PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 09/16/19
SUBJECT:
TITLE
CITY COUNCIL AUTHORIZATION TO RATIFY ADDITIONAL NOTICE OF OPPOSITION LETTERS REGARDING SB 266 (AS AMENDED SEPTEMBER 3, 2019) (LEYVA) - CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM: DISALLOWED COMPENSATION; BENEFIT ADJUSTMENTS
Label
CITY MANAGER RECOMMENDATION
Recommendation
Authorize by Minute Order
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COMPLIANCE STATEMENTS
FY 2019-21 Council Priority Workplan Compliance Statement
Economic Development and Diversification and Policy No. #403 - Create a sustainable economic ecosystem are adopted policy items under the FY 2019-21 Council Priority Workplan, effective March 1, 2019.
CEQA Compliance Statement
This is not a project as defined by CEQA.
BACKGROUND
On August 15, 2019, the League of California Cities (League) contacted City Managers throughout the state to inform them of the status of the proposed SB 266 (Leyva) legislation, and hosted a League-sponsored webinar on this draft legislation and its potential impacts to local cities if adopted into law.
SB 266 (Leyva) (SB 266) would require local cities to pay individual retirees (and their beneficiaries) for decades out of their respective general fund operating budgets to cover any amounts of a retiree's CalPERS-determined benefit that CalPERS later determines is "disallowed compensation." As amended, SB 266 places 100 percent of the total liability for such overpayments on public agencies-abdicating all responsibility previously held by CalPERS to ensure that retirement benefits are calculated and administered correctly.
As such, SB 266 is a retroactive benefit enhancement measure that will further strain local agency budgets at a time where retirement obligations are already effectively eliminating agencies' ability to provide critical services for the public. The League's objections to this measure are rooted in policy, operational, cost, and legal concerns which every state and local government agency would face s...
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