HomeMy WebLinkAboutAB 1912 - PER JPA - Liability STAFF REPORT
CITY OF PALM DESERT
ADMINISTRATIVE SERVICES DEPARTMENT
MEETING DATE: June 14, 2018
PREPARED BY: Stephen Y. Aryan, Risk Manager
REQUEST: Consideration to approve a letter of opposition for AB 1912
(Rodriguez): Public employees' retirement: joint powers agreements:
liability.
Recommendation
By Minute Motion, approve a letter of opposition for AB 1912 (Rodriguez).
Committee Recommendation
The Palm Desert Legislative Review Committee recommended submitting a letter of
opposition for this bill.
Strategic Plan
This item is not associated with any identifiable objective within the Palm Desert Strategic
Plan.
Background Analysis
Under the Joint Exercise of Powers Act, two or more public agencies may agree to form a
Joint Power Authority (JPA) that can exercise powers common to the member agencies.
This allows agencies to jointly address problems that do not neatly conform to jurisdictional
lines. One example of a JPA the City belongs to is the Coachella Valley Association of
Governments (CVAG).
Existing law presumes that any debts, liabilities, or obligations incurred by the JPA become
the debts, liabilities, and obligations of member agencies, unless the agreement specifies
otherwise. In the case of retirement obligations, it may be the case that a JPA agreement
specifically states that these obligations are not the debts of member agencies.
AB 1912 (Rodriguez) was introduced in part because of a JPA called "LA Works," which was
created by four cities in Los Angeles County to provide job training for jail inmates and other
unemployed/underemployed persons. After Los Angeles County terminated its contract with
LA Works in 2014, LA Works ceased submitting pension contributions. Because CaIPERS
was not able to collect money from either the JPA or the member agencies, CaIPERS
reduced the benefits of nearly 200 employees by 63%.
AB 1912 prohibits member agencies of a Joint Powers Authority (JPA) from disclaiming
liability for any retirement liability of the JPA, if it contracts with a public employee retirement
system.
June 14, 2018 - Staff Report
AB 1912 (Rodriguez) Opposition Letter
Page 2 of 2
As recently amended, AB 1912 requires a JPA's member agencies to mutually agree to
apportion the retirement liability of the JPA for existing contracts with a public employee
retirement system. If the member agencies are unable to mutually agree to apportionment of
the total retirement liability of the agency, the California Public Employees' Retirement
System (CaIPERS) Board shall do so based on the share of service received from the joint
power authority by a agency, or population of each member agency. These requirement
apply retroactively to all parties, both current and former, to any joint powers agreement.
AB 1912 also prohibits, on and after January 1, 2019, CaIPERS from contracting with a JPA,
unless the contract contains provisions regarding joint and several liability, among other
provisions.
The Palm Desert Legislative Review Committee respectfully recommends the City Council
oppose this bill.
Fiscal Analysis
The City's opposition of AB 1912 (Rodriguez) has no fiscal impact.
LEGAL REVIEW DEPARTMENT REVIEW FINANCIAL REVIEW CITY MANAGER
N/A N/A
Robert W. Hargreaves Lori Carney Janet Moore Lauri Aylaian
City Attorney Director of Administrative Services Director of Finance City Manager
ATTACHMENT: AB 1912 (Rodriguez) as amended on May 9, 2018
Draft Letter of Opposition for AB 1912 (Rodriguez)
AMENDED IN ASSEMBLY MAY 9, 2018
AMENDED IN ASSEMBLY APRIL 19, 2018
AMENDED IN ASSEMBLY MARCH 19, 2018
CALIFORNIA LEGISLATURE-2017-18 REGULAR SESSION
ASSEMBLY BILL No. 1912
Introduced by Assembly Member Rodriguez
January 23, 2018
An act to amend Section 6508.1 of,to add Sections 6508.2,20461.1,
20574.1,and 20575.1 to,and to repeal and add Section 20577.5 of,the
Government Code, and`o nd Scctio_ 366 2 ofthc Public Utilities
Codes relating to public agencies,and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1912, as amended, Rodriguez. Public employees' retirement:
joint powers agreements: liability.
(1) Existing law establishes various public agency retirement systems,
including, among others, the Public Employees' Retirement System,
the State Teachers'Retirement System,the Judges'Retirement System
II, and various county retirement systems pursuant to the County
Employees Retirement Law of 1937. These systems provide defined
pension benefits to public employees based on age, service credit, and
amount of final compensation.
The Joint Exercise of Powers Act generally authorizes 2 or more
public agencies,by agreement,to jointly exercise any common power.
Under the act, if-the an agency is not one or more of the parties to the
agreement but is a public entity, commission, or board constituted
pursuant to the agreement, the debts, liabilities, and obligations of the
agency are the debts, liabilities, and obligations of the parties to the
96
AB 1912 —2—
agreement, unless the agreement specifies
otherwise. The act also authorizes a party to a
joint powers agreement to separately contract for, or assume
responsibilities for, specific debts, liabilities, or obligations of the
agency.
This bill would eliminate that authorization, and would specify that
if an agency-to established by a joint powers agreement participates-in
in, or contracts with, a public retirement systemrall-parties7 member
agencies, both current and former to the agreement, would be-jointly
required to mutually agree as to the
apportionment of the agency's retirement obligations-to-the-retirement
among themselves,
provided that the agreement equals the total retirement liability of the
agency. The bill would require the board, in cases in which the member
agencies are unable to mutually agree to apportionment, to apportion
the retirement liability of the agency to each member agency, as
specified. The bill would also provide that if a judgment is rendered
against an agency or a party to the agreement for a breach of its
obligations to the retirement system,the time within which a claim for
injury may be presented or an action commenced against the other party
that is subject to the liability determined by the judgment begins to run
when the judgment is rendered. The bill would specify that those
provisions apply retroactively to all parties, both current and former,
to the joint powers agreement.
(2) The Public Employees'Retirement Law(PERL)creates the Public
Employees' Retirement System (PERS), which provides a defined
benefit to members of the system,based on final compensation,credited
service,and age at retirement,subject to certain variations. PERL vests
management and control of PERS in its Board of Administration.Under
PERL, the board may refuse to contract with, or to agree to an
amendment proposed by, any public agency for any benefit provisions
that are not specifically authorized by that law and that the board
determines would adversely affect the administration of the retirement
system.
This bill would prohibit the-board board, on and after January 1,
2019, from contracting with any public agency formed under the Joint
Exercise of Powers Act unless all the parties to that agreement are
jointly and severally liable for all of the public agency's obligation to
96
-3— AB 1912
the system.
(3) Existing law authorizes the governing board of a contracting
agency to terminate its membership with PERS, subject to specified
criteria. Existing law requires the PERS board to enter into a specified
agreement with the governing body of a terminating agency, upon
request of that agency, to ensure that final compensation is calculated
in the same manner as benefits of nonterminating agencies, and that
related necessary adjustments in the employer's contribution rate are
made and benefits adequately funded, including a lump-sum payment
at termination, if agreed to by the terminating agency and the board.
Existing law requires a terminating agency to notify the PERS board
of its intention to enter into this agreement within a specified period of
time. Existing law authorizes the PERS board to choose not to enter
into an agreement to terminate if the board determines that it is not in
the best interests of PERS. Existing law requires all plan assets and
liabilities of a terminating agency to be deposited in a single pooled
account, the terminated agency pool subaccount within the Public
Employees'Retirement Fund, a continuously appropriated fund.
This bill would also require the PERS board to enter into the
above-described agreement upon request of a member agency of a
terminating agency formed under the Joint Exercise of Powers Act,and
would require a member agency to notify the PERS board of its intention
to enter into this agreement within a specified period of time. The bill
would authorize the board, if it determines that it is not in the best
interests of the retirement system, to choose not to enter into that
agreement. To the extent that the bill would increase any lump-sum
payments made by a terminating agency and deposited into a subaccount
within the Public Employees' Retirement Fund, the bill would make
an appropriation.The bill would also provide that if the governing body
of a terminating agency or the governing bodies of its member agencies
do not enter into an agreement,the member agencies would then assume
the retirement obligations for their retirement ,
systems.
96
AB 1912 —4—
(4) Existing law makes a terminated agency liable to the system for
any deficit in funding for earned benefits, interest, and for reasonable
and necessary costs of collection, including attorney's fees. Existing
law provides that the board has a lien on the assets of a terminated
contracting agency, as specified, and that assets shall also be available
to pay actual costs, including attorney's fees necessarily expended for
collection on the lien.
This bill would extend that liability and lien to all of the parties of a
terminating agency that was formed under the Joint Exercise of Powers
Act.
several:To the extent that these changes would increase deposits in the
Public Employees' Retirement Fund, the bill would make an
appropriation.
(5) Existing law authorizes the board of PERS to elect not to impose
a reduction,or to impose a lesser reduction, on a terminated plan if the
board has made all reasonable efforts to collect the amount necessary
to fully fund the liabilities of the plan and the board finds that not
reducing the benefits, or imposing a lesser reduction, will not impact
the actuarial soundness of the terminated agency pool.
This bill would eliminate that provision. The bill would require the
board board, prior to exercising its authority to reduce benefits, to
consider and exhaust all options and necessary actions, including
evaluating whether to bring a civil action against any member agencies
to a terminated agency formed by an agreement under the Joint Exercise
of Powers Act to compel payment of the terminated public agency's
pension obligations.The bill would also specify that the board is entitled
to reasonable attorney's fees in addition to other costs. The bill would
also set forth related legislative findings.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. The Legislature finds and declares as follows:
2 (a) Retirement security is important to families, workers, and
3 communities, as well as to the local, regional, and statewide
4 economies, and provides financial security and dignity to those
5 who retire.
6 (b) A defined benefit plan offers, among other types of
7 retirement plans, a guarantee of financial security in retirement.
96
-5— AB 1912
1 (c) A Joint Power Authority(WA)created pursuant to the Joint
2 Exercise of Powers Act (Chapter 5 (commencing with Section
3 6500) of Division 7 of Title 1 of the Government Code)provides
4 important services and benefits to its geographical areas and
5 communities.
6 (d) A JPA may offer a defined benefit plan to attract, recruit,
7 and retain highly skilled employees toward providing services and
8 fulfilling its purpose.
9 (e) Employees who have been promised a retirement allowance
10 and the other benefits of a defined benefit plan by their employer
11 should be provided those benefits after reaching the requisite age,
12 based on years of service and an established benefit formula, as
13 promised by that employer.
14 (f) Further, an employee who accepts employment with a JPA
15 employer that promises a defined benefit plan may detrimentally
16 rely on the retirement benefit, as committed by the employer,
17 during his or her employment and retirement from that employer.
18 (g) Moreover, a JPA might have limited sources of revenue,
19 and an inability to increase,or secure additional sources of revenue,
20 that may lead to financial distress or insolvency of the JPA,absent
21 the financial surety of its member agencies and for the retirement
22 benefits of the JPA's employees.
23 (h) Additionally, employees who rely on a promise by a JPA
24 employer to provide retirement benefits by accepting and
25 maintaining employment with the employer based partly on the
26 employer's promise may do so to their own retirement detriment.
27 (i) Thus,member agencies of a JPA should not be permitted to
28 absolve themselves of financial liability, in whole or in part, of
29 the financial distress or insolvency of a JPA that results in
30 reductions in a defined benefit plan retirement allowance of a
31 retired JPA employee, of which the agencies are members.
32 (j) Therefore,in order to ensure that th
33 board of a public
34 retirement system is meeting its fiduciary duties and responsibilities
35 to its members and the system, the board should be permitted to
36 seek legal redress on behalf of its members as a result of the
37 financial insolvency of a WA that contracts with the retirement
38 system if the financial distress or insolvency of the WA may result
39 in a reduction of retirement benefits to its members.
96
AB 1912 —6-
1 (k) Further, to ensure that the board is meeting its fiduciary
2 duties and responsibilities,
3
4
5
6 contracts with the retirement system by a
7 JPA must protect present and future retirees of the JPA.
8 (1) For purposes of this section, "public retirement system"
9 means any pension or retirement system of a public employer,
10 including, but not limited to, an independent retirement plan
11 offered by a public employer that the public employer participates
12 in or offers to its employees for the purpose of providing retirement
13 benefits, or a system of benefits for public employees that is
14 governed by Section 401(a) of Title 26 of the United States Code.
15 SEC. 2. Section 6508.1 of the Government Code is amended
16 to read:
17 6508.1. (a) If the agency is not one or more of the parties to
18 the agreement but is a public entity, commission, or board
19 constituted pursuant to the agreement, the debts, liabilities, and
20 obligations of the agency shall be debts,liabilities,and obligations
21 of the parties to the agreement, unless the agreement specifies
22 otherwise. However, the parties to the agreement may not agree
23 otherwise with respect to the retirement liabilities of the agency
24 if the agency contracts with a public retirements system.
25 (b) For purposes of this section, `public retirement system"
26 means any pension or retirement system of a public employer,
27 including, but not limited to, an independent retirement plan
28 offered by a public employer that the public employer participates
29 in or offers to its employees for the purpose of providing retirement
30 benefits, or a system of benefits for public employees that is
31 governed by Section 401(a) of Title 26 of the United States Code.
32 SEC. 3. Section 6508.2 is added to the Government Code, to
33 read:
34 6508.2. (a) ,
35 (1) An agency established by agreement under this chapter that
36 participates in, or contracts with, a public retirement system,
37 all parties and member agencies, both current and former, to the
38 agreement, including all amendments thereto,shall-be-jointly-and
39
40 mutually agree as to the apportionment of the agency's retirement
96
-7— AB 1912
1 obligations among themselves,provided that the agreement equals
2 the total retirement liability of the agency. A copy of this mutual
3 agreement, signed by all parties thereto, shall be provided to the
4 board, which shall be reflected in the agreement with the board.
5 If the member agencies are unable to mutually agree to
6 apportionment of the total retirement liability of the agency, the
7 board shall apportion the retirement liability of the agency to each
8 member agency based on the share of service received from the
9 joint power authority by the agency, or population of each member
10 agency, such that the apportionment equals the total retirement
11 liability of the agency, which shall be reflected in the agreement
12 with the board. However, if, after the board apportions the
13 retirement liability, the member agencies mutually agree to
14 apportionment that equals the total retirement liability of the
15 agency, a copy of that agreement signed by all parties thereto shall
16 be provided to the board, which shall supersede the apportionment
17 made by the board, and be reflected in the agreement with the
18 board.
19 (2) For purposes of this section, "board" means the board of
20 any pension or retirement system of a public employer, including,
21 but not limited to, an independent retirement plan offered by a
22 public employer that the public employer participates in or offers
23 to its employees for the purpose of providing retirement benefits,
24 or a system of benefits for public employees that is governed by
25 Section 401(a) of Title 26 of the United States Code.
26 (b) Notwithstanding any other law, if a judgment is rendered
27 against an agency or a party to the agreement for a breach to its
28 obligations to the public retirement system,the time within which
29 a claim for injury may be presented or an action commenced
30 against any other party that is subject to the liability determined
31 by the judgment begins to run when the judgment is rendered.
32 (c) This section shall apply retroactively to all parties, both
33 current and former,to the agreement.
34 SEC.4. Section 20461.1 is added to the Government Code,to
35 read:
36 20461.1. (a) The On and after January 1, 2019, the board shall
37 not contract with any public agency formed by an agreement under
38 Chapter 5 (commencing with Section 6500)of Division 7 of Title
39 1 unless all the parties to that agreement,including all amendments
96
AB 1912 —8-
1 thereto,are jointly and severally liable for all of the public agency's
2 obligations to this system.
3 (1,-)--This-seetion-shall-apply-retretaetively-te-all-partiesrboth
4 ,
5
6
7
8
9 '
10
11 SEC. 5. Section 20574.1 is added to the Government Code,to
12 read:
13 20574.1. In lieu of the procedure set forth in Section 20574,
14 all parties to a terminating agency that was formed by an agreement
15 under Chapter 5 (commencing with Section 6500) of Division 7
16 of Title 1 shall b liable to the system for any
17 deficit in funding for earned benefits, as determined pursuant to
18 Section 20577, interest at the actuarial rate from the date of
19 termination to the date the agency pays the system,and reasonable
20 and necessary costs of collection, including attorneys' fees. The
21 board shall have a lien on the assets of a terminated contracting
22 agency and on the assets of all parties to the terminating contracting
23 agency, subject only to a prior lien for wages, in an amount equal
24 to the actuarially determined deficit in funding for earned benefits
25 of the employee members of the agency, interest, and collection
26 costs. The assets shall also be available to pay actual costs,
27 including attorney's fees, necessarily expended for collection of
28 the lien.
29 SEC. 6. Section 20575.1 is added to the Government Code,to
30 read:
31 20575.1. (a) Notwithstanding any other provision of this part
32 to the contrary, upon request of a terminating agency formed by
33 an agreement under Chapter 5 (commencing with Section 6500)
34 of Division 7 of Title 1 or of any member agency to the agreement,
35 the board shall enter into an agreement with the governing body
36 of a terminating agency or the governing body of the member
37 agency in order to ensure that(1) the final compensation used in
38 the calculation of benefits of its employees shall be calculated in
39 the same manner as the benefits of employees of agencies that are
40 not terminating, regardless of whether they retire directly from
96
-9— AB 1912
1 employment with the terminating agency or continue in other
2 public service; and (2) related necessary adjustments in the
3 employer's contribution rate are made, from time to time, by the
4 board prior to the date of termination to ensure that benefits are
5 adequately funded or any other actuarially sound payment
6 technique,including a lump-sum payment at termination,is agreed
7 to by the governing body of the terminating agency and the board.
8 (b) A terminating agency formed by an agreement under Chapter
9 5 (commencing with Section 6500) of Division 7 of Title 1 that
10 will cease to exist or its member agency shall notify the board not
11 sooner than three years nor later than one year prior to the
12 terminating agency's termination date of its intention to enter into
13 agreement pursuant to this section. The terms of the agreement
14 shall be reflected in an amendment to the agency's contract with
15 the board.
16 (c) If the board, itself, determines that it is not in the best
17 interests of the system,it may choose not to enter into an agreement
18 pursuant to this section.
19 (d) If the governing body of a terminating agency formed by
20 an agreement under Chapter 5 (commencing with Section 6500)
21 of Division 7 of Title 1 or the governing bodies of its member
22 agencies do not enter into an agreement pursuant to this section,
23 the member agencies shall assume the retirement obligations on
24 their retirement systems.
25 '
26
27
28
29 ,
30
31apperfienment-ef-the-tetal-retirement-liabilitrof-the-ageneythe
,
32 ,
33
34 ,
35 ,
36 ,
37
38 ,
39 ,
96
AB1912 —10—
1 ,
2
3 SEC. 7. Section 20577.5 of the Government Code is repealed.
4 SEC. 8. Section 20577.5 is added to the Government Code,to
5 read:
6 20577.5. The board shall, prior to exercising
7 authority granted pursuant to Section 20577, consider and exhaust
8 all options and necessary actions, including evaluating whether
9 to bring a civil action against any and all of the member agencies
10 that are parties to a terminated agency formed by an agreement
11 under Chapter 5 (commencing with Section 6500) of Division 7
12 of Title 1 to compel payment of the terminated agency's-pension
13 obligations, retirement obligations pursuant to Section 20575.1,
14 and shall be entitled to reasonably attorney's fees in
15 addition to other costs.
16 SEC.9. Section 366.2-o€-t e-Publie-Qt ities-Code-is-amended
17 to-read
18
19
20
21
22 ,
23giverraii-opportufrity-to-opt--out-of-his-or-her-eommunityis
24
25eheiee-aggregatorls
26 ,
27 ,
28
29
30 program-shall-not-result-in-a-shifling-of-eosts-between4he-eustomers
31
32
33
34
35 ,
36
37 statute.
38
39
40
96
-11 — AB1912
1 ,
2
3
4proteetioitsTand
5 ,
6
7 served by a local publicly owned electric utility. A community
8
9 ,
10
11
12
13
14 ,
15 ,
16 ,
17
18
19 ,
20
21 moves a location—of his--or hereleetrie—sere=ice wi`'-in the
22 ,
23shall-retain-the-same-subseriber-status-as-prior-terthe-moveTuitleas
24
25
26 ,
27 ,
28
29 .
30
31
32
33 ,
34 ,
35
36 ,
37
38
39
40
96
AB 1912 —12—
1 fa)---Tlie-metheds-foretitering-anti-terminating-agreements-with
2 ether
entitics.
3 ,
4 ,
5 ,
6
7
8 ,
9 ,
10
11
12
13
14
15
16
17
18 ,
19
20
21
22 rs.
23
24
25 ,
26the-eommunitreheiee-aggregater-to-prevent-shifting-of-eerstsTthe
27
28 ,
29
30 ,
31
32
33
34 ,
35
36 ,
37
38 planr
39
40 ,
96
-13— AB 1912
1
2
3
4 ,
5 anti-(}
6
7
8
9 must be-pititl-brthe-eustemers-of that preposeti-eommuftity-ehetee
10aggregatieti-programTtts-providecl-fot-iti-subdivisions- nd
,
11
12
13 ,
14
15
16
17eommuttity—eheiee—aggregaters—that—investigatepttrsuer
,
18
19
20 ,
21
22 ,
23 ,
24
25
26
27
28 ,
29 ,
30
31
32
33
34
35
36
37 ,
38
39
40 '
96
AB1912 —14—
1
2
3 ,
4
5
6
7 extended-under-either-of-the-fallowing-eireumstaneest
8
9
10
11 ,
12 order pursuant-to-this-sultveragrapit-shall-not-extend-the-deacHtne
13 for more-than-643-tittys:
14
15 ,
16
17 ,
18 ,
19 ,
20
21 ,
22 ,
23elltviee-aggregitter-for-the-eity7eountp7er-eity-antl-eountpthat
,
24
25
26 ,
27
28 ,
29
30 ,
31
32 , '
33 pursuant-ter subpttragrapil-(A)7
34 ,
35
36aggregatormarspeeifyin-theirioint-powers-agreement-thatruniess
37 ,
38 ,
39 ,
40
96
-15— AB 1912
1 .. .
2publie-retiretnent-systetn7the-rnembers-of-the-agener shall-be
3
4 agency.
5 ,
6its-a-eandition-of-registration-or-otherwise7require-an-ageneyis
7 ,
8
9 '
10
11 '
12 .
13
14 ,
15
16 ,
17
18 ,
19 ,
20 eustomers-that Lave _te_ed nto dir et tr nssetion _.Le_
21 ,
22 ,
23
24
25
26
27
28returning-chreet-aeeess-eustotners-fram-the-sante-elassTas
29 ,
30 ,
31
32
33 ,
34
35
36 ,
3 7 the-east-of-reentry:
38
39
40
96
AB 1912 —16-
1
2
3
4 ,
5
6
7 ,
8
9 ,
10 ,
11
12 €fig:
13
14
15
16
17
18
19
20
21
22 '
23 ,
24
25 _ _ elated the notification . otifcatio s The electrical
26
27
28 '
29
30
31
32
33
34 '
35eleetriettl-eftergy-serviee-previdetzl-by-the-eleetriettl-eorporattenTor
36
37
38
39
40
96
-17— AB 1912
1
2
3
4
5
6
7
8 ,
9
10
11 ,
12
13 P
14 ,
15
16
17
18 ,
19
20
21 '
22
23
24 the
25 ' ,
26of-implementittg-this-seetionineluding7but--not-limited-toall
,
27 ,
28
29
30 ,
31 ,
32 collections, and-eustomer eermtmieations-or-other-ser ees
33
34
35 n..
36
37 ,
38
39 '
40
96
AB 1912 -18-
1
2 '
3
4 ,
5
6 ,
7 ,
8
9 ,
10
11
12 ,
13 ,
14
15 ,
16
17
18
19
20
21 ,
22
23
24
25
26
27
28
29
30 ,
31
32
33
34 ,
35 '
36 '
37 ,
38 '
39 ,
96
-19— AB 1912
1
2
3
4
5
6
7 '
8 ,
9 ,
10
11
12 ,
13 '
14 enntraet ,
15eemmissienfer-the-perieel-eemmeneing-with-the-eustemerls
16 ,
17
18
19
20
21
22 ,
23
24
25 be-the-property-of-Ole-Department of Water-ReseureesTAny-eharges
26
27 ,
28ineitteting-agreements-withTer-enflers-with-respeettn7eleetneal
29
30
31 payment
32 ,
33
34
35
36 ,
37 ,
38
39
40 aggregatorsTpursuant
96
AB 1912 —20—
1
2 ,
3 ,
4
5 ,
6
7
8 eimiee-aggregation.
9
10 ,
11
12 ,
13
14 ,
15 ,
16 .
17 ,
18
19
20
21
22
23 ,
24 ,
25 customers.
26
27
28
29 ,
30
31
32
33
34 ,
35
36
37Gperator—Itas—transferred—the—eommunity—ehoice—aggregator2s
38
39 ,
40
96
-21— AB 1912
1 '
2
3
4 ,
5 ,
6
7
8
9 Gevei
0
96
, ' r"?z JL ..F.J
1.--)j--\ •
June 15, 2018
The Honorable Freddie Rodriguez
Chair, Assembly Public Employees, Retirement, & Social Security
State Capitol Building, Room 2188
Sacramento, CA 95814
RE: AB 1912 (Rodriquez). Public Employees' Retirement: Joint Powers Agreements: Liability.
Notice of Opposition (as amended 05/09/2018)
Dear Assembly Member Rodriguez:
On behalf of the City of Palm Desert, we must respectfully oppose Assembly Bill 1912 relating to
retirement liabilities of Joint Powers Authorities (JPAs).
JPAs which play a vital role in addressing public needs that cannot be effectively achieved solely by
a local agency. Like other cities, Palm Desert faces unique local challenges and a limited budget, but we
continue to innovate in order to obtain expertise and provide high quality services through the use of JPAs.
For example, the City is a member of the Coachella Valley Association of Governments, which is a regional
planning agency coordinating government services in the Coachella Valley that promotes a better quality of
life and balanced growth for our community.
The City of Palm Desert is deeply concerned that JPAs, such as CVAG, will no longer be a viable tool
should AB 1912 become law. This bill places substantial burned for all retirement related obligation to JPA
members. Such obligations include active employee normal pension costs, retiree unfunded accrued
liabilities, both active and retiree healthcare, and other post-employment retirement benefits. The cost of
these benefits and their impact on local governments cannot be overstated. While the intended goals of your
measure are laudable, for the reasons stated above the City of Palm Desert must oppose Assembly Bill 1912.
Sincerely,
SABBY JONATHAN
MAYOR
cc: City Council
The Honorable Jeff Stone, California State Senate
The Honorable Chad Mayes, California State Assembly
Anthony D. Gonsalves, Joe A. Gonsalves & Sons (ctonsalves@Qonsalvi.com)
Erin Sasse, League of California Cities (esasse@cacities.org)
Lauri Aylaian, City Manager
Janet Moore, Director of Finance/City Treasurer
Stephen Y. Aryan, Risk Manager