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00-0320_OC EMPLOYEES RETIREMENT SYSTEM_Interim Agr Second Amd0 0 SECOND AMENDMENT TO CITY OF SAN JUAN CAPISTRANO INTERIM AGREEMENT FOR SUPPLEMENTAL BENEFITS This Second Amendment to City of San Juan Capistrano Interim Agreement for Supplemental Benefits ("Second Amendment") is made and entered effective as of tha2oy o 00, by and among the CITY OF SAN JUAN CAPISTRANO, a public entity (hereinafter, "CITY"), CAPISTRANO VALLEY WATER DISTRICT, a public entity (hereinafter, "DISTRICT") and the ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM, a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937 ("OCERS"). RECITALS A. CITY, DISTRICT AND OCERS are parties to that certain CITY OF SAN JUAN CAPISTRANO INTERIM AGREEMENT FOR SUPPLEMENTAL BENEFITS dated as of the 8`h day of February, 1999, as amended ("Agreement'). B. CITY, DISTRICT AND OCERS wish to amend the Agreement to provide for an extension of the term of the Agreement. NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS: Extension of Term. Paragraph 7 of the Agreement is hereby amended by deleting the date, "March 31, 2000" and inserting in lieu thereof the date, "September 30, 2000." 2. Remaining Terms Unchanged. Except as expressly amended by Paragraph 1 of this Second Amendment, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect. 10990:123073.1 }I1 1 • • I 3. Miscellaneous. The Recitals of this Second Amendment are true and correct and are incorporated herein by this reference. This Second Amendment may not be altered, amended, modified, supplemented, terminated or superceded except in a writing executed by each party hereto. This Second Amendment may be executed in counterpart originals, which taken together shall constitute one and the same agreement. WHEREFORE, the parties have approved and executed this Second Amendment effective as of the day first written above. ORANGE 99UNTY EMPLOYEES REE SYSTEM, y Its: CITY OF ' N JUA 1 APISTRANO By: Its: Collene Campbell, Mayor CAPISTRANO VALLEY WATER DISTRICT By: l Its: Wy tt Hart, Chairman 10990:123073.1 2 32400 PASEO ADEI—ANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 (FAX) February 22, 2000 Jwto IlUllollttl t�I11tIt ' 1961 1776 Mr. Harvey L. Leiderman Steefel Levitt & Weiss One Embarcadero Center, Thirteenth Floor San Francisco, California 94111-3719 Re: Second Amendment to Interim Agreement - ARBA Gentlemen: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GIL JONES DAVID M. SWERDLIN CITY MANAGER GEORGE SCARBOROUGH At their meetings of February 15, 2000, the City Council of the City of San Juan Capistrano and the Board of Directors of the Capistrano Valley Water District both took action to approve the Second Amendment to the Interim Agreement for Supplemental Benefits. Three copies of the Agreement are enclosed. Upon signature by the Orange County Employees Retirement System, please return two of the copies to this office. Thank you for your cooperation. Please feel free to contact me if you have any questions. Very truly yours, Cheryl Jo City Clerk/Clerk of the Board Enclosure DRUG USE IS San Juan Capistrano: Preserving the Past to Enhance the Future 0 0 AYES: Directors Swerdlin, Greiner, Bathgate and Campbell and Chairman Hart NOES: None ABSENT: None APPROVAL OF CAPISTRANO VALLEY WATER DISTRICT MINUTES - ADJOURNED REGULAR MEETING OF JANUARY 18. 2000 The Minutes of the Adjourned Meeting of January 18, 2000, were approved as submitted. Director Bathgate abstained. APPROVAL OF SECOND AMENDMENT TO INTERIM AGREEMENT FOR SUPPLEMENTAL BENEFITS (OCERS) (600.70) I As set forth in the Report dated February 15, 2000, from the Administrative Services Director, the Second Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and Orange County Employees Retirement System extending the term to September 30, 2000, to allow OCERS time to complete its evaluation, was approved as submitted. 3. APPROVAL OF BANKRUPTCY INVESTMENT POOL SETTLEMENT FOR CAPISTRANO VALLEY WATER DISTRICT (600.70) As set forth in the Report dated February 15, 2000, from the Agency Counsel, the following Resolution was adopted approving bankruptcy settlement and authorizing certain actions and execution of documents relating to the Final Report of the Orange County Bankruptcy and related recovery litigation: RESOLUTION NO. 00-2-15-1. ACCEPTING SETTLEMENT AGREEMENT AND LIMITED RELEASE - ORANGE COUNTY BANKRUPTCY -A RESOLUTION OF THE BOARD OF DIRECTORS OF CAPISTRANO VALLEY WATER DISTRICT AUTHORIZING CERTAIN ACTIONS AND EXECUTION OF DOCUMENTS RELATING TO THE FINAL REPORT OF THE ORANGE COUNTY BANKRUPTCY AND RELATED RECOVERY LITIGATION ADOPTION OF RESOLUTION SUPPORTING PROPOSITION 13. THE SAFE DRINKING WATER, CLEAN WATER, WATERSHED PROTECTION AND FLOOD PROTECTION ACT (630.30) As set forth in the Report dated February 15, 2000, from the Assistant City Manager, the following Resolution supporting Proposition 13 was adopted: CVVVD Minutes -2- 2115100 C' • AGENDA ITEM February 15, 2000 TO: George Scarborough, General Manager FROM: Cynthia L. Russell, Administrative Services Director SUBJECT: Consideration of Second Amendment to Interim Agreement for Supplemental Benefits (Orange County Employees Retirement System) RECOMMENDATION: By motion, approve the Second Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and Orange County Employees Retirement System. SITUATION: On July 1, 1997, the Capistrano Valley Water District (CVWD) employees were transitioned to the City of San Juan Capistrano through an Operations and Maintenance Agreement. This agreement provides for the CVWD Additional Retirement Benefit Account (ARBA) to be transferred to the City's ARBA and benefits set forth in the District's Agreement for Supplemental Benefits to be incorporated into the City's Agreement. On February 2, 1999, the City approved an interim agreement for supplemental benefits providing for the inclusion of the CVWD benefits to be continued as part of the City. As OCERS was in the process of evaluating ARBA, the interim agreement had a sunset date of September 30, 1999. The agreement amendment occurs every six months and is necessary to keep the benefit in place while OCERS continues its evaluation and does not affect the eligibility or calculation of the monthly stipend amount. The current amended agreement will sunset on March 31, 2000. This amendment provides for an extension to September 30, 2000. Should the OCERS Board not complete their review by that date, the agreement will be extended for another six -month period. Staff recommends that the City Council approve the attached second amendment to the interim agreement. Upon approval by the City Council, the agreement will be submitted to the Orange County Employees Retirement System Board of Directors for their consideration. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: Not Applicable. FOR CITY COUNCIL AGEN4( u),D 3 Z • FIRST AMENDMENT TO CITY OF SAN JUAN CAPISTRANO INTERIM AGREEMENT FOR SUPPLEMENTAL BENEFITS This First Amendment to City of San Juan Capistrano Interim Agreement for 4 Supplemental Benefits ("First Amendment") is made and entered effective as of the /3 day of �5� 1999, by and among the CITY OF SAN JUAN CAPISTRANO, a public entity (hereinafter, "CITY"), CAPISTRANO VALLEY WATER DISTRICT, a public entity (hereinafter, "DISTRICT") and the ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM, a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937 ("OCERS"). RECITALS A. CITY, DISTRICT AND OCERS are parties to that certain CITY OF SAN JUAN CAPISTRANO INTERIM AGREEMENT FOR SUPPLEMENTAL BENEFITS dated as of the 8u' day of February, 1999 ("Agreement"). B. CITY, DISTRICT AND OCERS wish to amend the Agreement to provide for an extension of the term of the Agreement. NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS: Extension of Tenn. Paragraph 7 of the Agreement is hereby amended by deleting the date, "September 30, 1999" and inserting in lieu thereof the date, "March 31, 2000." 2. Remaining_ Terms Unchanged. Except as expressly amended by Paragraph 1 of this First Amendment, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect. 10990:104519.1 0 0 Agenda Item FINANCIAL CONSIDERATIONS: None. NOTIFICATION: 5121 San Juan Capistrano City Employees Association San Juan Capistrano Management Employees Association Orange County Employees Retirement System ALTERNATE ACTIONS: February 15, 2000 By motion, approve the Second Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and Orange County Employees Retirement System. 2. Request further information from staff. RECOMMENDATION: By motion, approve the Second Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and Orange County Employees Retirement System. Respectfully submitted, Cyr&ia Russell Administrative Services Director Exhibit 1 - Second Amendment to Interim Agreement for Supplemental Benefits CLR STEEFEL LEVITT & WEISS A PROFESSIONAL CORPORATION ONE EMBARCADERO CENTER , THIRTIETH FLOOR • SAN FRANCISCO, CALIFORNIA 94111-3719 TELEPHONE: (415) 758-0900. FACSIMILE: (415) 788-2019 January 26, 2000 Cynthia L. Russell Administrative Services Director City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Re: Second Amendment to Interim Agreement for Supplemental Benefits Dear Ms. Russell: Enclosed with this letter are two originals of a Second Amendment to City of San Juan Capistrano Interim Agreement for Supplemental Benefits, extending its term to September 30, 2000. In order to place this on the Board's agenda for action before the current expiration of March 31, 2000, we will need to have you return both originals to me not later than March 1, 2000, each signed by authorized representatives of the City of San Juan Capistrano and the Capistrano Valley Water District. (If you can have the executed documents to me by February 10 we might be able to get it on the Board's February 22 meeting agenda). Upon receipt, if adopted by the Board of Retirement, I will have the Second Amendment executed for OCERS and will return a fully -executed original to you for your files. Please give me a call if you have any questions. c: Jim Buck w/encl. Lawrence S. Offner, Esq. w/encl. 10990:123075.1 • SAN FRANCISCO, CALIFORNIA Sin rely, I �L H ey L. iderman lip^r_ i-,! 7 rPq • STAMFORD, CONNECTICUT• �i KI) C 'OvTX,I.4�-r APPS°•van 6y &Aaw CITY OF SAN JUAN CAPISTRANO INTERIM AGREEMENT FOR Sl1PO YMPNTAL BENEFITS This Agreement ("Agreement") is made and entered effective as of the 8th day of February 1999, by and among the CITY OF SAN JUAN CAPISTRANO, a public entity (hereinafter, "CITY"), CAPISTRANO VALLEY WATER DISTRICT, a public entity (hereinafter. "DISTRICT") and the ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM, a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937 ("OCERS"). RECITALS A. OCERS provides and administers a program of retirement benefits for the employees of the County of Orange ("COUNTY"), and the CITY, DISTRICT and certain other public agencies which have elected to participate in OCERS. B. The Retirement Fund managed by OCERS includes an earnings reserve, identified as the "Unallocated Fund Balance" ("UFB") C. OCERS and the COUNTY have previously entered into a Memorandum of Understanding Agreement, dated January 5, 1993, as amended ("County Agreement"), a true and correct copy of which is attached hereto, which establishes a procedure whereby funds derived from portions of the UFB known as "Employer's Share" and "Remaining Transferred Funds" are designated on the books of OCERS as an account known as the "Additional Retiree Benefit Account" ("ARBA") for the purpose of funding additional health benefits for certain retired members of OCERS. 10990:78930.1 D. Since in or about 1993 OCERS has designated on its books portions of ARBA for the purpose of funding additional benefits for retired members of the CITY and of the DISTRICT. E. OCERS and DISTRICT entered into an Agreement dated September 17, 1996 providing for the use of a portion of ARBA to fund additional benefits for retired members of the DISTRICT. The employees of the DISTRICT were transitioned into the CITY workforce as CITY employees on or about July 1, 1997 and may eventually retire from CITY service. F. OCERS, CITY and DISTRICT wish to enter into this Agreement for the purpose of designating a portion of the ARBA for additional benefits for retired CITY and DISTRICT employees who are members of OCERS, in amounts which reflect the proportion which the total contributions made to OCERS on behalf of CITY and DISTRICT employees bears to the total contributions made on behalf of all employees who are members of OCERS. G. CITY and DISTRICT acknowledge that OCERS is currently considering its policies regarding the use of excess earnings of the retirement system to fund ARBA for purposes other than additional health benefits and that this Agreement is entered into on an interim basis, pending OCERS' final decision regarding those policies. NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS: Definitions. (a) SJC ARBA is the account described in Paragraph 2 of this Agreement, for the purpose of designating funds to make the additional benefit payments described herein. (b) Defined terms in the County Agreement shall have the same meaning in this Agreement. 10990:78930.1 2 0 0 2, SJC ARBA. OCERS has previously designated a portion of the ARBA as representing the CITY's and the DISTRICT's share of ARBA. As of June 30, 1998, that portion totaled approximately 5755,000. As of the Effective Date of this Agreement, OCERS agrees to continuing to designate such funds for the benefit of retired members of the CITY and the DISTRICT, and to designate a pro rata share of additional available funds, as set forth below, for the same purpose. All such designated funds shall be known as the "SJC ARBA." For purposes of this Paragraph 2, "Pro rata share" shall be a sum determined (1) by designating from all amounts being transferred after the Effective Date from time to time into ARBA from the "employer share" (as defined in the County Agreement) an amount equal to one percent (1%) of the CITY's payroll for its employees who are members of OCERS; and (2) by multiplying all amounts being transferred from time to time into ARBA from Remaining Transferred Funds (as defined in the County Agreement) by a fraction, the numerator of which shall be the total of all employee contributions to OCERS during the preceding five (5) full calendar years made on behalf of CITY and DISTRICT employees who are members of OCERS, and the denominator of which shall be the total employee contributions made on behalf of all OCERS' members to OCERS during the same period. Additional Benefits. (a) At the direction of the CITY, funds transferred to the SJC ARBA and any earnings credited thereto by OCERS, shall be used to provide a retirement income supplement ("Supplement") to eligible retirees of the CITY and the DISTRICT. CITY shall be primarily responsible for the administration of this program, and all expenses of administration associated 10990:78930.1 0 0 with the program. CITY shall reimburse OCERS for any expenses of administration OCERS may incur in connection with this program, not to exceed $1,000 for calendar year 1999. (b) Effective July 1, 1997, the CITY entered into an operations and maintenance agreement with the DISTRICT. As a part of this agreement, DISTRICT employees were transitioned to the CITY workforce such that said employees became employees of the CITY and may eventually retire from the CITY (See Exhibit A hereto for a listing of transitioned employees). (c) To the extent funds are available in the SJC ARBA, the amount of the initial Supplement, for retirees of CITY except those retirees with prior DISTRICT service See Exhibit A), will be (for each retiree) $10.00 per month for each full year of service performed by the retiree for the CITY while such retiree was an active member of OCERS, but in no event shall such initial supplement exceed $250.00 per month for any retiree. The initial Supplement amount for each retiree shall receive a cost -of -living adjustment annually based on CPI -U for the Los AngelesiLong Beach Area not to exceed five percent (5%) annually. In computing a retiree's years of service for purposes of calculating the amount of this Supplement, only years of service with the CITY, or any predecessor agency of the CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of CITY who have at least ten (10) years of credited service as of their effective date of retirement. As used in this paragraph the term "credited service" shall refer to service credit earned as a member of OCERS, but shall exclude service if any, with a governmental agency other than the CITY or a predecessor agency of the CITY. 10990:78930.1 4 0 0 (d) To the extent funds are available in the SIC ARBA, the amount of the Supplement, for retirees of CITY with prior DISTRICT service, will be (for each retiree) calculated as follows: Transitioned DISTRICT Employees retiring from the City from July 1, 1997 through June 30, 2007 — The amount of the Supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for either the DISTRICT or the CITY while such retiree was an active member of OCERS. but in no event shall such Supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this Supplement, only years of service with the DISTRICT and CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of the CITY who have at least (5) years of credited service with the DISTRICT as of the effective date of their retirement. Such payments will commence upon approval of this agreement by both CITY and OCERS, and shall be retroactive to July 1, 1997, unless the member retired after July 1, 1997 in which case the payment will be retroactive to the effective date of the member's retirement. 10990.78930.1 • 171 2. Transitioned DISTRICT Employees retiring from the City on or after July 1, 2007 — The amount of the initial Supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT, provided such retiree has at least five (5) years of credited service with the DISTRICT as of the effective date of their retirement and $10.00 per month per each full year of service performed by the retiree for the CITY while such retiree was an active member of OCERS, but in no event shall such Supplement exceed $150.00 per month for any retiree for DISTRICT service and in no event shall such Supplement exceed $250.00 per month for any retiree for CITY service. The initial Supplement calculated for CITY service shall receive a cost -of -living adjustment annually based on CPI -U for the Los Angeles/Long Beach Area up to maximum of five percent (5%) annually. In no event shall the total Supplement payable to a transitioned DISTRICT employee retiring from the CITY on or after July 1, 2007 exceed the total of. (a) $150.00 per month (without inflationary adjustments) for DISTRICT service plus (b) $250.00 per month (subject to inflationary adjustments as provided in the preceding sentence) for CITY service. In computing the retirees years of service for purposes of calculating the amount of this Supplement, only years of service with either the DISTRICT or the CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be 10990;78930.1 0 0 included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of the CITY who have at least ten (10) years of credited service with the CITY as of their effective date of retirement. (e) To the extent funds are available in the SJC ARBA, The amount of the Supplement, for retirees of DISTRICT, will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT while such retiree was an active member of OCERS, but in no event shall such Supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this Supplement, only years of service with the DISTRICT, or any predecessor agency of the DISTRICT, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of the DISTRICT who have at least five (5) years of credited service with the DISTRICT as of the date of their retirement. Such payments will commence upon approval of this agreement by both CITY and Board, and shall be retroactive to January 1, 1996, unless the member retired after January 1, 1996 in which case the payment will be retroactive to the effective date of the member's retirement. In determining the amount of any retroactive payment hereunder, payments previously made from DISTRICT's portion of ARBA (before transition to the SJC ARBA) shall be deducted from the amount of the retroactive payment hereunder. (f) No retiree shall have a vested right to continued payment of any Supplement. No increase in the Supplement will occur on account of delayed commencement of 10990:78930. t 0 • payment of the Supplement beyond the date on which a retiree first becomes eligible for payment. No Supplement will be payable to a former employee of the CITY or DISTRICT unless and until such person commences receiving a retirement allowance from OCERS based on service with CITY or DISTRICT. Payments of said Supplement to any retiree will cease upon the earliest to occur of the following: (1) the date as of which, in the sole opinion of OCERS the fund balance in "SJC ARBA" is insufficient to continue to fund all such Supplements; (2) for that portion of the Supplement paid under Subsections 3(c) and 3(d)(2) based on CITY service, the date of the retiree's Medicare eligibility; (3) the date benefits cease to be paid by OCERS to the retiree with respect to CITY or DISTRICT service, or the retiree's eligibility to receive OCERS retirement benefits with respect to CITY or DISTRICT service ceases; (4) the date of the retiree's death; or (5) the termination of this Agreement. No Supplement will be payable to survivors of any retiree, and the amount of the Supplement paid to a retiree shall not be included in the calculation of any survivor's allowance after such retiree is deceased. Each Supplement is intended to provide the covered retiree with an enhancement to his or her retirement benefit, and is subject to the provisions of the Government Code and other applicable law. Neither the CITY nor OCERS shall have responsibility to pay any Supplement to the extent sufficient funds in the SJC ARBA are not then available to be paid pro rata to all eligible CITY and DISTRICT retirees under the terms of this Agreement. (g) Specific provisions regarding eligibility for a determination of the Supplement will be set forth from time to time in a written policy adopted by the CITY. The terms and conditions of such policy shall be consistent with the terms and conditions set forth in this Agreement, and shall be subject to approval by both the CITY and OCERS. 10990 78930.1 0 0 (h) Funds in the SJC ARBA shall be credited with investment earnings of OCERS on a basis no less favorable than such earnings are credited to ARBA. OCERS shall provide to the CITY, at least annually, financial statements reflecting the balance of the SJC ARBA and all account activity therein. The direction contemplated to be given to OCERS by the CITY regarding the application of SJC ARBA, shall be given within three (3) months following the month in which OCERS and the CITY enter into this Agreement and as frequently thereafter as may be appropriate. Such direction shall include a list of the retirees eligible to receive a Supplement, and the amount of the Supplement payable to each retiree. CITY and OCERS, through their authorized representatives, will consult and exchange relevant information for the purpose of developing and maintaining the list. 4. Failure to Pay Supplemental Benefit. If during the term of this Agreement, as defined below, the SJC ARBA has funds which exceed current Supplements payable under this Agreement, and OCERS fails timely to pay those benefits to CITY or DISTRICT retirees, as the case may be, the CITY may pay such Supplements to such retirees directly and make a claim against OCERS for reimbursement of such payments. 5. DISTRICT ARBA Agreement. The Agreement dated September 17, 1996 by and between OCERS and DISTRICT is hereby terminated and superceded in its entirety by this Agreement. All funds in ARBA previously designated for the benefit of DISTRICT retirees shall be included in the SJC ARBA as of the effective date of this Agreement. 10990:78930.1 9 6. Effect of Other ARBA Agreements. (a) In addition to the County Agreement, OCERS has entered into agreements relating to the ARBA with other districts and public agencies participating in OCERS. Nothing herein is intended to nor shall adversely affect any of the rights of the parties to those agreements, and no amendment, modification, or further agreement regarding ARBA between or among those parties shall adversely affect the rights of OCERS, CITY, or DISTRICT under the terms of this Agreement. (b) Notwithstanding the foregoing, nothing herein shall limit or affect in any manner whatsoever the right of the COUNTY and/or OCERS to alter, amend, modify, supplement, eliminate or supercede the County Agreement or any term thereof, provided however that the effect of such action on the CITY and the DISTRICT is similar to that on all other districts and agencies participating in OCERS with agreements relating to the ARBA. Term. This Agreement shall continue in force and effect though and including September 30, 1999, at which date it shall be deemed terminated and of no further force or effect, unless terminated earlier by either OCERS or CITY, as provided herein. This Agreement may be terminated by either OCERS or CITY by giving written notice of termination to the other, which termination shall be effective 90 days following the date of actual receipt of such notice by the notified party. In the case of OCERS, such notice shall be given to OCERS' Administrator. In the case of CITY, such notice shall be given to the Chair of the San Juan Capistrano Cit}' Council. Upon termination, no further Supplement payments shall be made from the SJC 10990:78930.1 10 0 0 6. Effect of Other ARBA Agreements. (a) In addition to the County Agreement, OCERS has entered into agreements relating to the ARBA with other districts and public agencies participating in OCERS. Nothing herein is intended to nor shall adversely affect any of the rights of the parties to those agreements, and no amendment, modification, or further agreement regarding ARBA between or among those parties shall adversely affect the rights of OCERS, CITY, or DISTRICT under the terms of this Agreement. (b) Notwithstanding the foregoing, nothing herein shall limit or affect in anv manner whatsoever the right of the COUNTY and/or OCERS to alter, amend, modify, supplement, eliminate or supercede the County Agreement or any term thereof, provided however that the effect of such action on the CITY and the DISTRICT is similar to that on all other districts and agencies participating in OCERS with agreements relating to the ARBA. 7. Term. This Agreement shall continue in force and effect though and including September 30, 1999, at which date it shall be deemed terminated and of no further force or effect, unless terminated earlier by either OCERS or CITY, as provided herein. This Agreement may be terminated by either OCERS or CITY by giving written notice of termination to the other, which termination shall be effective 90 days following the date of actual receipt of such notice by the notified parry. In the case of OCERS, such notice shall be given to OCERS' Administrator. In the case of CITY, such notice shall be given to the Chair of the San Juan Capistrano Cit} Council. Upon termination, no further Supplement payments shall be made from the SJC 10990 7893U 10 0 • ARBA, and all funds previously designated to the SJC ARBA shall remain funds of OCERS, as provided by law. DISTRICT shall have no right to terminate this Agreement. Indemnity, CITY hereby agrees to indemnify, defend and hold OCERS harmless from any and all claims, losses, damages, demands, causes of action of any nature whatsoever, and any attorneys fees, costs and expenses related thereto, made by any person, entity, public agency or district arising out of or related to the provisions of this Agreement or any action taken or to be taken pursuant hereto to the fullest extent permitted by law. 9. Representation of Authority. Each party hereto represents that it is duly authorized at law and in fact to enter into this Agreement and that it has taken all necessary action to authorize the undersigned to execute this Agreement on its behalf. 10. Miscellaneous. The Recitals of this Agreement are true and correct and are incorporated herein by this reference. This Agreement represents the entire agreement and understanding of the parties and supercedes any other agreements, understandings or actions taken with respect to the subject matter hereof. This Agreement may not altered, amended, modified, supplemented, terminated or superceded except in a writing executed by each party hereto. This Agreement may be executed in counterpart originals, which taken together shall constitute one and the same agreement. 10990.78930.1 I I WHEREFORE, the parties have approved and executed this Agreement effective as of the day first written above. ORANGE COUNTY EMPLOYEES RETIREF�T SYSTE� By: Lt LtLI Thomas N. Fox Its: Chairman of the Board of Retirement CITY N CAPISTRANO By: Ttc• ohn Greiner, Mayor VALLF,YWATER DISTRICT APPROVED AS TO FORM: Steefel, Levitt & Weiss, P. C. By Le,,cQ.Q h�xveVL.L. Leiderman Attorneys for Orange County Employees Retirement System John Shaw, City Attorney By: Attorney Mr -City of San Juan Capistrano And Capistrano Valley Water District 10990:78930.1 12 0 0 EXHIBIT "A" TRANSITIONED EMPLOYEES Pursuant to the Operations and Maintenance Agreement between the City of San Juan Capistrano and the Capistrano Valley Water District (DISTRICT) dated July 1, 1997, each and every DISTRICT employee, below the level of General Manager, became an employee of the City of San Juan Capistrano (CITY). Additionally, the benefits set forth in the DISTRICT Agreement for Supplemental benefits with OCERS are incorporated into the CITY Agreement for Supplemental Benefits with OCERS. The following is the list of DISTRICT employees transitioned to the CITY effective July 1, 1997. EmDlovee Name Hire Date Ando, Stacie 05-18-97 Ando, Steve 02-21-89 Bauman, Eric 09-17-90 Best, John 09-02-69 Boessler, Harry 07-10-78 Brady, Karen 08-03-95 Brand, Neil 06-01-83 Clark, Bob 06-15-87 David, Conrad 05-06-91 Ducharm, Donna 04-23-90 Harris, Craig 07-09-91 Johnson, Tom 03-14-94 Kennedy, Francie 10-28-92 LaMothe, Jay 05-17-82 Martinez, Angel 03-05-97 Romero, Jeffrey 07-26-90 Scott, Georg'Ann 07-29-86 Smith, Michael 07-12-89 Vasquez, Rueben 04-21-69 Vaughn, Ray 09-12-88 Villalpando, Manny 10-02-79 Widner, Jim 08-12-91 Williams, Greta 09-07-89 10990:78930.1 13 ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM 2942 DAIMLER STREET, SANTA ANA, CA MEMORANDUM OF UNDERSTANDING AGREEMENT This Agreement is made and entered into this �� day of 1993 by and between the COUNTY OF ORANGE (hereinafter a political subdivision of the State of California, and the ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM ("OCERS"), a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937, WHEREAS, OCERS provides and administers a program of retirement benefits for the employees of the COUNTY and certain other public agencies that participate in OCERS; and WHEREAS, OCERS is administered by a Board of Retirement, (hereinafter "Board") which is legally separate and independent of the COUNTY; and WHEREAS, COUNTY is interested in the operation of OCERS because COUNTY provides a major portion of the funding of OCERS; and WHEREAS, COUNTY and OCERS desire to maximize the level of benefits available to the members of OCERS while minimizing employer contributions thereto; and WHEREAS, it is the intent of the parties that this Agreement apply only to COUNTY and not to the other public agency members of OCERS; and WHEREAS, OCERS will negotiate separately with each other public agency member of OCERS regarding the disposition of the Remaining Transferred Funds not transferred to ARBA, NOW, THEREFORE, IT IS HEREBY AGREED between the parties as follows: 1. Definitions: "Adjusted Total Assets" are the total assets of OCERS less accounts payable and less any other reserve accounts that the Board deems appropriate. "Unallocated Fund Balance" ("UFB") is the fund created by annual earnings in excess of the amounts credited to contributions and reserves. (Gov't Code Sect. 31592) "County Advance Reserve" is a fund into which the surplus in UFS in excess of the amount reserved by the Board may be transferred. (Gov't Code Sect. 31592.2) "Remaining Transferred Funds" are the portion of the excess funds transferred from the UFB allocated for health benefit use. 4P 0l ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM OF UNDERSTANDING - AGREEMENT DECEMBER 14, 1992 page 2 "Additional Retiree Benefit Account" ("ARBA") is that portion of the "Remaining Transferred Funds" set aside exclusively for paying towards health insurance for present and future retirees of the COUNTY. 2. OCERS will establish a policy to maintain a reserve against deficiencies (Gov't. Code Sec. 31592) of 5% of the adjusted total assets of the retirement system that will become effective when the condition precedent set forth in paragraph s, below, is satisfied. 3. Any funds in the "UFB" in excess of the amount so reserved by the Board will be transferred into the "County Advance Reserve" and "Remaining Transferred Funds" in accordance with the formulas set forth in paragraph 4. 4. From the excess UFB funds the Board will transfer this year seventy-five percent (751) into the "County Advance Reserve" and to the County contributions to "ARBA" and twenty-five percent (251%) into "Remaining Transferred Funds". For the first year the County contribution toward "ARBA" shall be an amount equal to (1t) of County payroll subject to retirement contributions. This is a one-time transfer only for the first year funding this Agreement. The "Remaining Transferred Funds" may be commingled with other funds of OCERS for investment purposes. In future years, the "employer share" of the excess UFB shall be determined by multiplying the excess UFB by a fra,'i< t, the numerator of which is the employer's contribution to OCERS during the preceding ten (10) calendar years, and the denominator of which is the total contributions to OCERS during the same period. The "non -employer share" shall be the remainder of the excess UFB. Of the employer's share, an amount equal to one percent (1t) of County payroll subject to retirement contributions for those bargaining units participating in a retiree medical program shall be transferred from the excess UFB to "ARBA". The remainder of employer share will be transferred to the "County Advance Reserve." The non employer share shall be transferred to "Remaining Transferred Funds." 5. A portion of the "Remaining Transferred Funds" will be transferred to the "ARBA" account for the exclusive purpose of paying towards health insurance for present and future retirees of the COUNTY. To the extent that "ARBA" funds are available, the Retirement Board will transfer sufficient funds from the "ARBA" to the County Advance Reserve on a dollar for dollar basis to offset the County costs of providing a retiree medical program. The "ARBA" will be credited with the same assumed rate of interest for the County Advance Reserve to the extent that all other reserves are credited and the Unallocated Fund Balance is in excess of 3% of O ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM OF UNDERSTANDING - AGREEMENT DECEMBER 14, 1992. Page 3 the adjusted total assets of the retirement fund. In addition to the transfers described in 4 above and interest credits, the amount of funds to be transferred to the "ARBA" from the "Remaining Transferred Funds" will be based on the percentage of contributions from County employees during the previous five (5) years compared to total employee contributions to OCERS during the same time period. 6. If in future years OCERSI return .on investments is insufficient to credit the assumed rate of interest to all reserve accounts, such deficiency will be made up by transferring funds out of the UFB account but not so as to bring it below three percent (3$) of the adjusted total assets. If such transfer does not yield sufficient funds to credit the assumed rate of interest to all reserve accounts, then employer contributions to OCERS shall be increased during the ensuing fiscal year by an amount which is the lesser of: 1) the amount necessary to restore the adjusted total assets to three percent (33); or, 2) an amount equal to one-half of one percent (1/2%) of the total assets; except that in no event shall such increased employer contributions be less than the amount necessary to maintain reserves of at least one percent (1%) of total assets. 7. Investment earnings in future years shall be credited first to the reserve accounts of OCERS (at the assumed rate of interest) and, second, to the UFB. If crediting UFB brings the UFB to more that five percent (51t) of the adjusted total assets then any excess will be transferred into the County Advance Reserve, the Remaining Transferred Funds account, and the ARBA account in accordance with the formulas set forth in paragraph 4. and 5. above. 8. COUNTY will meet with representatives of COUNTY's recognized employee organizations to attempt to establish a funded Retiree Medical Care Plan for future retirees of the COUNTY and their eligible survivors. Unless and until mutually agreed to and signed written memoranda of understanding are reached with at least three (3) recognized representatives of employees of the County, this Agreement will have no force or effect except paragraph 9. 9. In consideration of the Board executing this document, COUNTY shall concurrently with its approval of this Agreement cause the Board of Supervisors by resolution adopted by majority vote make the provisions of Government Code Section 31529.5 applicable in Orange County authorizing the Board to contract for the legal services of an attorney in private practice. 0 0_ ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUX OF UNDERSTANDING - AGREEMENT DECEMBER 14, 1992 Page 4 10. The effective date of the Agreement shall be the 1st day of the month after the Chairman of the Board of Supervisors executes the Agreement on behalf of COUNTY. "This Memorandum of Understanding - Agreement shall supersede and replace the Memorandum of Understanding - Agreement between the parties dated March 13, 1992." CO Date of Execution % `3 By OF ORANGE ("COUNTY") ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM ("OCERS") Date of Execution -S'�3 By 441 Chairman, Board of Retirement APPROVED AS TO FORM: TERRY C. ANDRUS, COUNTY COUNSEL By Deputy C:MOUFNL12.14 0 0 2. CONCEPTUAL APPROVAL OF THE METROPOLITAN WATER DISTRICT LOCAL RESOURCES PROGRAM GRANT AGREEMENT FOR THE NON- DOMESTIC WATER SYSTEM EXPANSION (600.70) As set forth in the Report dated September 7, 1999, from the Public Works Director, the "Local Resources Program Grant" agreement for the non-domestic water system expansion between the District, the Metropolital Water District of Southern California and the Municipal Water District of Orange County was approved in concept, as required by the Metropolital Water District Board before staff time and resources will be invested in finalizing the agreement and before grant funds are set aside. Formal approval was tentatively scheduled in February, 2000. ADOPTION OF RESOLUTION ACCEPTING WATER FACILITIES AND EASEMENT AND AUTHORIZING RELEASE OF CERTIFICATE OF DEPOSIT, PARCEL MAP 83-861 (FLUIDMASTER. INC.) (420.701 As set forth in the Report dated September 7, 1999, from the Engineering and Building Director, the following Resolution was adopted accepting the public water improvements and easement from Fluidmaster, Inc., and authorizing the Clerk of the Board to forward the easement and a Notice of Completion to the Orange County Recorder: CVWD RESOLTUION NO. 99-9-7-1. ACCEPTING PUBLIC WATER FACILITIES AND EASEMENT - FLUIDMASTER. INC. - A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CAPISTRANO VALLEY WATER DISTRICT, ACCEPTING PUBLIC WATER FACILITIES AND EASEMENT LOCATED AT 30800 AND 30850 RANCHO VIEJO ROAD - PARCEL MAP 83-861 (FLUIDMASTER, INC.) Staff was authorized to release the $169,000 Certificate of Deposit 35 days after recording the Notice of Completion. 4. APPROVAL OF FIRST AMENDMENT TO INTERIM AGREEMENT FOR SUPPLEMENTAL BENEFITS (ORANGE COUNTY EMPLOYEES RETIREMENT RETIREMENT SYSTEM) f As set forth in the Report dated September 7, 1999, from the Administrative Services Director, the First Amendment to the Interim Agreement for Supplemental Benefits between the City, the Water District and the Orange County Employees Retiement System was approved to extend the term of the agreement to March 31, 2000 in order to allow the Retirement System time to complete its evaluation of the Additional Retirement Benefit Account. BOARD ACTIONS - None CVWD Minutes -2- 9M99 ti • AGENDA ITEM TO: George Scarborough, General Manager FROM: Cynthia L. Russell, Administrative Services Director September 7,1999 SUBJECT: Consideration of First Amendment to Interim Agreement for Supplemental Benefits (Orange County Employees Retirement System) RECOMMENDATION: By motion, approve the First Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and the Orange County Employees Retirement. SITUATION: On July 1, 1997, the Capistrano Valley Water District (CVWD) employees were transitioned to the City of San Juan Capistrano through an Operations and Maintenance Agreement. This agreement provides for the CVWD Additional Retirement Benefit Account (ARBA) to be transferred to the City's ARBA and benefits set forth in the District's Agreement for Supplemental Benefits to be incorporated into the City's Agreement. On February 2, 1999, the City approved an interim agreement for supplemental benefits providing for the inclusion of the CVWD benefits to be continued as part of the City. As OCERS was in the process of evaluating ARBA, the interim agreement had a sunset date of September 30, 1999. This amendment is a housekeeping item necessary for keeping the benefit in place while OCERS continues its evaluation and does not affect the eligibility or calculation of the monthly stipend amount. The first amendment provides for an extension to March 31, 2000. Should the OCERS Board not complete their review by March 31, 2000, the agreement will be extended for another six month period. Staff recommends that the City Council approve the attached first amendment to the interim agreement. Upon approval by the City Council, the agreement will be submitted to the Orange County Employees Retirement System Board of Directors for their consideration. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: Not Applicable. FOR CITY COUNCIL AGEN �vcv-D 3Z4 • Agenda Item -2- September 7, 1999 FINANCIAL CONSIDERATIONS: None. NOTIFICATION: San Juan Capistrano City Employees Association San Juan Capistrano Management Employees Association Orange County Employees Retirement System ALTERNATE ACTIONS: 1. By motion, approve the First Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and the Orange County Employees Retirement. 2. Request further information from staff. RECOMMENDATION: By motion, approve the First Amendment to the Interim Agreement for Supplemental Benefits between the City of San Juan Capistrano, Capistrano Valley Water District and the Orange County Employees Retirement. Respectfully submitted, al , La�� Cy0hia L. Russell Administrative Services Director Exhibit 1 - First Amendment to Interim Agreement for Supplemental Benefits CLR RETIREMENT SYSTEM ,r,l AlM, (,,,(r Krui rd CLL:Z' 1 .W11H IIID ., 0 0 February 10, 1999 RECEIVCD JUL Cindy Pendleton Administrative Services Director City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano: CA 92675 RE: City of San Juan Capistrano Interim Agreement for Supplemental Benefits Dear Cindy: Attached in an original, signed copy of the Interim Agreement for Supplemental Benefits for your files. �Yoyurs truly, Mary Almond, Secretary Office of the Administrator :ma Enclosure ORANGE COL\TT EMPLOYEES RETIREVIENT SI STENT • =_ Iliilu.er,.r.,a.�,u.r. Swirl, .Aim. C.1 o_'. -sal Mi t'llunr.-/4,SSS-n'UU ---7�2. APPROVAL OF REVISED AGREEMENT WITH THE ORANGE COUNTY RETIREMENT SYSTEM FOR SUPPLEMENTAL BENEFITS FROM THE Asset forth in the Report dated February 2,1999, from the Administrative Services Director, the revised Agreement between the City of San Juan Capistrano, Capistrano Valley Water District and the Orange County Employees Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account was approved. None ADJOURNMENT There being no further bu next regular meeting date ATTEST: GIL JO S, AN CV WD Minutes the Board, the meeting was adjourned at 7:37 p.m., to the I 2, 1999, at 5:30 p.m., in the City Council Chamber. submitted, CHERYL J00N944N, CITY CLERK -2- 2/2/99 0 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 (FAX) February 4, 1999 Jww► � unwuu 196) 1776 Mr. Harvey Liederman Orange County Employees Retirement System 2223 Wellington Avenue Santa Ana, California 92701 Re: Additional Retirement Benefits Account Dear Mr. Liederman: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER MATT HART GILJONES DAWO M. SWEROUN CITY MANAGER GEORGE$CARBOROUGH At their meeting of February 2, 1999, the City Council of the City of San Juan Capistrano and the Capistrano Valley Water District both approved the revised Agreement for Supplemental Benefits from the Additional Retirement Benefits Account. Three copies of the agreement have been signed by the City and the District and are enclosed. Upon approval of the Board of Supervisors, please return two fully -executed copies, one for the City and one for the Water District. Thank you for your cooperation. If I can be of further assistance, I can be reached at 443-6308. Very truly yours, Cheryl John on City Clerk/Clerk of the Board Enclosures cc: Administrative Services Director San Juan Capistrano: Preserving the Past to Enhance the Future o AGENDA ITEM February 2, 1999 TO: George Scarborough, General Manager FROM: Cynthia L. Russell, Administrative Services Director SUBJECT: Consideration of Revised Agreement with Orange County Employees Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account RECOMMENDATION: By motion, approve the revised Agreement between the City of San Juan Capistrano, Capistrano Valley Water District and the Orange County Employees Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account. SITUATION: On July 1, 1997, the Capistrano Valley Water District (CVWD) employees were transitioned to the City of San Juan Capistrano through an Operations and Maintenance Agreement. This agreement provides for the CVWD Additional Retirement Benefit Account (ARBA) to be transferred to the City's ARBA and benefits set forth in the District's Agreement for Supplemental Benefits to be incorporated into the City's Agreement. On February 3, 1998, the Board of Directors approved a draft agreement transferring the CVWD's ARBA and its benefits to the City's ARBA. On April 13, 1998, OCERS approved that draft agreement. Prior to final execution of that agreement by all parties, OCERS had a change in legal counsel and the agreement was never finalized. In October 1998, OCERS contacted the City requesting revisions to the original agreement. These revisions are of a housekeeping nature and do not affect the eligibility or calculation of the monthly stipend amount. They include the following: 1. Referencing the County Agreement as an attachment, rather than restating its terms in the City's agreement, and 2. Reimbursement from the ARBA to OCERS for administration costs not to exceed $1,000.00 annually. This amount is to be based on actual substantiated costs. FOR CIN COUNCIL AGEN VVVVVV � � AGENDA ITEM -2- February 2, 1999 3. Making this an interim agreement pending OCERS' review of its policies regarding the use of ARBA funds. These items need to be revised by OCERS prior to September 30, 1999. Should the OCERS Board not complete their review by September 30, 1999, the agreement will be extended. These revisions have been reviewed and approved by the City and both employee associations. The attached Agreement has incorporated the District benefits as required by the Operations and Maintenance Agreement. It is appropriate for the Board of Directors to approve this Agreement since it provides for benefits of former District employees. Therefore, staff recommends the Capistrano Valley Water District Board of Directors approve the attached agreement. Upon approval by the CVWD Board of Directors, the agreement will be submitted to the Orange County Employees Retirement System Board of Directors for their consideration. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: Not Applicable. FINANCIAL CONSIDERATIONS: None. NOTIFICATION: San Juan Capistrano City Employees Association San Juan Capistrano Management Employees Association Orange County Employees Retirement System ALTERNATE ACTIONS: 1. By motion, approve the revised Agreement between the City of San Juan Capistrano, Capistrano Valley Water District and the Orange County Employees Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account. 2. Request further information from staff. 11 AGENDA ITEM -3- February 2, 1999 RECOMMENDATION: By motion, approve Agreement between the City of San Juan Capistrano and the Orange County Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account. Respectfully submitted„ L. 6/50 Cyn is L. Russell Ad nistrative Services Director Exhibit 1 - Revised Agreement between the City of San Juan Capistrano, Capistrano Valley Water District and Orange County Employees Retirement System. 1 RETIREMENT SYSTEM February 10, 1999 • RECEIVED JUL Cindy Pendleton Administrative Services Director City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano; CA 92675 RE: City of San Juan Capistrano Interim Agreement for Supplemental Benefits Dear Cindy: Attached in an original, signed copy of the Interim Agreement for Supplemental Benefits for your files. Yours truly, Mary Almond, Secretary Office of the Administrator :ma Enclosure ORANGECOLATl'EMPLOYEES RETIREME\TSlSTEN 1• Ili-ihn¢o-m.i�,ruu-.Junr,r.Ana.(.1o'.-oI Telrnhoiw C/4) ASN -n'00 F.i-x i -141 --; h'; ^ 0 February 5, 1998 Mau i F mmmmo W111MO 1961 1776 Mr. Tom Bogdan, Assistant Administrator Orange County Employees Retirement System 2223 Wellington Avenue Santa Ana, California 92701 Re: Agreement for Supplemental Benefits Dear Mr. Bogdan: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GIL JONES DAVID M. S W EROLIN CITY MANAGER GEORGESCARBOROUGH At their meeting of February 3, 1998, the City Council of the City of San Juan Capistrano and the Capistrano Valley Water District both considered and approved an agreement relating to additional benefits to be paid to retirees from the Orange County Retirement System excess account, known as the Additional Retirement Benefit Account. Three copies of the Agreement are enclosed. Upon approval and signature by the Orange County Retirement System, please return two copies to this office so that both the City and the Capistrano Valley Water District may have an 'original" for their files. We appreciate your assistance in this matter. Please feel free to contact Cynthia Pendleton, Administrative Services Director, at 443-6301 if you have any questions. Very truly yours, Cheryl Joh so z City Clerk Enclosure cc: Cynthia Pendleton 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO. CALIFORNIA 92675 0 (714) 493-1171 • 0 FEBRUARY 3, 1998 MEETING OF THE CAPISTRANO VALLEY WATER DISTRICT BOARD OF DIRECTORS The Special Meeting of the and of Directors of the Capistrano Valley Water District was called to order by Chairman Jones at 10 p.m. in the City Council Chamber. ROLL CALL PRESENT: Jones, Chairman Davt . Swerdlin, Vice Chairman Collene pbell, Director Wyatt Hart, ctor ABSENT: John Greiner, STAFF PRESENT: George Scarborough, General Manager; Shaw, Interim Counsel; Cynthia L. Pendleton Treasurer, Cheryl Johnson Clerk of the Board; Je r Murray, Assistant City Manager; Thomas Tomlinson, Planning Director; William Huber, Direct of Engineering and Building Services, Al King, Director of Community Services; Lt. Paul Sulliv Orange County Sheriffs Department, Amy Amirani, Director of Public Works; Gillian E. Ram Recording Secretary. CONSENT CALENDAR It was moved by Director Swerdlin, seconded by Director Hart, that the staff recommendations be accepted for the following items listed on the Consent Calendar. The motion carried by the following vote: AYES: Directors Swerdlin, Hart, Campbell and Chairman Jones NOES: None ABSENT: Director Greiner As set forth in the Report dated February 3, 1998, from the Administrative Services Director, the Agreement with Orange County Employees Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account was approved as submitted. CVWD Minutes -1- 2/3/98 0 0 AGENDA ITEM February 3, 1998 TO: George Scarborough, General Manager FROM: Cynthia L. Pendleton, Administrative Services Director SUBJECT: Consideration of City Agreement with Orange County Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account RECOMMENDATION: By motion, approve Agreement between the City of San Juan Capistrano and the Orange County Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account. SITUATION: On July 1, 1997, the Capistrano Valley Water District (CVWD) employees were transitioned to the City of San Juan Capistrano through an Operations and Maintenance Agreement. This agreement provides for the CVWD Additional Retirement Benefit Account (ARBA) to be transferred to the City's ARBA and benefits set forth in the District's Agreement for Supplemental Benefits to be incorporated into the City's Agreement. The attached City Agreement has incorporated the District benefits as required by the Operations and Maintenance Agreement. It is appropriate for the Board of Directors to approve this Agreement since it provides for benefits of former District employees. Staff recommends the Capistrano Valley Water District Board of Directors approve the attached agreement. A couple of items are still being negotiated, and should their outcome be different than that which is included in the draft agreement, a revised agreement will be provide to the CVWD Board of Directors prior to the meeting on February 3, 1998. Upon approval by the CVWD Board of Directors, the agreement will be submitted to the Orange County Retirement System Board of Directors for their consideration. COMMISSIONIRQARD REVIEW AND RECOMMENDATIONS: Not Applicable. FINANCIAL CONSIDERATIONS: None. (f FOR CITY COUNCIL AGE .. 0 0 Agenda Item - 2 - February 3, 1998 NOTIFICATION: San Juan Capistrano City Employees Association San Juan Capistrano Management Employees Association Orange County Retirement System ALTERNATE ACTIONS: By motion, approve Agreement between the City of San Juan Capistrano and the Orange County Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account. 2. Request further information from staff. RECOMMENDATION: By motion, approve Agreement between the City of San Juan Capistrano and the Orange County Retirement System for Supplemental Benefits from the Additional Retirement Benefits Account. Respectfully submitted, Cyn is L. Pendleton Administrative Services Director CLP:JMR 0 0 CITY OF SAN JUAN CAPISTRANO AGREEMENT FOR SUPPLEMENTAL BENEFITS THIS AGREEMENT is made and entered into this day of 1997, by and between the CITY OF SAN JUAN CAPISTRANO, a public entity (hereinafter, "CITY'), and the ORANGE COUNTY RETIREMENT SYSTEM ("OCRS"), a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937; WHEREAS, OCRS provides and administers a program of retirement benefits for the employees of the CITY, and also provides similar benefits for officers and employees of the County of Orange ('COUNTY'), and certain other public agencies which have elected to participate in OCRS; and WHEREAS, the Retirement Fund managed by OCRS includes a surplus earnings reserve, identified in this agreement as the "Unallocated Fund Balance" ("UFB"); and WHEREAS, OCRS and the COUNTY have previously entered into an Agreement dated January 5, 1993 ('County Agreement"), which establishes a procedure whereby a portion of the "UFB" will be used to provide additional benefits for retirees; and WHEREAS, in entering into such agreement, it was and is the intention of OCRS and the COUNTY that funds from the "UFB" which are earmarked for additional benefits for retirees will be available, on a pro rata basis, for retirees of each of the public agencies which participate in OCRS, including the CITY; NOW THEREFORE, IT IS HEREBY AGREED between the parties as follows: Definitions: "Adjusted Total Assets" are the total assets of OCRS less accounts payable and less any other reserve accounts that the Board of Retirement of OCRS deems appropriate. Page 1 0 E "Unallocated Fund Balance" ("UFB") is the fund created by annual earnings in excess of the amounts credited to contributions and reserves (Govt. Code Sec. 31592). "County Advance Reserve" is a fund into which the surplus in the "UFB" in excess of the amount reserved by the Board may be transferred (Govt. Code Sec. 31592.2). "Remaining Transferred Funds" are the portion of the excess funds transferred from the "UFB" allocated for health benefits for retirees or other additional retiree benefits. "Additional Retiree Benefit Account ("ARBA") is that portion of the "Remaining Transferred Funds" set aside exclusively for paying towards health insurance for present and future retirees of the COUNTY. 'District Additional Benefit Account ("DABA") is the account described in paragraph 5 below, for the purpose of accumulating funds pending commencement of benefit payments described in such paragraph. "Board" shall mean the Board of Retirement of OCRS. "Reserve Accounts" shall mean the reserve accounts OCRS is required by law to maintain, or that the Board deems appropriate for OCRS to maintain, and may include ARBA, DABA, or any similar account for the payment of supplemental benefits to retirees only to the extent deemed appropriate by the Board. 2. Reserve Against Deficiencies. OCRS has established a policy maintaining a reserve against deficiencies (Govt. Code Sec. 31592) of five percent (5%) of the adjusted total assets of the retirement system. Any funds in the "UFB" in excess of the amount so reserved by the Board (hereinafter, "excess UFB") will be transferred into the "County Advance Reserve" and "Remaining Transferred Funds" in accordance with the formulas set forth in paragraph 3, below. Page 2 9 0 Use of Excess UFB. During the first year of the County Agreement, the Board will transfer seventy-five percent (75%) of the "excess UFB" funds into the "County Advance Reserve" and to the COUNTY contributions to "ARBA", and twenty-five percent (25%) into "Remaining Transferred Funds." For the first year of the County Agreement, the COUNTY contribution toward "ARBA" shall be an amount equal to one percent (1%) of COUNTY payroll subject to retirement contributions. This is a one-time transfer only for the first year of the County Agreement. The "Remaining Transferred Funds" may be commingled with other funds of OCRS for investment purposes. In subsequent years, the "employer share" of the "excess UFB" shall be determined by multiplying the "excess UFB" by a fraction, the numerator of which is the total of all employer contributions to OCRS during the preceding ten (10) calendar years, and the denominator of which is the total contributions to OCRS during the same period. The "non -employer share" shall be the remainder of the "excess UFB". Of the employer's share, an amount equal to one percent (1%) of the employer's payroll subject to retirement contributions shall, during the first year of this agreement, be transferred from the "excess UFB" to "DABA." Such transfer will be contingent on funds being available in the excess UFB to make such transfer. - The remainder of the employer share shall be transferred to the "County Advance Reserve". The non -employer share shall be transferred to "Remaining Transferred Funds". Additional Benefits -- County Employees. (a) The County Agreement currently provides that a portion of the "Remaining Transferred Funds" will be transferred to the "ARBA" account for the exclusive purpose of paying a portion of the premium for health insurance for present and future retirees of the COUNTY. This Page 3 transfer will be subject to the terms and conditions in the County Agreement. The Balance of the "Remaining Transferred Funds", not transferred to the "ARBA" will be available to fund additional benefits for retired members of OCRS who are retired from one of the non -County agencies, including the CITY. 5. Additional Benefits -- City Employees. (a) A portion of the "Remaining Transferred Funds" shall be made available to fund additional benefits for retirees of the CITY. Said portion shall be a fraction which has as its numerator the total employee contributions to OCRS made by the employees of the CITY and the DISTRICT (as defined below) within the previous five (5) years, and as its denominator the total of all employee contributions made to OCRS within the same period of time. At the direction of the CITY, such funds, and any investment income credited thereto by OCRS, shall be used to provide a retirement income supplement to eligible retirees. (b) Effective July 1, 1997, the CITY entered into a operations and maintenance agreement with the Capistrano Valley Water District (DISTRICT). As a part of this agreement, employees were transitioned to the CITY workforce such that said employees became employees of the CITY and may eventually retire from the CITY (See Exhibit A for a listing of transitioned employees). Pursuant to that agreement, the balance of the DISTRICT "DABA" account as of July 1, 1997 shall be transferred to the CITY " DABA" account for the purpose of funding supplemental benefits for these employees and DISTRICT retirees. 0 The amount of the initial retirement income supplement, for retirees of CITY except those retirees with prior DISTRICT service (See Exhibit A), will be (for each retiree) $10.00 per month per each full year of service performed by the retiree for the CITY while such retiree was an Page 4 0 0 active member of OCRS, but in no event shall such initial supplement exceed $250.00 per month for any retiree. The initial retirement income supplement amount for each retiree shall receive a cost -of - living adjustment annually based on CPI for the Los Angeles/Long Beach Area up to maximum of five percent (5%). In computing a retiree's years of service for purposes of calculating the amount of this supplement, only years of service with the CITY, or any predecessor agency of the CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of CITY who retire on or after July 1, 1996 and have at least ten (10) years of credited service as of their effective date of retirement. As used in this paragraph the term "credited service" shall refer to service credit earned as a member of the retirement system. (d) The amount of the retirement income supplement, for retirees of CITY with prior DISTRICT service, will be (for each retiree) calculated as follows: 1. Transitioned DISTRICT Employees retiring from the City from July 1, 1997 through June 30, 2007 - The amount of the retirement income supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for either the DISTRICT or the CITY while such retiree was an active member of OCRS, but in no event shall such supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this supplement, only years of service with the DISTRICT and CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be included, whether or not such other Page 5 0 0 governmental agency participates in OCRS. This supplement shall be paid to retirees of the CITY who have at least five (5) years of credited service with the DISTRICT as of January 1, 1996. Such payments will commence upon approval of this agreement by both CITY and Board, and shall be retroactive to July 1, 1997, unless the member retired after July 1, 1997 in which case the payment will be retroactive to the effective date of the member's retirement. 2. Transitioned DISTRICT Employees retiring from the City on or after July 1, 2007 - The amount of the initial retirement income supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT, provided such retiree has at least five (5) years of credited service with the DISTRICT as of January 1, 1996 and $10.00 per month per each full year of service performed by the retiree for the CITY while such retiree was an active member of OCRS, but in no event shall such supplement exceed $150.00 per month for any retiree for DISTRICT service and in no event shall such initial supplement exceed $250.00 per month for any retiree for CITY service. The initial retirement income supplement amount calculated for CITY service shall receive a cost -of -living adjustment annually based on CPI for the Los Angeles/Long Beach Area up to maximum of five percent (5%). In computing the retiree's years of service for purposes of calculating the amount of this supplement, only years of service with either the DISTRICT or the CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency Page 6 Ll will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of the CITY who have at least ten (10) years of credited service with the CITY as of their effective date of retirement. (e) The amount of the retirement income supplement, for retirees of DISTRICT, will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT while such retiree was an active member of OCRS, but in no event shall such supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this supplement, only years of service with the DISTRICT, or any predecessor agency of the DISTRICT, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of the DISTRICT who have at least five (5) years of credited service with the DISTRICT as of January 1, 1996. Such payments will commence upon approval of this agreement by both CITY and Board, and shall be retroactive to January 1, 1996, unless the member retired after January 1, 1996 in which case the payment will be retroactive to the effective date of the member's retirement. In determining the amount of any retroactive payment hereunder, payments previously made from District's DABA (before transfer to the City DABA) shall be taken into account. (f) No person shall have a vested right to continued payment of such supplement. No increase in the supplement will occur on account of delayed commencement of payment of the supplement beyond the date on which a person first becomes eligible for payment. No Page 7 0 0 supplement will be payable to a former employee of the CITY or DISTRICT unless and until such person commences receiving a retirement allowance from OCRS based on service with CITY or DISTRICT. Payments of said supplement to any retiree will cease upon the earliest to occur of the following: (1) the date as of which, in the opinion of the CITY and/or OCRS, the fund balance in "DABA" is insufficient to continue to fund such retirement income supplement, (2) for that portion of the supplement paid under Subsections 50 and 5(d)(2) based on CITY Service, the date of the retiree's Medicare eligibility (3) the date benefits cease to be paid by OCRS to the retiree with respect to CITY or DISTRICT service, or the retiree's eligibility to receive OCRS retirement benefits with respect to CITY or DISTRICT service ceases, or (4) the date of the retiree's death. No income supplement will be payable to survivors of any retiree pursuant to this Agreement, and the amount of the supplement paid to a retiree shall not be included in the calculation of any survivor's allowance after such retiree is deceased. This supplement is intended to provide each covered retiree with an enhancement to his or her OCRS retirement benefit, and is subject to the provisions of Government Code Sections 31691.1 and 31692. Neither the CITY nor OCRS shall have responsibility to pay any supplemental benefit for which sufficient funds are not available under the funding mechanism provided in this Agreement. (g) Specific provisions regarding eligibility for a determination of the retirement income supplement described herein will be set forth from time to time in a written supplemental retirement income policy adopted by the CITY. The terms and conditions of such policy shall be consistent with the terms and conditions set forth in this Agreement, and shall be subject to approval by both the CITY and OCRS, Page 8 • Ll (h) The portion of the Remaining Transferred Funds which are transferred to the "DABA" account and shall be accounted for in the same manner as a segregated pool of assets held for the account of the CITY and its eligible employees and retirees including DISTRICT retirees. Such funds shall be credited with investment earnings of OCRS on a basis no less favorable than such earnings are credited to "ARBA" or any other funds held for the purpose of paying additional benefits to employees or retirees of the COUNTY or any non -COUNTY agency. The CITY shall receive, at least annually, financial statements reflecting the balance of the "DABA" and all account activity herein. The direction contemplated to be given to OCRS by the CITY regarding the application of "DABA"s or Remaining Transferred Funds allocable to CITY/DISTRICT benefits, shall be given within three (3) months following the month in which this Agreement is entered into by the CITY and OCRS. Such direction shall include a list of the retirees eligible to receive the supplemental retirement income benefit, and the amount payable to each retiree. CITY and OCRS, through their authorized representatives, will consult and exchange relevant information for the purpose of developing said list. 6. Failure to Pay Supplemental Benefit. If "DABA" has assets which exceed payables allocable to "DABA", and if OCRS fails to pay directly to CITY/DISTRICT retirees the supplemental retirement benefit contemplated by this Agreement, the CITY may pay the supplemental retirement benefit to such retirees directly, from such funds as the CITY may have available. Then, to recover the cost of such payment, CITY may reduce its contributions to OCRS in an amount equal to the lesser of (1) the assets in DABA minus any payable allocable to DABA, or (2) the supplemental benefits paid by CITY to the retirees of CITY/DISTRICT. Page 9 0 0 7. Future Years. If in future years OCRS' return on investments is insufficient to credit the assumed rate of interest to all reserve accounts, such deficiency will be made up by transferring funds out of the "UFB" account, but not so as to bring it below three percent (3%) of the adjusted total assets. If such transfer does not yield sufficient funds to credit the assumed rate of interest to all reserve accounts, then employer contributions to OCRS shall be increased during the ensuing fiscal year by an amount which is the lesser of (1) the amount necessary to restore the UFB account to three percent (3%) of adjusted total assets; or (2) an amount equal to one-half of one percent ('/2%) of the City payroll subject to retirement contributions to OCRS, except that in no event shall such increased employer contributions be less than the amount necessary to maintain reserves of at least one percent (1%) of total assets. 8. Crediting of Investment Earnings. Investment earnings of OCRS in future years shall be credited first to the reserve accounts of OCRS (at the assumed rate of interest) and second, to the "UFB". If crediting the "UFB'; brings the "UFB" to more than five percent (5%) of the adjusted total assets of the system, then any excess (above 5% of adjusted total assets) will first be used to credit interest to the "ARBA," "DABA," and similar accounts. The interest credited to such accounts shall not exceed the OCRS assumed rate of interest, but will not be in an amount which would lower the "UFB" to less than five percent (5) of adjusted total assets. If there is still excess "UFB" after the ARBA, DABA, and similar accounts have been credited with interest, such excess will be transferred into the "County Advance Reserve", the "Remaining Transferred Funds" account, and the "DABA" account in accordance with the formulas set forth in paragraph 3 and 4 above. Page 10 0 0 9. Entire Agreement. This shall represent the entire Agreement between the parties, except to the extent this Agreement may be modified or supplemented by any addendum attached hereto, and duly agreed to by the parties. WHEREFORE, the parties have approved and executed this Agreement effective as of the date first written above. APPROVED AS TO FORM: Donald H. Rubin, Deputy Orange County Counsel APPROVED AS TO FORM: John Shaw, City Attorney ATTEST: Cheryl Johnson, City Clerk ORANGECOUNTYRETIREMENT SYSTEM M CITY OF SAN JUAN CAPISTRANO Un George Scarborough, City Manager CAPISTRANO VALLEYWATERDISTRICT IN Page 11 Gil Jones, Chairman TRANSITIONED EMPLOYEES Pursuant to the Operations and Maintenance Agreement between the City of San Juan Capistrano and the Capistrano Valley Water District (DISTRICT) dated July 1, 1997, each and every DISTRICT employee, below the level of General Manager, became an employee of the City of San Juan Capistrano (CITY). Additionally, the benefits set forth in the DISTRICT Agreement for Supplemental Benefits with OCRS are incorporated into the CITY Agreement for Supplemental Benefits with OCRS. The following is the list of employees transitioned effective July 1, 1997 Employee Name Hire Date Ando, Stacie 05-18-87 Ando, Steve 02-21-89 Bauman, Eric 09-17-90 Best, John 09-02-69 Boessler, Harry 07-10-78 Brady, Karen 08-03-95 Brand, Neil 06-01-83 Clark, Bob 06-15-87 David, Conrad 05-06-91 Ducharm, Donna 04-23-90 Harris, Craig 07-09-91 Johnson, Tom 03-14-94 LaMothe, Jay 05-17-82 Martinez, Angel 03-05-97 Romero, Jeffrey 07-26-90 Scott, Georg'Ann 07-29-86 Smith, Michael 07-12-89 Vasquez, Rueben 04-21-69 Vaughn, Ray 09-12-88 Villalpando, Manny 10-02-79 Widner, Jim 08-12-91 Williams, Greta 09-07-89 Page 12 COPY CITY OF SAN JUAN CAPISTRANO AGREEMENT FOR SUPPLEMENTAL BENEFITS THIS AGREEMENT is made and entered into this 3rd day of February 1998, by and between the CITY OF SAN JUAN CAPISTRANO, a public entity (hereinafter, "CITY'), and the ORANGE COUNTY RETIREMENT SYSTEM ("OCRS"), a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937; WHEREAS, OCRS provides and administers a program of retirement benefits for the employees of the CITY, and also provides similar benefits for officers and employees of the County of Orange ("COUNTY'), and certain other public agencies which have elected to participate in OCRS; and WHEREAS, the Retirement Fund managed by OCRS includes a surplus earnings reserve, identified in this agreement as the "Unallocated Fund Balance" ("UFB"); and WHEREAS, OCRS and the COUNTY have previously entered into an Agreement dated January 5, 1993 ("County Agreement"), which establishes a procedure whereby a portion of the "UFB" will be used to provide additional benefits for retirees; and WHEREAS, in entering into such agreement, it was and is the intention of OCRS and the COUNTY that funds from the "UFB" which are earmarked for additional benefits for retirees will be available, on a pro rata basis, for retirees of each of the public agencies which participate in OCRS, including the CITY; NOW THEREFORE, IT IS HEREBY AGREED between the parties as follows: Definitions: "Adjusted Total Assets" are the total assets of OCRS less accounts payable and less Page 1 • 0 any other reserve accounts that the Board of Retirement of OCRS deems appropriate. "Unallocated Fund Balance" ("UM") is the fund created by annual earnings in excess of the amounts credited to contributions and reserves (Govt. Code Sec. 31592). "County Advance Reserve" is a fund into which the surplus in the "UFB" in excess of the amount reserved by the Board may be transferred (Govt. Code Sec. 31592.2). "Remaining Transferred Funds" are the portion of the excess funds transferred from the "UFB" allocated for health benefits for retirees or other additional retiree benefits. "Additional Retiree Benefit Account ("ARBA") is that portion of the "Remaining Transferred Funds" set aside exclusively for paying towards health insurance for present and future retirees of the COUNTY. "District Additional Benefit Account ("DAB X') is the account described in paragraph 5 below, for the purpose of accumulating funds pending commencement of benefit payments described in such paragraph. "Board" shall mean the Board of Retirement of OCRS. "Reserve Accounts" shall mean the reserve accounts OCRS is required by law to maintain, or that the Board deems appropriate for OCRS to maintain, and may include ARBA, DABA, or any similar account for the payment of supplemental benefits to retirees only to the extent deemed appropriate by the Board. 2, Reserve Against Deficiencies. OCRS has established a policy maintaining a reserve against deficiencies (Govt. Code Sec. 31592) of five percent (5%) of the adjusted total assets of the retirement system. Any funds in the "UFB" in excess of the amount so reserved by the Board (hereinafter, "excess UFB") will be Page 2 transferred into the "County Advance Reserve" and "Remaining Transferred Funds" in accordance with the formulas set forth in paragraph 3, below. "Excess UFB", "adjusted total assets" and "reserve accounts" shall be determined and applied in the same manner with respect to this agreement and all similar agreements for supplemental benefits, entered into between OCRS and any other governmental agency, irrespective of differences in the exact wording of the particular agreements. 3. Use of Excess UFB. During the first year of the County Agreement, the Board will transfer seventy-five percent (75%) of the "excess UFB" funds into the "County Advance Reserve" and to the COUNTY contributions to "ARBA", and twenty-five percent (25%) into "Remaining Transferred Funds." For the first year of the County Agreement, the COUNTY contribution toward "ARBA" shall be an amount equal to one percent (1%) of COUNTY payroll subject to retirement contributions. This is a one-time transfer only for the first year of the County Agreement. The "Remaining Transferred Funds" may be commingled with other funds of OCRS for investment purposes. In subsequent years, the "employer share" of the "excess UFB" shall be determined by multiplying the "excess UFB" by a fraction, the numerator of which is the total of all employer contributions to OCRS during the preceding ten (10) calendar years, and the denominator of which is the total contributions to OCRS during the same period. The "non -employer share" shall be the remainder of the "excess UFB". Of the employer's share, an amount equal to one percent (1%) of the employer's payroll subject to retirement contributions shall, during the first year of this agreement, be transferred from the "excess UFB" to "DABA." Such transfer will be contingent on funds being available in the "excess UFB" to make such transfer. If insufficient funds are available in the "excess UFB" to make such transfer during the first year of this agreement, then such transfer shall be made in the first year in which there are sufficient funds available in the "excess UFB" to so permit. Page 3 0 0 The remainder of the employer share shall be transferred to the "County Advance Reserve". The non -employer share shall be transferred to "Remaining Transferred Funds". With respect to the employer's share, there has not been nor shall there be, transferred from "excess UFB" to either an ARBA or DABA account, or equivalent, held for the purpose of paying additional benefits to employees or retirees of any governmental agency, an amount equal to more than one percent (1%) of the respective employer's payroll subject to retirement contributions, and no such one percent (1%) transfer has occurred or will occur more than once, unless the CITY's DABA receives a one percent (11/6) transfer a like number of times. (a) The County Agreement currently provides that a portion of the "Remaining Transferred Funds" will be transferred to the "ARBA" account for the exclusive purpose of paying a portion of the premium for health insurance for present and future retirees of the COUNTY. This transfer will be subject to the terms and conditions in the County Agreement. The Balance of the "Remaining Transferred Funds", not transferred to the "ARBA" will be available to fund additional benefits for retired members of OCRS who are retired from one of the non -County agencies, including the CITY. 5. Additional Benefits -- City Employees. (a) A portion of the "Remaining Transferred Funds" shall be made available to fund additional benefits for retirees of the CITY and shall be transferred to the CITY DABA account. Said portion shall be a fraction which has as its numerator the total employee contributions to OCRS made by the employees of the CITY and the DISTRICT (as defined below) within the previous five (5) years, and as its denominator the total of all employee contributions made to OCRS within the Page 4 0 0 same period of time. At the direction of the CITY, such funds, and any investment income credited thereto by OCRS, shall be used to provide a retirement income supplement to eligible retirees. (b) Effective July 1, 1997, the CITY entered into a operations and maintenance agreement with the Capistrano Valley Water District (DISTRICT). As a part of this agreement, DISTRICT employees were transitioned to the CITY workforce such that said employees became employees of the CITY and may eventually retire from the CITY (See Exhibit A for a listing of transitioned employees). Pursuant to that agreement, the balance of the DISTRICT "DABA" account as of July 1, 1997 shall be transferred to the CITY " DABA" account for the purpose of funding supplemental benefits for these employees and DISTRICT retirees. (c) The amount of the initial retirement income supplement, for retirees of CITY except those retirees with prior DISTRICT service (See Exhibit A), will be (for each retiree) $10.00 per month per each full year of service performed by the retiree for the CITY while such retiree was an active member of OCRS, but in no event shall such initial supplement exceed $250.00 per month for any retiree. The initial retirement income supplement amount for each retiree shall receive a cost -of - living adjustment annually based on CPI for the Los Angeles/Long Beach Area up to maximum of five percent (5%). In computing a retiree's years of service for purposes of calculating the amount of this supplement, only years of service with the CITY, or any predecessor agency of the CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of CITY who retire on or after July 1, 1996 and have at least ten (10) years of credited service as of their effective date of retirement. As used in this paragraph the term "credited service" shall refer to service credit earned as a member of the Retirement System, but shall exclude service if any, with a governmental agency other than the CITY or a predecessor agency of the CITY. Page 5 0 (d) The amount of the retirement income supplement, for retirees of CITY with prior DISTRICT service, will be (for each retiree) calculated as follows: 1. Transitioned DISTRICT Employees retiring from the City from July 1, 1997 through June 30, 2007 - The amount of the retirement income supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for either the DISTRICT or the CITY while such retiree was an active member of OCRS, but in no event shall such supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this supplement, only years of service with the DISTRICT and CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of the CITY who have at least five (5) years of credited service with the DISTRICT as of January 1, 1996. Such payments will commence upon approval of this agreement by both CITY and Board, and shall be retroactive to July 1, 1997, unless the member retired after July 1, 1997 in which case the payment will be retroactive to the effective date of the member's retirement. 2. Transitioned DISTRICT Employees retiring from the City on or after July 1, 2007 - The amount of the initial retirement income supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT, provided such retiree has at least five (5) years of Page 6 0 0 credited service with the DISTRICT as of January 1, 1996 and $10.00 per month per each full year of service performed by the retiree for the CITY while such retiree was an active member of OCRS, but in no event shall such supplement exceed $150.00 per month for any retiree for DISTRICT service and in no event shall such initial supplement exceed $250.00 per month for any retiree for CITY service. The initial retirement income supplement amount calculated for CITY service shall receive a cost -of -living adjustment annually based on CPI for the Los AngelevLong Beach Area up to maximum of five percent (51/6). In no event shall the total supplement payable to a transitioned DISTRICT employee retiring from the CITY on or after July .1, 2007 exceed the total of (a) $150.00 per month (without inflationary adjustments) for DISTRICT service plus (b) $250.00 per month (subject to inflationary adjustments as provided in the preceding sentence) for CITY service. In computing the retiree's years of service for purposes of calculating the amount of this supplement, only years of service with either the DISTRICT or the CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of the CITY who have at least ten (10) years of credited service with the CITY as of their effective date of retirement. (e) The amount of the retirement income supplement, for retirees of DISTRICT, will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for Page 7 0 0 the DISTRICT while such retiree was an active member of OCRS, but in no event shall such supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this supplement, only years of service with the DISTRICT, or any predecessor agency of the DISTRICT, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCRS. This supplement shall be paid to retirees of the DISTRICT who have at least five (5) years of credited service with the DISTRICT as of January 1, 1996. Such payments will commence upon approval of this agreement by both CITY and Board, and shall be retroactive to January 1, 1996, unless the member retired after January 1, 1996 in which case the payment will be retroactive to the effective date of the member's retirement. In determining the amount of any retroactive payment hereunder, payments previously made from District's DABA (before transfer to the City DABA) shall be taken into account. (I) No person shall have a vested right to continued payment of such supplement. No increase in the supplement will occur on account of delayed commencement of payment of the supplement beyond the date on which a person first becomes eligible for payment. No supplement will be payable to a former employee of the CITY or DISTRICT unless and until such person commences receiving a retirement allowance from OCRS based on service with CITY or DISTRICT. Payments of said supplement to any retiree will cease upon the earliest to occur of the following: (1) the date as of which, in the opinion of the CITY and/or OCRS, the fund balance in "DABA" is insufficient to continue to fund such retirement income supplement, (2) for that portion of the supplement paid under Subsections 50 and 5(d)(2) based on CITY Service, the date of the retiree's Medicare eligibility (3) the date benefits cease to be paid by OCRS to the retiree with respect to CITY or DISTRICT service, or the retiree's Page 8 eligibility to receive OCRS retirement benefits with respect to CITY or DISTRICT service ceases, or (4) the date of the retiree's death. No income supplement will be payable to survivors of any retiree pursuant to this Agreement, and the amount of the supplement paid to a retiree shall not be included in the calculation of any survivor's allowance after such retiree is deceased. This supplement is intended to provide each covered retiree with an enhancement to his or her OCRS retirement benefit, and is subject to the provisions of Government Code Sections 31691.1 and 31692. Neither the CITY nor OCRS shall have responsibility to pay any supplemental benefit for which sufficient funds are not available under the funding mechanism provided in this Agreement. (g) Specific provisions regarding eligibility for a determination of the retirement income supplement described herein will be set forth from time to time in a written supplemental retirement income policy adopted by the CITY. The terms and conditions of such policy shall be consistent with the terms and conditions set forth in this Agreement, and shall be subject to approval by both the CITY and OCRS, (h) The portion of the Remaining Transferred Funds which are transferred to the "DABA" account shall be accounted for in the same manner as a segregated pool of assets held for the account of the CITY and its eligible employees and retirees including DISTRICT retirees. Such funds shall be credited with investment earnings of OCRS on a basis no less favorable than such earnings are credited to "ARBA" or any other funds held for the purpose of paying additional benefits to employees or retirees of the COUNTY or any non -COUNTY agency. The CITY shall receive, at least annually, financial statements reflecting the balance of the "DABA' and all account activity herein. The direction contemplated to be given to OCRS by the CITY regarding the application of "DABA"s or Remaining Transferred Funds allocable to CITY/DISTRICT benefits, shall be given within three (3) months following the month in which this Agreement is entered into by the CITY and Page 9 OCRS. Such direction shall include a list of the retirees eligible to receive the supplemental retirement income benefit, and the amount payable to each retiree. CITY and OCRS, through their authorized representatives, will consult and exchange relevant information for the purpose of developing said list. If "DABA" has assets which exceed payables allocable to "DABA', and if OCRS fails to pay directly to CITY/DISTRICT retirees the supplemental retirement benefit contemplated by this Agreement, the CITY may pay the supplemental retirement benefit to such retirees directly, from such fiords as the CITY may have available. Then, to recover the cost of such payment, CITY may reduce its contributions to OCRS in an amount equal to the lesser of (1) the assets in DABA minus any payable allocable to DABA, or (2) the supplemental benefits paid by CITY to the retirees of CITY/DISTRICT. 7. Future Years. If in future years OCRS' return on investments is insufficient to credit the assumed rate of interest to all reserve accounts, such deficiency will be made up by transferring funds out of the "IJFB" account, but not so as to bring it below three percent (31/6) of the adjusted total assets. If such transfer does not yield sufficient funds to credit the assumed rate of interest to all reserve accounts, then employer contributions to OCRS shall be increased during the ensuing fiscal year by an amount which is the lesser of (1) the amount necessary to restore the UFB account to three percent (3%) of adjusted total assets; or (2) an amount equal to one-half of one percent (Y2%) of the City payroll subject to retirement contributions to OCRS, except that in no event shall such increased employer contributions be less than the amount necessary to maintain "UFB account" of at least one percent (M) of total assets. Page 10 0 9 8. Crediting of Investment Earnings. Investment earnings of OCRS in future years shall be credited first to the reserve accounts of OCRS (at the assumed rate of interest) and second, to the "UFB". If crediting the "LTFB'; brings the "LTFB" to more than five percent (5%) of the adjusted total assets of the system, then any excess (above 5% of adjusted total assets) will first be used to credit interest to the "ARBA," "DABA," and similar accounts. The interest credited to such accounts shall not exceed the OCRS assumed rate of interest, but will not be in an amount which would lower the "UFB" to less than five percent (5) of adjusted total assets. If there is still excess "UFB" after the ARBA, DABA, and similar accounts have been credited with interest, such excess will be transferred into the "County Advance Reserve", the "Remaining Transferred Funds" account, and the "ARBA" and "DABA" accounts m accordance with the formulas set forth in paragraph 3 and 4 above. 9. Entire Agreement. This shall represent the entire Agreement between the parties, except to the extent this Agreement may be modified or supplemented by any addendum attached hereto, and duly agreed to by the parties. Page 11 0 0 WHEREFORE, the parties have approved and executed this Agreement effective as of the date first written above. APPROVED AS TO FORM: Donald H. Rubin, Deputy Orange County Counsel APPROVED TO FORM: John S w, City Attorney ORANGECOUNTYRETIREIENI' SYSTEM Lin CITY OF RAN JUO CAPISTRANO City Manager Capistrano Valley Water District has read the foregoing Agreement, approves it, and agrees to be bound by its terms. VaILEY WATER DISTRICT General Manager Page 12 0 0 TRANSITIONED EMPLOYEES Pursuant to the Operations and Maintenance Agreement between the City of San Juan Capistrano and the Capistrano Valley Water District (DISTRICT) dated July 1, 1997, each and every DISTRICT employee, below the level of General Manager, became an employee of the City of San Juan Capistrano (CITY). Additionally, the benefits set forth in the DISTRICT Agreement for Supplemental Benefits with OCRS are incorporated into the CITY Agreement for Supplemental Benefits with OCRS. The following is the list of employees transitioned effective July 1, 1997 Employee Name Hire Date Ando, Stacie 05-18-87 Ando, Steve 02-21-89 Bauman, Eric 09-17-90 Best, John 09-02-69 Boessler, Harry 07-10-78 Brady, Karen 08-03-95 Brand, Neil 06-01-83 Clark, Bob 06-15-87 David, Conrad 05-06-91 Ducharm, Donna 04-23-90 Harris, Craig 07-09-91 Johnson, Tom 03-14-94 LaMothe, Jay 05-17-82 Martinez, Angel 03-05-97 Romero, Jeffrey 07-26-90 Scott, Georg'Ann 07-29-86 Smith, Michael 07-12-89 Vasquez, Rueben 04-21-69 Vaughn, Ray 09-12-88 Villalpando, Manny 10-02-79 Widner, Jim 08-12-91 Williams, Greta 09-07-89 Page 13 RETIREMENT SYSTEM 0 February 10, 1999 Cindy Pendleton Administrative Services Director City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano: CA 92675 RE: City of San Juan Capistrano Interim Agreement for Supplemental Benefits Dear Cindy: Attached in an original. signed copy of the Interim Agreement for Supplemental Benefits for your files. Yours truly, Mary Almond, Secretary Office of the Administrator :ma Enclosure OR.),NG - COCNTI- ENIPLO) EES RETIREVIENTSI STEM • _Ana. ( [-, I,1rhnnr r -141 F.0 i -tai =1Kbli- Lw�/F.R�r f�PFruvan 6y 3oa2o a�P�9' CITY OF SAN JUAN CAPISTRANO INTERIM AGREEMENT FOR SUPPT FMENTAL BENEFITS This Agreement ("Agreement') is made and entered effective as of the 8th day of February 1999, by and among the CITY OF SAN JUAN CAPISTRANO, a public entity (hereinafter, "CITY"), CAPISTRANO VALLEY WATER DISTRICT, a public entity (hereinafter. 'DISTRICT") and the ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM, a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937 ("OCERS"). RECITALS A. OCERS provides and administers a program of retirement benefits for the employees of the County of Orange ("COUNTY"), and the CITY, DISTRICT and certain other public agencies which have elected to participate in OCERS. B. The Retirement Fund managed by OCERS includes an earnings reserve, identified as the "Unallocated Fund Balance" ("UFB"). C. OCERS and the COUNTY have previously entered into a Memorandum of Understanding Agreement, dated January 5, 1993, as amended ("County Agreement'), a true and correct copy of which is attached hereto, which establishes a procedure whereby funds derived from portions of the UFB known as "Employer's Share" and "Remaining Transferred Funds" are designated on the books of OCERS as an account known as the "Additional Retiree Benefit Account" ("ARBA") for the purpose of funding additional health benefits for certain retired members of OCERS. 10990.78930.1 r 0 D. Since in or about 1993 OCERS has designated on its books portions of ARBA for the purpose of funding additional benefits for retired members of the CITY and of the DISTRICT. E. OCERS and DISTRICT entered into an Agreement dated September 17, 1996 providing for the use of a portion of ARBA to fund additional benefits for retired members of the DISTRICT. The employees of the DISTRICT were transitioned into the CITY workforce as CITY employees on or about July 1, 1997 and may eventually retire from CITY service. F. OCERS, CITY and DISTRICT wish to enter into this Agreement for the purpose of designating a portion of the ARBA for additional benefits for retired CITY and DISTRICT employees who are members of OCERS, in amounts which reflect the proportion which the total contributions made to OCERS on behalf of CITY and DISTRICT employees bears to the total contributions made on behalf of all employees who are members of OCERS. G. CITY and DISTRICT acknowledge that OCERS is currently considering its policies regarding the use of excess earnings of the retirement system to fund ARBA for purposes other than additional health benefits and that this Agreement is entered into on an interim basis, pending OCERS' final decision regarding those policies. NOW THEREFORE. THE PARTIES AGREE AS FOLLOWS: Definitions. (a) SJC ARBA is the account described in Paragraph 2 of this Agreement, for the purpose of designating funds to make the additional benefit payments described herein. (b) Defined terms in the County Agreement shall have the same meaning in this Agreement. 10990:78930.1 • 2. SJC ARBA. OCERS has previously designated a portion of the ARBA as representing the CITY's and the DISTRICT's share of ARBA. As of June 30, 1998, that portion totaled approximately $755,000. As of the Effective Date of this Agreement, OCERS agrees to continuing to designate such funds for the benefit of retired members of the CITY and the DISTRICT, and to designate a pro rata share of additional available funds, as set forth below, for the same purpose. All such designated funds shall be known as the "SJC ARBA." For purposes of this Paragraph 2, "pro rata share" shall be a sum determined (1) by designating from all amounts being transferred after the Effective Date from time to time into ARBA from the "employer share" (as defined in the County Agreement) an amount equal to one percent (M) of the CITY's payroll for its employees who are members of OCERS; and (2) by multiplying all amounts being transferred from time to time into ARBA from Remaining Transferred Funds (as defined in the County Agreement) by a fraction, the numerator of which shall be the total of all employee contributions to OCERS during the preceding five (5) full calendar years made on behalf of CITY and DISTRICT employees who are members of OCERS, and the denominator of which shall be the total employee contributions made on behalf of all OCERS' members to OCERS during the same period. 3. Additional Benefits. (a) At the direction of the CITY, funds transferred to the SJC ARBA and any earnings credited thereto by OCERS, shall be used to provide a retirement income supplement ("Supplement") to eligible retirees of the CITY and the DISTRICT. CITY shall be primarily responsible for the administration of this program, and all expenses of administration associated 10990:78930.1 n with the program. CITY shall reimburse OCERS for any expenses of administration OCERS may incur in connection with this program, not to exceed $1,000 for calendar year 1999. (b) Effective July 1, 1997, the CITY entered into an operations and maintenance agreement with the DISTRICT. As a part of this agreement, DISTRICT employees were transitioned to the CITY workforce such that said employees became employees of the CITY and may eventually retire from the CITY (See Exhibit A hereto for a listing of transitioned employees). (c) To the extent funds are available in the SJC ARBA, the amount of the initial Supplement, for retirees of CITY except those retirees with prior DISTRICT service See Exhibit A), will be (for each retiree) $10.00 per month for each full year of service performed by the retiree for the CITY while such retiree was an active member of OCERS, but in no event shall such initial supplement exceed $250.00 per month for any retiree. The initial Supplement amount for each retiree shall receive a cost -of -living adjustment annually based on CPI -U for the Los Angeles/Long Beach Area not to exceed five percent (5%) annually. In computing a retiree's years of service for purposes of calculating the amount of this Supplement, only years of service with the CITY, or any predecessor agency of the CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of CITY who have at least ten (10) years of credited service as of their effective date of retirement. As used in this paragraph the term "credited service" shall refer to service credit earned as a member of OCERS, but shall exclude service if any, with a governmental agency other than the CITY or a predecessor agency of the CITY. 10990:78930.1 0 (d) To the extent funds are available in the SJC ARBA, the amount of the Supplement. for retirees of CITY with prior DISTRICT service, will be (for each retiree) calculated as follows: Transitioned DISTRICT Employees retiring from the City from July 1, 1997 through June 30, 2007 — The amount of the Supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for either the DISTRICT or the CITY while such retiree was an active member of OCERS, but in no event shall such Supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this Supplement, only years of service with the DISTRICT and CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of the CITY who have at least (5) years of credited service with the DISTRICT as of the effective date of their retirement. Such payments will commence upon approval of this agreement by both CITY and OCERS, and shall be retroactive to July 1, 1997, unless the member retired after July 1, 1997 in which case the payment will be retroactive to the effective date of the member's retirement. 10990:78930.1 • 2. Transitioned DISTRICT Employees retiring from the City on or after July 1, 2007 — The amount of the initial Supplement will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT, provided such retiree has at least five (5) years of credited service with the DISTRICT as of the effective date of their retirement and $10.00 per month per each full year of service performed by the retiree for the CITY while such retiree was an active member of OCERS, but in no event shall such Supplement exceed $150.00 per month for any retiree for DISTRICT service and in no event shall such Supplement exceed $250.00 per month for any retiree for CITY service. The initial Supplement calculated for CITY service shall receive a cost -of -living adjustment annually based on CPI -U for the Los Angeles/Long Beach Area up to maximum of five percent (5%) annually. In no event shall the total Supplement payable to a transitioned DISTRICT employee retiring from the CITY on or after July 1, 2007 exceed the total of: (a) $150.00 per month (without inflationary adjustments) for DISTRICT service plus (b) $250.00 per month (subject to inflationary adjustments as provided in the preceding sentence) for CITY service. In computing the retiree's years of service for purposes of calculating the amount of this Supplement. only years of service with either the DISTRICT or the CITY, or any predecessor agency of the DISTRICT or CITY, will be included, and service with any other governmental agency will not be 10990.78930.1 0 • included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of the CITY who have at least ten (10) years of credited service with the CITY as of their effective date of retirement. (e) To the extent funds are available in the SJC ARBA, The amount of the Supplement, for retirees of DISTRICT, will be (for each retiree) $5.00 per month per each full year of service performed by the retiree for the DISTRICT while such retiree was an active member of OCERS, but in no event shall such Supplement exceed $150.00 per month for any retiree. In computing the retiree's years of service for purposes of calculating the amount of this Supplement, only years of service with the DISTRICT, or any predecessor agency of the DISTRICT, will be included, and service with any other governmental agency will not be included, whether or not such other governmental agency participates in OCERS. This Supplement shall be paid to retirees of the DISTRICT who have at least five (5) years of credited service with the DISTRICT as of the date of their retirement. Such payments will commence upon approval of this agreement by both CITY and Board, and shall be retroactive to January 1, 1996, unless the member retired after January 1, 1996 in which case the payment will be retroactive to the effective date of the member's retirement. In determining the amount of any retroactive payment hereunder, payments previously made from DISTRICT's portion of ARBA (before transition to the SJC ARBA) shall be deducted from the amount of the retroactive payment hereunder. (f) No retiree shall have a vested right to continued payment of any Supplement. No increase in the Supplement will occur on account of delayed commencement of 10990. 78930.1 9 0 payment of the Supplement beyond the date on which a retiree first becomes eligible for payment. No Supplement will be payable to a former employee of the CITY or DISTRICT unless and until such person commences receiving a retirement allowance from OCERS based on service with CITY or DISTRICT. Payments of said Supplement to any retiree will cease upon the earliest to occur of the following: (1) the date as of which, in the sole opinion of OCERS the fund balance in "SJC ARBA" is insufficient to continue to fund all such Supplements; (2) for that portion of the Supplement paid under Subsections 3(c) and 3(d)(2) based on CITY service, the date of the retiree's Medicare eligibility; (3) the date benefits cease to be paid by OCERS to the retiree with respect to CITY or DISTRICT service, or the retiree's eligibility to receive OCERS retirement benefits with respect to CITY or DISTRICT service ceases; (4) the date of the retiree's death; or (5) the termination of this Agreement. No Supplement will be payable to survivors of any retiree, and the amount of the Supplement paid to a retiree shall not be included in the calculation of any survivor's allowance after such retiree is deceased. Each Supplement is intended to provide the covered retiree with an enhancement to his or her retirement benefit, and is subject to the provisions of the Government Code and other applicable law. Neither the CITY nor OCERS shall have responsibility to pay any Supplement to the extent sufficient funds in the SIC ARBA are not then available to be paid pro rata to all eligible CITY and DISTRICT retirees under the terms of this Agreement. (g) Specific provisions regarding eligibility for a determination of the Supplement will be set forth from time to time in a written policy adopted by the CITY. The terms and conditions of such policy shall be consistent with the terms and conditions set forth in this Agreement, and shall be subject to approval by both the CITY and OCERS. 10990-.78930.1 0 E (h) Funds in the SJC ARBA shall be credited with investment earnings of OCERS on a basis no less favorable than such earnings are credited to ARBA. OCERS shall provide to the CITY, at least annually, financial statements reflecting the balance of the SJC ARBA and all account activity therein. The direction contemplated to be given to OCERS by the CITY regarding the application of SJC ARBA, shall be given within three (3) months following the month in which OCERS and the CITY enter into this Agreement and as frequently thereafter as may be appropriate. Such direction shall include a list of the retirees eligible to receive a Supplement, and the amount of the Supplement payable to each retiree. CITY and OCERS. through their authorized representatives, will consult and exchange relevant information for the purpose of developing and maintaining the list. 4. Failure to Pay Supplemental Benefit. If during the term of this Agreement, as defined below, the SJC ARBA has funds which exceed current Supplements payable under this Agreement, and OCERS fails timely to pay those benefits to CITY or DISTRICT retirees, as the case may be, the CITY may pay such Supplements to such retirees directly and make a claim against OCERS for reimbursement of such payments. 5. DISTRICT ARBA Agreement. The Agreement dated September 17, 1996 by and between OCERS and DISTRICT is hereby terminated and superceded in its entirety by this Agreement. All funds in ARBA previously designated for the benefit of DISTRICT retirees shall be included in the SJC ARBA as of the effective date of this Agreement. 10990:78930.1 9 0 6. Effect of Other ARBA Agreements. (a) In addition to the County Agreement, OCERS has entered into agreements relating to the ARBA with other districts and public agencies participating in OCERS. Nothing herein is intended to nor shall adversely affect any of the rights of the parties to those agreements, and no amendment, modification, or further agreement regarding ARBA between or among those parties shall adversely affect the rights of OCERS, CITY, or DISTRICT under the terms of this Agreement. (b) Notwithstanding the foregoing, nothing herein shall limit or affect in any manner whatsoever the right of the COUNTY and/or OCERS to alter, amend, modify, supplement, eliminate or supercede the County Agreement or any term thereof, provided however that the effect of such action on the CITY and the DISTRICT is similar to that on all other districts and agencies participating in OCERS with agreements relating to the ARBA. 7. Term. This Agreement shall continue in force and effect though and including September 30, 1999, at which date it shall be deemed terminated and of no further force or effect, unless terminated earlier by either OCERS or CITY, as provided herein. This Agreement may be terminated by either OCERS or CITY by giving written notice of termination to the other, which termination shall be effective 90 days following the date of actual receipt of such notice by the notified party. In the case of OCERS, such notice shall be given to OCERS' Administrator. In the case of CITY, such notice shall be given to the Chair of the San Juan Capistrano Cit}' Council. Upon termination, no further Supplement payments shall be made from the SJC 10990:78930.1 10 0 a ARBA, and all funds previously designated to the SJC ARBA shall remain funds of OCERS, as provided by law. DISTRICT shall have no right to terminate this Agreement. 8. Indemnity. CITY hereby agrees to indemnify, defend and hold OCERS harmless from any and all claims, losses, damages, demands, causes of action of any nature whatsoever, and any attorneys fees, costs and expenses related thereto, made by any person, entity, public agency or district arising out of or related to the provisions of this Agreement or any action taken or to be taken pursuant hereto to the fullest extent permitted by law. 9. Representation of Authority. Each party hereto represents that it is duly authorized at law and in fact to enter into this Agreement and that it has taken all necessary action to authorize the undersigned to execute this Agreement on its behalf. 10. Miscellaneous. The Recitals of this Agreement are true and correct and are incorporated herein by this reference. This Agreement represents the entire agreement and understanding of the parties and supercedes any other agreements, understandings or actions taken with respect to the subject matter hereof. This Agreement may not altered, amended, modified, supplemented, terminated or superceded except in a writing executed by each party hereto. This Agreement may be executed in counterpart originals, which taken together shall constitute one and the same agreement. 10990:78930.1 11 WHEREFORE, the parties have approved and executed this Agreement effective as of the day first written above. ORANGE COUNTY EMPLOYEES RETIRE -(ZIT SYSTEBy:VI,I LU I Thomas N. Fox Its: Chairman of the Board of Retirement CITY JU CAPISTRANO By: Its. ohn Greiner, Mayor VALLWWATER DISTRICT APPROVED AS TO FORM: Steefel, Levitt & Weis,^�s, P. C. By; La lr---- e L. Leiderman Attorneys for Orange County Employees Retirement System John Shaw, City Attorney By: Q( K�� Attorney f r City of San Juan Capistrano And Capistrano Valley Water District 10990:79930.1 12 • s EXHIBIT "A" TRANSITIONED EMPLOYEES Pursuant to the Operations and Maintenance Agreement between the City of San Juan Capistrano and the Capistrano Valley Water District (DISTRICT) dated July 1, 1997, each and every DISTRICT employee, below the level of General Manager, became an employee of the City of San Juan Capistrano (CITY). Additionally, the benefits set forth in the DISTRICT Agreement for Supplemental benefits with OCERS are incorporated into the CITY Agreement for Supplemental Benefits with OCERS. The following is the list of DISTRICT employees transitioned to the CITY effective July 1, 1997. Employee Name Hire Date Ando, Stacie 05-18-97 Ando, Steve 02-21-89 Bauman, Eric 09-17-90 Best, John 09-02-69 Boessler, Harry 07-10-78 Brady, Karen 08-03-95 Brand, Neil 06-01-83 Clark, Bob 06-15-87 David, Conrad 05-06-91 Ducharm, Donna 04-23-90 Harris, Craig 07-09-91 Johnson, Tom 03-14-94 Kennedy, Francie 10-28-92 LaMothe, Jay 05-17-82 Martinez, Angel 03-05-97 Romero, Jeffrey 07-26-90 Scott, Georg'Ann 07-29-86 Smith, Michael 07-12-89 Vasquez, Rueben 04-21-69 Vaughn, Ray 09-12-88 Villalpando, Manny 10-02-79 Widner, Jim 08-12-91 Williams, Greta 09-07-89 10990:78930.1 13 ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM 2942 DAIMLER STREET, SANTA ANA, CA MEMORANDUM OF LTMERSTANDI2FG AGREEMENT This Agreement is made and entered into this Z F' day of 1993 by and between the COUNTY OF ORANGE (hereinafter "CONN "), a political subdivision of the State of California, and the ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM ("OCERS"), a public retirement system organized and existing pursuant to the provisions of the County Employees Retirement Law of 1937, WHEREAS, OCERS provides and administers a program of retirement benefits for the employees of the COUNTY and certain other public agencies that participate in OCERS; and WHEREAS, OCERS is administered by a Board of Retirement, (hereinafter "Board") which is legally separate and independent of the COUNTY; and WHEREAS, COUNTY is interested in the operation of OCERS because COUNTY provides a major portion of the funding of OCERS; and WHEREAS, COUNTY and OCERS desire to maximize the level of benefits available to the members of OCERS while minimizing employer contributions thereto; and WHEREAS, it is the intent of the parties that this Agreement apply only to COUNTY and not to the other public agency members of OCERS; and WHEREAS, OCERS will negotiate separately with each other public agency member of OCERS regarding the disposition of the Remaining Transferred Funds not transferred to ARBA, NOW, THEREFORE, IT IS HEREBY AGREED between the parties as follows: 1. Definitions: "Adjusted Total Assets" are the total assets of OCERS less accounts payable and less any other reserve accounts that the Board deems appropriate. "Unallocated Fund Balance" ("UFB") is the fund created by annual earnings in excess of the amounts credited to contributions and reserves. (Gov't Code Sect. 31592) "County Advance Reserve" is a fund into which the surplus in UFB in excess of the amount reserved by the Board may be transferred. (Gov't Code Sect. 31592.2) "Remaining Transferred Funds" are the portion of the excess funds transferred from the UFB allocated for health benefit use. ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM OF UNDERSTANDING - AGREEMENT DECEMBER 14, 1992 Page 2 "Additional Retiree Benefit Account" ("ARBA") is that portion of the "Remaining Transferred Funds" set aside exclusively for paying towards health insurance for present and future retirees of the COUNTY. 2. OCERS will establish a policy to maintain a reserve against deficiencies (Gov't. Code Sec. 31592) of 5% of the adjusted total assets of the retirement system that will become effective when the condition precedent set forth in paragraph 8, below, is satisfied. 3. Any funds in the "UFB" in excess of the amount so reserved by the Board will be transferred into the "County Advance Reserve" and "Remaining Transferred Funds" in accordance with the formulas set forth in paragraph 4. 4. From the excess UFB funds the Board will transfer this year seventy-five percent (75%) into the "County Advance Reserve" and to the County contributions to "ARBA" and twenty-five percent (251%) into "Remaining Transferred Funds". For the first year the County contribution toward "ARBA" shall be an amount equal to (1%) of County payroll subject to retirement contributions. This is a one-time transfer only for the first year funding this Agreement. The "Remaining Transferred Funds" may be commingled with other funds of OCERS for investment purposes. In future years, the "employer share" of the excess UFB shall be determined by multiplying the excess UFB by a fraL.'ic-L, the numerator of which is the employer's contribution to OCERS during the preceding ten (10) calendar years, and the denominator of which is the total contributions to OCERS during the same period. The "non -employer share" shall be the remainder of the excess UFB. Of the employer's share, an amount equal to one percent (It) of County payroll subject to retirement contributions for those bargaining units participating in a retiree medical program shall be transferred from the excess UFB to "ARBA". The remainder of employer share will be transferred to the "County Advance Reserve." The non employer share shall be transferred to "Remaining Transferred Funds." 5. A portion of the "Remaining Transferred Funds" will be transferred to the "ARBA" account for the exclusive purpose of paying towards health insurance for present and future retirees of the COUNTY. To the extent that "ARBA" funds are available, the Retirement Board will transfer sufficient funds from the "ARBA" to the County Advance Reserve on a dollar for dollar basis to offset the County costs of providing a retiree medical program. The "ARBA" will be credited with the same assumed rate of interest for the County Advance Reserve to the extent that all other reserves are credited and the Unallocated Fund Balance is in excess of 31; of ORANGE COUNTY MEMORANDUM OF DECEMBER 14, EMPLOYEES RET'. UNDERSTANDING 1992 REM= SYSTEM - AGREEMENT Page 3 the adjusted total assets of the retirement fund. In addition to the transfers described in 4 above and interest credits, the amount of funds to be transferred to the "ARBA" from the "Remaining Transferred Funds" will be based on the percentage of contributions from County employees during the previous five (5) years compared to total employee contributions to OCERS during the same time period. 6. If in future years OCERS' return .on investments is insufficient to credit the assumed rate of interest to all reserve accounts, such deficiency will be made up by transferring funds out of the UFB account but not so as to bring it below three percent (3%) of the adjusted total assets. If such transfer does not yield sufficient funds to credit the assumed rate of interest to all reserve accounts, then employer contributions to OCERS shall be increased during the ensuing fiscal year by an amount which is the lesser of: 1) the amount necessary to restore the adjusted total assets to three percent (3%); or, 2) an amount equal to one-half of one percent (1/2%) of the total assets; except that in no event shall such increased employer contributions be less than the amount necessary to maintain reserves of at least one percent (1%) of total assets. 7. Investment earnings in future years shall be credited first to the reserve accounts of OCERS (at the assumed rate of interest) and, second, to the UFB. If crediting UFB brings the UFB to more that five percent (5k) of the adjusted total assets then any excess will be transferred into the County Advance Reserve, the Remaining Transferred Funds account, and the ARBA account in accordance with the formulas set forth in paragraph 4. and 5. above. 8. COUNTY will meet with representatives of COUNTY's recognized employee organizations to attempt to establish a funded Retiree Medical Care Plan for future retirees of the COUNTY and their eligible survivors. Unless and until mutually agreed to and signed written memoranda of understanding are reached with at least three (3) recognized representatives of employees of the County, this Agreement will have no force or effect except paragraph 9. 9. In consideration of the Board executing this document, COUNTY shall concurrently with its approval of this Agreement cause the Board of Supervisors by resolution adopted by majority vote make the provisions of Government Code Section 31529.5 applicable in Orange County authorizing the Board to contract for the legal services of an attorney in private practice. ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM OF UNDERSTANDING - AGREEMENT DECEMBER 14, 1992 Page 4 10. The effective date of the Agreement shall be the 1st day of the month after the Chairman of the Board of Supervisors executes the Agreement on behalf of COUNTY. "This Memorandum of Understanding - Agreement shall supersede and replace the Memorandum of Understanding - Agreement between the parties dated March 13, 1992." Date of Execution 1-6- j3 well By OF ORANGE ("COUNTY") ORANGE COUNTY EMPLOYEES jRRETIIRREMENT SXY//S�TEM ( "OCERS") Date of Execution -S'`�3 By\z.1 . /.X Chairman, Board of Retirement APPROVED AS TO FORM: TERRY C. ANDRUS, COUNTY COUNSEL By �..� Deputy C:MOUFNL12.14