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Home My WebLink AboutCC AG PKT 2003-01-27 #L AGENDA REPORT - DATE: January 27, 2003 TO: Honorable Mayor and City Council FROM: John B. Bahorski, City Manager g SUBJECT: 2 Year Retirement Service Credit SUMMARY OF REQUEST: Receive and file report, authorize staff to proceed with adoption of a resolution required by the Public Employees' Retirement System designating a time period in which eligible non - safety members may retire and be credited with two years of service in the retirement system. BACKGROUND: During the past budget workshops, City staff outlined the severe economic constraints that must be faced in the coming fiscal years. With declining revenues and increased police and fire benefit costs, the outlook for 03/04 was a deficit in the general fund of approximately $400,000. Potential State revenue reductions were unknown at that time and not included as part of the budget. The State has now identified the loss of revenues to municipalities. For Seal Beach, that translates to a loss of $500,000 in vehicle in -lieu fees for this fiscal year and $1.2 million for FY 03/04. Maintenance and operations budgets had been kept to a bare minimum for many years and any further reductions would severely impact services to the community. Personnel costs remain the largest expenditure in the general fund. Council took action to impose a hiring freeze and any vacancies have remained unfilled. Since FY 01/02, 11 positions have remained unfilled. Non - sworn personnel were provided no salary increases for the current fiscal year. All cost - saving avenues are being explored which is why the PERS 2 -year Additional Service Credit option is being offered on a voluntary basis to all eligible employees rather than impose layoffs or other cost - saving measures. The Public Employees Retirement System (PERS) allows public agencies to provide 2 years of additional service credit to encourage early retirement. The member must be eligible to retire (age 50 or more), have at least 5 years of service credit and retire during a designated time period. There is a cost involved to offer this service credit; the City must pay to PERS the equivalent of the difference between the allowance the member will receive and the allowance the member would have received without the additional service credit. In return, the City must maintain at least one vacancy resulting in an overall reduction in the work force and a cost - savings for the City. Agenda Item,, Page 2 — Two Year Retirement Service Credit • FISCAL IMPACT: There are 13 employees who meet the criteria for the 2 -year service credit. If all 13 took advantage of the program, the cost to the City would be $351,775 with commensurate savings. This information was disseminated to employees during the negotiation process and based on interest received at that time, staff anticipates a very small number of employees to participate in the early retirement program. PERS requires that the cost of implementing such a program be made known prior to adopting the required resolution which designates a time period in which participants must retire. RECOMMENDATION: It is recommended that Council authorize staff to proceed with adoption of the PERS required resolution designating a time period in which eligible employees voluntarily elect to retire and receive a two -year credit for service in the California PERS retirement system. This resolution would be considered by Council at their February 10 meeting. Actuarial 8 Employer Services Division • P.O. Box 942709 �� Sacramento, CA 94229 -2709 Telecommunications Device for the Deaf - (916) 326 -3240 Ca1PERS FAX (916) 326 -3005 November 20, 2002 Employer Code #0377 Reply to Section 105 Ms. Ginger Bennington Administrative Assistant City of Seal Beach City Hall, 211 Eighth Street Seal Beach, CA 90740 . Dear Ms. Bennington: Enclosed are the necessary documents for adoption by your governing body to provide another designated period for granting two years additional service credit pursuant to Government Code Section 20903 for local miscellaneous members. The following documents must be completed and returned to this office: 1. Resolution, original or certified copy. 2. Certification of Governing Body's Action, (CON -12). 3. Certification of Compliance With Government Code Section 7507, (CON -12A). 4. Certification of Compliance With Government Code Section 20903. The following forms are also enclosed: 1. Two Years Additional Service Credit Section 20903, information, (CON -29). 2. Procedures for Calculation of Cost and Cost Estimate Factors, (CON -3). The Resolution must include the designated period and specify the eligible group of members. If the eligible group is employed in a specific department and it is the agency's intention to limit the eligibility to a specific classification within a specific department, please identify both the classification and the department. The benefit cannot be provided on the basis of employee organization or unrepresented groups. California Public Employees' Retirement System Lincoln Plaza - 400 P Street - Sacramento, CA 95814 page 2 Government Code Section 7507 requires that the costs to provide this benefit be made public at a public meeting at least two weeks prior to the adoption of the Resolution. To determine the total dollar amount, use the enclosed cost factors to calculate the approximate employer cost for each employee who will be eligible for the additional service credit. The agency is to certify compliance on the enclosed Certification of Compliance with Govemment Code Section 7507. The agency will be responsible for the actual costs of providing the additional service credit. In addition, there is a $10.00 valuation charge for each member who retires during the designated period and receives the additional service credit. An information sheet is also enclosed. If you have any questions, please do not hesitate to contact me at (916) 326 -3683. • Sincerely, --- 3Cat dQ Eva Hwang Employer Representative Public Agency Contract Services Attachments EH:bjb , CITY COUNCIL OF THE . CITY OF SEAL BEACH RESOLUTION TO GRANT ANOTHER DESIGNATED PERIOD FOR TWO YEARS ADDITIONAL SERVICE CREDIT WHEREAS, the City Council of the City of Seal Beach is a contracting Public A 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 SEAL BEACH BY Presiding Officer Attest: Clerk/Secretary (Rev. 1/96) , CITY COUNCIL OF THE ,, CITY OF SEAL BEACH RESOLUTION , ' TO • GRANT ANOTHER DESIGNATED PERIOD • FOR TWO YEARS ADDITIONAL SERVICE CREDIT WHEREAS, the City Council of the City of Seal Beach 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 SEAL BEACH BY Presiding Officer Attest: Clerk/Secretary (Rev. 1/96)