HomeMy WebLinkAbout2008/04/22 Item 10
CITY COUNCIL
AGENDA STATEMENT
~!~ CllYOF
"~CHUlA VISTA
APRIL 22, 2008, Item~
ITEM TITLE:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA GRANTING ANOTHER DESIGNATED
PERIOD FOR TWO YEARS ADDITIONAL SERVICE
CREDIT
DIRECTOR OF HUMAN RESOURCESiJ12--
CITY MANAGER /0.111/
ASSISTANT CIT{~A~ER cy)
SUBMITTED BY:
REVIEWED BY:
4/5THS VOTE: YES D NO ~
SUMMARY
In an effort to significantly reduce the fiscal year 2009 general fund budget by reducing the
number of benefited employees throughout the organization, staff is proposing that Council
grant another Two Years Additional Service Credit for eligible employees, and provide for a
limited medical incentive program for those that retire during the prescribed window period.
The proposal is to offer this benefit only to Local Miscellaneous employees, in all
departments of the City and Police and Fire Department managers.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed actIvIty for
compliance with the California Environmental Quality Act (CEQA) and has determined
that the activity is not a "Project" as defined under Section 15378 of the State CEQA
Guidelines because it does not involve a physical change to the environment; therefore,
pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject
to CEQA. Thus, no environmental review is necessary.
RECOMMENDATION
Council adopt the Resolution.
BOARDS/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
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APRIL 22, 2008, Item J1L
Page 2 of 4
On October 16, 2007, the City Council of the City of Chula Vista approved a Resolution of
Intention to provide Two Years Additional California Public Employees Retirement System
(CalPERS) Service Credit for Local Miscellaneous members and Local Safety members
(police and Fire). An Emergency Ordinance was adopted on November 6,2007. Sixty-two
employees took advantage of this early retirement incentive.
Numerous efforts are being implemented to reduce expenditures in fiscal year 2009. It is
recommended that the City offer another Two Years Additional Service Credit pursuant to
Government Code section 20903 for Local Miscellaneous members and police and fire
department management employees in the classifications of Police Chief, Police Captain,
Fire Chief, Deputy Fire Chief and Fire Battalion Chief, who retire during the designated
period of May 5, 2008, through August 5, 2008. The City is also proposing a lirnited
medical incentive program, offered only for the first 30 days of the retirement window to
further encourage eligible employees to retire by June 5, 2008, to help minimize, prevent
pending layoffs and to reduce personnel costs.
Government Code section 20903 provides Two Years Additional CalPERS Service
Credit to members who retire during a designated period. The City must certify that if
any early retirements are granted after receipt of service credits pursuant to Section
20903, it is the City's intention that any vacancies created or at least one vacancy in any
position in any department or other organizational unit remain permanently unfilled,
thereby resulting in an overall reduction in the workforce of the department or
organizational unit.
Window Period
An eligible employee may apply for the benefit during the designated window period,
which cannot be less than ninety days, nor more than 180 days. Staff is proposing a
ninety-three-day window period from May 5, 2008, through August 5, 2008.
Eligibility
To be eligible, the following criteria must be met:
. member must have at least five years of CalPERS service credit;
. member must be employed for at least one day during the designated period;
. member must retire during the designated period;
. member cannot receive credit under this section if member is receiving any
unemployment insurance payments;
. if a retired member subsequently reenters membership, additional service
credit is forfeited.
Medical Incentive
To further encourage as many eligible employees as possible to retire within the first 30
days of the designated period, so the City may realize the greatest potential salary savings
and mitigate layoffs, in addition to the Two Years Additional Service Credit, staff is
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APRIL 22, 2008, Item ~
Page 3 of 4
proposing a medical incentive program, under the City's Retiree Health Plan. Under this
program, the City will pay the cost of the medical insurance premium for Employee Only
coverage as follows:
Retiring between 05/05/08 - 06/05/08
Retiring between 06/06/08 - 08/05/08
Medical Incentive through 12/31/09
No Medical Incentive Provided
Upon retirement, employees are required to enroll in Medicare Part A and Part B once they
become eligible. Any medical insurance premiums for any eligible dependents will be the
employee's responsibility. Non-benefited, unclassified hourly employees are not eligible for
the medical incentive program.
DECISION MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is
not site specific and consequently the 500 foot rule found in California Code of
Regulations section I 8704.2(a)(l) is not applicable to this decision.
FISCAL IMPACT
Government Code Section 7507 requires that the estimated present value of the additional
employer contributions for the proposed contract amendments be made public at a public
meeting at least two weeks prior to the adoption of the Resolution. The estimated amount
is based on the members' annual reportable compensation, cost factors established by
CalPERS actuaries and the fact that the City contracts for a Post-Retirement Survivor
allowance. If all 233 eligible employees opt to take the Two Year Additional Service
Credit and retire during the designated period, the estimated cost will be:
Miscellaneous Plan
Additional Employer Contribution:
Annual Cost:
Rate Increase in Employer Contribution:
$10,985,707 (over twenty years)
$829,736
0.99%
Additionally, if all 233 eligible employees retire under this program, the annual base
salary savings would be approximately $24.8 million annually. However, during the
previous Two Year Service Credit offering, only 20 percent of the eligible employees
retired. Assuming only 10 percent acceptance rate, both the employer costs and salary
savings would be reduced proportionately. Again, assuming 10 percent of eligible
employees retire, the annual net savings to the City's General Fund is estimated at $2.48
million.
A final list of employees who applied for retirement pursuant to the offer will be
presented to CalPERS after the expiration of the application window. CaIPERS will
include the cost of the Two Years Additional Service Credit in the City's employer
contribution rate commencing with the fiscal year starting two years after the end of the
designated period. The increase in employer contribution will be amortized over twenty
years.
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APRIL 22, 2008, Item~
Page 4 of 4
The estimated cost of the medical incentive program is $80,125 over nineteen months, if
10 percent of eligible retirees took the coverage for the full nineteen months. However,
the City is saving approximately $163,875 in cafeteria plan flexible benefits for this same
group.
We will be able to accurately identify the final costs once all eligible employees
separate from the City and retire.
In addition to the budgetary impacts, there will be an impact to the City's unfunded
liability for other post-employment benefits (OPEB). The Finance Department will
determine the OPEB unfunded liability in order to comply with the Governmental
Accounting Standards Board Pronouncement 45.
CONTRACT AMENDMENT PROCESS
A contract amendment between the City of Chula Vista and CalPERS to grant a
designated period is not required.
ATTACHMENTS
For signature:
1. Resolution to Grant Another Designated Period for Two Years Additional Service
Credit
2. Certification of Governing Body's Action (PERS-CON-12)
3. Certification of Compliance with Government Code Section 7507 (PERS CON-
12A)
4. Certification of Compliance with Government Code Section 20903
Signature not required:
5, Estimated Present Value of Additional Employer Contribution.
Prepared by: Marcia Raskin, Director of Human Resources
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^ ,J-.. ' .
rt-rl lAC llmer'\---
CITY COUNCIL
OF THE
CITY OF CHULA VISTA
RESOLUTION
TO
GRANT ANOTHER DESIGNATED PERIOD
FOR
TWO YEARS ADDITIONAL SERVICE CREDIT
WHEREAS, the City Council of the City of Chula Vista is a contracting Public Agency of
the Public Employees' Retirement System; and
WHEREAS, said Public Agency desires to provide another designated period for Two
Years Additional Service Credit, Section 20903, based on the contract
amendment included in said contract which provided for Section 20903,
Two Years Additional Service Credit, for eligible members;
NOW, THEREFORE, BE IT RESOLVED, that said City Council does seek to add
another designated period, and does hereby authorize this Resolution,
indicating a desire to add a designated period from
through for
eligible members in the
Adopted and approved this
day of
CITY COUNCIL
OF THE
CITY OF CHULA VISTA
BY
Presiding Officer
Attest:
Clerk/Secretary
(Rev. 1/96)
10-5
At+-ochlY\en+- 2..
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
of the
(governing body)
(public agency)
on
(date)
Clerk/Secretary
Title
PERS-CON-12 (rev. 1/96)
10-6
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
~c\,mei\+ 3
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
I hereby certify that in accordance with Section 7507 of the Government Code
the future annual costs as determined by the System Actuary for the increase
in retirement benefit( s) have been made public at a public meeting of the
of the
(governing body)
(public agency)
on
which is at least two weeks prior to the adoption of the
(date)
Resolution / Ordinance.
Clerk/Secretary
Title
Date
PERS-CON-12A (rev. 1/96)
10-7
p" J, '4.
T-7'~o'.f"("enf' \
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Sranch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 20903
In accordance with Govemment Code Section 20903 and the contract between the
Public Employees' Retirement System, the City Council of the City of Chula Vista
hereby certifies that:
1. Because of an impending curtailment of, or change in the manner of performing
service, the best interests of the agency will be served by granting such additional
service credit.
2. The added cost to the retirement fund for all eligible employees who retire during
the designated window period will be included in the contracting agency's
employer contribution rate for the fiscal year that begins two years after the end of
the designated period.
3. It has elected to become subject to Section 20903 because of impending
mandatory transfers, demotions, and layoffs that constitute at least 1 percent of the
job classification, department or organizational unit, as designated by the
goveming body, resulting from the curtailment of, or change in the manner of
performing, its services.
4. Its intention at the time Section 20903 becomes operative is to keep all vacancies
created by retirements under this section or at least one vacancy in any position in
any department or other organizational unit permanently unfilled thereby resulting
in an overall reduction in the work force of such department or organizational unit.
THEREFORE, the City Council of the City of Chula Vista hereby elects to provide the
benefits of Government Code Section 20903 to all eligible members who retire within
the designated period, through
CITY COUNCIL
OF THE
CITY OF CHULA VISTA
BY
Presiding Officer
Attest:
Clerk/Secretary
Date
10-8
2yr certification-PA (Rev. 4/04)
City of Chula Vista
List of Benefited Employees (Mise)
=>age 49
50-54 49 0.63 $40,130.02
50-54 49 0.63 $43,797.17
50-54 49 0.63 $83,494.59
50-54 49 0.63 $60,269.39
50-54 49 0.63 $30,532.81
50-54 50 0.63 $52,908.71
50-54 49 0.63 $95,792.53
50~54 49 0.63 $43,797.17
50-54 49 0.63 $26,435.35
50-54 50 0.63 $60.269.39
50-54 50 0.63 $36,369.66
50-54 50 0.63 $63,178.15
50-54 50 0.63 $39,815.69
50-54 50 0.63 $69,617.78
50-54 50 0.63 $30,057.46
50-54 50 0.63 $42,369.00
50-54 50 0.63 $10,898.92
50-54 50 0.63 $42,369.00
50-54 50 0.63 $93,867.23
50-54 50 0.63 $27,757.06
50-54 50 0.63 $35,295.62
50~54 50 0.63 $46,149.67
50-54 50 0.63 $29,704.31
50-54 50 0.63 $69,617.78
50-54 50 0.63 $57,345.89
50-54 50 0.63 $45,832.22
50~54 50 0.63 $27,137.07
50-54 50 0.63 $27,003.90
50-54 50 0.63 $38,042.55
50-54 50 0.63 $33,308.57
50-54 50 0.63 $29,624.87
50-54 51 0.63 $45,228.46
50-54 51 0.63 $50,215.18
50-54 51 0.63 $31,291.86
50-54 51 0.63 $26,435.35
50-54 51 0.63 $53,449.91
50-54 51 0.63 $50,524.77
50-54 51 0.63 $28,231.42
50-54 51 0.63 $60,153.09
50-54 51 0.63 $24,548,54
50-54 51 0.63 $49,809.29
50-54 51 0.63 $25,233.72
50-54 51 0.63 $50,215.18
50~54 51 0.63 $34,480.39
50-54 51 0.63 $63,178.15
50-54 51 0.63 $26,435.35
50-54 51 0.63 $41,288.90
50-54 51 0.63 $36,143.45
50-54 51 0.63 $24,548.54
50-54 51 0.63 $30,532.81
50~54 51 0.63 $66,483.31
50-54 51 0.63 $55,236.96
50-54 51 0.63 $139,020.34
50-54 51 0.63 $49,809.29
50-54 51 0.63 $54,937.54
50-54 51 0.63 $37,928.55
50-54 51 0.63 $65,129.01
50-54 51 0.63 $95,792.53
50-54 51 0.63 $33,308.57
50-54 51 0.63 $63,178.15
50-54 51 0.63 $29,663.69
50-54 51 0.63 $30,073.19
04/17/2008
10-9
A-!-\uch')'Oe(\ J-- 5
Page 1
City of Chula Vista
List of Benefited Employees (Mise)
=>age 49
04/17/2008
50-54 51 0.63 $42,369.00
50-54 51 0.63 $36,842.72
50-54 51 0.63 $33,308.57
50-54 51 0.63 $37,954.75
50-54 52 0.63 $30,057.46
50-54 52 0.63 $36.842.72
50-54 52 0.63 $43,797.17
50-54 52 0.63 $31,920.69
50-54 52 0.63 $41,953.44
50-54 52 0.63 $90,247.58
50-54 52 0.63 $55,388.15
50-54 53 0.63 $29,989.32
50-54 52 0.63 $39,815.69
50-54 52 0.63 $36,369.66
50-54 52 0.63 $47,288.08
50-54 52 0.63 $54,137,05
50-54 52 0.63 $34,480.39
50-54 53 0.63 $63,178.15
50-54 52 0.63 $73,316.88
50-54 52 0.63 $41,164.74
50-54 52 0.63 $36,639.28
50-54 52 0.63 $31,920.69
50-54 52 0.63 $27,003.90
50-54 52 0.63 $80,329.65
50-54 52 0.63 $38,084.48
50-54 52 0.63 $71,538.18
50-54 52 0.63 $45,546.72
50-54 52 0.63 $100,255.10
50-54 52 0.63 $24,548.87
50-54 52 0.63 $27,757.06
50-54 52 0.63 $49,809.29
50-54 52 0.63 $41,721.33
50-54 53 0.63 $36,639.28
50-54 53 0.63 $54,790.28
50-54 53 0.63 $54,381.27
50-54 53 0.63 $54,274.15
50-54 54 0.63 $36,481.21
50-54 53 0.63 $54,274.15
50-54 53 0.63 $34,480.39
50-54 53 0.63 $83,479.69
50-54 53 0.63 $12,274.35
50-54 53 0.63 $33,308.57
50-54 53 0.63 $27,757.06
50-54 53 0.63 $27,292.85
50-54 53 0.63 $50,215.18
50-54 54 0.63 $22,516.77
50-54 53 0.63 $27,757.06
50-54 53 0.63 $27,003.90
50-54 53 0.63 $37,928.55
50-54 54 0.63 $34,480.39
50-54 54 0.63 $27,003.90
50-54 54 0.63 $24,548.87
50-54 54 0.63 $27,003.90
50-54 54 0.63 $27,757.06
50-54 54 0.63 $32,764.10
50-54 54 0.63 $28,296.12
50-54 54 0.63 $141,750.06
50-54 54 0.63 $54,937.54
50-54 54 0.63 $54,274.15
50-54 54 0.63 $54,790.28
50-54 54 0.63 $28,354.11
50-54 54 0.63 $25,233.72
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Page 2
City of Chula Vista
List of Benefited Employees (Mise)
=>age 49
04/17/2008
50-54 54 0.63 $54,937.54
50-54 54 0.63 $52,908.71
50-54 54 0.63 $49,809.45
50-54 54 0.63 $42,307.25
50-54 54 0.63 $27,757.06
50-54 54 0.63 $41,953.44
55-59 55 0.72 $35,490.87
55-59 55 0.72 $39,343.26
55-59 55 0.72 $72,203.60
55-59 55 0.72 $61,085.61
55-59 55 0.72 $61,367.53
55-59 55 0.72 $38,066.93
55-59 55 0.72 $61,085.61
55-59 55 0.72 $62,785.76
55-59 55 0.72 $28,055,85
55-59 55 0.72 $38,066.93
55-59 55 0.72 $39,339.71
55-59 55 0.72 $37,816.46
55-59 55 0.72 $100,910.35
55-59 55 0.72 $46,078.16
55-59 55 0.72 $31,722.35
55-59 55 0.72 $17,175.79
55-59 55 0.72 $53,724.90
55-59 55 0.72 $109,476.99
55-59 56 0.72 $50,053.91
55-59 56 0.72 $36,480.79
55-59 56 0.72 $72,203.60
55-59 56 0.72 $34,351.39
55-59 56 0.72 $62,027.60
55-59 56 0.72 $39,343.26
55-59 56 0.72 $51,689.66
55-59 56 0.72 $48,351.14
55-59 56 0.72 $91,805.69
55-59 56 0.72 $28,838.53
55-59 56 0.72 $39,343.26
55-59 56 0.72 $41,306.80
55-59 56 0.72 $26,739.65
55-59 56 0.72 $43,883.99
55-59 57 0.72 $39,707.37
55-59 57 0.72 $31,722.35
55-59 57 0.72 $137,492.60
55-59 57 0.72 $84,856.45
55-59 57 0.72 $62,785.76
55-59 57 0.72 $36,480.79
55-59 57 0.72 $76,566.30
55-59 57 0.72 $61,085.61
55-59 57 0.72 $62,785.76
55-59 57 0.72 $30,369.27
55-59 57 0.72 $54,043.52
55.59 57 0.72 $36,615.76
55-59 57 0.72 $89,098.96
55-59 57 0.72 $31.191.83
55-59 57 0.72 $45,862.88
55-59 57 0.72 $51,689.66
55-59 58 0.72 $27,085.59
55-59 58 0.72 $63,300.74
55-59 58 0.72 $27,179.19
55-59 58 0.72 $36,270.75
55-59 58 0.72 $31,191.83
55-59 59 0.72 $123,743,32
55-59 58 0.72 $16,357.91
55-59 58 0.72 $33,947.78
10-11
Page 3
City of Chula Vista
List of Benefited Employees (Mise)
=>age 49
55-59 59 0.72 $84,960.53
55-59 59 0.72 $61,085.61
55-59 59 0.72 $50,053.91
55-59 59 0.72 $76,566.30
55-59 60 0.72 $28,838.53
55-59 59 0.72 $50,053.91
55-59 59 0.72 $62,617.46
60-64 60 0.73 $29,800,31
60-64 60 0.73 $29,239.07
60-64 61 0.73 $46,356.94
60-64 61 0.73 $50,749.10
60-64 60 0.73 $47,698.83
60-64 60 0.73 $46,718.13
60-64 60 0.73 $53,310.64
60-64 60 0.73 $49,413.10
60-64 60 0.73 $13,260.38
60-64 60 0.73 $65,145.62
60-64 60 0.73 $49,022.68
60-64 61 0.73 $51,585.74
60-64 61 0.73 $40,005.66
60-64 61 0.73 $34,327.23
60-64 61 0.73 $55,762.48
60-64 61 0.73 $43,948.95
60-64 61 0,73 $34,456.29
60-64 61 0.73 $32,330.53
60-64 61 0.73 $64,179.92
60-64 61 0.73 $138,124.48
60-64 63 0.73 $116,168.61
60-64 62 0.73 $32,162.94
60-64 62 0.73 $38,311.51
60-64 62 0.73 $53,055.93
60-64 62 0.73 $63,657.78
60-64 62 0.73 $46,135.64
60-64 63 0.73 $73,206.43
60-64 63 0.73 $46,356.94
60-64 63 0.73 $96,282.69
60-64 64 0.73 $32,162,94
60-64 65 0.73 $31,690.34
60-64 65 0.73 $14,619.53
65+ 67 0.65 $80,436.56
65+ 68 0.6S" $13,017.39
65+ 69 0.65 $28,638.23
65+ 72 0.65 $51,949.92
Add'l Employer Contributions $10,985,707.75
Divide Add'l Employer
Contributions by 13.24 (20yr
amortization factor) $829,736.24
Divide 20yr amortization
amount by annual payroll
plan $83,891,371 0.99%
04/17/2008
10-12
Page 4
RESOLUTION NO. 2008-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA GRANTING ANOTHER DESIGNATED
PERIOD FOR TWO YEARS ADDITIONAL SERVICE
CREDIT
WHEREAS, the City Council of the City ofChula Vista is a contracting Public Agency of
the Public Employees' Retirement System; and
WHEREAS, said Public Agency desires to provide another designated period for Two Years
Additional Service Credit, section 20903, based on the contract amendment included in said contract
which provided for section 20903, in Two Years Additional Service Credit, for eligible members;
and
NOW, THEREFORE, BE IT RESOLVED the City Council ofthe City ofChula Vista does
hereby grant a period for Two Years Additional Service Credit pursuant to Government Code
section 20903 from May 5, 2008, through August 4, 2008, for all local miscellaneous and police
department and fire department managers in the classifications of Police Chief, Police Captain, Fire
Chief, Deputy Fire Chief and Fire Battalion Chief, members of the California Public Employees
Retirement System (CaIPERS).
Presented by
Approved as to form by
Marcia Raskin
Director of Human Resources
~OI\~~
Ann Moore
City Attorney
J :\Altorney\RESO\6ENEFITS\ Two-year service credil_ 04-22-08.doc
10-13