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'