HomeMy WebLinkAboutMINUTES - 12162003 - C85 TO: BOARD OF SUPERVISORS
"; -- - CONTRA
FROM: John Sweeten
COSTAn
County Administrator
COUNTY
DATE: December 16, 2003Inj
SUBJECT: Agreement with the CCCERA to Pay County Share of Paulson and
Walden Settlement
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
Recommendation:
1. APPROVE and AUTHORIZE the County Administrator to execute on behalf of the County a'
payment agreement with the Contra Costa County Employees' Retirement Association
(CCCERA), requiring the County's payment of approximately $28 million amortized over twenty
years to pay for retirement benefit costs in fulfillment of the 1999 Paulson and Walden
Settlement Agreement.
Background:
In 1599, the County, CCCERA, and other parties reached settlement in the Contra Costa County
Superior Court cases of Paulson v. CCCERA and Walden v. CCCERA, which were consolidated
into a class action. On October 15, 1999, the Superior Court approved the Settlement Agreement.
The Settlement Agreement implemented the Ventura decision and set forth pay items to be
included and excluded in calculating retirement benefits for retirees who retired before the 1997
Ventura decision.
To offset increases in the unfunded actuarial accrued liability caused by the increased benefit
payments called for by the settlement, CCCERA set aside $90 million. The Settlement Agreement
provides that if the $90 million is insufficient to cover the costs of the increased benefit payments,
each employer, including the County, will be responsible for paying additional employer
contributions, amortized over a twenty-year period unless the employer and the Retirement Board
agreed to a shorter period.
Since the $90 million is insufficient to cover the costs of the increased benefit payments, the
County and other public employers must pay additional costs. The County's share of the
additional costs is approximately $28 million. As to the additional costs owed by the County, a
payment agreement is needed to complete compliance with the terms of the Settlement
Agreement. The proposed payment agreement between the County and CCCERA establishes a
payment schedule for the County. Under the payment agreement, the County can also pay off its
liability in a lump sum payment.
Each County Department will be assessed a proportionate share of the casts beginning in
December 2003. County Department Heads have been advised of this additional cost and have
been asked to absorb this year's cost.
TTACHMENT: S SIGNATURE:
a RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
►"APPROVE _ OTHER
SIGNATUR (S)'--_
ACTION OF BOD N r' `-cr. s '' /i/ 7 APPROVED AS RECOMMENDED ..oTHIrR
VOTE OF SUP VISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
1C UNANIMOUS{ABSENT AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
Contact.Tony Enea S-1094 ,
Cc:County Counsel-Kevin Kerr ATTESTED
County Auditor-Roger Edwards John Sweeten,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
j„ 'DEPUTY
AGREEMENT TO PAY APPORTIONED SHARE OF
WALDEN/PAULSON SETTLEMENT AGREEMENT LIABILITY
This Agreement is entered into as of the day of , 2003,by and between
Contra Costa County ("Employer") and the Contra Costa County Employees' Retirement Association
("CCCERX')(collectively referred to as the"Parties").
WHEREAS Employer(or its predecessor)was a participating employer in the Contra
Costa County Employees' Retirement Association in 1999 and was a party to a class action settlement
agreement("Settlement Agreement")that settled the cases of Paulson v. Contra Costa County
Employees'Retirement Association, Contra Costa County Superior Court Case No. C-96-02939,and
Walden v. Contra Costa County Employees'Retirement Association,Contra Costa County Superior Court
Case No. C-97-02935, and that was approved by order of the Superior Court filed on October 15, 1999;
and
WHEREAS pursuant to that Settlement Agreement Employer(or its predecessor) agreed
to pay its proportionate share of the calculated liabilities arising from the Settlement Agreement which are
not covered by an initial transfer of$90 million from.CCCERA reserves once all member claims had
been processed and the full cost of the settlement could be calculated; and
WHEREAS all member claims under the Settlement Agreement have now been
processed and CCCERA's actuary has now calculated the proportionate share of Employer's liability
arising from.the Settlement Agreement as of December 31, 2002(the"Valuation Date"); and
WHEREAS Employer and CCCERA each has the power to enter into and be bound by
this Agreement and to perform the obligations required by it to be performed hereunder, which
obligations are fully enforceable by and against each Party to this Agreement;
NOW,THEREFORE,Employer and CCCERA agree as follows:
12/01/03 1
\\CCCR FS\SYS\SHARED\Comrnon\Paulson Lawsuit\Contra Costa CountyTaulson er liability payment contract CCC.doc
1. Employer agrees to pay and CCCERA agrees to accept the surn of
$ determined as of the Valuation Date, together with interest thereon at 8%per
annum compounded("Interest"),in full settlement of the Employer's proportionate share of the liability
apportioned to it pursuant to the Settlement Agreement.
OR
1. Employer has elected to pay a lump sum payment of $1,258.134.65 on or
before August 1, 2004 and amortize the balance of $26,846,846.32 over 19.5 years,resulting in 19
annual payments of $2,759,911.47 due and payable on August 1 of each year beginning with August 1,
2005 and a final payment of $1.406,543.17 due and payable on February 1, 2424,with Interest due on
any overdue payment, which amortization CCCERA agrees to accept pursuant to the Settlement
Agreement. Contra Costa County will have the ability to pay off, in a lump sum payment, its liability
balance as determined by CCCERA.
2. CCCERA and Employer understand that any experience gains or losses related to
CCCERA members affected by the Settlement Agreement and any changes in the assumed rate of
interest occurring after the Valuation Date will be allocated among all employers then participating in
CCCERA in accordance with CCCERA's general procedures for allocating experience gains or losses in
effect at the time any such post-December 31, 2002 experience gains or losses occur and will not affect
the terms of this agreement.
3. This Agreement constitutes a single integrated written contract expressing the
entire agreement between Employer and CCCERA with regard to the payment of Employer's share of its
proportionate liability arising from the Settlement Agreement, and supercedes all prior or
contemporaneous written or oral agreements between Employer(or its predecessor) and CCCERA with
regard to the payment of such liability. CCCERA and Employer expressly acknowledge that there are no
other agreements, arrangements, or understandings between them with respect to the payment of
Employer's share of its proportionate liability arising from the Settlement Agreement.
12/01/03 2
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4. This Agreement shall inure to the benefit of and shall be binding upon CCCERA
and Employer and their respective successors and assigns.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of California as applied to domiciliaries therein.
6. This Agreement may be signed in counterparts, each of which shall constitute a
duplicate original and all of which shall constitute one and the same Agreement.
7. In the event that any dispute arises between the Parties (or their successors)
concerning or in any way relating to this Agreement,the Parties expressly agree that they and their
successors will each bear their own costs or attorney's fees incurred as a result of or arising in connection
with any such dispute,including any such costs or fees incurred in the course of any legal proceeding
arising in connection with or necessary to resolve any such dispute,and that neither Karry nor its
successor will be entitled to recover any such costs or fees from the other Party or its successor an any
basis whatsoever.
8. This Agreement may be modified only by the express written agreement of the
Parties (or their successors)signed by the authorized representatives of each.
IN WITNESS WHEREOF,the Parties hereto have duly executed and entered into this
Agreement through their authorized representatives as designated below, as of the date and
year first above written.
Date: EMPLOYER
By:
Title:
CONTRA COSTA COUNTY EMPLOYEES'
Date: RETIREMENT ASSOCIATION
By:
Title.
12/4I/o3 3
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Contra Costa County Paulson Liability Payment Schedule 20"-2024
Payment Interest Princiggl Balance
Balance due 28,064,980.97
8/1/2004* 1,258,134.65 - 1,258,134.65 26,806,846.32
1 8/1/05 2,759,911.47 2,144,547.71 615,363.76 26,191,482.56
2 8/1/06 2,759,911.47 2,095,318.60 664,592.87 25,526,889.69
3 8/1/07 2,759,911.47 2,042,151.18 717,760.29 24,809,129.40
4 8/1/08 2,759,911.47 1,984,730.35 775,181.12 24,033,948.26
5 8/1/09 2,759,911.47 1,922,715.86 837,195.61 23,196,752.67
6 8/1/10 2,759,911.47 1,855,740.21 904,171.26 22,292,581.41
7 8/1/11 2,759,911.47 1,783,406.51 976,504.96 21,316,076.46
8 8/1/12 2,759,911.47 1,705,286.12 1,054,625.35 20,261,451.10
9 8/1/13 2,759,911.47 1,620,916.09 1,138,995.38 19,122,455.72
10 8/1/14 2,759,911.47 1,529,796.46 1,230,115.01 17,892,340.71
11 8/1/15 2,759,911,47 1,431,387.26 1,328,524.21 16,563,816.49
12 8/1/16 2,759,911.47 1,325,105.32 1,434,806.15 15,129,010.34
13 8/1/17 2,759,911.47 1,210,320.83 1,549,590.64 13,579,419.70
14 8/1/18 2,759,911.47 1,086,353.58 1,673,557.89 11,905,861.81
15 8/1/19 2,759,911.47 952,468.94 1,807,442.53 10,098,419.28
16 8/1/2.0 2,759,911.47 807,873.54 1,952,037.93 8,146,381.35
17 8/1/21 2,759,911.47 651,710.51 2,108,200.96 6,038,180.39
18 8/1/22 2,759,911.47 483,054.43 2,276,857.04 3,761,323.35
19 8/1/23 2,759,911.47 300,905.87 2,459,005.60 1,302,317.75
20 2/1/24 1,406,503.17 104,185.42 1,302,317.75 0.00
53,844,821.10 27,037,974.78 26,806,846.32
* Amount paid is to bring total owed back to 12/31/03 balance owed (payments for 7 mos from
1/1/2004 thru 7/31/2004).
Remaining liability is paid over 19.5 years set up as an ordinary annuity(payments at the end of a period)
with final payment due on February 1,2024
$26,806,846.32/9.712937031 = $2,759,911.47
accounting/paulson payments due/Contra Costa County proposed payment schedule 2004-2024.xis.xls/19.5 yrs Ord Ann ppd by Rick Koehler 12/1/03
CCCERA
FINAL PAULSON LIABILITY
as of 1/1/2003 with interest calculated to various dates
>.:::.<;:,:IJiak l # At► rt t3wed ::;::; ntr�+ t :, Tt�t+afE. :.:,:.:;:.:
Contra Costa County 26,475, 97.60 thru 10/31/03
26,475,897.60 165,474.36 26,641,371.96 thru 11/30/03
26,641,371.96 165,474.36 26,806,846.32 thru 12/31/03
26,806,846.32 178,712.31 26,985;558.63 thru 1/31/04
26,985,558.63 178,712.31 27,164;270.94 thru 2/29/04
27,164,270.94 178,712.31 27,342;983.25 thru 3/31/04
27,342,983.25 178,712.31 27,521;695.56 thru 4/30/04
27,521,695.56 178,712.30 27,700,407.86 thru 5/31/04
27,700,407.86 178,712.31 27,879,120.17 thru 6/30/04
27,879,120.17 185,860.80 28,064,980.97 thru 7/31/04
Interest compounded every six months on the schedule
Excel/Accounting/Paulson payments due/Poulson Districts Final Liability amounts plus jinterest.xls 12/1/03