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HomeMy WebLinkAbout19 - Charter Amendment - Public PensionsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. fQ September 25, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Robin Clauson, City Attorney (949) 644 -3000 rclauson(a)city. newport- beach. ca. us SUBJECT: Program Charter Amendment Regarding Public Pensions ISSUE: Should the City Attorney be directed to prepare a Charter Amendment for Council consideration that would require a public vote for any changes in public pensions for City workers that would result in increased costs to the City? RECOMMENDATION: The City Council should decide whether or not to place a City Charter Amendment regarding public pensions for City workers on a future ballot and, if it decides to do so, refer the proposed Charter Amendment to the City Attorney with direction for draft language. DISCUSSION: Background: One of the major enticements and remunerations for municipal workers has historically been a defined benefit pension plan, typically administered by the California Public Employees' Retirement System (CalPERS). By Ordinance No. 533, adopted and approved on March 19, 1945, the City of Newport Beach joined CalPERS and has offered its employees a defined benefit pension plan since that date. The City s contract with CalPERS is authorized by section 900 of the City Charter and may not be terminated without a vote. Over the years, due to State legislation, plan amendments, and collective bargaining agreements, the defined benefit plans offered to City employees have changed many times. Also over the years, primarily due to the investment rates of returns achieved by CalPERS on plan assets, the cost of these defined benefit plans to the City have varied greatly — from 0.0% in the case of miscellaneous employees to 26.702% for safety employees for the fiscal year ended June 2006. Charter Amendment Regarding Public Pensions September 25, 2007 Page 2 Although CalPERS has a fifteen -year average compounded return on investments of over 9.0 %, recent actuarial investment losses have had a significant impact on actuarially required employer contributions by the City. Until recently, CalPERS actuaries assumed an annual investment return of 8.25 %. The actual investment returns for the fiscal years ended June 2001, 2002, and 2003 were -7.2 %, -5.9°% and +3.9%, respectively. This produced a three -year actuarial loss of - 15.45 %, - 14.15°%, and - 4.35° %, respectively, or a three -year cumulative actuarial loss of - 33.95 %. Investment returns have rebounded the past few fiscal years but, _ to protect against future rate increases CalPERS adopted a new "rate smoothing" method which spread these asset gains and losses over many years. The net result is that the City can expect the employer contribution rates to the pension plans to remain within current ranges for many years. At the City Council Meeting of August 14, 2007, Council Member Curry raised the idea of a future Charter Amendment that would require a public vote of the voters of Newport Beach to approve any change in public pensions for City of Newport Beach employees that would increase the cost of pensions to the City. This idea was further discussed at the City Council Finance Committee meeting of August 28, 2007. Councilmember Curry presented information to the Committee regarding his proposal and suggested something similar to provisions in the Charters of the Cities of San Diego and San Francisco. The information provided to the Committee is attached as an exhibit to this Staff Report. Public Notice: This agenda item may be noticed according to the Brown Act (72 hours in advance of the public meeting at which the City Council considers the Rem). Funding Availability: If approved, this action would only require minimal funding if the vote is held in conjunction with a .regularly scheduled municipal election in 2008. Pre pa by: Robin L. Clauson, City Attorney Attachments: Material Presented to the Finance Committee (August 28, 2007 Mayor -ftft Steven Rosansky Mayor Pro Tem Edward D. Selich Council Members Keith D. Curry Leslie J. Daigle Nancy Gardner Michael F. Henn Don Webb CITY OF NEWPORT BEACH OFFICE OF THE CITY COUNCIL August 28, 2007 Memorandum To: The City Council Finance Committee From: Keith Curry Re: Charter Amendment to Require Public Vote to Increase Pension Benefits As you are aware, on August 14, I requested the Finance Committee consider the issue of requiring voter approval for increases in the publicly funded pension benefits of City employees. This idea is patterned after the long standing practice in the City and County of San Francisco to require voter approval for pension benefit increases. In San Francisco, the benefit plan itself is written into the Charter (Appendix A), and therefore requires a vote to change. Third party research indicates that out of 131 separate elections on pension increases, they were approved by the voters 52 times. The San Francisco system is currently over funded at 104% and is one of the few California jurisdictions without a serious pension funding shortfall. It is interesting to note that in 1996, San Francisco voters approved an increase in benefits for existing retired employees by a margin of 50.7 %, an increase in firefighter retirement benefits by 57.7 %, and rejected an effort to repeal the voter requirement with 72.6% voting not to repeal. The City of San Diego, facing a funding ratio of only 68.2% and an unfunded liability of $1.4 billion, submitted Proposition B to the voters in the November, 2006 election. Proposition B was enacted with a 69.95% Yes vote. City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658 -8915 • www.city.newport- beach.ca.us Finance Committee August 28, 2007 Page 2 Proposition B amended the San Diego City Chatter to require the following: It requires that any increase in retirement benefits to any employee or elected official shall not become effective without a ratifying vote of the electors. (Cost of living increases were excluded. Because we are members of PERS, rather than a stand alone system, the cost of living language is not relevant for us.) 2. It adopted language that required any change that affects the benefits of any employee under the retirement system or affects the vested defined benefits of any retiree shall not be enacted without approval of a majority vote of the affected employees or retirees. This would appear to protect employees from having their benefits reduced unilaterally without a vote of the plan participants. 3. The Charter amendment requires the preparation of an actuarial study to be developed and published in the ballot pamphlet as part of any request to increase benefits. 4. It allows for the negotiation of tentative agreements with employee bargaining units; however, such agreements remain tentative as it relates to increases in pension benefits until ratified by the voters. 5. The Amendment includes an automatic sunset provision after 15 years unless re-approved by the voters. 6. The Amendment was effective on January 1, 2007. Discussion I believe the San Diego Charter Amendment provides a good template for Newport Beach. Conceptually, I believe our charter amendment should include the following provisions: A. Require that all increases in pension benefits shall require voter authorization. Specifically, this should apply to changes in the basic retirement formula, e.g., 3@50, and changes in the amount of the percentage of City contributions for retirement costs. B. Any increase being submitted to the voters, should include an independent actuarial cost assessment disclosing the expected cost impact to the City for such an increase. This should be included in the ballot pamphlet. Adjustments to pension benefits that do not result in increased actuarial costs should not be subject to the voter requirement. C. The City should be authorized to reach tentative agreements, but any agreement requiring an increase in public cost for pension benefits shall remain tentative until ratified by the voters. Finance Committee August 28, 2007 Page 3 D. Cost of living adjustments in benefit payments as determined by the PERS board would not be subject to this amendment. Discretionary adjustments to the City contribution rate based on cost of living or other automatic adjustments will require a vote. E. Nothing in the amendment should preclude the City from advancing its payments or accelerating the pay down of its unfunded liability at its discretion, so long as the benefits paid to retirees are not increased. F. This amendment shall be limited to pension benefits. G. Language that requires the approval of bargaining units prior to any change (not resulting in an increase in benefits), would appear consistent with current practice and is an appropriate safeguard against bad faith bargaining. H. A sunset provision is appropriate; however, it should be after 20 years and should coincide with an election year. If the Finance Committee concurs, I would recommend that this item be reported to the September 25 City Council meeting with a recommendation, and at that meeting, the full council be requested to give direction to the City Attorney to bring back for consideration a draft Charter Amendment. Thank you for your consideration. Employees' Retirement Benefits . San Diego County, CA Page I of 5 -eau• Of Woll»n VOWS of Cslifernu aduestlon fund San Diego County, CA November 7, 2006 Election Proposition e City Employees' Retirement Benefits N 1�✓�te»; City of San Diego Charter Amendment - Majorlty Approval Required wren Pass: 213009169.95% Yes votes ...... 9t4961 30.05% No votes See Also: Index of all Propositions Results as of Nuv 21 21l Opm Information shown below: Eiyc Irnpa ct I Impartial Analyois l ArEam�ia I i%II Te Shall the C4arler be amended to re4itim voter approval jar any Mereaaes 1n retdrement system be a lisforpublte employees? Fiscal Impact: As recent as June 30, 2000, the valuation of the plan assets was $2.46 billion and the projected Plan liabilities were $2.53 billion, M represented s Rwdiag ratio (Plan assets to Plan liabilities) of 97.3 %. Ag June 30, 2005, the most recent data available, the Plan assets were 53:48 hitlion, while the projected Plan liabilities have Uruwn to $4.38 billion. 'Phis roprosonts a funding ratio of 60.2% and an unfunded liability of $1.4 billion. In addition, the unfunded liability as a poroentage of payroll went from 1$,4% in fiscal year 2000 to 216.9% in fiscal year 2003. While a portion of the increase to the Itnfltnded liability was the result of poor investment perfonnenco, the significant cause of the City's Current dilemma resulted fium the City's decision to grant increased employee retirement benefits while at the same time not maldng the necessary contributions to fund these benefits. During this same time period, the City's annual required contributiun to the System grew $oast $47.5 million in fiscal year 2000 to S 162 million in fiscal year 2007, taking valuable resources away from critical sorvioos and capltal heeds. Proposition B roquires that City elnplvyee benefit in4reases approved by the City 06moil be subject to approval by San a Diego voters. It also requires public disclosure of the fill cost and impact of the proposed. benefit increases on the financial stability of the Cityhem 's retem system, along with a clear etrplaWOn of the proposed source of funding for these benefits. Costs associated with public votes on proposed benefit increases would be limited, with the expectation If Proposition B is approved that City employee contracts would be synchronized Official Information News and Analysis -.I-1 s- �.. s.., . • FUblic'eafety net' or's '7.9118/06 Suggest a link related o gronositi9ll B Links to 10V W a outside of Smart Motor ero provided far informatiop oniy and e0 not imply endeneaent. Proposition B: City Employees' Retirement Benefits . San Diego County, CA with regularly scheduled elections, and such votes would be consolidated with regular primary or general elactions. Impartial Analysis from City Attorney WRehaei J. Agulm The City Council has authorized the placement of a proposition on the ballot seeking voter approval to amend Article IX, section 143.1 of the San Diego City Charter. The amendment would require that voters approve certain increases in retirement system benefits for pubilc employees. In particular, the proposition provides that any ordinance that amends the City's retirement system by increasing the benefits of any employee, legislative officer or elected official shall not be adopted without approval of a majority of the qualified electors voting on the nuttter. The ballot question states that voter approval Is required fur "any increases." The text of the measure states that increases in benefits due to cost of living 4ustments would not require a vote of the electorate. This measure oleo, provides that, prior to placement on the ballot of 41, roposed Increase in retirement benefits, the retirement system will prepare an actuarial study of costs due to the benefit ebanges. A summary of the actuarial study will be published in the ballot pamphlet issued to voters. This measure further provides that City officials and employee organizations may negotiate tentative agreements that would increase retirement benefits. Howevet the agreements will not become final or binding unless a majority of San Diego's quallfied voters approve of the Increases. If this measure ig approved, it will become operative on January 1, 2007 for all proposed increases in retirement system benefits tentatively agreed upon by the City on or after that date. This measure provides that the requirement of voter approval for retirement benefit inmo*es will ruin in effect far 15 years from that date, at which time the requiremcnt will automatically be repealod and removed from the Charter. This ballot measure wilt take effect if passed by a majority of the City's voters. Agents For Proposition B TAXPAYERS HAVE BEEN LEFT HOLDING THE BAG Page 2 of 5 Arguments Against Proposition H Proted Your Family's Safety. Vote NO on Proposition BI Proposition B: City Employees' Retirement Benefits • San Diego County, CA The City of San Diego's employee pension system is under - funded by over S 1.4 billion. This shortfall represents a potential obligation owed by every taxpayer in the city. PROPOSITION B PROTECTS TAXPAYERS Proposition B gives voters the final say over future pension increases for elected officials and city ompioyees. It eliminates the baektoom deals that created the city's current pension fund crisis. IT WORKS EFFECTIVELY IN SAN FRANCISCO Public employee unions in Salt Francisco have even more political clout than they do in San Diego. Over a decade ago, facing a pension crisis, voters in San Francisco approved a requirement similar to Proposition B. Since then, San Francisco has avoided the pension under- funding problems that afilict San Diego and other public agencies in California and across the nation. WON'T IMPACT LEGITIMATE PENSION INCREASES If it can be shown that pension benefits paid San Diego workers aren't adequate to attract or retain workers in highly- competitive fields like public safety, voters will approve reasonable benefit increases. But voters should and will require elected officials to demonstrate in advance how they intend to pay for enhanced benefits. IMPLEMENTATION COST WILL BE SMALL In Proposition B is approved, employee labor contracts can be synchronized to coincide with regularly scheduled state and federal elections, so that If and when pension increases are recommended, the cost of placing them before voters will be minimal. INSURANCE POLICY FOR OUR FUTURE Some say the city's pension problems are so widely known that theta`s little chance the same Page 3 of S &Wgitlen R will make is harder to hlr San Diego's own Independent budget analyst expects our city to lose more than 100 police officers this fiscal year alone. We tan not attract new officers because of the low wages and benefits the city pays than. Proposition B will only make this problem worse. Pmonaltion B w 111 COST no mnney, not move it. Proposition B will mean more and more police officers and firefighters continue to leave San Diego for other cities with better pay and benefits —AFTER we have spent hundreds of thousands of our tax dollars to train them! That's a really bad deal fbr San Diego! Proposition B will guarantee we get what we pay forl Low pay and benefits fbr police atld firefighters mean low standards for our public safety. When we call 411, we want to env= the best trained-and most experienced emergency medical personnel work in our city- -not another one with better pay and benefits. PMposttion B Kh the bar for our aafety even lower. San Diego already has one of the lowest ratios of police officers and firefighters per population in the state. Proposition B will only make that problem worse. Pxen-- rnait1o� will take aveav our flaxibllty to malgghAdlly needed public sdaW � If Proposition B passes, it won't matter how badly we need to change public safety compensation. We will have to wait years to put It to a vote. Join the police officers, firefighters, EMTs and paramedics who serve San Diego and VOTE NO ON PROPOSITION Ill Frank DeCleoq Vice - President San Diego Firefighters Bill Nemee President SDPOA Proposition B: City Employees' Retirement Benefits - San Diego County, CA Page 4 of 5 mistake will be repeated In the future. But memories are short, and the pressure to increase benefits never lets up. Proposition B provides insurance that once the current crisis fades, safeguards will still be in place. jam: /Iwww.Yw0nBapd ..eom Jerry Sanders Mayor of San Diego Jon Coupal President Howard Jarvis Taxpayers Assn, Michael J. Aguirre San Diego City Attorney Carl De Maio Chairman San Diego Citizens for Accountable Government Donna Frye City Councilmember Full Text of Proposition B ORDINANCE ##0 -19473 (Date of Final Passage 3/27106) CHARTER SECTION LANGUAGE 143.1 Approval of Retirement System Benefits (a) No ordinance amending the retirement system which affects the benefits of any employee under such retirement system shall be adopted without the approval of a tngjority vote of the members of sold system. No ordinance amending the retirement system which increases the benefits of any employee, legislative ofiioar or elected official under such retirement system, with the exception of Cost of Living Adjustments, shall be adopted without the approval of a majority of those qualified electors voting on the matter. No ordinance amending the retirement system which affects the vcsted defined benefits of any retiree of such retirement system shall be adopted without the approval of a m4lority vote of the affected retirees of said retirement system. (b) Prior to any proposed amendment of the retirement system which increases benefits of any employee, legislative officer or elected official under sueh:retiremolt system being placed on the ballot, the retirement system shall prepare an actuariai study of the cost due to die benefit changes proposed based upon the amortization schedules established by Charter Section 143. A summary of the actuarial study shall be published in the ballot pamphlet. Proposition B: City Employees' Retirement Benefits - San Diego County, CA Page 5 of 5 (c) Nothing in subsection (a) of this section shall prevent City ofiieials from negotiating tentative agreements with employee organizations incorporating benefit changes to the extent permitted by state law. provided, however that no amendment of the retirement system which increases benefits, with the exception of Cost of Living Adjustments, of any employee, legislative officer or elected official under such retirement system, shall become binding or effective until approved by a majority of those qualified electors voting on the matter, and shall not have any force or effect if rejected by said voters. The City Council "have no authority to enter into final or binding agreements regarding retirement system benefits increases until and unless those increases to retirement system benefits are approved by a majority of those qualified electors voting on the matter. (d) The requirement for voter approval of retirement system benefit increases shall become operative on January 1, 2007, for all proposed increases in retirement system benefits tentatively agreed upon by the City on or after that date. This requirement shall remain in effect for a period of fifteen (15) years from that date, at which time this requirement shall be automatically repealed and removed from the Charter. San Diep Home Paae 11 �) About Smart Voter II Feedbac Created: November 21, 200611;24 PST Smart Voter <Mtp.1Av .amartvoter.or&15- Copyright ® League of women Voters of California Education Fund 1 jJ/www.hvvc. ore The League of Women Voters neither supports nor opp dt candidate for pvbltc gBSoe ar poUdeal jwdes. David Bile From: Jack Dean [ 41stdbut1onQpena1ontsurAm1.coml sent: Monday, $eptember 12, 2005 8:22 AM To: PensionWateh Subsodber Subject: (FACT] San Francisco voters make pension decisions httpl / /www.aignonsandiego.com /news /metro /20050911- 9999- lnllpeneions.htmi The San Diego Union - Tribune September 11, 2005 San Francisco voters make pension decisions By Steve Schmidt While fiscally conservative San Diego stews over its pension problems, Some unlikely news has come from the north: San Francisco, by many accounts, is operating one of the beat municipal pension systems in the state. That's right. The city of leftists and over - the -hill hippies is proving far more fiscally savvy than the land of moderates and Dick Murphy straight arrows. San Francisco's retirement system is 104 percent funded, meaning it has slightly more than it needs to cover estimated future retirement benefits. San Diego is 65 percent funded, the lowest among eight of the state's largest pension Systems. The Orange County pension system is 69 percent funded. Pension experts consider the yawning gap Striking. "Rather painful to hear, isn't it ?" said John Moorlaeh, Orange County's treasurer and tax collector. "It's a curious.thing," said April Holing, the certified public accountant who led San Diego's Pension Reform Committee last year. San Francisco's success is largely attributed to an unusual law that goes back more than a century: The city requires voter approval for any pension plan change, including benefit increases. In other major pension systems across California, including San Diego, elected officials make the final decisions on benefits. Clare Murphy, executive director of the San Francisoo Employees' Retirement System, believes the ballot hurdle has helped keep a lid on pension coats, while other systems have sweetened benefits in recent years. Retired San Francisco employees receive pension checks averaging 82,195 a month, compared with $2,350 for public retirees in San Diego. San Frarcisco voters. have considered 131 pension proposals over the past century, • approving 40 percent of them. In 1996, voters there rejected a proposal by than -mayor Willie Brown that would have shifted the pension - decision burden to elected officials, Some community leaders in San Diego, including City Attorney Michael Aguirre, think the city should follow San Francisco's lead and require voters to approve any benefit increases, Aguirre and others say that more public scrutiny is needed to help fix the financial mess in the city's pension system, i Assemblyman Keith Richman, a leading backer of public pension reform, agrees. Involving voters ensures "that decisions are made out in the open," Said RiCWAn, R- Chstsworth. "It absolutely brings checks and balances." See links to previous days' newsclips at http: / /www.PenuionTounami.com FACT is the Fullerton Association of Concerned Taxpayers. FACT's primary focus is on Califorria's public employee pension crisis, but we are also attempting to monitor developments.in all three pension spheres -- public employees, corporations and social security -- since it is taxpayers who will ultimately be responsible for making up deficits incurred by any of them. We also try to monitor international trends. New subscribers are welcome) simply send a request to JackDean@PensionTsunami.com . To unsubacribs, send a blank message to PensionWatch- Unsubacribe @PensionTsuaami.com . ------------------------- --- ---- ------ ---------- ------- --- ----- - - - --- "The state is that great fiction by which everyone tries to live at the expense of everyone else." -- Frederic eastiat (0- 7007 -58) ORDINANCE NUMBER O- I (NEW SERIES) DATE OF FINAL PASSAGE AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 4, OF THE SAN DIEGO MUNICIPAL CODE BY ADDING DIVISION 19, TITLED "VOTER APPROVAL OF RETIREMENT SYSTEM BENEFIT INCREASES" RELATING TO THE IMPLEMENTATION OF CHARTER SECTION 143.1 WHEREAS, a ballot proposition was approved by the qualified voters of the City of San Diego on November 7, 2006, that amended City Charter section 143. 1, regarding approval of increases to Retirement System Benefits; and WHEREAS, this ballot proposition requires that no ordinance amending the retirement system which increases the benefits of any employee, legislative officer or elected official under the retirement system, with the exception of Cost of Living Adjustments, shall be adopted without the approval of a majority of those qualified electors voting on the matter; WHEREAS, the City of San Diego and its labor organizations have met and conferred in good faith regarding this ordinance, in order to implement the amendment to Charter section 143.1; NOW, THEREFORE, BE IT ORDAINED, by the Council of the City of San Diego, as follows: Section 1. That Chapter 2, Article 4, of the San Diego Municipal Code be and is hereby amended by adding Division 19, sections 24.1901 through 24.1906, titled "Voter Approval of Retirement System Benefit Increases ", to read as follows: -PAGE 1 OF 7- (0- 2007 -58) § 24.1901 Purpose The purpose of this ordinance is it to implement an amendment to San Diego City Charter section 143. 1, regarding voter approval of Retirement System Benefit increases. § 24.1902 Definition of an "Increase" in Retirement System Benefits An "increase" in Retirement System Benefits that is subject to voter approval pursuant to City of San Diego Charter section 143. 1, shall mean any increase in the Retirement System Benefits to be provided to any employee, legislative officer or elected official under such retirement system, with the exception of Cost of Living Adjustments as currently provided under the language in the San Diego Municipal Code, Chapter 2, Article 4, Division 15, Section 24.1505, due to: (a) a change in the retirement formula of percentage credit per year of service; (b) a change in the 2 percent maximum annual change cap in the Cost of Living Adjustment as provided in the San Diego Municipal Code, Chapter 2, Article 4, Division 15, Section 24.1505; (c) a change in retiree health benefits; (d) a change in the formula for retiree death benefits; (e) a change in the formula for those retiring due to disability; (f) a new Retirement System Benefit; or (g) a change in any other Retirement System Benefit, unless specifically excluded below. -PAGE 2 OF 7- (0- 2007 -58) § 24.1903 Changes that are Not Considered an "Increase" in Retirement System Benefits The following changes shall not be considered to be an increase in Retirement System Benefits,.and thus are not subject to voter approval under Charter section 143.1: (a) salary increases, special salary increases, special salary adjustments, salary step increases, pay for performance payments, or gain sharing payouts; (b) "negotiated specialty add -ons ", such as those set forth in the City's annual listing of earnings codes included in retirement base earnings; (c) the City's "pick up" of employee contributions to the Retirement System; (d) the establishment of a defined contribution plan for retiree medical expenses for employees hired on or after July 1, 2005, as previously agreed to between the City and certain labor unions (Memorandum of Understanding between the City of San Diego and San Diego Municipal Employees' Association of July 1, 2005 through June 30, 2008, Article 22(D)(1); Memorandum of Understanding between the City of San Diego and Local 145, International Association of Fire Fighters, AFL -CIO of July 1, 2005 through June 30, 2006, Article 23(2)(E)(1); Memorandum of Understanding between the City of San Diego and Local 127, American Federation of State, County and Municipal Employees, District Council 36, AFL -CIO of July 1, 2005 through June 30, 2008, Article 43(1)(E)(1); Memorandum of Understanding -PAGE 3 OF 7- (0- 2007 -58) between City of San Diego and Deputy City Attorney Association of July 1, 2005 through June 30, 2006, Article 7), or (e) enhanced services provided by the Retirement System. § 24.1904 Timing and Process for Voter Approval of Negotiated Retirement System Benefit Increases (a) The process for voter approval of Retirement System Benefit increases agreed to by one or more labor organizations representing employees of the City of San Diego and the City shall be as follows. Once the City and a labor organization reach a tentative agreement on a Memorandum of Understanding, the tentative agreement shall be reduced to writing and shall be adopted or rejected by the City Council of the City of San Diego and by the membership of the labor organization. (b) If the City Council and the labor organization ratify the tentative agreement (the "Ratified Tentative Agreement "), the terms and conditions contained in the Ratified Tentative Agreement shall be incorporated into a Memorandum of Understanding, along with a statement that the Retirement System Benefit increase is subject to approval by the qualified electors and the San Diego City Employees Retirement System membership. If the Ratified Tentative Agreement contains an increase to Retirement System Benefits as defined in this ordinance, then the City Attorney shall cause a measure to be prepared and'submitted to the Mayor and City Council for approval, and then to the qualified voters of the City of San Diego at the next special, general or primary City -wide election, -PAGE 4 OF 7- (0- 2007 -58) provided that no election shall be called for the sole purpose of approval of a Retirement System Benefit increase. The measure shall provide that the Retirement System Benefit increase shall not be implemented by the City unless approved by the San Diego City Employees Retirement System membership, as appropriate, and a majority of those qualified electors voting on the matter approve the measure. If approved as set forth above, the Retirement System Benefit increase shall take effect at such time as was agreed to in the Memorandum of Understanding. (c) In the event a measure pertaining to Retirement System Benefit increases will appear on a ballot, the Mayor agrees to support the measure in writing, by so stating in the appropriate ballot materials and in any other appropriate forum, as allowed by applicable laws, regulations and City policies. (d) In the event that the qualified electors voting on the measure reject the Retirement System Benefit increase, the Retirement System Benefit increase shall not take effect. Should the term of the Memorandum of Understanding which contains the rejected Retirement System Benefit . increase be three years or longer, then the Memorandum of Understanding will reopen on economic terms only 24 months after the effective date of the Memorandum of Understanding. § 24.1905 Costs of Placing the Measure on the Ballot All costs related to any measure placed on the ballot for voter approval of Retirement System Benefit increases shall be borne by the City of San Diego. -PAGE 5 OF 7- (0- 2007 -58) The City shall not consider the cost of such ballot measures in determining whether to make concessions of Retirement System Benefit increases in collective bargaining. Section 2. That a full reading of this ordinance is dispensed with prior to passage, since a written copy was made available to the City Council and the public prior to the day of passage. Section 3. This ordinance shall take effect and be in force on the thirtieth day from and after its final passage. APPROVED: MICHAEL J. AGUIRRE, City Attorney LM William Gersten Deputy City Attorney WG:jb 11/22/2006 Or.Dept:Mayor 0- 2007 -58 I hereby certify that the foregoing Ordinance was passed by the Council of the City of San Diego, at this meeting of ELIZABETH S. MALAND City Clerk By Deputy City Clerk -PAGE 6 OF 7- Approved: Vetoed: (date) JERRY SANDERS, Mayor (date) . JERRY SANDERS, Mayor -PAGE 7 OF 7- (0- 2007 -58)