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Mr. Bartel cautioned that he has reviewed only the summaries issued by the conference committee as well as press releases, and that he has not had an opportunity to see the actual language of the proposed legislation. He also noted that once the language is released to the public, it cannot be changed, meaning that if the legislature does vote on Friday it will be a simple up or down vote. Based on his understanding, the legislation would pertain almost exclusively to anyone hired after January 1, 2013 and perhaps laterals hired after January 1, 2013 and would have very little or no impact on current employee formulas. Retirement formulas would likely be what are referred to as a 2.7% at 57 based on three highest years earnings and the member contribution would be 50% of the total normal costs, which are expected to be in the neighborhood of 10-11% for new employees. Other components include salary caps and no retroactive benefits increases. The only substantial factor he felt applied to existing employees is a language change that would make it easier to negotiate for them to pay more than the current statutory 9% member contribution. He noted that there are certain components of the Governor's 12-point plan that are not in the legislation, ncluding a hybrid investment option and changes to other post retirement benefits. Councilmember McGovern asked if this would automatically pass down to each city, if approved. Mr. Bartel said his understanding is that it would be mandatory for all cities, excluding charter cities. Councilmember McGovern asked when this would go into effect. Mr. Bartel stated January 31, 2013. Councilmember McGovern asked and Mr. Bartel confirmed that if passed, the legislation would take effect regardless of what action the Council takes on this contract. Councilmember Thorne said he has been in communication with contacts in Sacramento all day, that there are a few points of confusion and that any comparison against the white paper will have to wait until the language is released Thursday morning. He asked if Mr. Bartel had any idea what the magnitude of"normal total cost" versus a percentage of total cost would be. Mr. Bartel said in looking at the 2.7% at 57 alternative formula the total normal cost would be 20%-22% for a 50% contribution of 10% to 11% as already mentioned. If applied to current formulas, the total normal cost for fire at 3% at 55 would likely be on order of 27%-28% of total pay, for a 50% contribution of 13%-14%. 3% at 50 would be roughly 25%, for a 50% contribution of about 12.5%. Councilmember Thorne said his latest understanding is that 3% would be entirely eliminated. Mr. Bartel confirmed. He explained that two pieces of legislation would be removed from the code and no longer available to new hires: SB 400, which enabled 3% at 50 and 3% at 55, and AB 616, which enabled the three non-safety enhanced formulas (2.5% at 55, 2.7% at 55 and 3% at 60). Councilmember Sullivan asked if these features are mandated or would have to be negotiated into union contracts. Mr. Bartel said it would be mandated for new employees. The only item that would be subject to negotiations would be any member contribution over 9%. Special City Council Minutes Page 3 of 5 August 28, 2012