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HomeMy WebLinkAboutAmendment to the CalPers Contract to provide the pre-retirem Pt E C F 14 E D -9 All 0: 10 V Council/Agency Meeting Held: ///7-/06 C"i Deferred/Continued to:&Otg� h U T_1'-]G'j C-1 ,*Approved 13 Conditionally A1PPPfTV& 13 Denied Cil!tsigignat& Council Meeting Date: 1/17=06 Department ID Number ADCS-06-03 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLX MAYOR AND CITY COUKIL MEMBERS I -e �. (�kV SUBMITTED BY: PENELO)jE!��CULUET(Hf-_GRAFT, ITY MINISTRATOR PREPARED BY: ROBERT HALL, DEPUTY CITY ADMINISTRATOR SUBJECT: AMENDMENT TO THE CALPERS CONTRACT TO PROVIDE THE PRE-RETIREMENT OPTIONAL SETTLEMENT 2 DEATH BENEFIT FOR LOCAL SAFETY MEMBERS lFstatement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The current Memoranda of Understanding (MOU) between the City of Huntington Beach and the Huntington Beach Fire Association (HBFA), Huntington Beach Fire Management Association (FMA), Marine Safety Officer's Association (MSOA), Huntington Beach Police Management Association (PMA) and the Huntington Beach Police Officers' Association (HBPOA), each include a provision to implement a contract amendment with the California Public Employees' Retirement System (CaIPERS) for the Pre-Retirement Optional Settlement 2 Death Benefit. CalPERS law requires a Resolution of Intention, and a first and final reading of an Ordinance in order to implement these contract amendments. Funding- Source: All funding remains included in the Fiscal Year 2005/06 budget and will be included in the Fiscal Year 2006/07 budget for HBFA. According to costing estimates provided during the appropriate negotiation periods, the Pre-Retirement Optional Settlement 2 Death Benefit for safety members will cost approximately $50,569 for the contracts' terms. Recommended Action: Motion to: 1. Adopt Resolution of Intent No.,�,�-� a Resolution of intent between the Board Of Administration of the California Public Employees' Retirement System and the City 0 REQUEST FOR ACTION 0 MEETING DATE: 1/17/2006 DEPARTMENT ID NUMBER: ADCS-06-03 Council of the City of Huntington Beach. 2. Introduce for adoption Ordinance No. �i.?Jr to amend the Public Employees' Retirement System contract to provide Section 21548 Pre-Retirement Optional Settlement 2 Death Benefit for Safety Members and return to City Council for second reading and adoption on February 6, 2006. 3. Authorize the City Clerk to execute the Certification of Governing Body's Action and the Certification of Compliance with Government Code Section 7507. 4. Authorize and approve Mayor to execute CalPERS Resolution of Intention (Form #CON- 302). Alternative Action(s): None. The current MOU's for HBFA, FMA, MSOA, PMA and HBPOA include a provision for implementation of the Pre-Retirement Optional Settlement 2 Death Benefit as soon as practicable. Analysis: The Pre-Retirement Optional Settlement 2 Death Benefit offers the beneficiary of a deceased member, who was eligible to retire for service at the time of death, (i.e., age 50 or over and vested in CalPERS a monthly allowance equal to the amount the member would have received if the member had retired from service on the date of death and selected Option 2, the highest monthly allowance a member can leave a beneficiary. The 2005/06 employer rate for the current safety plan is 29.957%. According to the attached cost analysis from CalPERS, the post-amendment employer rate will be 30.140% (an increase of 0.183%) through June 30, 2006. Government Code Section 7507 requires that the future annual costs of the proposed contract amendment be made public at a City Council meeting at least two weeks prior to the adoption of the final ordinance. These costs are as follows: 1. Change in the Present Value of Benefits (PVB) $553,300 2. Change in the Accrued Liability $377,923 3. Change in the Total Employer Rate 0.1830/6 As an update to the cost analysis provided for this benefit, the annual valuation for the City's safety plan dated October 14, 2005 has been received. This valuation includes the Pre- Retirement Optional Settlement 2 Death Benefit and provides that the employer rate will decrease to 28.556% effective July 1, 2006. The annual valuations are issued at the end of every year and are based on the prior fiscal year (July 1 St to June 30t"). As of each June 30, the CalPERS actuary calculates the "desirable" level of plan assets as of that point in time by P:\RCA\RCA 2006\RCA Opt 2 Safety 1-17-06.doc _ _7_ 116)2M 1:50 PM REQUEST FOR ACTION MEETING DATE: 1/17/2006 DEPARTMENT ID NUMBER: ADCS-06-03 subtracting the present value of scheduled future employee contributions and future employer normal costs from the present value of benefits. The resulting "desirable" level of assets is called the accrued liability. In addition to plan amendments, other events such as investment or demographic gains or losses can change the plan's condition from year to year. Environmental Status: Not applicable Attachment(s): NumberCity Clerk's Page . Description 1. Resolution of Intent No.o?o06' Exhibit A—Amendment to Contract 2. Ordinance # 31a5' (Exhibit A included in Attachment#1) 3. CalPERS Contract Amendment Cost Analysis 4. Certification of Governing Body's Action 5. Certification of Compliance with Government Code 7507 6. 1 CalPERS Resolution of Intention Form #CON-302 P:\RCA\RCA 2006\RCA Opt 2 Safety 1-17-06.doc 1.3- 1 W0061'50 PM ATTACHMENT # 1 RESOLUTION NO. 2006-2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH: STATING THE CITY COUNCIL'S INTENTION TO APPROVE AN AMENDMENT TO THE EXISTING CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AND PROVIDING NOTICE THAT ON February 6 2006THE CITY COUNCIL WILL CONSIDER ADOPTION OF ORDINANCE NO. 3725 APPROVING SAID CONTRACT AMENDMENT; THE SUBJECT MATTER BEING THE PROVISION OF SECTION 21548 PRE-RETIREMENT OPTIONAL SETTLEMENT 2 DEATH BENEFIT FOR PUBLIC SAFETY MEMBERS WHEREAS, the City Council of the City of Huntington Beach, effective October 1, 1945, entered into a contract with the Board of Administration, California Public Employees' Retirement System ("CALPERS"); which contract has been amended a number of times since October 1, 1945; and WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and WHEREAS, one of the steps in the procedure to amend the existing contract between the City of Huntington Beach and CALPERS is by the City Council's adoption of a resolution giving notice of its intention to approve an amendment to said contract; which resolution shall contain a summary of the proposed change; and WHEREAS,the following is a statement of the proposed change: To provide Government Code Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit) for Public Safety Members NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach as follows: SECTION 1. The City Council of the City of Huntington Beach hereby gives notice that on February 6, 2006, it will consider adoption of Ordinance No. 3725 ; which ordinance will approve an amendment to the existing contract between the City Council of the City of Huntington Beach and CALPERS, concerning the above-described retirement benefits to public safety members. 05reso/PERS death 2 1 0 Resolutila No. 2006-2 SECTION 2. A copy of the proposed amendment to the CALPERS /City Council of the City of Huntington Beach contract is attached hereto as Exhibit "A" and incorporated herein by this reference. SECTION 3. A copy of the proposed contract amendment is also attached as an exhibit to Ordinance No. 37 25 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 17thday of January ,200-6 Mayor REVIEWED AND APPROVED: APPROVED AS TO FORM: Vty Adm istrator aCiy4Atto�mey INI D A D APPROVED: Deputy City Administrator 05reso/PERS death 2 2 Y Exhibi " Reso. *26-2 CaIPERS California Public Employees' Retirement System AMENDMENT TO CONTRACT Between the Board of Administration California Public Employees' Retirement System and the City Council City of Huntington Beach The Board of Administration, California Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective October 1, 1945, and witnessed October 27, 2005, and as amended effective January 1, 1950, March 1, 1952, November 1, 1957, March 1, 1958, October 1, 1961, January 1, 1971, January 12, 1974, April 18, 1975, February 21, 1976, August 7, 1976, September 17, 1977, September 30, 1978, June 6, 1981, March 18, 1982, February 24, 1983, December 4, 1986, March 18, 1988, November 4, 1999, April 20, 2000, June 30, 2001, October 5, 2001, February 6, 2003 and May 8, 2003 A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective May 8, 2003, and hereby replaced by the following paragraphs numbered 1 through 12 inclusive: 1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age" shall mean age 55 for local miscellaneous members and age 50 for local safety members. Exhibit Reso. 2006� 2. Public Agency shall participate in the Public Employees' Retirement System from and after October 1, 1945 making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency. 3. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement: a. Local Fire Fighters (herein referred to as local safety members); b. Local Police Officers (herein referred to as local safety members); 1. Local Police Officers shall include individuals defined by Section 20020 of the Government code prior to its amendment at the 1975-76 Regular Legislative Session, effective January 1, 1976, employed by Public Agency prior to such amendment. C. Ocean Beach Lifeguards (included as local safety members); d. Employees other than local safety members (herein referred to as local miscellaneous members). 4. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System: a. CROSSING GUARDS, EMPLOYEES IN STUDENT DESIGNATED POSITIONS AND SENIOR OUTREACH ASSISTANTS HIRERD ON AND AFTER MARCH 18, 1982; AND b. RESERVE FIREFIGHTERS HIRED ON AND AFTER DECEMBER 4, 1986. 5. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full). Exhibit "An Reso. 2006. � 7. Public Agency elected and elects to be subject to the following optional provisions: a. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local safety members and local miscellaneous members. b. Section 20421 ("Local Safety Member" shall include ocean beach lifeguards of a city as described in Government Code Section 20421). C. Sections 21624, 21626 and 21628 (Post-Retirement Survivor Allowance) for local fire members only. d. Section 20020.1 ("Local Police Officer" shall include employees of a police department who were employed to perform identification or communication duties on August 4, 1972 and who elected to be local safety members within six months of April 18, 1975). Legislation repealed said Section effective January 1, 1985. e. Section 21024 (Military Service Credit as Public Service), Statutes of 1974. f. Section 20042 (One-Year Final Compensation). g. Section 20903 (Two Years Additional Service Credit). h. Section 21037 (Cancellation of Payment for Optional Service Credit Upon Retirement for Industrial Disability) for local safety members only. i. Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit). 8. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on April 18, 1975. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 9. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System. s' Exhibit Reso. 2006-2 10. Public Agency shall also contribute to said Retirement System as follows` a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 21574 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local miscellaneous members and local safety members. b. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law. C. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law. 11. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law. 12. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by direct payments between the employee and the Board. B. This amendment shall be effective on the 11 th day of Marr h 2006_. BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF HUNTINGTON BEACH c BY l BYt LO I G TLAND, ACTING CHIEF PRESIDING OFFICER AC ARI & EMPLOYER SERVICES BRANCH PUBLIC MPLOYEES' RETIREMENT SYSTEM Witness Date Clerk f' AMENDMENT ER#0097 PERS-CON-702A(Rev.8\05) i • Res. No. 2006-2 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) 1, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an regular meeting thereof held on the 17th day of January, 2006 by the following vote: AYES: Bohr, Green, Coerper, Sullivan, Hardy, Hansen, Cook NOES: None ABSENT: None ABSTAIN: None Ci Clerk and ex-officio Jerk of the City Council of the City of Huntington Beach, California ATTAC H M E NT #2 0 • ORDINANCE NO. 3 7 2 5 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH REGARDING THE PROVISION OF PRE-RETIREMENT OPTIONAL SETTLEMENT 2 DEATH BENEFITS FOR PUBLIC SAFETY MEMBERS The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. That an amendment to the contract between the Board of Administration California Public Employees' Retirement System and the City Council of the City of Huntington Beach is hereby authorized,a copy of said amendment being attached hereto, marked as Exhibit A, and by such reference made a part hereof as though herein set out in full. SECTION 2. Said amendment pertains to the provision of Government Code Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefits) for public safety members. SECTION 3. The Mayor is hereby authorized, empowered, and directed to execute said amendment for and on behalf of the City of Huntington Beach. SECTION 4. This ordinance shall take effect 30 days after the date of its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 6th day of February ,200.6 ATTEST: QKn)- A4v/4� /�,�i'd+ate Cit Jerk Mayor REVIEWED AND APPROVED: APPROVED AS TO FORM: ity Admiblistrator r ity Attorne 1 Y l IN ED A D APPROVED: Deputy City Administrator 05or"ERS death 2 1 r Exhibit Ord. No. 3725 CAPERS California Public Employees' Retirement System AMENDMENT TO CONTRACT Between the Board of Administration California Public Employees' Retirement System and the City Council City of Huntington Beach The Board of Administration, California Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective October 1, 1945, and witnessed October 27, 2005, and as amended effective January 1, 1950, March 1, 1952, November 1, 1957, March 1, 1958, October 1, 1961, January 1, 1971, January 12, 1974, April 18, 1975, February 21, 1976, August 7, 1976, September 17, 1977, September 30, 1978, June 6, 1981, March 18, 1982, February 24, 1983, December 4, 1986, March 18, 1988, November 4, 1999, April 20, 2000, June 30, 2001, October 5, 2001, February 6, 2003 and May 8, 2003 A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective May 8, 2003, and hereby replaced by the following paragraphs numbered 1 through 12 inclusive: 1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age" shall mean age 55 for local miscellaneous members and age 50 for local safety members. Exhibit "A" Ord. No. 3725 2. Public Agency shall participate in the Public Employees' Retirement System from and after October 1, 1945 making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency. 3. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement: a. Local Fire Fighters (herein referred to as local safety members); b. Local Police Officers (herein referred to as local safety members); 1. Local Police Officers shall include individuals defined by Section 20020 of the Government code prior to its amendment at the 1975-76 Regular Legislative Session, effective January 1, 1976, employed by Public Agency prior to such amendment. C. Ocean Beach Lifeguards(included as local safety members); d. Employees other than local safety members (herein referred to as local miscellaneous members). 4. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System: a. CROSSING GUARDS, EMPLOYEES IN STUDENT DESIGNATED POSITIONS AND SENIOR OUTREACH ASSISTANTS HIRERD ON AND AFTER MARCH 18, 1982; AND b. RESERVE FIREFIGHTERS HIRED ON AND AFTER DECEMBER 4, 1986. 5. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full). Exhibit "A"' • Ord. No. 370 7. Public Agency elected and elects to be subject to the following optional provisions: a. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local safety members and local miscellaneous members. b. Section 20421 ("Local Safety Member" shall include ocean beach lifeguards of a city as described in Government Code Section 20421). C. Sections 21624, 21626 and 21628 (Post-Retirement Survivor Allowance)for local fire members only. d. Section 20020.1 ("Local Police Officer" shall include employees of a police department who were employed to perform identification or communication duties on August 4, 1972 and who elected to be local safety members within six months of April 18, 1975). Legislation repealed said Section effective January 1, 1985. e. Section 21024 (Military Service Credit as Public Service), Statutes of 1974. f. Section 20042 (One-Year Final Compensation). g. Section 20903 (Two Years Additional Service Credit). h. Section 21037 (Cancellation of Payment for Optional Service Credit Upon Retirement for Industrial Disability) for local safety members only. i. Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit). 8. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on April 18, 1975. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 9. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System. s' . . .Exhibit "A"• Ord. No. 3725 10. Public Agency shall also contribute to said Retirement System as follows: a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 21574 of said Retirement Law. (Subject to annual change.) In addition, all assets and liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of all local miscellaneous members and local safety members. b. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law. C. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law. 11. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law. 12. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by direct payments between the employee and the Board. B. This amendment shall be effective on the 11 th day of March . _- BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF HUNTINGTON BEACH Q ' c BY l BYA.-C wZ- LO I G TLAND, A T1NG CHIEF PRESIDING OFFICER AC ARI & EMPLOYER SERVICES BRANCH PUBLICEMPLOYEES' RETIREMENT SYSTEM l'01, do� Witness Date A P•�-•�n t�. G� Clerk f AMENDMENT ER#0097 PERS-CON-702A(Rev.8\05) Ord. No. 3725 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I,JOAN L. FLYNN, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City,do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven;that the foregoing ordinance was read to said City Council at a regular meeting thereof held on the 17th day of January,2006,and was again read to said City Council at a regular meeting thereof held on the 6th day of February,2006, and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council. AYES: Bohr, Green, Coerper, Sullivan, Hardy, Hansen, Cook NOES: None ABSENT: None ABSTAIN: None I,Joan L.Flynn,CITY CLERK of the City of Huntington Beach and ex-officio Clerk of the City Council,do hereby certify that a synopsis of this ordinance has been published in the Huntington Beach Fountain Valley Independent on February 16,2006. In accordance with the City Charter of said City Joan L. Flynn,City Clerk Ci lerk and ex-officio Qqrk Deputy City clerk of the City Council of the City of Huntington Beach,California ATTACHMENT #3 CT AMENDMENT COST ANALYSIS-VALUATION BASIS:JUNE 30,2003 PLAN FOR CITY OF HUNTINGTON BEACH _MPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit Actuarial Cost Estimates in General What will this amendment cost? Unfortunately,there is no simple answer.There are two major reasons for the complexity of the answer: • First,all actuarial calculations,including the ones in this cost estimate are based on a lot of assumptions about the future—demographic assumptions about the percentage of your employees that will terminate, die,become disabled,and retire in each future year,and economic assumptions about what salary increases for each active employee and the most important assumption: what the assets at CalPERS will earn for each year into the future until the last dollar is paid to current members of your plan. While CalPERS has set these assumptions as our best estimate of the real future of your plan,it must be understood that these assumptions are very long term predictors and will surely not be realized each year as we go forward. For example,the asset earnings for the past 15 years at CAPERS have ranged from -7.2%to 20.5%,yet the 15 year compound return has been 9.4%,well above our assumption. Second,the very nature of actuarial funding produces the answer to the question of amendment cost as the-sum of two separate pieces: 1. The increase in Normal Cost(i.e.,the increase in future annual premiums in the absence of surplus or unfunded liability)expressed as a percentage of total active payroll,and 2. The increase in Past Service Cost(i.e.,Accrued Liability—representing the current value of the increased benefit for all past service of current members)which is expressed as a lump sum dollar amount. The cost is the sum of a percent of future pay and a lump sum dollar amount(the sum of an apple and an orange if you will). To communicate the total cost,either the increase in Normal Cost(i.e.,future percent of payroll)must be converted to a lump sum dollar amount(in which case the result is called the increase in the present value of benefits), or the Past Service Cost(i.e.,the lump sum)must be converted to a percent of payroll(in which case the result is the increase in the employer's rate).Converting the Past Service Cost lump sum to a percent of payroll requires a specific amortization period. So,the new employer rate can be computed in many different ways depending on how long one will take to pay for it. And don't forget the first bullet point above;all of these results depends on all of the assumptions being exactly realized. Rate Volatility As is stated above,the cost estimates supplied in this communication are based on a number of assumptions about very long term demographic and economic behavior. Even if these assumptions are exactly realized(terminations, deaths,disabilities, retirements, salary growth,and investment return)there will be differences on a year to year basis.This year to year difference between actual experience and the assumptions are called gains and losses and serve to raise or lower the employer's rates from year to year.So,the rates will bounce around,especially due to the ups and downs of investment returns. The volatility in annual employer rates may be affected by this amendment.The reason is that higher benefits and earlier retirement ages require the accumulation of more assets per member earlier in their career. Rate volatility can be measured by the ratio of plan assets to active member payroll. Higher asset to payroll ratios produce more volatile employer rates.To see this,consider two plans,one with assets that are 4 times active member payroll,and the other with assets that are 8 times active.payroll. In a given year,see what happens when assets rise or fall 10°Jo above or below the actuarial assumption. For the plan with a ratio of 4,this 10 percent gain or loss in assets is the same in dollars as 40%of payroll and for the plan with a ratio of 8; this is equivalent to 80%of payroll. If this gain or loss is spread over 20 years(and we oversimplify by ignoring interest on the gain or loss),then the first plan's rate changes by 2%of pay while the second plan's rate changes by 4%of pay. November 23,2004 Page 1 of 8 CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:JUNE 30,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit When a plan is amended,liability changes but assets do not. In addition,the desired state is to be 100%funded (i.e.,to bring assets to equal accrued liability). Therefore,we disclose the ratio of accrued liability to payroll rather than assets to payroll as a measure of the plan's potential future rate volatility. The higher the ratio,the more volatile the future rate may be.The table below contains these measures of potential future rate volatility. It should also be noted that these ratios tend to stabilize as the plan matures. That is,all plans with no past service start their lives with zero assets and zero accrued liability—and so asset to payroll ratio and liability to payroll ratio of zero.However,as time goes by these ratios begin to rise and then tend to stabilize at some constant amount as the plan matures. Higher benefit levels and earlier expected retirements produce higher constant future ratios. For example;our miscellaneous plan pools have ratios that range.from 2.5 for the"29/0 at 60"pool to a ratio of 4.5 for the"3%at 60"pool. For safety pools,the ratios range from 3 for the"2%at 55"pool to a ratio of 9 for the"3%at 50"pool. Current Plan Current Plan Before Amendment After Amendment Accrued Liability $ 320,670,227 $ 321,048,150 Payroll 28,919,302 28,919,302 Volatility Index 11.09% 11.10% Present Value of Projected Benefits The table below shows the change in the total present value of benefits for the proposed plan amendment. The present value of benefits represents the total dollars needed today to fund all future benefits for currentmembers of the plan(i.e.,without regard to future employees). The difference between this amount and current plan assets must be paid by future employee and employer contributions. As such,the change in the present value of benefits due to the plan amendment represents the"cost"of the plan amendment. However,for plans with excess assets some or all of this"cost"may already be covered by current excess assets. As of June 30,2003 Current Plan Post-Amendment Total Assets at Market Value(MVA) $ 245,943,582 $ 245,943,582 Actuarial Value of Assets(AVA) 270,537,940 270,537,940 AVA I MVA 110.0% 110.010/0 Present Value of Projected Benefits(PVB) $ 385,343,113 $ 385,896,413 Actuarial Value of Assets(AVA) 270,537,940 270,537,940 Present Value of Future Employer and Employee Contributions(PVB—AVA) $ 114,805,173 $ 115,358,473 Change to PVB 553,300 Accrued Liability It is not required,nor necessarily desirable,to have accumulated assets sufficient to cover the total present value of benefits until every member has left employment. Instead,the actuarial funding process calculates a regular contribution schedule of employee contributions and employer contributions(called normal costs)which are designed to accumulate with interest to equal the total present value of benefits by the time every member has left employment. As of each June 30,the actuary calculates the"desirable"level of plan assets as of that point in time by subtracting the present value of scheduled future employee contributions and future employer normal costs from the total present value of benefits. The resulting"desirable"level of assets is called the accrued lra6i/ily November 23,2.004 Page 2 of 8 0 i CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:TUNE 36,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit A plan with assets exactly equal to the plan's accrued liability is simply"on schedule"in funding that plan,and only future employee contributions and future employer normal costs are needed. A plan with assets below the accrued liability is"behind schedule",or is said to have an unfunded liability,and must temporarily increase contributions to get back on schedule. A plan with assets in excess of the plan's accrued liability is"ahead of schedule",or is said to have excess assets and can temporarily reduce future contributions. A plan with assets(AVA)in excess of the total present value of benefits is called super-funded,and neither future employer nor employee contributions are required. Of course,events such as plan amendments and investment or demographic gains or losses can change a plan's condition from year to year. For example,a plan amendment could cause a plan to move all the way from being super-funded to being in an unfunded position. The changes in your plan's accrued liability,unfunded accrued liability,and the funded ratio as of June 30,2003 due to the plan amendment are shown in the table below. As of June 30,2003 Current Plan Post-Amendment Entry Age Normal Accrued Liability(AL) $ 320,670,227 $ 321,048,150 Actuarial Value of Assets(AVA) 270,537,940 270,537,940 Unfunded Liability/(Excess Assets)(UAL=AL-AVA) $ 50,132,287 $ 50,510,210 Funded Ratio(AVA I AL) 84.4% 84.3% Change to AL 377,923 Total Employer Contribution Rate While the tables above.give the changes in the accrued.liability and funded status of the plan due to the amendment, there remains the question of what will happen to the employer contribution rate because of the change in plan provisions. CalPERS policy is to implement rate changes due to plan amendments immediately on the effective date of the change in plan benefits. This change is displayed as the"Change to Total Employer Rate"on the following page. If the contract amendment effective date is on or before June 30,2005,the change in the employer contribution rate should be added to the employer's current rate. In general, the policy also provides that the change in unfunded liability due to the plan amendment will be separately amortized over a period of 20 years from the effective date of the amendment and all other components of the plan's unfunded liability/excess assets will continue to be amortized separately. However,your actuary may choose to apply different rules to plans with a current employer contribution rate of zero. The pre-amendment excess assets in these plans were sufficient to cover the employer's normal cost for one or more years into the future. A plan amendment will use up some or all of the pre-amendment excess assets. In order to maintain our goal of providing rates that are relatively stable,while talking into account known or expected future events,your actuary may decide to spread any remaining excess assets over a single number of years. This is known as a"fresh start"and will generally be for a period not less than 15 years,and in no case less than 5 years. You may call your actuary to discuss further alterative financing options. If the amendment uses up all excess assets and creates an unfunded liability(i.e.,from being ahead of schedule to behind schedule),the total post- amendment unfunded liability may be amortized over 20 years. In no case may the annual contribution with regard to a positive unfunded liability be less than the amount which would be required to amortize that unfunded liability,as a level percent of pay,over 30 years. The table on the following page shows the change in your plan's employer contribution rate due to the plan amendment for fiscal 2005-2006. November 23, 2004 Page 3 of 8 CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:JUNE 30,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit As of June 30,2003 Current Plan Post-Amendment 2005-2006 Employer Rate Payment for Normal Cost 16.234% 16.302% Payment on Amortization Bases 13.723% 13,838% Total Employer Rate 29.957% 30.140% Change to Nonnal Cost 0.068% Change to Total Employer Rate 0.183% - Current Amortization Base' Multiple Base Amendment Amortization Base -Fresh Start 2 N/A -Multiple Base 3 20-year 2005-2006 Employee Rate Total Employee Rate 9.000% 9.00010/0 Change to Total Employee Rate 0.000% 2006-2007 Estimated Employer Rate.(recognizing 16% 30.4% 34.1% investment return for 2003-2004) Projection Amortization Base Multiple Base Multiple Base 1—Details of the current amortization base are shown on page I i of June 30,2003 annual valuation report. If you have adopted any other subsequent amendments,the current amortization base is the schedule after these adopted amendments. 2- If a fixed number of years is shown,it means that the current unfunded actuarial liability is projected and amortized over this fixed number of years. This amortization replaces the amortization schedule shown in your June 30,2003 annual valuation and any other subsequent amendments you have adopted. 3- If 20-year is shown,it means that the change in liability due to plan amendments is amortized separately over a 20-year period. This amortization schedule is in addition to.the amortization schedule shown in the June 30,2003 annual valuation and any other subsequent amendments you have adopted. In the above table,the information shown in the 2005-2006 box represents the actual initial contribution rate that will apply during fiscal 2005-2006 if you adopt the amendment. However,these figures do not incorporate the 16% investment return in 2003-2004. The estimated employer rates shown in the 2006-2007 box will give you a good estimate of what to expect in 2006-2007. Note that the change in normal cost in the table above may be much more indicative of the long term change in the employer contribution rate due to the plan amendment. The plan's payment on amortization bases shown in the table above is a temporary adjustment to the employer contribution to"get the plan back on schedule". This temporary adjustment to the employer rate varies in duration from plan to plan. For example,a plan with initial excess assets being amortized over a short period of time will typically experience a large rate increase when excess assets are fully amortized. While a plan amendment for such a plan may produce little or no increase in the employer contribution rate now,the change in normal cost due to the plan amendment will become fully reflected in the employer contribution rate as soon as initial excess assets are fully amortized. November 23, 2004 Page 4 of 8 CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:JUNE 30,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit Disclosure If your agency is requesting cost information for two or more benefit changes,the cost of adopting more than one of these changes may not be obtained by adding the individual costs. Instead,a separate valuation must be done to provide a cost analysis for the combination of benefit changes. If the proposed plan amendment applies to only some of the employees in the plan,the rate change due to the plan amendment still applies to the entire plan,and is still based on the total plan payroll. Any mandated benefit improvements not included in the June 30,2003 annual valuation have not been incorporated into this cost analysis. Please note that the 2006-2007 projected cost in the cost analysis provided in this document should not be relied upon once the CalPERS actuarial staff have completed the next annual valuation,that is,the annual valuation as of June 30, 2004. If you have not taken action to amend your contract,and we have already completed the June 30, 2004 annual valuation report,we recommend you contact our office for an updated cost analysis,based on the new annual valuation. In any case,an amendment effective after June 30,2006 will require an updated cost analysis. Descriptions of the actuarial methodologies,actuarial assumptions,and plan benefit provisions may be found in the appendices of the June 30, 2003 annual report. Please note that the results shown here are subject to change if any of the data or plan provisions change from what was used in this study. Certification This actuarial valuation for the proposed plan amendment is based on the participant,benefits,and,asset data used in the June 30, 2003 annual valuation,with the benefits modified if necessary to reflect what is currently provided under your contract with CalPERS,and further modified to reflect the proposed plan amendment. The valuation has been performed in accordance with standards of practice prescribed by the Actuarial Standards Board,and the assumptions and.methods are internally consistent and reasonable for this plan,as prescribed by the CalPERS Board of Administration according to provisions set forth in the California Public Employees'Retirement Law. Richard Santos,A.S.A. Associate Pension Actuary,CalPERS i Fin Process Ids: Annual-220775 Base-230170 Proposal-230171 November 23, 2004 Page 5 of 8 • CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:JUNE 30,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit Summary of Plan Amendments Valued COVERAGE GROUP 76001 —' PAY Pre-Amendment • Benefit not part of Contract Package. • Benefit not part of Contract Package. Post-Amendment • An employee's eligible survivor may receive the Optional Settlement 2 Death benefit if the member dies while actively employed,has attained at least age 50,and has at least 5 years of credited service(total service across all CalPERS employers and with certain other Retirement Systems with which CalPERS has reciprocity agreements). A CalPERS member must be actively employed with the CalPERS employer providing this benefit to be eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married at least one year before death. A member's survivor may choose this benefit in lieu of the Basic Death benefit or the 1957 Survivor benefit. • The Optional Settlement 2 Death benefit is a monthly allowance equal to the Service Retirement benefit that the member would have received had the member elected Optional Settlement 2 and retired on the date of his or her death_ (A retiree who elects Optional Settlement 2 receives an allowance that has been reduced so that it will continue to be paid after his or her death to a surviving beneficiary.) The allowance is payable as long as the surviving spouse lives,at which time it is continued to any unmarried children under age 18. There is a guarantee that the total amount paid will at least equal the Basic Death Benefit. November 23,2004 Page 6 of 8 CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:DUNE 30,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit COVERAGE GROUP 75001r Pre-Amendment • Benefit not part of Contract Package. • Benefit not part of Contract Package. Post-Amendment An employee's eligible survivor may receive the Optional Settlement 2 Death benefit if the member dies while actively employed,has attained at least age 50,and has at least 5 years of credited service(total service across all CalPERS employers and with certain other Retirement Systems with which CalPERS has reciprocity agreements). A CalPERS member must be actively employed with the CalPERS employer providing this benefit to be eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married at least one year before death. A member's survivor may choose this benefit in lieu of the Basic Death benefit or the 1957 Survivor benefit. • The Optional Settlement 2 Death benefit is a monthly allowance equal to the Service Retirement benefit that the member would have received had the member elected Optional Settlement 2 and retired on the date of his or her death. (A retiree who elects Optional Settlement 2 receives an allowance that has been reduced so that it will continue to be paid after his or her death to a surviving beneficiary.) The allowance is payable as long as the surviving spouse lives,at which time it is continued to any unmarried children under age 18. There is a guarantee that the total amount paid will at least equal the Basic Death Benefit. November 23, 2004 Page 7 of 8 CONTRACT AMENDMENT COST ANALYSIS-VALUATION BASIS:JUNE 30,2003 SAFETY PLAN FOR CITY OF HUNTINGTON BEACH EMPLOYER NUMBER 97 Benefit Description:21548,Pre-Retirement Optional Settlement 2 Death Benefit COVERAGE GROUP 7400JL Pre-Amendment • Benefit not part of Contract Package. • Benefit not part of Contract Package. Post-Amendment • An employee's eligible survivor may receive the Optional Settlement 2 Death benefit if the member dies while actively employed,has attained at least age 50,and has at least 5 years of credited service(total service across all CalPERS employers and with certain other Retirement Systems with which CalPERS has reciprocity agreements). A CalPERS member must be actively employed with the CalPERS employer providing this benefit to be eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married at least one year before death. A membees survivor may choose this benefit in lieu of the Basic Death benefit or the 1957 Survivor benefit. • The Optional Settlement 2 Death benefit is a monthly allowance equal to the Service Retirement benefit that the member would have received had the member elected Optional Settlement 2 and retired on the date of his or her death. (A retiree who elects Optional Settlement 2 receives an allowance that has been reduced so that it will continue to be paid after his or her death to a surviving beneficiary.) The allowance is payable as long as the surviving spouse lives,at which time it is continued to any unmarried children under age 18. There is a guarantee that the total amount paid will at least equal the Basic Death Benefit. November 23,2004 Page 8 of 8 ATTACHMENT #4 CALIFORNIA PUBLIC EIROYEES' RETIREMENT SYSTEM* Actuarial and Employer Services Branch Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229-2709 (888) CalPERS (225-7377) CERTIFICATION OF GOVERNING BODY'S ACTION hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the City Council ofthe (governing body) City of Huntington Beach (public agency) on January 17, 2006 (date) Cle Secretary Assistant City Clerk Title PERS-CON-12(rev. 1/96) ATTACHMENT #5 CALIFORNIA PUBLIC E4PLOYEES' RETIREMENT SYSTEPI Actuarial and Employer Services Branch Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229-2709 (888) CalPERS (225-7377) CERTIFICATION OF COMPLIANCE WITH GOVERNMENT CODE SECTION 7507 I hereby certify.that in accordance with Section 7507 of the Government Code the future annual costs as determined by the System Actuary for the increase in retirement benefit(s) have been made public at a public meeting of the City Council of the (governing body) City of Huntington Beach (public agency) on January 17, 2006 which is at least two weeks prior to the adoption of the (date) Resolution /Ordinance. Cler ecretary Assistant City Clerk Title Date January 19, 2006 PERS-CON-12A(rev. 1/96) ATTACHMENT #6 RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL CITY OF HUNTINGTON BEACH WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution_of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agefi�y of a resolution giving notice of its intention to approve an amendment said contract, which resolution shall contain a summary of the change proposed in said contract; and WHEREAS, the following is a statement of the proposed change: To provide Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit) for local safety members. NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby give notice of intention to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof. By: Presiding Officer Mayor Title January 1`7, 2006 Date adopted and approved (Amendment) CON-302(Rev.4196) 0 0 RCA ROUTING SHEET INITIATING DEPARTMENT: ADMINISTRATION SUBJECT: Amendment to the CalPERS Contract to Provide the Pre-Retirement Optional Settlement 2 Death Benefit for Local Safety Members COUNCIL MEETING DATE: January 17, 2006 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached Not Applicable ❑ Resolution (w/exhibits & legislative draft if applicable) Attached Not Applicable ❑ Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable ❑ Attached Contract/Agreement (w/exhibits if applicable) Not Applicable ❑ (Signed in full by the City Attome Attached Subleases, Third Party Agreements, etc. Not Applicable ❑ (Approved as to form by City Attome Attached Certificates of Insurance (Approved by the City Attorney) Not Applicable ❑ Fiscal Impact Statement (Unbudget, over$5,000) Attached Not Applicable ❑ Attached Bonds (If applicable) Not Applicable ❑ Staff Re ort If applicable Attached P � PP ) Not Applicable ❑ Commission Board or Committee Re ort If applicable Attached P ( PP ) Not Applicable ❑ Findings/Conditions for Attached Approval and/or Denial El Not,4ppl;cable ❑ EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff ) Assistant City Administrator Initial ) Uty Administrator Initial City Clerk ) EXPLANATION FOR RETURN OF ITEM: (Below • Only) RCA Author: P.Ahumada 0 0 PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) M PR"ETHtEMENT am a Citizen of the United States and a WW WWW .:F• resident of the County aforesaid; I am 7rUNK , A,DEt USED EM- over the age of eighteen years, and not a 2S' 4iN10 WAS EW �OFDEAJH, 301.'RETIRE FOR party to or interested in the below entitled E AT THE TU11E U.E., matter. I am a principal clerk of the "AN ORDNANCE OF THE IOULD oR. o�rlEe .<ma CITY' OF HUNTINGTON TEb IN CALPERS}A HUNTINGTON BEACH INDEPENDENT BEACwAA,'�Fi°R121NGAN! NTHLYnuowAHCE AMENDMENT TO; THEUAL T T CONTRACT BETWEEN OUNT a newspaper of general circulation, THE BOARD OF ADMIN- R, ISTRAT!©N CALIFORNIA ,CEMED IF SER printed and published in the City of PUBLIC .FMPLQYEES' HAD RETIRED 'FROM RETIREMENT •SYSTEM SERVICE ©N THE DATE Huntington Beach, County of Orange AND TW CITY COUNCIL DEAtH AND SE- OF THE CITY OF HUN• CTED OPTION 2,THE TINGTON 'BEACH RE. EST :.MQNZH Y State of California, and that attached LOB >: CARDING THE PROW Notice is a true and complete co SION �OF-PRE-RETIRE- p PY as MENT OPTIONAL, SET- OII- TLEMENT 2 DEATH was printed and published in the BENEFITS FOR PUBLIC 11 SS �►OLE i i Huntington Beach issue of said SYNOPS13e WS, D THE CURRENT NIEM- � newspaper to wit the Issue(s) of: oRANDA ,OF UTTER- y C , STAPFN11N6 (MOB) BE= h 'a re #►i�x TWEEN THE CITY OF sas 8 HUNVINOTON BEACH #I "FabA !Y AND THE'NUNTIMOTON D+ 11 REACH FIRE ASSOCIA- roll cet4 AYES$ ,'#IM' r 7IONIiUN- +� TIN67ON REIICifi FN#E �oer�rer�° MA,NAGEMENT 'ASSO- 0 FEBRIIARY 16,2006 c1AArwa %MA- ASSOCIATIOMSO $ TNIIF°. HUNTUI T in, ASSOCM1##il (PMA) HUN7Di4CH AND THE HUNTI STON• 2 14 MAIN STREET BEACH. POLICE OFRC_ #14(NTIM AI St 11T E•RS' .ASSOCIATION ,. CA92�48 BFOA}EACHIHCLIIDE k, 714-t$6-SR27 1 declare, under penalty of perjury, that A PRO" t1 TO IM- lOANL.FLY NN, N EMENT A CONTRACT CITY CLERK AMENDMENT WITH }'ubli CIT Hwntlagten the foregoing is true and correct. THE.CALIF PUs- Reach } 1 endep# 41C EMPt '. RE- Beach TIREd1INT SYSTEMS Executed on FEBRIIARY 16,2006 ((caLPERsj ItETIREM�i OPTH?NAL SETTLEMENT 2 DFIT EATH at Costa Mesa, California. =,,,RAELINi AS Signature