Loading...
HomeMy WebLinkAbout4.01 Draft Minu 07-24-2001SPECIAL MEETING - July 24, 2001 CITIES OF DUBLIN AND SAN RAMON JOINT CITY COUNCIL MEETING TUESDAY, JULY 24, 2001 - SAN RAMON CITY HALL 2222 CAMINO RAMON ~ SAN RAMON, CA The City Councils of the Cities of Dublin and San Ramon held a special meeting at 13:00 p.m. on July 24, 2001 at San Ramon City Hall, 2222 Camino Ramon, San Ramon. San Ramon Mayor David Hudson presiding. PRESENT: Dublin City Councilmembers Janet Lockhart, Tony Oravetz, George Zika, Claudia McCormick and Mayor Guy Houston, Dublin Staff City Manager Rich Ambrose, City Attorney Elizabeth Silver and Personnel Officer Julie Carter. San Ramon City Councilmembers Curt Kinney, Nancy Tatarka, Abram Wilson and Mayor Dave Hudson, San Ramon Staff City Manager Herb Moniz, City Attorney Bob Saxe, and City Clerk Judy Macfarlane. Mayor Hudson said the City Councils would be discussing if they were interested in amending the Dougherty Regional Fire Authority (DRFA) Joint Exercise of Powers Agreement (JEPA) to enable the DRFA Board to provide enhanced retirement benefits (PERS 3% ~ 50) to former DRFA employees, to consider changing the composition of the DRFA Board, and to consider terminating the DRFA/PERS contract. Mr. Ambrose said a request had been received from Alameda County Firefighters Local 55 and after reviewing the request the DRFA Board of Directors, the City Managers of Dublin and San Ramon, determined that per the existing JEPA, the Board of Directors (the City Managers) did not have the authority to act on the request. He said the Union then requested the issue be referred to the two City Councils. When the issue was referred to Dublin's City Attorney in June, it was requested the two City Councils meet and discuss the issue as well as discuss the potential for terminating the Joint Dougherty Regional Fire Authority and look at any other issues related to winding up the affairs of the Authority. He said JEPA was revised in 1997 when the City of San Ramon decided to have its fire service provided by the San Ramon Valley Fire Protection District. He said at that time employees working for DP, FA either went to work for the San Ramon Valley Fire Protection District, the Alameda County Fire Department, retired or went to other employment. He said the request for consideration of retirement package enhancements would affect all former DRFA employees who are currently not retired under PERS. DP, FA no longer has an employment relationship with those employees, they are employees of CITY COUNCIL MINUTES VOLUME 20 SPECIAL MEETING July 24, 2001 PAGE 327 other entities. He also said the Cities had received a valuation by ['ERS based on June 30, 1900 assets that indicated the Fire Authority had in excess of $6 million in retirement assets in the fund that represented contributions made by the Cities of Dublin and San Ramon to the Fire Authority while it was in existence plus accrued interest or earnings as result of overpayments. The valuation also looked at what it would cost to implement $% at 50 and estimated it would reduce the assets of DP, FA by approximately $1.3 million. He said if there is an interest on the part of the City Councils to pursue the request of the Fire Union, staff would recommend that there be a modification to the DP, FA JEFA and a request for a valuation because PERS investments have not been as successful over the last six to nine months as they were prior to that time. One of the reasons the Authority was not terminated in 1997 was there were some services we needed to continue to provide for with respect to retiree medical. The Fire Authority has been taking care of retiree medical as well as workers' compensation claims for former employees of the Fire Authority. He said in their discussions with PERS they believe there is a way the cities could take advantage of another provision in the PERS code that would allow them to set up a special contract for retiree medical and at the same time terminate the relationship with PERS so that the remaining assets would accrue back to the two cities. Terminating the contract would take approximately three to four years and the issue of contract termination is in no way related to 3% at 50. If they were our employees and were asking for an enhanced benefit we would be able to negotiate that as part of a meet and confer process but we do not have that relationship with the employees that would be affected by any such contract amendment. He introduced Brian McKenna, president of the Alameda County Firefighters Local #55 and Chief Rick Probert, San Ramon Valley Fire Protection District who were in the audience. Mayor Houston asked where the information had come from that said it would take three to four years to terminate the contract with PERS and what is the process. Ms. Carter said the report provided by the City Attorney's office indicated that terminations were lower on the PERS priority list and therefore it would take three to four years. She said they attempt to do the valuation amendments that would increase FERS assets within 60 to 90 days. Mayor Hudson and after reading the staff report it appeared the Union was asking for a benefit for which there hadn't been a contribution. Mr. Ambrose said their contribution 'was for the contract amendment that was enacted by Alameda County for the time that they serve Alameda County. He said the 3% at 50 benefit that was provided to the former firefighters of San ~andro was paid for by the City of San Leandro and came out of their PEPS asset account. He said the current Alameda County fire department employees were not responsible for paying for the time CITY COUNCIL MINUTES VOLUME £0 SPECIAL MEETING July 24, 2001 PAGE 328 they served with the City of San Leandro, just as former DRFA employees who are currently Alameda County fire employees or San Ramon Valley Fire Protection District employees would not be responsible for paying for the service that came from their service with DP, FA. Cm. Lockhart asked if there was a precedent for this. Mr. Ambrose said the City of San Leandro approved a contract amendment to provide this benefit to their former employees who are currently Alameda County Fire employees. Cm. Zika asked how San Leandro got around the concern regarding the gift of public funds and had it been interpreted what liability the city or the individual has. Ms. Silver responded the cities would not have any liability. She said this is a request for DP, FA to amend its contract with PERS to provide enhanced retirement benefits to former DRFA employees. The gift of public funds issue is when a public agency spends money it has to be for a public purpose. If an expenditure of money is for a public purpose and it also has an incidental benefit to a private individual that is ok as long as the public agency has determined that there is a public purpose for the expenditure of the money. If DRFA decides to amend the contract with PERS to provide the enhanced retirement benefits there is clearly a benefit to private individuals. One of the benefits of providing retirement benefits is to retain current employees and help recruit future employees. She said DRFA doesn't have any employees and is not going to have any employees because of the 1997 amendment to the JEPA. Cm. Zika asked what is the Council's or individual's liability if we approve this. Ms. Silver said there wouldn't be any liability on the part of the individual Councilmembers or on the part of the two cities because if the Council took this action it would be DP, FA amending the contract with PERS. She said there would be a liability to the two cities indirectly because of the $1.3 million cost. Cm. Zika said if he voted to approve this and somebody says that it is a gift of public funds would he have any personal liability. Ms. Silver replied he wouldn't have personal liability. She said if this is approved by DRFA they should make a finding that there is a public purpose and identify that public purpose. Cm. Zika asked would the reason San Leandro used be appropriate in this situation. CITY COUNCIL MINUTES VOLUME 20 SPECIAL MEETING July 24, 2001 PAGE 329 Ms. Silver said there is one difference and that is San Leandro contracts with Alameda County to provide fire services. DRFA does not contract with Alameda County to provide fire services in the DRFA service area. Cm. Kinney asked if we do what the Union is asking would that dissolve DRFA totally. Mr. Ambrose said this issue has absolutely nothing to do with dissolving DP, FA. He said the Council can instruct the board to terminate DRFA as part of the provision within the existing JEPA. He said we believe we have the authority to terminate it currently in the amended contract with PEPS without taking any action on the 3% at 50 but we don't have authority to amend the contract. If the two City Councils decide to end DR_FA that would be direction to the City Managers that you want to terminate the contract. He said we just can't modify the retirement contact. Cm. Kinney said when San Ramon went to the San Ramon Valley Fire Protection District and Dublin went to Alameda County, DRFA was kept alive to take care of administrative and outstanding financial details. Mr. Ambrose said we are only currently responsible for outstanding workers comp and retiree medical benefits. He said we could still terminate the PEPS contract and it could be dissolved by the two cities jointly agreeing to share the cost of the outstanding workers' comp cases and retiree medical benefits. Mayor Houston said the PERS assets over time have been a moving target. He said he could recall years with DRFA and even with the City when we were in the negative column and had a liability with respect to retirement. He said he thought the reason 5% at 50 has come about globally was that PERS made some good investments and rode a very strong market for a few years and as a result of that assets improved and the cities have became over funded as opposed to under funded. Cm. Kinney asked wouldn't we still be obligated for retirement benefits owed to the employees that retired from DP, FA before we dissolved. Mr. Ambrose responded from the ['ERS standpoint it is funded. Cm. Kinney confirmed that the money that was left over would come back to the cities. Mayor Hudson said the report states that staff recommends that the two City Councils provide direction to the DRFA Board of Directors as to whether or not to initiate the termination of the DRFA contract with PEPS. He said he was bothered by the statement that the termination process was estimated to take three to four years. He said he would CITY COUNCIL MINUTES VOLUME 20 SPECIAL MEETING July 24, 2001 PAGE 330 hate to approve :3% at 50 and in three to four years find out the fund was in the negative and we had to fund it. He said he was prepared to give direction to the Board of Directors to find out where we stand and asked if anyone else that felt the same way. Cm. Wilson asked how can we make a rational decision when we don't know what is in the account. He said he was concerned that the cities may have to fund this if we terminate DP, FA. Mayor Houston said he thought the first thing we should do is reconstitute the board and give direction to request a financial analysis from PERS. He said after the financial analysis is complete then the decision about granting the request can be made. He said the public benefit he saw was, 1) taking care of good employees that were still serving Dublin, Alameda County and the San Ramon Valley Fire Protection District but getting out of the business so that we don't have another request 18 months or five years from now on some other issue. He said we can put DRFA to rest and turn that obligation over to the other agencies and whatever balances there are can be negotiated and split among the two cities. In response to Mayor Hudson's question regarding makeup of the board, Mayor Houston said he would change the board from the two City Managers to the two City Councils. He said he thought it was an important issue and both of the Councils should get together so that we are all on the same page. Mayor Hudson asked for clarification on the time periods of three to four years or the 30 to 60 days being discussed. Mr. Ambrose said it may be possible to get a PERS valuation in 30 to 60 days. He said the process is once you have the valuation, you make a decision and then the issue is how long it takes PERS to act on that decision. He said there certainly was no interest on the part of the current board to have that process take three to four years. Mayor Houston said we have to understand that the same time that the valuations are made we say lets get going with the other process as well. Cm. Kinney asked couldn't we just move forward with our motion stating that is what we want to do and also have the valuation done. Mr. Ambrose said we can do that if there is consensus on the part of the Councils. The City Managers can request that from PERS without amending the JPA at this time but to take action on the 3% at 50 the two city councils individually will have to take action on amending the JPA. CITY COUNCIL MINUTES VOLUME 20 SPECIAL MEETING July 24, 2001 PAGE 331 Cm. Zika asked when we receive the valuation from PERS can they project out what the valuation may be in three to four years when we want to dump DR_FA. Mayor Hudson said what he was seeing was direction to go forward and get the valuation of how much money was in the account and then the Councils would make a decision on the termination of DRFA. Mayor Houston made a motion to reconstitute the board and at the same time request the city managers to ask PERS for a financial evaluation of our accounts. He said that information would come back to a meeting of the reconstituted board in 30 to 60 days. Cm. Kinney said he would second the motion with one amendment that we try to push the three to four year plan at the same time. Mayor Houston said the amendment was to direct the City Managers to say it was the Councils' intent to dissolve DR_FA and that we want to see an accelerated schedule that will make that happen. Mr. Ambrose said we will still be meeting as two City Councils and staff will return with a revised JEPA and the Councils can act individually on that JEPA if they so choose. Mayor Hudson called for a vote on the motion. The motion passed unanimously. Minutes prepared by Judy Macfarlane, San Ramon City Clerk. ADJOURNMENT 11.1 There being no further business to come before the joint Councils Mayor Hudson said he would adjourn the meeting to the next joint meeting of the reconstituted DRFA in 50 to 60 days. ATTEST: City Clerk Mayor CITY COUNCIL MINUTES VOLUME 20 SPECIAL MEETING July 24, 2001 PAGE 332