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Title:
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Receipt and Filing of the Information Related to the City’s Intention to Provide Additional Service Credit for Local Miscellaneous Members of the California Public Employees Retirement System.
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City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council receive and file information related to the City’s
intention to provide additional service credit for Local Miscellaneous Members of the
California Public Employees Retirement System.
BACKGROUND:
In an effort to further reduce staffing levels and costs within the City Attorney’s
Office, staff is recommending that the City Council offer eligible employees within the
specified job classification two years of additional service credit through the
California Public Employees Retirement System (CalPERS).
DISCUSSION:
In accordance with the Public Employees Retirement Law, two years of additional
service credit may be offered to employees who have at least five years of CalPERS
service and meet the minimum age requirement for a service retirement.
Additionally, an agency must be facing impending mandatory transfers, demotions or
layoffs that constitute at least 1 percent (1%) of the job classification, department or
organizational unit, as designated by the City. Further, the City must certify that it
intends to keep all vacancies created by retirements under this program or at least
one vacancy in any position in any department or organizational unit permanently
unfilled resulting in an overall reduction in the work force.
Meeting Date: 08/09/10 Item Number: A-1
AGENDA ITEM: Receipt and Filing of the Information Related to the City’s
Intention to Provide Additional Service Credit for Local Miscellaneous Members
of the California Public Employees Retirement System
Contact Person/Dept.: Serena Wright Phone Number: (310) 253-5640
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: []
Public Notification: (E-Mail) Meetings and Agendas – City Council (08/05/10),
Culver City Management Group (08/05/10)
Department Approval:
Serena Wright (07/30/10)
City Attorney Approval:
Carol Schwab (by H. Baker) (08/02/10)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (08/04/10)
City Manager Approval:
Martin R. Cole (08/05/10) City of Culver City, California
City Council Agenda Item Report
In order to provide this early retirement incentive, the City must designate a window
period of between 90 and 180 days during which eligible employees must retire to
receive the early retirement incentive. Staff is recommending that the designated
window period be August 26, 2010 – November 30, 2010.
To offer this early retirement incentive, CalPERS requires the City follow certain
procedures. Publicly acknowledging cost considerations is the first step in the
process. This staff report has been prepared in compliance with Government Code
Sections 7507(c)(1)(A) and 20903(i), which requires the City to publicly disclose
“…the additional employer contributions, and the funding therefor…” at least two
weeks prior to the City Council adopting a resolution implementing the early
retirement program.
The funding for the additional employer contributions shall be provided by the
projected annual salary and benefit savings resulting from the affected positions
being vacated as a result of early retirement.
Staff will be bringing back a report for the City Council’s consideration and potential
action to adopt the two years additional service credit on August 23, 2010.
FISCAL ANALYSIS:
Staff has identified the following classification that is eligible to receive the additional
service credit benefit:
Classification
Department
Projected Annual
Salary Savings
(excluding
benefits)
Deputy City Attorney II
City Attorney
$134,690
Total Projected Annual
Salary Savings:
$134,690
Less Projected Annual
City Cost to implement
the Early Retirement
Program:
($6,088)
Net Projected Annual
Salary Savings:
$128,602
City of Culver City, California
City Council Agenda Item Report
In order to reduce the impact to the City, CalPERS allows the annual cost to be paid
through an increase in the employer contribution rate, starting two fiscal years after
the end of the designated window period, which may continue for as long as twenty
(20) years. The impact of this change on the City’s employer contribution rate is
expected to be minor compared to the overall contributions. Also, such impacts are
far less than the annual salary and benefit savings resulting from the positions being
vacated. It should be noted that benefits represent an additional 35% – 40% of
salary in costs to the City.
In addition, the City will experience a one-time cost when accrual leave banks are
cashed out upon retirement in accordance with the terms of their respective
Memorandum of Understanding.
MOTION:
That the City Council:
Receive and file this report.