The California Public Employees Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan for employees first hired on or after January 1, 2013. Existing law, the Joint Exercise of Powers Act, generally authorizes 2 or more public agencies, by agreement, to jointly exercise any common power, which may include hiring employees and establishing retirement systems.

This bill would authorize a joint powers authority to offer defined benefit plans or formulas that are not PEPRA plans or formulas provided that the plans or formulas were those the employees received prior to the creation of the authority, the employees are not new members under PEPRA, and they are employed by the authority within 180 days, as specified.

The California Public Employees Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan for employees first hired on or after January 1, 2013. Existing law, the Joint Exercise of Powers Act, generally authorizes 2 or more public agencies, by agreement, to jointly exercise any common power, which may include hiring employees and establishing retirement systems.

This bill would authorize a joint powers authority to offer defined benefit plans or formulas that are not PEPRA plans or formulas provided that the plans or formulas were those the employees received prior to the creation of the authority, the employees are not new members under PEPRA, and they are employed by the authority within 180 days, as specified.

The California Public Employees Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan for employees first hired on or after January 1, 2013. Existing law, the Joint Exercise of Powers Act, generally authorizes 2 or more public agencies, by agreement, to jointly exercise any common power, which may include hiring employees and establishing retirement systems.

This bill would require authorize a joint powers authority to offer defined benefit plans or formulas that are not PEPRA plans or formulas provided that the plans or formulas were those the employees received prior to the creation of the authority, the employees are not new members under PEPRA, and they are employed by the authority with 180 days, as specified.

Under the Public Employees Medical and Hospital Care Act (PEMHCA), an uninsured surviving spouse or other eligible family member of a deceased firefighter or peace officer is eligible to enroll in a health benefit plan approved or maintained by the Board of Administration of the Public Employees Retirement System if the death of the firefighter or peace officer occurred as a result of injury or disease arising out of, and in the course of, the firefighters or peace officers official duties, as specified. Under PEMHCA, the employer of a deceased firefighter or peace officer is required to notify the board within 10 days of the death of the firefighter or peace officer if a spouse or a family member may be so eligible for enrollment.

This bill would require the employer to also provide the board with updated contact information of the spouse or family member. By requiring local government employers to provide this contact information, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

SENATE THIRD READING

STR Bill Id:SB 1203

Author:(Hertzberg)

As Amended Ver:April 13, 2016

Majority vote

SENATE VOTE: 29-4

SUMMARY: Authorizes a joint powers authority (JPA) formed on or after January 1, 2013, as specified, to provide employees who transfer to the JPA the same defined benefit plan or formula that they received from their respective employer prior to the JPAs formation rather than the benefit required under the California Public Employees' Pension Reform Act of 2013 (PEPRA). Specifically, this bill:

1. Allows a JPA formed on or after January 1, 2013, as specified, to provide employees the defined benefit plan or formula that the employees received from their respective employers prior to the employers forming the JPA.
2. Provides that the employee must not be a new member with that employer and must be employed by the JPA within 180 days of the formation of the JPA.
3. Prohibits the formation of a JPA on or after January 1, 2013, in a manner that exempts a new member from the requirements of PEPRA. New members may only participate in a plan that conforms to the requirements of PEPRA.

EXISTING LAW:

1. Authorizes, under the Joint Exercise of Powers Act, public agencies to enter into agreements to jointly exercise any power common to the contracting parties, including providing for the creation of an agency or entity that is separate from the parties to the agreement and is responsible for the administration of the agreement.
2. Allows local public employers forming a JPA to contract with the California Public Employees' Retirement System (CalPERS) to offer retirement benefits to their employees if the JPA meets the federal definition of a governmental plan. The JPA is then a new contracting employer in the retirement system.
3. Establishes, under PEPRA, a new retirement plan formula and requires public employers to offer the PEPRA formula to new employees first hired into public service after January 1, 2013, as defined.
4. Requires pre-PEPRA members who were first hired into public service prior to January 1, 2013, and who move between public employers within a 180-day time period, to be grandfathered under pre-PEPRA retirement formulas and eligible to receive the benefit plans offered to employees of the public employer on December 31, 2012 (i.e., the benefit plan in place prior to PEPRA implementation).
5. Authorizes a JPA formed by the cities of Brea and Fullerton on or after January 1, 2013, to provide employees who transfer to the JPA from Brea or Fullerton with the "classic" retirement formulas that the employees were receiving from their respective employers within 180 days of the cities providing for the exercise of the common power, to which the employee was associated, by the JPA.
6. Specifies that on or before January 1, 2017, up to three cities in Orange County that are contiguous with Brea or Fullerton may join the JPA and extend the same protections, with regard to classic retirement formulas, to their transferred employees and prohibits the formation of the JPA in a manner that would exempt a new employee or member from the requirements of PEPRA. New members may only participate in a plan that conforms to the requirements of PEPRA.

FISCAL EFFECT: According to the Assembly Appropriations Committee, one-time special fund costs to CalPERS of approximately $200,000 for implementation and systems changes.

COMMENTS: According to the sponsor of the bill, the California Professional Firefighters, "For some communities, the most efficient, cost-effective model for providing fire protection and emergency medical services in the wake of the Great Recession is to form a JPA so that local agencies can integrate their respective services in those jurisdictions and in doing so, achieve economies of scale and cost savings. However, one barrier to these consolidations has arisen and created a significant obstacle to full integration of fire protection and EMS [emergency management system] services in this regard because of the inability to transfer existing, classic employees to a newly formed JPA without an interruption or loss of those employees' classic retirement formulas or benefit plans.

"PEPRA allows classic employees (employees hired on or before January 1, 2013) who move between public employers within a 180-day window to be grandfathered under pre-PEPRA retirement formulas. Understanding this, PEPRA further specifies that a classic employee who moves between public employers within a 180-day period will receive the benefit formula that the employer was offering on December 31, 2012. Because PEPRA took effect on January 1, 2013, a JPA formed after that date is considered a new employer and therefore, has no classic retirement formula or benefit to offer its classic employees.

"Realizing the aforementioned unintended consequence of PEPRA, a handful of local agency employers and their respective employee organizations collectively seeking to form JPAs in recent years, have since pursued special legislation authorizing PEPRA exceptions specific to their agencies. Therefore, authorizing legislation applicable statewide, which remedies the aforementioned unintended consequence is needed so as to alleviate not only the existing burden that falls on individual agencies to introduce authorizing bills specific to their respective, proposed JPA agreements, but also to eliminate the cost incurred by taxpayers and time delays for implementation each time an agency-specific bill is introduced.

"Furthermore, SB 1203 aids local public agencies in their efforts to effectively recruit and retain the most experienced, qualified public safety professionals. Indeed, by providing equity for all seasoned and veteran firefighters and other public workers who wish to continue to serve in their communities without being forced to consider transferring to another public agency, SB 1203 advances the public's interest. And, when lives are on the line, every second counts. SB 1203 ultimately also allows local public agencies to achieve economies of scale for the taxpayers, which in turn translates into better response times."

Related/Prior Legislation

SB 24 (Hill) of the current legislative session, currently in the Assembly Public Employees, Retirement, and Social Security Committee, authorizes a JPA formed by the Cities of Belmont, Foster City, and San Mateo to provide the JPA employees a defined benefit plan or formula that those employees received as classic CalPERS members from their employment with the cities. The language of SB 24 is substantially the same as statutory language enacted for the Cities of Fullerton and Brea (SB 1251 (Huff), Chapter 757, Statutes of 2014).

SB 354 (Huff), Chapter 158, Statutes of 2015, clarified the time period during which a CalPERS classic member employed in the Cities of Brea and Fullerton may transfer to a JPA formed by those two cites and retain classic benefit formulas received prior to the transfer.

SB 1251 (Huff), Chapter 757, Statutes of 2014, created an exemption in PEPRA to allow classic employees transferred to a new JPA formed by the Cities of Brea and Fullerton after January 1, 2013, to retain their classic retirement benefits following transfer to and employment in the JPA.

AB 340 (Furutani), Chapter 296, Statutes of 2012, enacted PEPRA, effective January 1, 2013, which implemented statewide reform of pension plans and related public employment benefits.

Analysis Prepared by: Karon Green / P.E.,R., & S.S. / (916) 319-3957 FN: 0004000

Date of Hearing: June 29, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 1203

Author:(Hertzberg) – As Amended Ver:April 13, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes a joint powers authority (JPA) formed on or after January 1, 2013, to provide employees who transfer to the JPA the same defined benefit plan or formula that they received from their respective employer prior to the JPA’s formation rather than the benefit required under the California Public Employees' Pension Reform Act of 2013 (PEPRA).

FISCAL EFFECT:

One-time special fund costs to the California Public Employees' Retirement System (CalPERS) of approximately $200,000 for implementation and systems changes.

COMMENTS:

1. JPA and PEPRA. A JPA is the authority created by an agreement between multiple public agencies to exercise powers common to each of them for the purpose of accomplishing specific common goals. A JPA can be used by agencies to share regional responsibilities, such as fire services.

Under PEPRA, new public agencies formed after January 1, 2013 must use the new pension formulas for their employees. As a result, current employees cannot be transferred into a JPA without losing their benefits, even if no lapse in public service or change in duties and responsibilities occur.

1. Purpose. This bill is intended to allow local agencies to leverage the cost benefits and efficiency advantages JPAs can offer without prejudice to existing employee pensions.
2. Related legislation. SB 24 (Hill) of 2016, currently in this committee, authorizes a JPA formed by the Cities of Belmont, Foster City, and San Mateo to provide the JPA employees a defined benefit plan or formula that those employees received as classic CalPERS members from their employment with the cities.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

 THIRD READING  

Bill No: SB 1203

Author:

:

Vote:

SENATE PUBLIC EMP. & RET. COMMITTEE: 3-0, 4/11/16

AYES: Pan, Beall, Hall

NO VOTE RECORDED: Morrell, Moorlach

SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/27/16

AYES: Lara, Beall, Hill, McGuire, Mendoza

NO VOTE RECORDED: Bates, Nielsen

SUBJECT:

SOURCE: California Professional Firefighters

DIGEST: This bill requires that, in the case of a joint powers authority (JPA) formed on or after January 1, 2013 that contracts with the California Public Employees’ Retirement System (CalPERS), any employee moving from employment with a public agency forming the JPA to employment with the JPA be provided the same defined benefit plan or formula that they had as an employee of the public agency on or before December 31, 2012.

ANALYSIS:

Existing law:

1. Authorizes, under the Joint Exercise of Powers Act, public agencies to enter into agreements to jointly exercise any power common to the contracting parties, including providing for the creation of an agency or entity that is separate from the parties to the agreement and is responsible for the administration of the agreement.
2. Allows local public employers forming a JPA to contract with CalPERS to offer retirement benefits to their employees if the JPA meets the federal definition of a governmental plan. The JPA is then a new contracting employer in the retirement system.
3. Establishes, under the Public Employees’ Pension Reform Act (PEPRA), a new retirement plan formula and requires public employers to offer the PEPRA formula to new employees first hired into public service after January 1, 2013, as defined.
4. Requires pre-PEPRA members—referred to as “classic” members by CalPERS—who were first hired into public service prior to January 1, 2013, and who move between public employers within a 180-day time period, to be grandfathered under pre-PEPRA retirement formulas and eligible to receive the benefit plans offered to employees of the public employer on December 31, 2012 (i.e., the benefit plan in place prior to PEPRA implementation).
5. Allows a JPA formed by the Cities of Brea and Fullerton on or after January 1, 2013, to provide employees who transfer to the JPA from Brea or Fullerton with the “classic” retirement formulas that the employees were receiving on December 31, 2012, from their respective employers.
6. Clarifies that the formation of the JPA by Brea and Fullerton shall not act in a manner so as to exempt a member from PEPRA who would otherwise be subject to PEPRA.

This bill requires the following when public agencies form a JPA on or after January 1, 2013, and contract with CalPERS for benefit coverage for employees of the JPA:

1. Employers that form the JPA, if they provided employee benefits on or before December 31, 2012, must provide classic employees who transfer to the JPA with continuance of the same benefit plans or formulas that those employees received from their respective employers on or before December 31, 2012.
2. In order to receive continuance of the classic member benefits, the classic employees must transfer between the member agency and the JPA within 180 days of the member agency providing for the exercise of the common power.
3. The formation of a JPA on or after January 1, 2013, may not act in a manner to exempt someone from PEPRA who would otherwise have been subject to PEPRA. Employees who became new members of CalPERS after January 1, 2013, must be subject to PEPRA.

Background

PEPRA allows classic employees who move between public employers to be grandfathered under pre-PEPRA retirement formulas. Since employers, over time, could have more than one retirement formula for specific classes of employees, PEPRA further specifies that a classic employee who moves between public employers within a 6-month period will receive the benefit formula that the employer was offering on December 31, 2012 (i.e., one day prior to implementation of PEPRA). A JPA formed after that date would be a new employer in CalPERS and would therefore have no classic formula to offer classic employees.

Related/Prior Legislation

SB 24 (Hill, 2016), currently in the Assembly Public Employment and Social Security Committee, authorizes a JPA formed by the Cities of Belmont, Foster City, and San Mateo to provide the JPA employees a defined benefit plan or formula that those employees received as classic CalPERS members from their employment with the cities. The language of SB 24 is substantially the same as statutory language enacted for the Cities of Fullerton and Brea (SB 1251, Huff, Chapter 757, Statutes of 2014).

SB 354 (Huff, Chapter 158, Statutes of 2015) clarified the time period during which a CalPERS classic member employed in the Cities of Brea and Fullerton may transfer to a JPA formed by those two cites and retain classic benefit formulas received prior to the transfer.

SB 1251 (Huff, Chapter 757, Statutes of 2014) created an exemption in PEPRA to allow classic employees transferred to a new JPA formed by the Cities of Brea and Fullerton after January 1, 2013, to retain their classic retirement benefits following transfer to and employment in the JPA.

AB 340 (Furutani, Chapter 296, Statutes of 2012) enacted PEPRA, effective January 1, 2013, which implemented statewide reform of pension plans and related public employment benefits.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, CalPERS estimates that it would incur one-time costs of $200,000 (special fund) to implement the provisions of the bill. Specifically, the cost would apply to “information technology changes in order to provide each JPA employee the same benefit formula as that employee had with one of the cities forming the JPA.”

SUPPORT: (Verified 5/27/16)

California Professional Firefighters (source)

California State Firefighters’ Association

California Statewide Law Enforcement Association

Laborers’ International Union of North America, Local 777

Laborers’ International Union of North America, Local 792

Orange County Professional Firefighters Association, Local 3631

OPPOSITION: (Verified 5/27/16)

None received

ARGUMENTS IN SUPPORT: From a letter from the California Professional Firefighters:

The Great Recession forced local public agencies up and down our state to implement hard-dollar cuts in core public services, including fire protection, as a result of severely squeezed budgets. Over the last few years in many of our communities, fire stations have been closed, or rolling “brown-outs” have been implemented, in an effort to save money. Firefighters have been laid off, and a whole host of other safety-net services have been eliminated or severely pared back.

For some communities, the most efficient, cost-effective model for providing fire protection and emergency medical services in the wake of the Great Recession is to form a JPA so that local agencies can integrate their respective services in those jurisdictions and in doing so, achieve economies of scale and cost savings. However, one barrier to these consolidations has arisen and created a significant obstacle to full integration of fire protection and EMS services in this regard because of the inability to transfer existing, classic employees to a newly formed JPA without an interruption or loss of those employees’ classic retirement formulas or benefit plans.

Therefore, legislation applicable statewide, which remedies the aforementioned unintended consequence, is needed so as to alleviate not only the existing burden that falls on individual agencies to introduce authorizing bills specific to their respective, proposed JPA agreements, but also to eliminate the cost incurred by taxpayers and time delays for implementation each time an agency-specific bill is introduced.

Furthermore, SB 1203 aids local public agencies in their efforts to effectively recruit and retain the most experienced, qualified public safety professionals. Indeed, by providing equity for all seasoned and veteran firefighters and other public workers who wish to continue to serve in their communities without being forced to consider transferring to another public agency, SB 1203 advances the public’s interest. And, when lives are on the line, every second counts. SB 1203 ultimately also allows local public agencies to achieve economies of scale for the taxpayers, which in turn translates into better response times.

Prepared by:

5/28/16 16:46:02

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1203 (Hertzberg) - Retirement systems: joint powers authorities: benefit formulas

This bill meets the criteria for referral to the Suspense File.

Bill Summary: With respect to a joint powers authority (JPA) formed on or after January 1, 2013 that contracts with the California Public Employees’ Retirement System (CalPERS), this bill would authorize that any employees moving from employment with a public agency forming the JPA to employment with the JPA be provided the same defined benefit plan or formula that they had as an employee of the public agency on or before December 31, 2012.

Fiscal Impact: CalPERS estimates that it would incur one-time costs of $200,000 (special fund) to implement the provisions of the bill.

Background: Current law authorizes public agencies to enter into agreements to jointly exercise any power common to the contracting parties, including providing for the creation of an agency or entity (a Joint Powers Authority, or JPA) that is separate from the parties to the agreement and is responsible for the administration of the agreement. The JPA can then contract with CalPERS to offer retirement benefits if it meets certain requirements, and becomes a contracting employer in the retirement system.

Current law, the Public Employees’ Pension Reform Act of 2013 (PEPRA), establishes a new retirement plan formula and requires public employers to offer the PEPRA formula to new employees first hired into public service after January 1, 2013, as defined. Pre-PEPRA members (also known as “classic” members) who were first hired into public service prior to January 1, 2013, and who move between public employers within a 180-day time period, are grandfathered under pre-PEPRA retirement formulas and consequently are eligible to receive the benefit plans offered to employees of the public employer on December 31, 2012 (i.e., the benefit plan in place prior to PEPRA implementation). Since employers, over time, could have more than one retirement formula for specific classes of employees, PEPRA further specifies that a classic employee who moves between public employers within a 180-day period will receive the benefit formula that the employer was offering on December 31, 2012 (i.e., one day prior to implementation of PEPRA). A JPA formed after that date would be a new employer in CalPERS and would therefore have no classic formula to offer classic employees.

Bill Summary: This bill would authorize that when public agencies form a JPA on or after January 1, 2013, and contract with CalPERS for benefit coverage for its employees, employers that form the JPA, if they provided employee benefits on or before December 31, 2012, must provide classic employees who transfer to the JPA with continuance of the same benefit plans or formulas that those employees received from their respective employers on or before December 31, 2012, as specified.

The formation of a JPA on or after January 1, 2013, may not act in a manner to exempt someone from PEPRA who would otherwise have been subject to it. Employees who became new members of CalPERS after January 1, 2013, must be subject to PEPRA.

Related Legislation:

• SB 24 (Hill, 2016), currently in the Assembly Rules Committee, authorizes a JPA formed by the Cities of Belmont, Foster City, and San Mateo to provide the JPA employees a defined benefit plan or formula that those employees received as classic CalPERS members from their employment with the cities. The language of SB 24 is substantially the same as statutory language enacted for the Cities of Fullerton and Brea (SB 1251, 2014).
• SB 354 (Huff, Chapter 158, Statutes of 2015) clarified the time period during which a CalPERS “classic” member who is employed in the cities of Brea and Fullerton can transfer to a Joint Powers Authority (JPA) formed by those two cites and retain classic benefit formulas received prior to the transfer.
• SB 1251 (Huff, Chapter 757, Statutes of 2014) created the current exemption in PEPRA to allow classic employees transferred to a new JPA formed by the cities of Brea and Fullerton after January 1, 2013, to retain their classic retirement benefits following transfer to and employment in the JPA.

Staff Comments: CalPERS estimates that the bill would result in a one-time cost of about $200,000 for information technology changes in order to provide each JPA employee the same benefit formula as that employee had with one of the cities forming the JPA.

-- END --

SENATE COMMITTEE ON

PUBLIC EMPLOYMENT AND RETIREMENT

Dr. Richard Pan, Chair

2015 - 2016 Regular

Bill No: SB 1203 Hearing Date: 4/11/16

Subject: Retirement systems: joint powers authorities: benefit formulas

SOURCE: California Professional Firefighters

DIGEST: In the case of a joint powers authority (JPA) formed on or after January 1, 2013 that contracts with the California Public Employees’ Retirement System (CalPERS), this bill requires that any employees moving from employment with a public agency forming the JPA to employment with the JPA be provided the same defined benefit plan or formula that they had as an employee of the public agency on or before December 31, 2012.

ANALYSIS:

Existing law:

1. Authorizes, under the Joint Exercise of Powers Act, public agencies to enter into agreements to jointly exercise any power common to the contracting parties, including providing for the creation of an agency or entity that is separate from the parties to the agreement and is responsible for the administration of the agreement.
2. Allows local public employers forming a JPA to contract with the California Public Employees’ Retirement System (CalPERS) to offer retirement benefits to their employees if the JPA meets the federal definition of a governmental plan. The JPA is then a new contracting employer in the retirement system.
3. Establishes, under the Public Employees’ Pension Reform Act (PEPRA) a new retirement plan formula and requires public employers to offer the PEPRA formula to new employees first hired into public service after January 1, 2013, as defined.
4. Requires pre-PEPRA members—referred to as “classic” members by CalPERS—who were first hired into public service prior to January 1, 2013, and who move between public employers within a 180-day time period, to be grandfathered under pre-PEPRA retirement formulas and eligible to receive the benefit plans offered to employees of the public employer on December 31, 2012 (i.e., the benefit plan in place prior to PEPRA implementation).
5. Allows a JPA formed by the cities of Brea and Fullerton on or after January 1, 2013, to provide employees who transfer to the JPA from Brea or Fullerton with the “classic” retirement formulas that the employees were receiving on December 31, 2012, from their respective employers.
6. Clarifies that the formation of the JPA by Brea and Fullerton shall not act in a manner so as to exempt a member from PEPRA who would otherwise be subject to PEPRA.

This bill:

Requires the following when public agencies form a JPA on or after January 1, 2013, and contract with CalPERS for benefit coverage for employees of the JPA:

1. Employers that form the joint powers authority, if they provided employee benefits on or before December 31, 2012, must provide classic employees who transfer to the JPA with continuance of the same benefit plans or formulas that those employees received from their respective employers on or before December 31, 2012.
2. In order to receive continuance of the classic member benefits, the classic employees must transfer between the member agency and the JPA within 180 days of the member agency providing for the exercise of the common power.
3. The formation of a JPA on or after January 1, 2013, may not act in a manner to exempt someone from PEPRA who would otherwise have been subject to PEPRA. Employees who became new members of CalPERS after January 1, 2013, must be subject to PEPRA.

Background

PEPRA allows classic employees who move between public employers to be grandfathered under pre-PEPRA retirement formulas. Since employers, over time, could have more than one retirement formula for specific classes of employees, PEPRA further specifies that a classic employee who moves between public employers within a 6 month period will receive the benefit formula that the employer was offering on December 31, 2012 (i.e., one day prior to implementation of PEPRA). A JPA formed after that date would be a new employer in CalPERS and would therefore have no classic formula to offer classic employees.

Related/Prior Legislation

SB 24 (Hill, 2016), currently in Assembly Rules Committee, authorizes a JPA formed by the Cities of Belmont, Foster City, and San Mateo to provide the JPA employees a defined benefit plan or formula that those employees received as classic CalPERS members from their employment with the cities. The language of SB 24 is substantially the same as statutory language enacted for the Cities of Fullerton and Brea (SB 1251, 2014).

SB 354 (Huff, Chapter 158, Statutes of 2015) clarified the time period during which a CalPERS classic member employed in the cities of Brea and Fullerton may transfer to a Joint Powers Authority (JPA) formed by those two cites and retain classic benefit formulas received prior to the transfer.

SB 1251 (Huff, Chapter 757, Statutes of 2014) created an exemption in PEPRA to allow classic employees transferred to a new JPA formed by the cities of Brea and Fullerton after January 1, 2013, to retain their classic retirement benefits following transfer to and employment in the JPA.

AB 340 (Furutani, Chapter 296, Statutes of 2012) enacted PEPRA, effective January 1, 2013, which implemented statewide reform of pension plans and related public employment benefits.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT:

California Professional Firefighters (source)

California State Firefighters’ Association

Laborers’ International Union of North America, Local 777

Laborers’ International Union of North America, Local 792

Orange County Professional Firefighters Association, Local 3631

OPPOSITION:

None received

ARGUMENTS IN SUPPORT:

From a letter from California Professional Firefighters:

The Great Recession forced local public agencies up and down our state to implement hard-dollar cuts in core public services, including fire protection, as a result of severely squeezed budgets. Over the last few years in many of our communities, fire stations have been closed, or rolling “brown-outs” have been implemented, in an effort to save money. Firefighters have been laid off, and a whole host of other safety-net services have been eliminated or severely pared back.

For some communities, the most efficient, cost-effective model for providing fire protection and emergency medical services in the wake of the Great Recession is to form a JPA so that local agencies can integrate their respective services in those jurisdictions and in doing so, achieve economies of scale and cost savings. However, one barrier to these consolidations has arisen and created a significant obstacle to full integration of fire protection and EMS services in this regard because of the inability to transfer existing, classic employees to a newly formed JPA without an interruption or loss of those employees’ classic retirement formulas or benefit plans.

Therefore, legislation applicable statewide, which remedies the aforementioned unintended consequence, is needed so as to alleviate not only the existing burden that falls on individual agencies to introduce authorizing bills specific to their respective, proposed JPA agreements, but also to eliminate the cost incurred by taxpayers and time delays for implementation each time an agency-specific bill is introduced.

Furthermore, SB 1203 aids local public agencies in their efforts to effectively recruit and retain the most experienced, qualified public safety professionals. Indeed, by providing equity for all seasoned and veteran firefighters and other public workers who wish to continue to serve in their communities without being forced to consider transferring to another public agency, SB 1203 advances the public’s interest. And, when lives are on the line, every second counts. SB 1203 ultimately also allows local public agencies to achieve economies of scale for the taxpayers, which in turn translates into better response times.