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Home My WebLink AboutAGENDA REPORT 2005 0119 CC REG ITEM 10FTO: FROM: DATE MOORPARK CITY COUNCIL AGENDA REPORT Honorable City Council ITEM 10-a R CITY OF MOORPARK, CALIFORNIA City Council Meeting Of J-/ ACTION: _ — BY: Deborah S. Traffenstedt, ATCM /City Clerk `.�-T- January 11, 2005 (CC Meeting of 1/19/05) SUBJECT: Consider Resolution Granting Another Designated Period for Two Years Additional Service Credit Retirement Incentive Pursuant to Government Code Section 20903 and Consistent with the City's Contract with California Public Employees' Retirement System (Ca1PERS) BACKGROUND At the City Council's regular meeting on January 5, 2005, the Council directed staff to schedule a resolution for the Council's regular meeting on January 19, approving and designating the time period for the two years of additional service credit retirement incentive for one eligible Principal Planner position in the Community Development Department. The attached copy of the agenda report for the January 5 meeting gives the background information for the proposed retirement incentive, including but not limited to the required disclosure of the costs to the City. The window period for the two additional years of service credit is proposed to be 90 days beginning January 21, 2005. CalPERS provides a resolution for adoption, which is included as an attachment to this report. STAFF RECOMMENDATION Adopt Resolution No. 2005- , including a 90 -day window period beginning January 21, 2005, for one eligible Principal Planner position in the City's Community Development Department. Attachments: 1. January 5, 2005, agenda report. 2. Resolution to Grant Another Designated Period for Two Years Additional Service Credit (and required certification forms). ITEM q .C. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Deborah S. Traffenstedt, ATCM /City Clerk :? 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 Or, vuly 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(3) 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. X14 a b11� Honorable City Council January 5, 2005, Regular Meeting Daga 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 90011 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. 8. 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) ATTACH 1, CALPERS 2003 ACTUARIAL VALUATION REPORT CONTRIBUTION RATES AND CALCULATION OF ADDITIONAL EMPLOYER CONTRIBUTIONS/ INCREASE IN EMPLOYER CONTRIBUTION RATE 6/30/03 Ca1PERS 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 i\io 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- y CITY COUNCIL OF THE CITY OF MOORPARK RESOLUTION TO GRANT ANOTHER DESIGNATED PERIOD FOR TWO YEARS ADDITIONAL SERVICE CREDIT WHEREAS, the City Council of the City of Moorpark 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 MOORPARK AQ Attest: Clerk /Secretary (Rev. 1/96) '' Presiding Officer "00.s 20 CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM Actuarial and Employer Services Division 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 (governing body) (public agency) on (date) Clerk/Secretary Title PERS- CON -12 (rev. 1/96) of the 1110101 �-aa Z' —►. ems.', 1 CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM Actuarial and Employer Services Division Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229 -2709 (888) CalPERS (225 -7377) 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 and /or the increase in retirement benefit(s) have been made public at a public meeting of the •n (date) Resolution / Ordinance. Date PERS- CON -12A (rev. 1/96) of the (governing body) (public agency) which is at least two weeks prior to the adoption of the Clerk/Secretary Title CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM Actuarial and Employer Services Division Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229 -2709 CERTIFICATION OF COMPLIANCE WITH GOVERNMENT CODE SECTION 20903 In accordance with Government Code Section 20903 and the contract between the Public Employees' Retirement System, the City Council of the City of Moorpark hereby certifies that: 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 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 Council of the City of Moorpark 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 MOORPARK Attest: Clerk/Secretary Date Presiding Officer 2yr certification -PA (Rev. 4/04)