City of Culver City, California
Agenda Item Report
Meeting Date: 8/24/09 Item Number: A-2
CITY COUNCIL AGENDA ITEM: (1) Adoption of a Resolution (a) Providing
Additional Service Credit Pursuant to Government Code Section 20903 for Local
Miscellaneous Members of the California Public Employees Retirement System
(CalPERS); (b) Designating the Window Period as September 1, 2009 to November
30, 2009; and (c) Specifying the Eligible Group of Members; and (2) Authorize the
Mayor to Execute the Certification of Compliance with Government Code Section
20903.
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: [x]
Commission Action Required: Yes [] No [x] Date: _______________
Public Notification (E-Mail) Meetings and Agendas – City Council (08/19/09), (E-Mail)
Culver City Management Group (08/19/09) and (E-Mail) Culver City Employees’
Association (08/19/09)
Department Approval:
Serena Wright (08/17/09)
City Attorney Approval:
Carol Schwab (by H. Baker) (08/19/09)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (08/19/09)
City Manager Approval:
Mark Scott (08/19/09)
RECOMMENDATION:
Staff recommends that the City Council (1) adopt a Resolution (a) providing
additional service credit pursuant to Government Code Section 20903 for Local
Miscellaneous Members of the California Public Employees Retirement System
(CalPERS); (b) designating the window period as September 1, 2009 to
November 30, 2009; and (c) specifying the eligible group of members; and (2)
authorize the Mayor to execute the Certification of Compliance with Government
Code Section 20903.
BACKGROUND:
At the August 10, 2009 City Council meeting, the City Council considered
information in accordance with Government Code Section 7507 regarding the
potential costs and savings related to the elimination of two positions through the
CalPERS Early Retirement Incentive Program. The item was considered as an
action item, with an opportunity for members of the public to provide comment. As
mentioned at that time, the second step of the process is for the City Council to
adopt a resolution which: (1) provides additional service credit pursuant to
Government Code Section 20903 for Local Miscellaneous Members of the California City of Culver City, California
Agenda Item Report
Public Employees Retirement System (CalPERS); (2) Designates the Window
Period; and (3) Specifies the Eligible Group of Members. A copy of the staff report
from the August 10, 2009 meeting is attached for the City Council’s reference.
DISCUSSION:
In accordance with the Public Employees Retirement Law, the Early Retirement
Program may be offered to employees who have (1) at least five years of service
with a CalPERS member agency and (2) meet the minimum age requirement for a
service retirement (generally 50 years of age for a Miscellaneous Member).
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 or change in the manner of performing service. 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. As part of
implementing the Early Retirement Program, the City must designate a window
period between ninety and one hundred eighty (90 – 180) days during which eligible
employees must retire to receive the early retirement incentive.
Additional Service Credit
As an incentive to encourage eligible employees to accept an early retirement,
Government Code Section 20903 provides the authority for the City (as a member of
the CalPERS retirement system) to offer two additional years of service credit.
Designation of the Window Period
The Public Employee Retirement Law requires the City to designate a window
period of between 90 and 180 days during which eligible employees may retire and
receive the additional two years’ service credit. At the August 10, 2009 City Council
meeting, staff was initially inclined to recommend a window period of September 1,
2009 to December 31, 2009. However, upon further review, staff is now
recommending a window period of September 1, 2009 to November 30, 2009.
Eligible Group of Members
As mentioned at the August 10, 2009 meeting, the current eligible group of members
include the following classifications:
• Assistant City Manager/Risk Manager
• Senior and Social Services Specialist
City of Culver City, California
Agenda Item Report
As reported to the City Council in July and at the August 10, 2009 City Council
meeting, the City Manager is working with staff to re-evaluate the entire City budget
and associated workplans. As part of this effort, the City Manager will be reviewing
the Early Retirement Program for additional opportunities to offer a “second round”
of early retirements to further reduce payroll costs.
FISCAL ANALYSIS:
Staff has identified the following positions that are eligible to receive the two years
additional service credit:
Classification
Projected Annual Salary
Savings (exluding benefits)
Senior & Social Services Specialist
Assistant City Manager/Risk Manager
Projected Annual Salary Savings:
$ 62,523
$177,172
$239,695
Less Projected Annual City Cost to
implement the Early Retirement
Incentive:
($11,523)
Net Projected Annual Salary Savings: $228,172
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 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 savings resulting from the positions being vacated.
The net projected annual salary savings noted above does not include the additional
ongoing savings realized from a reduction in benefit costs.
Upon separation from employment, in compliance with the requirements of State law
and applicable provisions of the Memoranda of Understanding (MOUs) with the
City’s bargaining groups, retiring employees are eligible for a one-time payout of
certain leave balances (vacation, sick leave, etc.). This requirement is a general
provision of law or the MOUs and is not a requirement of the Early Retirement
Program.
ATTACHMENTS:
1. Staff Report from August 10, 2009
2. Resolution
3. Certification of Compliance with Government Code Section 20903
City of Culver City, California
Agenda Item Report
MOTION:
That the City Council:
1. Adopt a Resolution (a) providing additional service credit pursuant to
Government Code Section 20903 for Local Miscellaneous Members of
the California Public Employees Retirement System (CalPERS); (b)
designating the window period as September 1, 2009 to November 30,
2009; and (c) specifying the Eligible Group of Members; and
2. Authorize the Mayor to execute the Certification of Compliance with
Government Code Section 20903.