City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends that the City Council receive and file information related to the
City’s intention to provide an early retirement incentive in the form of additional
service credit for Local Miscellaneous Members of the California Public Employees
Retirement System.
BACKGROUND:
As discussed over the past several months, the City is facing significant budgetary
challenges due to a number of economic issues, including the elimination of the
Redevelopment Agency. In light of this, staff is undertaking a number of measures to
address the projected budget shortfall. One part of this strategy is recommending
that City Council offer eligible employees within certain job classifications two years
of additional service credit through the California Public Employees Retirement
System (CalPERS). This action will reduce staffing levels and, subsequently, costs.
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
Meeting Date: 1/23/12 Item Number: A-1
CITY COUNCIL 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 (01/19/12),
Culver City Management Group (01/19/12), Culver City Employees Association (/19/12)
Department Approval:
Serena Wright (01/18/12)
City Attorney Approval:
Carol A. Schwab (by H. Baker) (01/19/12)
Chief Financial Officer Approval:
Jeff Muir (01/19/12)
City Manager Approval:
John M. Nachbar (01/19/12) City of Culver City, California
Agenda Item Report
one vacancy in any position in any department or organizational unit permanently
unfilled resulting in an overall reduction in the work force.
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 February 14, 2012 – May 14, 2012.
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 require 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 projected salary savings, the increased costs due to an increase in the
employer contribution rate, and the net savings are contained in the Fiscal
Analysis section of this report. If all positions proposed to be offered the early
retirement incentive were to take the incentive, then the following significant
annual savings would be realized:
Gross Salary Savings: $3,699,252
Less: Increased Costs: $ 168,285
Net Salary Savings: $3,530,967
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 and resolution for the City Council’s consideration
and potential action to adopt the two years additional service credit on February 13,
2012.
Should the City Council ultimately adopt the resolution on February 13, 2012, this
would be the fourth round of early retirement incentives offered by the City since the
economic downturn began in 2008. Since 2009, through a combination of
elimination of vacant positions and offering the prior rounds of early retirement
incentives, the City has reduced its workforce by a total of 67 positions.
FISCAL ANALYSIS:
Staff has identified the following classifications that are eligible to receive the
additional service credit benefit: City of Culver City, California
Agenda Item Report
Classification
Department
Projected Annual
Salary Savings
(excluding
benefits)
Deputy City Attorney I City Attorney’s Office $124,993
Legal Operations Manager City Attorney’s Office $98,889
Deputy City Clerk City Clerk’s Office $79,023
Records Management
Coordinator
City Clerk’s Office
$66,046
Executive Assistant to City
Manager
City Manager’s Office
$77,463
Administrative Clerk Community Development $47,829
Administrative Secretary
(2)
Community Development
$116,612
Associate Analyst Community Development $70,112
Associate Planner Community Development $83,060
Events Coordinator Community Development $89,506
Housing Assistant (2) Community Development $130,128
Occupancy Specialist Community Development $38,983
Management Analyst Community Development $83,060
Redevelopment Project
Manager (2)
Community Development
$222,904
Structural Rehabilitation
Specialist
Community Development
$76,695
Accountant II Finance $78,239
Accounting Division
Manager
Finance
$107,099
Accounting Technician (2) Finance $117,198
Payroll Technician (2) Finance $129,480
Senior Account Clerk Finance $52,775
Treasury Division Manager Finance $107,099
Human Resources Analyst Human Resources $83,060
Safety Officer Human Resources $77,076
Information Systems
Analyst
Information Technology
$87,305
Senior Computer
Programmer Analyst
Information Technology
$101,385
Telecommunication Analyst Information Technology $81,827
Administrative Secretary
(2)
Parks, Recreation &
Community Services
$116,612 City of Culver City, California
Agenda Item Report
Classification
Department
Projected Annual
Salary Savings
(excluding
benefits)
Senior and Social Services
Specialist
Parks, Recreation &
Community Services
$65,064
Senior Management
Analyst
Parks, Recreation &
Community Services
$98,889
Administrative Secretary Police $58,306
Property Technician Police $56,028
Secretary Police $52,251
Administrative Clerk/RPT Public Works $43,286
Administrative Secretary
(2)
Public Works
$116,612
Clerk Typist/RPT Public Works $37,271
Permit Technician Public Works $52,251
Sanitation Crew Supervisor
(2)
Public Works
$125,044
Senior Civil Engineer
Public Works
$119,510
Senior Management
Analyst
Public Works
$98,889
Management Analyst Transportation $83,060
Secretary Transportation $52,251
Senior Management
Analyst
Transportation
$98,889
Total Projected Annual
Salary Savings:
Up to
$3,699,252
Less Projected Annual
City Cost to implement
the Early Retirement
Program:
Up to
($168,285)
Net Projected Annual
Salary Savings:
Up to
$3,530,967
It is unlikely that all eligible employees within the above listed classifications will
retire within the designated window period. However, if 10% were to take advantage
of the early retirement incentive, the City would realize the following savings:
Gross Salary Savings: $369,925
Less: Increased Costs: $ 16,828
Net Salary Savings: $353,097 City of Culver City, California
Agenda Item Report
In order to reduce the impact to the City, CalPERS allows the City to pay the annual
cost through an increase in the employer contribution rate, starting two fiscal years
after the end of the designated 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.
The City will also experience a one-time cost when the employees cash-out their
accrual leave banks upon retirement in accordance with the terms of their respective
Memorandum of Understanding.
ATTACHMENTS:
None
MOTION:
That the City Council:
Receive and file this report.