another qualified retirement program for that individual, such as the PARS retirement program; and WHEREAS, the '37 Act restriction on returning to service is not imposed upon County retirees who are subsequently elected to County office, who may continue to receive retirement benefits while also receiving compensation for current service, pursuant to an express exception in the '37 Act; nor is this restriction imposed on retirees in the California Public Employees' Retirement System ("CalPERS"), in which most California cities participate; and WHEREAS, there are approximately 700 individuals, both currently retired City employees/elected officials and current City employees/elected officials who will be retiring in the future, who could be impacted adversely if they were to be elected or appointed to City office after retirement from the City; and WHEREAS, the City Council finds that there should not be a financial disincentive to serving as an elected or appointed Mayor or City Council member in San Rafael, and that the requirements of the '37 Act and PEMHCA, in connection with the City's changes in retirement benefits, may dissuade good candidates in the future; and WHEREAS, the City already provides to its management and mid -management employees an additional retirement benefit, namely, a City contribution to the PARS retirement plan in a sum equal to three percent (3%) of salary; and WHEREAS, granting this same relatively small benefit to the offices of Mayor and City Council member, with an estimated total annual cost to the City of $927.00, would allow a retiree returning to service as Mayor or City Council member to suspend his or her retirement and retiree health care benefits without losing them entirely, while still receiving the standard compensation and current health care coverage the City provides to these offices; and therefore would negate the unfair and disparate impacts otherwise incurred by retirees returning to serve in these offices and eliminate the financial disincentive to serve the City in this capacity; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael hereby grants to the offices of Mayor and City Council member, effective January 1, 2012, an additional retirement benefit, namely, a City contribution to the PARS retirement plan in a sum equal to three percent (3%) of salary. 1, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Monday, the 19th of November 2012, by the following vote, to wit: AYES: Councilmembers: Connolly, Heller, Levine, McCullough & Mayor Phillips NOES: Councilmembers: None ABSENT: Councilmembers: None +TVEsther C. Beirne, City Clerk'