HomeMy WebLinkAbout2009/07/14 Item 3CITY COUNCIL
AGENDA STATEMENT
6,,
~; ~~~~~
J ~~ CITY OF
CHULAVISTA
JULY 14, 2009, Item 3
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA GRANTING A PERIOD FOR TWO YEARS
ADDITIONAL SERVICE CREDIT PURSUANT TO
GOVERNMENT CODE SECTION 20903 FOR ALL LOCAL
PUBLIC SAFETY FIRE (IAFF) MEMBERS OF THE
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT
SYSTEM (CALPERS)
SUBMITTED BY: DIRECTOR OF HUMAN RESOURCES Ji,(.'~p/
REVIEWED BY: CITY MANAGER 'HU`
ASSISTANT CITY ANAGER ~
4/STNS VOTE: YES ~ NO ^X
SUMMARY
In an effort to significantly reduce the fiscal year 2010 and 2011 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 the International
Association of Fire Fighters (IAFF) eligible employees only, and provide for a limited
medical incentive program for those that retire during the prescribed 90-day window period.
Staff is proposing Council to adopt this Resolution offering this benefit to all Local Public
Safety Fire employees represented by the IAFF bargaining group effective July 14, 2009.
ENVIRONMENTAL REVIEW
Not applicable
RECOMMENDATION
Council adopt the Resolution.
BOARDS/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
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JULY 14, 2009, Item 3
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
(CaIPERS) Service Credit for Local Miscellaneous members and Local Safety members
(Police and Fire). An Emergency Ordinance was adopted on November 6, 2007. Sixty-two
(62) employees took advantage of this eazly retirement incentive.
On April 22, 2008, the Council approved a second Resolution of Intention to provide the
same Ca1PERS 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 eazly retirement opportunity.
On December 16, 2008, the Council approved a third Resolution of Intenflon to provide the
same Ca1PERS benefit to all Local Miscellaneous and Local Public Safety (Police)
employees in all departments of the City. Thirty-three (33) employees took advantage of
this early retirement incentive.
Numerous efforts are being implemented to reduce expenditures in fiscal yeaz 2010 and
2011. It is recommended that the City offer another Two Years Additional Service Credit
pursuant to Government Code section 20903 for Local Public Safety (Fire) members, who
retire during the designated period of July 15, 2009 to October 12, 2009.
The City is also proposing a limited, two-tiered medical incentive program. If an employee
takes advantage of the two-yeaz additional service credit, the City will pick up the cost of the
health caze premium for Employee Only for two (2) calendaz years. If an employee has
akeady reached the 30-yeaz maximum years of service for safety employees and therefore
cannot take advantage of the two-yeaz additional service credit, the City will provide the
cost of health care premium for Employee Only for four (4) calendaz yeazs. The City is
offering a medical incentive to encourage as many employees as possible to consider
retiring this fiscal yeaz in an effort to help rn;n;m;~e or prevent layoffs and to reduce
personnel costs.
Government Code secfion 20903 provides Two Yeazs Additional Ca1PERS Service
Credit to members who retire during a designated period. The City must certify that if
any eazly retirements aze 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 deparhnent 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-day (90) window period from July 15, 2009 -October 12, 2009.
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JULY 14, 2009, Item 3
Page 3 of 4
Elieibility
To be eligible, the following criteria must be met:
• member must have at least five yeazs of Ca1PERS 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
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 with 2 Additional Service Credit Medical Incentive for 2 calendaz years
Retiring without 2 Additional Service Credit Medical Incentive for 4 calendaz years
Upon retirement, employees aze 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 aze not eligible for
the medical incentive pmgram.
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 18704.2(a)(1) 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 pay rate, cost factors established by Ca1PERS actuaries
and the fact that the City contracts for aPost-Retirement Survivor allowance. If all
twenty (20) eligible employees opt to take the Two Yeaz Additional Service Credit and
retire during the designated period, the estimated cost will be:
Safety (Fire) Plaa
Additional Employer Contribution: $1,469,911 (over twenty yeazs)
Annual Cost: $111,020
Rate Increase in Employer Contribution: 1.29%
Additionally, if all twenty (20) eligible employees retire under this program, the annual
base salary savings would be approximately $1.758 million annually. However, during
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NLY 14, 2009, Item ,3
Page 4 of 4
the three previous Two Yeaz Service Credit opportunities, a total of 30 percent of the
eligible employees retired. We are estimating that approximately 5 percent of the eligible
employees may retire. The estimated annual salary savings to the City's General Fund is
estimated at $87,929.
A final list of employees who applied for retirement pursuant to the offer will be
presented to Ca1PERS after the expiration of the application window. Ca1PERS 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.
The estimated cost of the medical incentive program is $4,377 per year, if 5 percent of all
eligible retirees took the coverage. However, the City is saving approximately $5,143 a
year in City contribution for this same group. Total net savings from salaries and medical
contribution is $93,072 per year.
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.
CON'T'RACT AMENDMENT PROCESS
A contract amendment between the City of Chula Vista and Ca1PERS 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:
Estimated Present Value of Additional Employer Contribution.
Prepared by: Kelley Bacan, Director of Human Resources
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CiT~ ~z~~~cAa,
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C~~f +3F CY1~i~A ~1ST~
~~
~~~~ AN03T~l~~i ~~si~TE~ ~~~~~~
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°~~~ ~~~~ A~1i~iT3O~1;~~. ~~~c~ >N~~~iT
Vll}iEREAS, the City Councii ofi~e Cifij ofi Chuia Vista is a contracting Public Agency of
the Pubiic Empiayees' Retirement System; aa,d
Ni~IERSAS, said Public Agency desires to provide another designated period for Two
Years Additonal Service Credit, Section 20903, based on the contract
amendment included in said contract uvhich prodded for Section 20903,
Two Years Additional 5savice Credit, far eiigible member;
~1abV, THE~tEPORS, 8E iT RS80~LV;=i7, that said Oity Council does seek to add
another designated period, and does Hereby authorize this Rescluticn,
indicating a desire to add a designated period dram
Ju1v15, 2009 $hrough October 12, 2009 far
effigible Local Public Safety Fire members o t e a i ornia
Public Employees Retirement ystem (Ca1PER5).
Adop#ed and approved #i~is 14th day Of July ~ 2009
CITY CGt_J~ICiL
flF TH;"
CITY OF C'i~ULA VISTA
A#tast:
Cieri</Secretary
Donna Norris, CMC
(ROV. ti?6J
$Y
Rrasiding Ctficer
Cheryl Cox, Mayor
3-5
CALIFORNIA PUBLIC EMPLOYI=E S' RETiRI_MENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramentd. CA 94229-2709
(8$8} CaIPERS {225-7377)
CE~tT1FICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adapted by the
City Council Of the
(governing body)
City of Chula Vista
(public agency)
On .7uly 14, 2009
(date)
Clerk/Becretary
Donna Norris, CMC
City Clerk
PERS-CON~12 (r=_v. 1l98)
3-6
CAL1~t)R~IiA PLiSLi~C SilflP4,0YESS' ~2S~IF'cSi~ENT S'trS'fB~i
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
{888} CaIPERS (225-7377}
OBR~i~i~A?'i®N O~ ~ai~PL9AiyCi= M11TH
~t~>ISf2~lAAS~tT X049;= S~CTiO~I 75~i7
i hereby certify that in accordance with Section 7507 of the Government Code
She Mature annual casts as de#errnined by the System Actuary for the increase
in re#irernent benefit(s) have been made public at a public meeting of the
City Council
(governing body)
of the
City of Chula Vista
(public agency)
en June 23, 2009 which is at least two weeks prior #a the adoption of the
(date)
Pesolution /Ordinance.
Clerk/Secretary
Donna Norris, CMC
City Clerk
l"itle
Da$e July 14, 2009
PC=RS-CON-12A (rev. 1/96)
3-7
CALIFORNIA PUBLIC EMPI.DYEES' RETIREMENT SYSTEM
Employer Services Division
Contract Mairrtenance Unit
P.O. Box 942709
Sacramento, CA 94229-2709
CERTIFICATION DF COMPLIANCE'NlITH
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:
because of an impending curtailment af, 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.
I# 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 unifi, as designated by the
governing 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 Cauncii 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, July 15. 2009 through October 12, 2009
CITY COUNCIL
OF THE
CITY OF CHULA VISTA
Attest;
BY
Presiding Qft:icer
Cheryl Cox, Mayor
Clerk/Secretary
Donna Norris, CMC, City Clerk
Suly 14, 2009 .
Date
2yr certification-PA (Rev. 4104)
3-8
Two Years Additional CaIPERS Service Credit
For Local Safety Fire Members
W
I
fD
280 09/08/86 FIRE CAPTAIN (112 HR) IAFF 54 0.87 $91,150.55 $79,300.98
115 11/06/78 FIRE CAPTAIN (112 HR) IAFF 53 0.87 $91,150.55 $79,300.98
531 04/06/92 FIRE ENG (112 HR) IAFF 54 0.87 $77,716.93 $67,613.73
314 06/08/87 FIRE CAPTAIN (112 HR) IAFF 57 0.82 $91,150.55 $74,743.45
76 05/31/75 FIRE ENG (BO HR) IAFF 66 0.68 $77,71fi.92 $52,847.51
281 09/08/86 FIRE CAPTAIN (112 HR) IAFF 54 0.87 $91,150.55 $79,300.98
463 12/17/90 FIRE CAPTAIN (112 HR) IAFF 51 0.87 $91,150.55 $79,300.96
133 07/26/80 FIRE CAPTAIN (112 HR) IAFF 54 0.87 $91,150.55 $79,300.98
162 01/17/83 FIRE CAPTAIN (112 HR) IAFF 51 0.87 $91,150.55 $79,300.98
2361 09/06/02 SR FIRE INSPECTOR IAFF 58 0.82 $83,145.06 $68,178.95
426 04/23/90 FIRE CAPTAIN (80 HR) IAFF 51 0.87 $91,150.55 $79,300.98
282 09/08/86 FIREFIGHTER (112 HR) IAFF 56 0.82 $66,051.18 $54,161.97
331 10/19/87 FIRE CAPTAIN (112 HR) IAFF 53 0.87 $91,150.55 $79,300.98
141 06115/81 FIRE CAPTAIN (80 HR) IAFF 60 0.75 $91,150.55 $68,362.91
75 03120/75 FIRE ENG (112 HR) IAFF 62 0.75 $77,716.93 $58,287.70
405 11/06/89 FIRE ENG (112 HR) IAFF 56 0.82 $77,716.93 $63,727.88
163 02/01/83 FIRE CAPTAIN (112 HR) IAFF 55 0.82 $91,150.55 $74,743.45
164 05/02/83 FIRE CAPTAIN (112 HR) IAFF 56 0.82 $91,150.55 $74,743.45
537 04/06/92 FIRE CAPTAIN (112 HR) IAFF 53 0.87 $91,150.55 $79,300.98
208 03/25/85 FIRE BATTALION CHIEF (112 HR) IAFF 54 0.87 $113,552.56 $98,790.73
$1,756,573.66
Add'I Employer Contributions
$1,469,910.53
Divide Add'I Employer Contributions by 13.24 (20yr amortization factor) $111,020.43
Divide 20 amortization amount by annual payroll plan $6,5f 1.29%
June 2009
EQ
RESOLUTION NO. 2009-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA GRANTING A PERIOD FOR TWO YEARS
ADDITIONAL SERVICE CREDIT PURSUANT TO
GOVERNMENT CODE SECTION 20903 FOR ALL LOCAL
PUBLIC SAFETY FIRE (IAFF) MEMBERS OF THE
CALIFORNIA PUBLIC E.'VIPLOYEES RETIREMENT SYSTEM
(CALPERS)
WHEREAS, in an effort to significantly reduce the fiscal year 2010 and 2011 general
fund budget by reducing the number of benefited employees throughout the organization, staff is
proposing that Council grant another Two Yeazs Additional Service Credit for the International
Association of Fire Fighters (IAFF) eligible employees only, and provide for a limited medical
incentive program for those that retire during the prescribed 90-day window period; and
WHEREAS, staff is proposing Council to adopt this Resolution offering this benefit to all
Local Public Safety Fire employees represented by the IAFF bargaining group effective July 14,
2009; and
WHEREAS, on October 16, 2007, the City Council of the City of Chula Vista approved a
Resolution of Intention to provide Two Yeazs Additional California Public Employees
Retirement System (Ca1PERS) Service Credit for Local Miscellaneous members and Local
Safety members (Police and Fire); and
WHEREAS, an Emergency Ordinance was adopted on November 6, 2007; and
WHEREAS, sixty-two (62) employees took advantage of this early retirement incentive;
and
WHEREAS, on April 22, 2008, the Council approved a second Resolution of Intention to
provide the same Ca1PERS benefit to all Local Miscellaneous employees and a limited, specific
list of classifications in Police and Fire management; and
WHEREAS, eighteen (18) employees took advantage of the early retirement opportunity;
and
WHEREAS, on December 16, 2008, the Council approved a third Resolution of Intention
to provide the same Ca1PERS benefit to all Local Miscellaneous and Local Public Safety (Police)
employees in all departments of the City; and
WHEREAS, thirty-four (34) employees took advantage of this early retirement incentive;
and
WHEREAS, numerous efforts are being implemented to reduce expenditures in fiscal
year 2010 and 201 l; and
3-10
Resolution No. 2009-
Page 2
WHEREAS, It is recommended that the City offer another Two Years Additional Service
Credit pursuant to Government Code section 20903 for Local Public Safety (Fire) members, who
retire during the designated period of July 15, 2009 to October 12, 2009; and
WHEREAS, the City is also proposing a limited, two-tiered medical incentive program;
and
WHEREAS, if an employee takes advantage of the two-year additional service credit, the
City will pick up the cost of the health care premium for Employee Only for two (2) calendaz
years; and
WHEREAS, if an employee had already reached the 30-year maximum yeazs of service
for safety employees and therefore cannot take advantage of the two-yeaz additional service
credit, the City will provide cost of health caze premium for Employee Only for four (4) calendar
yeazs; and
WHEREAS, 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; and
WHEREAS, Government Code section 20903 provides Two Yeazs Additional Ca1PERS
Service Credit to members who retire during a designated period; and
WHEREAS, 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; and
WHEREAS, 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; and
WHEREAS, staff is proposing a ninety day (90) window period from July 15, 2009 -
October 12, 2009; and
WHEREAS, to be eligible, the following criteria must be met:
• member must have at least five yeazs of CaIPERS 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; and
3-11
Resolution No. 2009-
Page 3
WHEREAS, in addition to the Two Yeazs 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 with 2 Additional Service Credit Medical Incentive for 2 calendaz Yeazs
Retiring without 2 Additional Service Credit Medical Incentive for 4 calendaz years; and
WHEREAS, upon retirement, employees aze 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; and
WHEREAS, non-benefited, unclassified hourly employees are not eligible for the medical
mcenhve program.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby grant a period for two years additional service credit pursuant to Government
Code section 20903 for all Local Public Safety Fire (IAFF) members of the California Public
Employees Retirement System (Ca1PERS).
Presented by
Kelley Bacon
Director of Human Resources
Approved as to form by
Ci ~~
Bart C. Miesfeld ~~~ p~ r~
City Attorney
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