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HomeMy WebLinkAboutAGENDA REPORT 2005 1207 CC REG ITEM 09BMOORPARK CITY COUNCIL AGENDA REPORT ITEM q .8. rErvOF MOORPARK.CALIFORNIA _- ty Council Meeting of /a - 7- .{ 005 ACTION:!�1���.a Bw' TO: Honorable City Council FROM: Steven Kueny, City ManagerG. Prepared by Johnny Ea, Finance Director /�_41,---7 DATE: November 15, 2005 (CC Meeting of 12/7/2005) SUBJECT: Consider California Public Employees Retirement Systems (CalPERS) Benefits and Adjustment to Compensation for City Council Members BACKGROUND At the September 1, 2004 City Council meeting, the City Clerk submitted an agenda report showing the maximum allowed compensation for the Moorpark City Council and outlined various benefit options for Council to consider as benefits for members of the City Council (attachment) . The benefit items considered included CalPERS retirement, medical, dental, vision and life insurance. The City Council at that time approved adding the health benefits, but did not approve a monthly compensation increase or the CalPERS retirement. The approved health benefits for Council became effective January 1, 2005. The CalPERS item was included in the Budget & Finance Committee (Mayor Hunter and Mayor pro Tem Harper) agenda for the November 2, 2005 meeting for review and discussion by the Committee. The Committee also discussed the option of combining the Council's compensation for the regular City Council meeting and the Moorpark Redevelopment Agency meetings into one set amount per month (current compensation per Council Member is $300 /month and Honorable City Council December 7, 2005, Regular Meeting Page 3 $30 /meeting when acting as the Redevelopment Agency with a maximum of $120 /month). Subsequent to the Committee meeting, the City Attorney confirmed that per California Health and Safety Code Section 33114.5, agency board members' compensation "shall not exceed thirty dollars ($30) per member for each meeting of the agency attended by the member ". Therefore, the option of combining the Council compensation and the RDA meeting compensation (when acting as the Redevelopment Agency) is not available due to the requirement to attend the agency meeting in order to receive the $30. The Committee moved to refer these items to the City Council for consideration without a recommendation. DISCUSSION As shown in the attached September 1, 2004 report, the City Council compensation was last adjusted in 1990 at $300 per month, which is consistent with Government Code Section 36516(a.1) for a city up to and including 35,000 population. The referenced Government Code allows the City Council compensation to be increased by up to 5% for each calendar year from the operative date of the last adjustment when an ordinance or amendment is enacted. This would be as high as $623.68 as of December 2005. Per Government Code Section 36516(d), "any amounts paid by a city for retirement, health and welfare, and federal social security benefits shall not be included for purposes of determining salary ". On January 1, 2005, estimated the City of Government Code 36516( Council compensation at for cities with over population. the Calif Moorpark's a.2), this the second 35,000 up arnia Department of Finance population at 35,908. Per estimate would put the City level ($400 /month if adopted) to and including 50,000 in In addition, the September 1 report also included a survey of surrounding agencies for the CalPERS retirement benefit. The result of the survey shows that 8 out of the 14 agencies surveyed in 2004 provided CalPERS retirement benefits to their elected officials. If approved, the City Council could participate in CalPERS and receive service credit in a similar manner as participating City employees. The City currently pays both the employee as well as the City's contribution rate, which is currently at 18.78% of regular salary (7% employee and 11.78% 00021 -1 Honorable City Council December 7, 2005, Regular Meeting Page 3 City's share). This equates to about $68 /month or $816 per fiscal year for each City Council Members in total contributions. The City's rate varies and is expected to decline in future years as CalPERS recovers from investment losses (CalPERS estimates 11.728% in FY 2006 -07 and 11.5% in FY 2007- 08). If the Council elects to participate in CalPERS retirement; they would get full -time service credit for working part -time (meaning that their service credit will be based on the number of months instead of hours while in office as an elected official). In addition, once the Council becomes a member of CalPERS, they can buy back (at each member's own cost) prior year service credit as long as they have service credit on account at CalPERS. The City Council qualifies as an "Optional Member" under Section 20322 of the Government Code per the City's contract with CalPERS. In summary, the following are some possible alternatives for the City Council to consider as adjustments to compensation & benefits for each Council Members: 1. Status Quo; $300 /month for Council compensation and continue to receive $30 /RDA meeting with a maximum of $120 per month. 2. Increase Council compensation to $400 /month and continue to receive $30 /RDA meeting with a maximum of $120 per month with an effective date of January 2007. 3. Increase the Council compensation by up to 5% for each year from the last adjustment to as high as $623.68 per month as of December 2005 and continue to receive $30 /RDA meeting with a maximum of $120 per month with an effective date of January 2007. 4. Per Elect for Council to participate in CalPERS. This option would go into effect the pay period following adoption of a City Council resolution and completion of the required CalPERS election of "Optional Membership" form. Please note that under Government Code Section 36516.5, "a change in compensation does not apply to a councilman during his term of office; however, the prohibition herein expressed shall not prevent the adjustment of the compensation of all members of Q00�15 Honorable City Council December 7, 2005, Regular Meeting Page 4 a council serving staggered terms whenever one or more members of such council become eligible for a salary increase by virtue of his beginning a new term of office ". The next general municipal election will be held in November 2006 and certification will likely take place in December 2006. Therefore, based on this Government Code, any adopted compensation increase for members of Council would go into effect no earlier than January 2007. STAFF RECOMMENDATION Direct staff as deemed appropriate. Attachment: 9/1/04 Agenda Report ATTACHMENT I'YTEM ___ ,-C„,�_ MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Steven Kueny, City Manager i Prepared by Deborah S. Traffenstedt, ATCM /City Clerk . J-_D DATE: August 26, 2004 (CC Meeting of 9/1/04) SUBJECT: Consider Adjustment to Moorpark City Council Compensation and Benefits BACKGROUND Compensation for the Moorpark City Council was last adjusted in 1990. Presently, the Moorpark City Council receives $300.00 per month, which is consistent with Government Code Section 36516 for a city up to and including 35,000 population. The Moorpark City Council also receives the federally mandated retirement contribution, which is in lieu of Social Security. The City currently pays 7.5% retirement compensation to the City Council, which is the same contribution paid to the City's part -time employees. The referenced Government Code allows the City Council compensation to be increased by up to 5% for each year from the operative date of the last adjustment. This would be as high as $623.68 effective December 2004 (14 years since the last adjustment in December 1990) . In addition, when acting as the Redevelopment Agency, the Moorpark City Council may receive $30.00 per meeting with a maximum of $120.00 per month. nISCUSSInN Moorpark's population was 34,887 as of January 1, 2004 (California Department of Finance population estimate), and the Fiscal Year (FY) 2004 -05 budget totals $43,861,445. The following table shows a comparison of city council compensation, population, and annual budget for nearby cities within the same population range of less than 35,000 residents. 000217 Honorable City Council September 1, 2004, Regular Meeting Page 2 Agency Agoura Hills Calabasas Malibu Port Hueneme Santa Paula Compensation $300.00 $465.00 $300.00 $682.00 $300.00 Population* 22,150 22,900 13,550 22,137 29,121 FY 2004 -05 Budget ** $21,675,432.00 $41,200,000.00 $21,368,492.00 $31,299,735.00 $20,863,881.00 * California Department of Finance 1/1/2004. ** Including capital improvement projects but not including Redevelopment Agency budget. Many cities, special districts, and school districts also provide selected benefits to their elected officials, such as participation in retirement and health /life insurance programs. The following is a survey of several cities and the Moorpark Unified School District (MUSD) Board of Education: CalPERS Agency Retirement Medical Dental Vision Life (Amount) MOORPARK NO* NO NO NO NO Agoura Hills No Yes Yes No No Calabasas Yes Yes Yes Yes Yes ($50,000) Camarillo Yes ** Yes * ** Yes Yes Yes ($50,000) Fillmore No No No No No Ojai Yes Yes Yes Yes Yes ($20,000) Oxnard Yes Yes * ** Yes Yes Yes (unknown) Port Hueneme Yes ** Yes Yes Yes No Santa Paula No* Yes * ** Yes * ** No No Simi Valley Yes ** Yes Yes Yes Yes($151,000) Thousand Oaks Yes Yes Yes Yes No Ventura No * * ** Yes Yes Yes No Westlake Village Yes No No No No MUSD No Yes Yes Yes No * Deferred compensation only ** PERS Retirement and deferred compensation * ** As a cafeteria plan - amounts vary from $626 to $908 per month * * ** Social Security only If the Moorpark City Council is interested in initiating health (medical, dental, and vision) and life insurance benefits, it's recommended that the Council's insurance program be the same as the program approved for the competitive service regular full - time positions (medical program beginning January 1, 2005). Excerpts from the competitive service employee benefit program are as follows: 00©�:13 Honorable City Council September 1, 2004, Regular Meeting Page 3 A. Dental, Life, and Vision Insurance: City shall continue to pay one hundred percent (100 %) of premiums for full -time employee and eligible dependents' coverage for the dental, life, and vision insurance programs. (Currently the City provides a $25,000 life insurance policy for each competitive service employee as well as $5,000 for a spouse and $2,000 for dependent children up to age 23.) B. Medical Insurance: January 1, 2005, through June 30, 2005, Medical Insurance Cafeteria Plan: This section shall be valid beginning January 1, 2005, at which time a cafeteria plan will be implemented for medical insurance. The City's contribution for each employee shall consist of a medical insurance allowance of up to a maximum of $908.00, which is intended to fully pay the family rate for the lowest cost CalPERS medical insurance Preferred Provider Organization (PPO) plan, and such contribution shall be inclusive of the minimum CalPERS medical insurance payment amount as specified in Section 22825 of the Government Code ($48.40 in calendar year 2005) . The medical insurance cafeteria plan contribution is intended to pay for medical insurance for the employee and eligible dependents; however, an employee may convert up to a maximum of $275.00 of the medical insurance cafeteria plan allowance to cash or a deferred compensation payment each month, if not used for payment of CalPERS medical insurance costs for employee and /or eligible dependents. The Moorpark City Council retirement program can also be amended to be the same as that provided to full -time competitive service employees. Presently, the City Council receives the same retirement contribution as a part -time employee, and the part - time program is actually a form of deferred compensation paid by the City. If this is modified, the Moorpark City Council could participate in the California Public Employees Retirement System (CalPERS) and receive service credit in a similar manner as participating City employees. For CalPERS retirement, the City currently pays both the employee as well as City share, which is currently about 15% of salary (7% employee and 8% City contributions). The City amount varies and is expected to decline in future years as CalPERS recovers from stock market losses on its investments. As recently as 2001, the City's share of retirement was 0% based on current and prior year earnings and City's actuarial projections. For CalPERS retirement purposes, the City Council qualifies as an "optional" member under Section 20322 of the Government Code_ The retirement benefit received would be based on the established percentage of 0 00 61-6119 Honorable City Council September 1, 2004, Regular Meeting Page 4 total compensation paid (does not include reimbursement of expenses). Any changes to amend the $300 per month City Council compensation by an amount not exceeding 5% per calendar since 1990 must be adopted by an ordinance pursuant to Section 36516 of the Government Code. If the Council determines to proceed with an ordinance to increase monthly compensation, staff recommends that first reading of the ordinance be scheduled for September 15 with second reading and adoption on October 6, in order to have the ordinance take effect prior to certification of the November 2004 election results and have the change in compensation apply during the next term of office (pursuant to Section 36516.5 of the Government Code). Any amounts paid by a city for retirement, health and welfare are not included for the purposes of determining salary compensation under Section 36516, provided the same benefits are available and paid by the city for its employees. If the Council approves retirement, health and life insurance benefits for the City Council consistent with that provided to the City's competitive service employees, the recommended effective date for the insurance should be January 1, 2005, and the retirement benefit would go into effective the pay period following adoption of a City Council resolution and completion of the required Ca1PERS election of Optional Membership form. If directed, staff would prepare the Ca1PERS retirement resolution for the September 15, 2004, regular meeting. Total estimated maximum costs for City Council insurance benefits that are consistent with that provided to competitive service employees are as follows, based on the January 1, 2005, cafeteria plan for medical insurance and the current rates for employee plus family for dental, vision and life insurance (please note that dental, vision, and life insurance rates have a renewal date of January 1 and may be higher): Medical 5 x $ 908.00 Dental 5 x $ 134.41 Vision 5 x $ 20.70 Life 5 x $ 9.01 $1,072.12 (maximum insurance cost based on current known rates) Honorable City Council September 1, 2004, Regular Meeting Page 5 For discussion purposes, other alternatives offering limited versions of benefits already received by competitive service employees are presented below: 1. City Councilmember only medical insurance, no dependents, no cash back, and specify not to exceed lowest -cost Preferred Provider Organization (PPO) plan; no dental, vision and life insurance: $344.12. 2. City Councilmember only medical insurance, no dependents, no cash back, and specify not to exceed lowest -cost Preferred Provider Organization (PPO) plan; and dental, vision and life insurance for City Councilmember, no dependents: $344.12 + $42.19 + $8.00 + $7.50 = $401.81. 3. City Councilmember and dependents medical insurance, specify not to exceed lowest cost PPO plan, and no cash back; and dental, vision and life insurance for City Councilmember and dependents: $344.12 + $134.41 + $20.70 + $9.51 = $508.74 (family rate). 4. Other combinations of the employee benefit plans. STAFF RECOIOWNDATION Direct staff as deemed appropriate.