HomeMy WebLinkAboutAGENDA REPORT 2005 0105 CC REG ITEM 09CITEM 9•C
CITY OF MOORPARK, CALIFORNIA
City Council Meeting
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MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Deborah S. Traffenstedt, ATCM /City Clerk �i/ ✓�
DATE: December 23, 2004 (CC Meeting of 1/5/05)
SUBJECT: Consider Authorizing Two Years Additional Service Credit
Retirement Incentive for One Position Pursuant to
Government Code Section 20903 and Consistent with the
City's Contract with California Public Employees'
Retirement System (CalPERS)
BACKGROUND
On July 2, 2003, the City Council adopted Ordinance No. 294, amending
the CalPERS contract consistent with the requirements of Government
Code Section 20903 (commonly referred to as the "Golden Handshake ").
This benefit is intended to be utilized by CalPERS contracting
agencies to encourage reduction of staffing levels when needed due to
impending curtailment of or change in the manner of performing
service. The benefit currently offered by the Golden Handshake is
two years of additional service credit.
The City's current contract with CalPERS allows the City Council to
adopt a resolution affirming that the two years of additional service
credit retirement incentive is to be offered. The process requires
the scheduling of a "public meeting" agenda item, including
disclosure of the costs to the public agency, and designation of the
job classification(s), department(s), or unit(s) eligible for this
benefit. The CalPERS process also requires the City Council to adopt
a resolution at a subsequent meeting (not less than two weeks
following the public meeting agenda item), which resolution must
include a designation of the time period of 90 to 180 days during
which an eligible member must retire to receive the additional
service credit.
Honorable City Council
January 5, 2005, Regular Meeting
Page 2
DISCUSSION
The future annual costs and the increase in retirement benefits are
generally disclosed in "Procedures for Calculation of Additional
Employer Contributions and Funding Therefore to be Disclosed at the
Public Meeting ", included as Attachment 1 to this report. At this
time, staff is proposing to designate the job classification of
Principal Planner, Community Development Department, only, due to the
Community Development fund budget deficit in the current fiscal year
and anticipated staffing cost issues projected for the next fiscal
year. There is only one eligible employee.
Included as Attachment 2 to this report is the CalPERS 2003 Actuarial
Valuation Report Contribution Rates and Calculation of Additional
Employer Contributions /Increase in Employer Contribution Rate for the
Principal Planner position. The total estimated cost to the City
for the two years service credit is approximately $44,855, which will
be amortized and paid by the City over a 20 -year period. The
increase in the employer contribution rate is estimated to be
.0401812, which would be paid over a 20 -year period beginning two
years after the retirement of the eligible employee.
Please note that pursuant to Government Code Section 20903, the
Council will need to certify that its intent is that the one
Principal Planner vacancy created by retirement under Section 20903
shall remain permanently unfilled, thereby resulting in an overall
reduction in the work force.
STAFF RECOMMENDATION
Direct staff to schedule a resolution for the Council's regular
meeting on January 19, 2004, approving and designating the time
period for the two years of additional service credit retirement
incentive.
Attachments:
1. Procedures for Calculation of Additional Employer Contributions
and Funding Therefore to be Disclosed at the Public Meeting
2. 2003 CalPERS Actuarial Valuation Report Contribution Rates and
Calculation of Additional Employer Contributions/ Increase in
Employer Contribution Rate
00001 -9
Procedures for Calculation of "Additional Employer Contributions" and Funding
Therefore to be Disclosed at the Public Meeting
The "additional employer contributions" that the agency discloses at its public meeting is
an estimate of the present value of additional employer contributions which will be
required in the future for providing the two years service credit. This amount is
calculated based on the member's annual reportable compensation, the cost factor and
whether the agency's contract provides the Post - Retirement Survivor Allowance
(Survivor Continuance) and /or an increased Cost -of- Living Allowance of 3 %, 4% or 5 %.
The "additional employer contributions" is calculated as follows:
Identify all individuals who meet the minimum eligibility for retirement and who are
employed in the designated classification, department or organizational unit.
2. Determine the annual pay rate for each person. "Payrate" indicates that amount of
compensation a member is paid for a full unit of time. Always use the member's
FULL TIME pay rate.
3. Determine the age for each person and locate the appropriate factor on the Cost
Factor Chart.
4. Multiply the annual pay rate by the cost factor, (annual pay rate) X (cost factor) _
estimated cost.
5. Determine whether your agency's contract provides for the Post - Retirement
Survivor Allowance. If yes, proceed to step #7.
6. If your agency's contract does not provide for the Post - Retirement Survivor
Allowance, multiply the value determined in step #4, above, by 0.95.
7. Determine whether your agency's contract provides for the increased Cost -of- Living
Allowance of 3 %, 4% or 5 %. If not, no further calculations are needed.
& If your agency's contract provides the 3 %, 4 %, or 5% cost -of- living allowance,
multiply the value determined above by 1.09 to estimate the cost of providing the
additional service credit.
The "additional employer contributions" are paid by the agency through an increase in
the employer contribution rate, starting two fiscal years after the end of the designated
period. The increase in the employer contribution rate may continue for as long as 20
years.
To estimate the increase in the employer contribution rate percent:
1) Take the "additional employer contributions" calculated above, and
2) First divide by 13.24 (the 20 -year amortization factor), and
3) Then divide by member compensation.
PERS- CON -40 (Rev. 8/04) ATTACHMENT 1 P..p 11
90000C
CALPERS 2003 ACTUARIAL VALUATION REPORT CONTRIBUTION RATES
AND CALCULATION OF ADDITIONAL EMPLOYER CONTRIBUTIONS/
INCREASE IN EMPLOYER CONTRIBUTION RATE
6/30/03 CalPERS Actuarial Valuation Report Contribution Rates:
Fiscal Year 2005/2006 11.783%
Fiscal Year 2006/2007 11.8% (Projected)
Additional Employer Contributions for Proposed 2 Years Service
Credit:
Annual Pay Rate for Principal Planner: $84,314.04
$84,314 x .56 Cost Factor = $47,215.862 Estimated Cost
No Post - Retirement Survivor Allowance, multiply Estimated Cost
by 0.95 = $44,855.068
2% Cost -of- Living Allowance = no further calculations
Increase in Employer Contribution Rate:
$44,855.068/13.24 (20 -year amortization factor) _ $3,387.845
$3,387.845/$84,314.04 = .0401812
ATTACHMENT 2
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