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THE CITY OF 2 - -~- ~"' CITY COUNCIL AGENDA REPORT j~L£~S~4NTONo March 18, 2008 Administrative Services Department TITLE: PURSUANT TO MEMORANDUM OF UNDERSTANDING BETWEEN CITY AND IAFF LOCAL 1974 ADOPT A RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO THE CONTRACT WITH CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM TO PROVIDE SECTION 21548 PRE-RETIREMENT OPTION 2W DEATH BENEFIT FOR LOCAL FIRE MEMBERS AND INTRODUCTION OF RELATED ORDINANCE SUMMARY The City of Pleasanton entered into a Memorandum of Understanding with the International Association of Fire Fighters, Local 1974, effective August 1, 2007. Part of that agreement included a Side Letter for the City to obtain an actuarial valuation from CaIPERS for an expanded death benefit which allows the eligible beneficiary of a deceased public safety member to receive a lifetime monthly allowance similar to the amount he/she would have received if the deceased public safety employee retired on the date of death. The benefit would be implemented through contract amendment provided the cost did not exceed $27,000 the first contract year. This cost is shared approximately 50/50 with the City of Livermore under a cost sharing agreement. RECOMMENDATION Staff recommends that the City Council, pursuant to the Memorandum of Understanding between the City of Pleasanton and Internationals Association of Firefighters, Local 1974, adopt a Resolution of Intention to approve an amendment to the contract between the Board of Administration of the California Public Employees' Retirement System and the City Council of the City of Pleasanton for the Section 21548 Pre-Retirement Option 2W Death Benefit for fire safety members effective May 17, 2008, and to introduce an ordinance authorizing said amendment. FINANCIAL STATEMENT Under current CaIPERS actuarial assumptions, the City will not pay the normal cost (estimated actuarial cost) until fiscal year 2008/2009 (the second year of the negotiated Fire contract) and each year thereafter. At that time, the new normal rate for the City will increase 0.19% from 25.042% to 25.232% per year. In dollars, this represents an increase of about $24,938 annually. Attached for review is the Contract Amendment Cost Analysis -Valuation Basis: June 30, 2006, Safety Fire Plan for City of Pleasanton.