HomeMy WebLinkAbout13-004 Resolution Authorizing Lump Sum Payment of CalPERS Balance - Side FundRESOLUTION NO. 13 -004
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
AUTHORIZING A LUMP SUM PAYMENT TO THE
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM
TO PAY OFF THE REMAINING BALANCE DUE
ON THE CITY'S MISCELLANEOUS PLAN EMPLOYER SIDE FUND
WHEREAS, the governing body of the City of Saratoga contracts with the Board of
Administration of the California Public Employee's Retirement System (CaIPERS) for employee
retirement pension benefits, and;
WHEREAS, effective July 1, 2003, the California Public Employees Retirement System
(CaIPERS) mandated all agencies with fewer than 100 active employees be assigned to a risk pool plan to
reduce or eliminate the large fluctuations in small employer's contribution rates caused by unexpected
demographic events, and;
WHEREAS, by mandate of CaIPERS, the City of Saratoga is part of the 2 % @55 for
Miscellaneous Employees risk pool for miscellaneous employees hired prior to May 12, 2012, and;
WHEREAS, when CAPERS placed the City in this actuarial valuation risk pool it calculated the
unfunded liability for the City to be $697, 545 — this liability became known as the "Side Fund ", and;
WHEREAS, this Side Fund was structured to pay off principal and accruing interest costs over a
ten year amortization period, through an added Side Fund Employer Contribution Rate calculated and
charged as a factor of salary, and;
WHEREAS, effective July 1, 2005, the Side Fund Rate was added to the "Normal Cost" Rate to
determine the Total Employer Contribution Rate, and;
WHEREAS, the remaining balance of this side fund as of February 15, 2013 is $245,444, and;
WHEREAS, CaIPERS treats these side funds as loans to the City and charges interest on this
loan equal to the Ca1PERS discount rate, currently at 7.5 %, and;
WHEREAS, the City is scheduled to make payments on this Side Fund to include principal and
interest on the outstanding balance through its last payment, scheduled for June 30, 2015, and;
WHEREAS, the City has the option to make a lump sum pay off of its Side Fund at any time,
and;
NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Saratoga
authorizes and directs the City Manager to execute and deliver the necessary documents and payment to
accomplish the intention of the above resolution.
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga City
Council held on the 6"' day of February 2013 by the following vote:
AYES: Council Member Chuck Page, Manny Cappello, Howard Miller, Vice Mayor
Emily Lo, Mayor Jill Hunter
NOES: None
ABSENT: None
ABSTAIN: None
�V
Jill Hunter, Mayor
ATTEST:
-:� o DATE:
Crys Bothelio, City Clerk