City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends that the City Council (1) 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 and (2) certify compliance
with Government Code Sections 20903 and 7507.
BACKGROUND:
As discussed over the past several months, the City is facing significant budgetary
challenges due to the current economic downturn. Consistent with the direction of
the City Council and City Manager, staff is undertaking a number of measures to
address the projected budget shortfall. As part of the strategy, staff is recommending
that the City Council offer eligible employees within certain job classifications two
years of additional service credit through the California Public Employees
Retirement System (CalPERS) as an incentive to early retirement. 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
Meeting Date: 1/25/10 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 (CalPERS) and Certify
Compliance with Government Code Sections 20903 and 7507
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 (01/20/10),
Culver City Management Group (01/xx/10), Culver City Employees Association
(01xx/10)
Department Approval:
Serena Wright (01/21/10)
City Attorney Approval:
Carol Schwab (by H. Baker) (01/21/10)
Chief Financial Officer Approval:
Mark Scott (01/21/10)
City Manager Approval:
Mark Scott (01/21/10) City of Culver City, California
City Council Agenda Item Report
intends to keep all vacancies permanently unfilled, resulting in an overall reduction in
the workforce. The City can choose to eliminate the position held by the retiree or
another position in the department or organizational unit.
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 15, 2010 – June15, 2010.
To offer this early retirement incentive, CalPERS requires the City to 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.
Projected Savings Through Implementing the Early Retirement Incentive (ERI)
Staff has identified 41 positions within the City which meet the qualifications for the
ERI. For illustrative purposes, in the highly unlikely event all identified employees
were to accept the ERI, the resulting annual salary savings to the City would be
approximately $4,020,000. Assuming a 20-year amortization period, the ERI would
cost the City approximately $185,000 annually in increased employer contributions.
The net savings to the City would be $3,415,000 annually. However, staff wants to
be very clear that this scenario where all eligible employees accept the ERI will not
be realized.
The following table illustrates two more probable scenarios (continuing to assume a
20-year amortization period):
Staff will return to the City Council with a report for consideration and potential action
to adopt the two years of additional service credit on February 8, 2010.
FISCAL ANALYSIS:
PARTICIPATION 20% (8 positions) 10% (4 positions)
Salary Savings $804,000 $402,000
Contribution
Increase (Cost)
$(37,000) $(18,500)
Net Savings $767,000 $383,500 City of Culver City, California
City Council Agenda Item Report
Staff has identified the following 40 classifications that are eligible to receive the
additional service credit benefit:
Classification
Department
Projected Annual
Salary Savings
(excluding
benefits)
Accounting Division
Manager
Finance $107,099
Associate Analyst Finance $70,112
Building Official Community Development $142,993
Chief Information Officer Information Technology $165,224
Community Development
Director
Community Development $150,300
Deputy City Attorney II City Attorney $134,690
Deputy City Clerk City Clerk $79,023
Deputy City Treasurer Finance $142,993
Equipment Maintenance
Manager
Transportation $120,704
Executive Asst to City
Manager
City Manager’s Office $77,463
Facilities Maintenance
Crew leader
Public Works $66,705
Facilities Maintenance
Manager
Public Works $90,865
Graphic Services
Supervisor
Information Technology $68,388
Housing Program
Supervisor
Community Development $89,506
Human Resources Analyst Human Resources $83,060
Legal Operations Manager City Attorney’s Office $98,889
Maintenance Operations
Manager
Public Works $121,912
Management Analyst Community Development $79,023
Management Analyst Transportation $83,060
Parks, Recreation &
Community Services
Director
Parks, Recreation &
Community Services
$148,807
Payroll Technician Finance $64,740
Police Records Technician Police Department $47,829
Public Works Director Public Works $165,224 City of Culver City, California
City Council Agenda Item Report
Classification
Department
Projected Annual
Salary Savings
(excluding
benefits)
Purchasing Officer Finance $98,889
Recreation Manager Parks, Recreation &
Community Services
$120,107
Recreation Supervisor Parks, Recreation &
Community Services
$81,421
Redevelopment Project
Manager
Community Development $111,452
Safety Services
Communications Operator
Police $60,677
Senior Building & Safety
Inspector
Community Development $83,476
Senior Civil Engineer Public Works $119,510
Senior Management
Analyst
Finance $114,834
Senior Management
Analyst
City Attorney $98,889
Senior Management
Analyst
Parks, Recreation &
Community Services
$98,889
Senior Management
Analyst
Public Works $98,889
Senior Planner Community Development $107,099
Senior Structural Rehab
Specialist
Community Development $83,476
Solid Waste & Recycling
Operations Supervisor
Public Works $82,236
Street Maintenance
Supervisor
Public Works $86,438
Traffic Painting Crewleader Public Works $67,710
Treasury Division Manager Finance $107,099
Total Projected Annual
Salary Savings:
Up to
$4,019,700
Less Projected Annual
City Cost to implement
the Early Retirement
Program:
Up to
($184,470)
Net Projected Annual
Salary Savings:
Up to
$3,835,230 City of Culver City, California
City Council Agenda Item Report
In addition, the City will 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.
MOTION:
That the City Council:
1. Certify this report has been prepared in compliance with Government Code
Sections 20903 and 7507; and,
2. Receive and file this report.