HomeMy WebLinkAbout2005-08-23 - AGENDA REPORTS - CALPERS CONTR AMEND (2)Agenda Item: q
CITY OF SANTA CLARITA
AGENDA REPORT
Ken Striplin
CONSENT CALENDAR City Manager Approval:
Item to be presented by:
DATE: August 23, 2005
SUBJECT: CONTRACT AMENDMENT WITH CALIFORNIA EMPLOYEES'
RETIREMENT SYSTEM (CALPERS) TO PROVIDE 21354.5 (2.7%
AT 55 FORMULA) FOR LOCAL MISCELLANEOUS MEMBERS
DEPARTMENT: City Manager's Office
RECOMMENDED ACTION
City Council adopt a resolution of intent to amend the contract with California Employees'
Retirement System (CaIPERS) to provide 21354.5 (2.7% at 55 formula) for local miscellaneous
members; introduce and pass to second reading an ordinance entitled: "AN ORDINANCE OF
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, AMENDING
THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION, CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL, CITY OF
SANTA CLARITA."
BACKGROUND
Annually, the City Manager meets with employees to discuss compensation and benefits. During
last year's meetings, employees expressed a great deal of interest in looking at enhancing the
City's retirement plan. At the same time, the City began a comprehensive workforce planning
effort toward the goal of creating a Workforce & Organizational Development Plan. As part of
that process, in January 2005 a sub -committee in conjunction with the Workforce &
Organization Plan was formed to conduct an in-depth analysis of our current retirement plan and
to evaluate options for possible enhancement and employee consideration. This process was
initiated with the purpose of enhancing attraction, retention and ensuring Santa Clarita remains a
competitive workplace. The City also retained the services of an actuarial consultant to assist in
projecting the future cost of any such benefit to ensure both short-term and long-term fiscal
stability.
ordinance passed to
Adopted: ,"--q q Second reading
The sub -committee spent an extensive amount of time educating employees on the various
options and understanding the financial impacts. The process yielded several options which
employees carefully considered. A key component to the City implementing an enhancement
was the financial participation of all employees. After several meetings, careful consideration of
the various options, and an employee survey, the vast majority of employees chose the enhanced
retirement benefit through Ca1PERS -- 2.7% @ 55 formula. This benefit was also determined to
be most aligned with the ultimate goal of employee attraction and retention.
As discussed, employees agreed that any enhanced benefit would be implemented only with the
financial participation of both the City and employees. Employees agreed to pay 2 percent of the
total cost while the City would pay 3.3 percent. This proposal was also discussed with the City's
represented employees who agreed as part of this year's MOU to implement the benefit and to the
financial contribution. The City Council approved that MOU on July 12, 2005.
Ca1PERS requires the City Council to adopt a resolution of intent. Following that action, the
City must conduct an employee election and receive majority support from employees. Once the
election is completed, staff will bring back a final ordinance for Council adoption. The proposed
effective date of the benefit would be January 1, 2006.
ALTERNATIVE ACTIONS
Other direction as directed by the City Council.
FISCAL IMPACT
The proposed benefit enhancement is a negotiated agreement between the City and the
employees. City staff agreed to pay 2% while the City will pay 3.3%. The total cost is 5.3% or
$1,201,311. Funds for this benefit enhancement have been budgeted in the 2005-2006 Budget.
The City received an actuarial report from the California Employees' Retirement System
(CALPERS) and per compliance with Government Code 7507 the following information was
provided. The change in the present value of benefits is $8,215,087. The change in the accrued
liability is $4,041,333.
ATTACHMENTS
Resolution
Ordinance
Exhibit