It is recommended that the Board of Commissioners adopt Resolution 2026-05 to approve the amendment to the Victor Valley Wastewater Reclamation Authority’s (“VVWRA”) Personnel Rules and Regulations section 7.22 (stability pay) to ensure compliance with CalPERS requirements.

As a contracting agency of CalPERS, VVWRA is subject to statutory and regulatory requirements that govern whether compensation is reportable for pension calculation purposes. The Public Employees’ Retirement Law (“PERL”), the Public Employees’ Pension Reform Act of 2013 (“PEPRA”), and related regulations codified in the California Code of Regulations (“CCR”) require that contracting agencies must accurately reflect information related to compensation items in publicly available documentation approved by the Board of Commissioners.

All items of compensation which are reportable to CalPERS aside from salary are delineated and defined in the exclusive list of special compensation items under Title 2 CCR sections 571(a) for classic members, and section 571.1(b) for PEPRA members.  All special compensation items must also meet the requirements of 2 CCR sections 571(b) and 571.1(a), which require that every special compensation item is included in a publicly available written labor policy or agreement that:
•    Has been duly approved and adopted by an employer's governing body in accordance with requirements of applicable public meetings laws;
•    Indicates the conditions for payment of the item of special compensation, including, but not limited to, eligibility for, and amount of, the special compensation;
•    Is posted at the office of the employer or immediately accessible and available for public review from the employer during normal business hours or posted on the employer's internet website;
•    Indicates an effective date and date of any revisions
•    Is retained by the employer and available for public inspection for not less than five years; and
•    Does not reference another document in lieu of disclosing the item of special compensation.

VVWRA received a determination letter dated October 27, 2025 with respect to one of its recently retired employees that deemed stability pay as noncompliant.  CalPERS’ asserted that stability pay was not compliant because the existing provisions of section 7.22 (stability pay) of the Personnel Rules and Regulations did not align with the manner in which stability pay has been historically calculated and reported to CalPERS. 

To address this, legal counsel has recommended revisions to section 7.22 (stability pay) of the Personnel Rules and Regulations to clarify the conditions and payment and method of calculation to comply with CalPERS’ overarching requirements in the PERL.  The draft revisions were presented to CalPERS for review and a compliance statement was issued by CalPERS thereafter subject to approval by the Board of Commissioners.

Accordingly, legal counsel has prepared an amendment (Exhibit 2) to the Personnel Rules and Regulations consistent with the draft revisions to section 7.22 (stability pay) of the Personnel Rules and Regulations that were approved by CalPERS.  Staff recommends that the Board of Commissioners adopt the amendment by approving Resolution 2026-05 (Exhibit 1).   

The purpose of approving this resolution is to ensure that stability pay meets all the applicable requirements of 2 CCR sections 570.5 and 571.1.  Any subsequent revisions will be similarly presented to the Board of Commissioners for adoption and approval at a future meeting.