The URL can be used to link to this page

Home My WebLink About2008/12/16 Item 5 ITEM TITLE: SUBMITTED BY: REVIEWED BY: CITY COUNCIL AGENDA STATEMENT ::S\(~ CITY OF . · - (HULA VISTA DECEMBER 16, 2008, Item 5 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULAVISTA GRANTING A PERIOD FOR TWO YEARS ADDITIONAL SERVICE CREDIT PURSUANT TO GOVERNMENT CODE SECTION 20903 FOR ALL LOCAL MISCELLANEOUS AND LOCAL PUBLIC SAFETY (POLICE) EMPLOYEES AND MEMBERS OF THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM (CALPERS) DIRECTOR OF HUMAN RESOURCES f'{f2-- INTERIM CITY MANAGER ~"/ DEPUTY CITY MANAGER ~ 4/5THS VOTE: YES D NO 0 SUMMARY Iri an effort to significantly reduce the fiscal year 2009 and 20 I 0 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 to all Local Miscellaneous and Local Public Safety (Police) employees in all departments of the City. ENVIRONMENTAL REVIEW Not applicable RECOMMENDATION Council adopt the Resolution. BOARDS/COMMISSION RECOlVlME1'mA nON . Not applicable DISCUSSION On October 16, 2007, the City Counc.il of the City ofChula 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 5-1 DECEMBER 16, 2008, Item~ Page 2 of 4 (Police and Fire). An Emergency Ordinance was adopted on November 6, 2007. Sixty-two (62) employees took advantage of this early retirement incentive. On April 22, 2008, the Council approved a second Resolution of Intention to provide the same CalPERS benefit to all Local Miscellaneous employees and a limited, specific list of classifications in Police and Fire management. Eighteen (18) employees took advantage of the early retirement opportunity. Numerous efforts are being implemented to reduce expenditures in fiscal year 2009 and 2010. It is recommended that the City offer another Two Years Additional Service Credit pursuant to Government Code section 20903 for Local Miscellaneous members and Local Public Safety (police) members, who retire during the designated period of December 31, 2008 and June 26, 2009. The City is also proposing a limited, two-tiered medical incentive program. If an employee retires by Friday, March 27,2009, the City will pick up the cost of the health care premium for Employee Only through December 31,2010. If employees retire anytime after March 27, 2009 and no later than June 26, 2009, the City will pick up the cost of the health care premium for Employee Only through December 31, 2009. The City is offering a medical incentive to encourage as many employees as possible to consider retiring this fiscal year in an effort to help minimize or 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 (178) one hundred seventy eight day window period from December 31,2008 - June 26, 2009. Eligibility I 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. 5-2 DECEMBER 16,2008, Item5 Page 3 of 4 Medical Incentive In addition to the Two Years Additional Service Credit, staff is 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 01/01/09 - 03/27/09 Retiring between 03/28/09 - 06/26/09 Medical Incentive through 12/31/10 Medical Incentive through 12/31/09 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)(1) is not applicable to this decision. FISCAL IiVIP ACT 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 250 eligible employees opt to take the Two Year Additional Service Credit and retire during the designated period, the estimated cost will be: Local Miscellaneous and Local Safety Police Plan Additional Employer Contribution: Annual Cost Rate Increase in Employer Contribution: $12,459,370 (over twenty years) $622,969 0.75% Additionally, if all 250 eligible employees retire under this program, the annual base salary savings would be approximately $18.75 million annually. However, during the two previous Two Year Service Credit opportunities, a total of 30 percent of the eligible employees retired. " After recently surveying the eligible employees, we are estimating that approximately 20 percent of the eligible employees may retire. The annual net savings to the City's General Fund is estimated at $3.75 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. CalPERS will 5-3 DECEMBER 16, 2008, 1tem~ Page 4 of 4 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. . The estimated cost of the medical incentive program is $365,750 over nineteen months, if 20 percent of all eligible retirees took the coverage for the full nineteen months. However, the City is saving approximately $791,667 in cafeteria plan flexible benefits for this same group, which will result in a net savings of$425,917. 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: I. 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- l2A) 4. Certification of Compliance with Government Code Section 20903 Signature not required: Estimated Present Value of Additional Employer Contribution.' Prepared by: N!arcia Raskin, Director of Human Re~ources ~ 5-4 City of Chula Vista List of Benefited Employees =>age 49 stimate ost Emp 10 # AGE AGE Bracke"t (Annual Rate X 2764 50 50-54 0.63 $35,859.62 2420 50 50-54 0.63 $45,549.04 0390 50 50-54 0.63 $34,640.97 0395 50 50-54 0.63 $44,063.78 0507 50 50-54 0.63 $28,084.08 0324 50 50-54 0.63 $39,607.82 3594 50 50-54 0.63 $31,733.84 2178 50 50-54 0.63 $35,967.54 0261 50 50-54 0.63 $34,640.97 2321 50 50-54 0.63 $28,084.08 0984 50 50-54 0.63 $41,408.24 0273 50 50-54 0.63 $36.461.72 1873 50 50-54 . 0.63 $39,607.82 0787' 50 50-54 0.63 $47,037.57 0351 50 50-54 0.63 $37,425.04 0565 50 50-54 0.63 $43,999.57 0478 50 50-54 0.63 539,607.82 1833 50 50-54 0.63 $37,589.15 0224 50 50-54 0.63 529,488.27 0483 50 50-54 0.63 $29,017.83 3354 50 50-54 0.63 524,993.35 2683 50 50-54 0.63 $37,940.50 2160 50 50-54 0.63 $100,255.09 0988 50 50-54 0.63 $108,275,45 1164 50 50-54 0.63 $60,269.32 0997 50 50-54 0.63 $66,579,45 3127 50 50-54 0.63 $65,128.95 0250 50 50-54 0.87 573,046,42 0193 50 50-54 0.87 $84,025.24 3645 50 50-54 0.87 $66,335.76 0653 50 50-54 0.87 $66,335.76 0764 50 50-54 0.87 $66,335.76 0662 50 50-54 0.87 573,046,42 0288 50 50-54 0.87 $84,025.2<1 0360 50 50-54 0.63 554,274.12 3098 50 50-54 0.63 552,514.58 0580 50 50-54 0.63 550,215.27 1945 50 50-54 0.63 $74,47<1.24 2900 50 50-54 0.63 599,051.75 0529 50 50-54 0.63 $69,617.81 0367 51 50-54 0.63 $47,995.61 0290 51 50-54 0.63 537,824,43 1772 51 50-54 0.63 528,084.08 2628 51 50-54 0.63 $50,048.74 0837 51 50-54 0.63 $34,6<10.97 2467 51 50-54 0.63 $39,564.26 0434 51 50-54 0.63 $36,70752 0443 .51 50-54 0.63 544,063.78 2729 51 50-54 0.63 $11,901.59 2933 51 50-54 0.63 $27,492.77 2176 51 50-54 0.63 $41.735.30 0503 51 50-54 0.63 $31,754.09 Page 1 5-5 City of Chula Vista List of Benefited Employees =>age 49 stlmate ost Emp 10 # AGE AGE Bracket (Annual Rate X 2175 51 50-54 0.63 545,549.04 3390 51 50-54 0.63 $100,255.09 0521 51 50-54 0.63 $60,269.32 0482 51 50-54 0.63 $52,908.72 0631 51 50-54 0.87 573,046,42 1017 51 50-54 0.63 527,137.06 3122 51 50-54 0.63 530,809.85 3007 51 50-54 0.63 557,345.89 0175 51 50-54 0.87 5129,626.19 0472 51 50-54 0.63 $69,617.77 0263 51 50-54 0.63 565,705.26 0778 52 50-54 0.63 539,472.91 0566 52 50-54 0.63 $37,589.15 0624 52 50-54 0.63 $44,063.78 0600 52 50-54 0.63 $29,360.68 3097 52 50-54 0.63 $30,850.15 1928 52 50-54 0.63 $31.754.09 0085 52 50-54 0.63 $39.445.64 0364 52 50-54 0.63 538,316.35 0167 52 50-54 0.63 $42,940.54 13.02 52 5.0-54 0.63 534,640.97 0091 52 50-54 0.63 $25,530.54 .0721 52 50-54 0.63 526,243.02 1659 52 50-54 0.63 $34,640.97 2320 52 5.0-54 0.63 528,867.41 3369 52 5.0-54 0,63 527,492.77 .0375 52 50-54 0.63 532,543.56 1098 52 5.0-54 0.63 547,037.57 0450 52 5.0-54 0.63 541,408.24 0074 52 5.0-54 0.63 544.063.78 1525 52 5.0-54 0.63 $28.867.41 1226 52 5.0-54 0.63 $95,792.60 0333 52 5.0-54 0.63 $50,524.68 1289 52 50-54 0.63 $65.128.95 .03.09 52 50-54 0.63 $53,449.94 2434 52 50-54 0.63 $63,178.14 .0196 52 5.0-54 0.87 $1.00,837.97 0278 52 5.0-54 0.87 $84,025.24 0154 52 50-54 0.87 5100,837.97 2425 52 50-54 0.63 $50,215.19 1165 52 50-54 0.63 $49,809.36 0429 52 50-54 .0.63 $49,809.36 2821 52 50-54 0.63 $50,215.19 0682 52 50-54 0.63 $60.153.03 0864 52 50-54 0.63 168,560.38 1197 52 50-54 0.63 $69.617.77 1274 52 50-54 0.63 $57,135.03 2563 52 . 50-54 0.63 $65,705.28 0335 53 '50-54 0.63 543,390.11 3277 53 50-54 0.63 $25,530,49 0510 53 50-54 0.63 538,104.88 1889 53 50-54 0.63 $45,549.04 Page 2 5-6 City of Chula Vista List of Benefited Employees =>age.49 stlmate osl Emp ID # AGE AGE Bracket (Annual Rate X 2388 53 50.54 0.63 $25,530.90 3653 53 50.54 0.63 $28,084.08 0661 53 50.54 0.63 $33,197.52 0421 53 50.54 0.63 141,408.24 . 0098 53 50.54 0.63 $33,197.52 1603 53 50.54 0.63 $37,824.43 0467 53 50.54 0.63 $43,631.51 2033 53 . 50.54 0.63 $35.859.62 0307 53 .50.54 0.63 $38,316.35 0889 53 50.54 0.63 $31,259.84 1347 53 50.54 0.63 $31,276.10 2905 53 50.54 0.63 $35,859.62 0627 53 50.54 0.63 $80,329.69 0166 53 50.54 0.63 $54,381.26 0169 53 50.54 0.87 $73,046.42 1866 53 50.54 0.63 $49,809.36 2910 53 50.54 0.63 . 154,136.96 1547 53 50.54 063 $42,811,41 1860 53 50.54 0.63 $55,388.22 3763 53 50.54 0.63 $75,760.78 3433 53 50.54 0.63 $90,247.59 1216 54 50.54 0.63 $12,765.27 0435 54 50.54 0.63 $39,445.64 0958 54 50.54 0.63 $34,640.97 1407 54 50.54 0.63 $28,867.41 1412 54 50.54 0.63 $28,867.41 0498 54 50.54 0.63 $38,104.88 0632 54 50.54 0.63 $35,859.62 3041 54 50.54 0.63 $32,674.16 0323 54 50.54 0.63 528,867.41 0129 54 50.54 0.63 $39,607.82 1074 54 50.54 0.63 $54,790.35 0628 54 50.54 0.87 $66,335.76 0328 54 50.54 0.63 554,381.26 3178 54 50.54 0.63 554.274.13 3559 54 50.54 0.63 $47,824.01 0904 54 50.54 0:63 $65,705.28 3374 55 55.59 063 $30,899,45 . 2421 55 55.59 063 $35.859.62 0468 55 55.59 0.63 $26,24302 0602 55 55.59 0.63 528,867.41 2289 55 55.59 0.63 $28,867.41 0188 55 55.59 0.63 525,530.90 . 2190 55 55.59 0.63 $35,778.36 0366 55 55.59 0.63 S5i,801.80 0436 55 55.59 0.63 $29,488.27 0103 55 55.59 0.63 $43,999.57 1723 55 55.59 0.63 528.084.08 2422 55 55.59 0.63 528,084.08 0481 55 55.59 0.63 $37,940.50 1999 55 55.59 0.63 $23,417.30 1127 55 55.59 0.63 $52,908.72 Page 3 5-7 City of Chula Vista List of Benefited Employees =>age 49 stlmate os! Emp ID # AGE AGE Bracket (Annual Rate X 3998 55 55-59 0.63 561,676.27 2616 55 55-59 0.63 $54,274.12 0149 55 55-59 0.82 595,042.68 0648 55 55-59 0.63 $54,790.35 1172 .55 55-59 0.63 554,274.12 0523 55 55-59 0.63 $57,135.03 1805 55 55-59 0.63 557,135.06 2148 56 55-59 0.72 $32,991.32 . 1086 56 55-59 0.72 $39,589.68 2155 56 55-59 0.72 $29,178.17 0859 56 55-59 0.72 $39,589.68 1831 56 55-59 0.72 536,910.50 0270 56 55-59 0.72 $47,921.21 3295 56 55-59 0.72 $40,913.36 3081 56 55-59 0.72 541,295.62 0442 56 55-59 0.72 5109,476.99 0146 56 55-59 0.72 $61,085.65 1481 56 55-59 0.72 $61,367.47 0310 56 55-59 0.72 $61,085.65 0425 56 55-59 0.72 5100,910.43 0849 56 55-59 0.72 $65,297.21 0410 56 55-59 0.72 $75,091.73 2993 57 55-59 0.72 $27,809.15 0219 57 55-59 0.72 $35,725.54 0519 57 55-59 0.72 $29,992.02 0097 57 55-59 0.72 $37,940.02 0378 57 55-59 0.72 $50,285.22 0570 57 55-59 0.72 $40,917.01 0470 57 55-59 0.72 $42,959.02 0170 57 55-59 0.72 $47,921.21 0256 57 55-59 0.72 $52,056.03 2928 57 55-59 0.72 $40,917.01 1678 57 55-59 0.72 $17,862.77 0957 57 55-59 0.72 $62,027.57 2361 57 55-59 0.82 $68,178.95 0134 57 55-59 0.72 $75,091.73 2395 58 55-59 0.72 $47,697.49 2234 58 55-59 0.72 $32,991.32 0212 58 55-59 0.72 $38,080.43 0218 58 55-59 0.72 553,757.22 3143 58 55-59 0.72 $33,163.24 0438 58 55-59 0.72 $32,439.52 1491 58 55-59 0.72 $41,295.62 2449 58 55-59 0.72 $91,805.67 2661 58 55-59 0.72 576,566.25 0439 . 58 55-59 0.72 561,085.65 0526 58 55-59 0.82 $156,588.84 1584 58 55-59 0.72 $84,856.39 0355 58 55-59 0.72 565,297.18 0445 58 55-59 0.72 565,297.18 1451 59 55-59 0.72 $28,169.01 0350 59 55-59 0.72 $37,721.66 Page 4 5-8 City of Chula Vista List of Benefited Employees =>age 49 stimate ost Emp ID # AGE AGE Bracket (Annual Rate X 0776 59 55-59 on $29,391.49 2139 59 55-59 0.72 532.439.52 0362 59 55-59 0.72 537,940.02 2297 59 55-59 0.72 563,300.82 2199 60 60-64 0.72 552,056.05 1943 60 60-64 on 517,862.77 2142 60 60-64 on S61,085.65 3859 60 60-64 0.72 576,566.25 3759 60 60-64 0.72 584,960.53 0090 60 60-64 0.75 586,929.28 3010 61 60-64 0.73 551,389.58 1149 61 60-64 0.73 550,983.63 3664 61 60-64 0.73 532,541.87 0712 61 60-64 0.73 530.408.57 2865 61 60-64 0.73 513,790.74 0791 61 60-64 0.73 530,408.57 1896 61 60-64 0.73 552,779.03 2212 61 60-64 0.73 563.487.23 2932 62 60-64 0.73 $35,700.31 0268 62 60-64 0.73 533,623.84 2433 62 60-64 0.73 561,471.69 0767 62 60-64 0.73 545,70685 1285 62 60-64 0.73 552,779.05 0052 62 60-64 0.73 548,211.13 2946 62 60-64 0.73 $49,606.87 3744 62 60-64 0.73 5138,124.41 1229 62 60-64 0.73 553,31063 0461 63 60-64 0.73 534,456.22 0422 63 60-64 0.73 539,843.87 1869 63 60-64 0.73 547,980.98 0506 63 60-64 0.73 555,178.11 1493 63 60-64 0.73 551,585.76 0349 63 60-64 0.73 $66,20.<1.09 0462 64 60-64 0.73 533.449.53 0168 64 60-64 0.73 548,211.13 3624 64 60-64 0.73 $96,282.69 1218 64 60-64 0.73 $76,134,67 1982 65 65+ 0.73 . $33.44953 0822 66 65+ 0.65 513,53806 1283 66 65+ 0.65 $29,346.20 1482. 68 65+ 0.65 580,436.64 0555 69 65+ 0.65 $13,538.06 2078 70 65+ 0.65 529,783.63 0200 73 65+ 0.65 554,027.93 Add" Employer Contributions $12,459,370.24 Divide Add" Employer Contributions by 13.24 (20yr amortization factor) $941,040.05 Page 5 5-9 Emp ID # City of Chula Vista List of Benefited Employees =>age 49 AGE .AGE Bracket Divide 20yr amortization amount by annual.payroll plan $124,840,796 Page 6 5-10 stlmate Cost (Annual Rate X 0.75% RESOLUTION NO. 2008- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA GRANTING A PERIOD FOR TWO YEARS ADDITIONAL SERVICE CREDIT PURSUANT TO GOVERL'WENT CODE SECTION 20903 FOR ALL LOCAL MISCELLANEOUS AND LOCAL PUBLIC SAFETY (POLICE) EMPLOYEES Ai'<D MEMBERS OF THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM (CaIPERS) WHEREAS, the City Council of the City of Chula Vista is a contracting Public Agency of the Public Employees' Retirement System ("PERS"); and WHEREAS, said Public Agency desires to provide another designated period for Two Years Additional Service Credit, pursuant to California Government Code section 20903, based on the contract amendment included in the contract which provided for section 20903, in Two Years Additional Service Credit, for eligible members. 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 December 31,2008, through June 26, 2009, for all local misceilaneous and local public safety (Police) employees, members of the California Public Employees Retirement System (CaIPERS). Presented by Approved as to form by Marcia Raskin Director of Human Resources ./".... "". . ,r , . '. ~ ~ /! (' . . ~ .~kc:J[.. X-l I ~ W r ~art C. MieMeld ~ fy i ~ .~ \j.ity Atto\,{ey ....J' . J:\AllorneyIRESOLUTlONS\HR\BENEFlTS\CalPERS\Two-year service credit_\2-16-08.d6 -11