SR-602-003 (19)
f:\person:misc/council\council60Twoyear.doc Santa Monica, California
Council Meeting: July 22, 2003
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Presentation of Information Related to Granting Another Designated
Period for Two Years Additional Service Credit with the California Public
Employees' Retirement System as part of the City?s Cost Reduction
Strategy
INTRODUCTION
This report presents information and costs of offering two years additional service credit
with the California Public Employees? Retirement System (CalPERS) for certain job
classifications as part of the City?s strategy to reduce staffing levels and reduce General
Fund costs. Government Code Section 7507 requires that the cost to provide the two
years additional service credit benefit be made public at a public meeting at least two
weeks prior to the adoption of the Resolution. A resolution will be submitted to the City
Council for recommended adoption on August 12, 2003.
DISCUSSION
The City of Santa Monica contracts with CalPERS to provide retirement plans for
permanent employees. As a contracting agency, the City may provide two years
additional service credit to members who retire during a designated period because of
impending mandatory transfers, layoffs, or demotions. The City of Santa Monica
previously offered additional service credit to eligible employees in 1993. Due to
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impending mandatory layoffs because of the City?s current financial situation, the
additional service credit will be offered to eligible employees in the classifications of
Traffic Operations Superintendent, Open Space Administrator, Library Literacy Program
Coordinator, City Manager?s Office Administrator, and Legal Secretary (in the City
Attorney?s Office) during the period of August 13, 2003 through November 11, 2003.
The vacancies created by early retirements in these positions represent at least one
percent of each job classification. It is the City?s intention, under Government Code
Section 20903, to keep all vacancies created by early retirements under this section, or
at least one vacancy in any position in the City organization, permanently unfilled,
thereby resulting in an overall reduction in the work force. The conditions above meet
CalPERS requirements.
BUDGET/FISCAL IMPACT
The one-time cost of offering the two years additional service credit to employees in
these classifications is anticipated to be approximately $184,003.00. The City is also
offering to make a one-time payment of $17,040.00 into the Santa Monica City
Employees Coalition Benefit Trust to vest these individuals in the trust. Therefore an
appropriation of $201,043.00 will be necessary from FY02-03 year-end savings to fund
these costs. The salary and benefits savings in FY03-04 will more than offset the one-
time cost of offering these benefits. Ongoing salary and benefits savings resulting from
these vacancies will contribute toward the reductions needed to balance the City?s
budget in FY03-04 and beyond. Appropriate budget actions will be presented for
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adoption at the August 12, 2003 City Council meeting.
RECOMMENDATION
It is recommended that City Council receive and file this information. Government Code
Section 7507 requires that the cost to provide the two years additional service credit
benefit be made public at a public meeting at least two weeks prior to the adoption of
the Resolution. The attached resolution will be submitted for adoption to the City
Council on August 12, 2003 along with appropriate budget changes.
Prepared By: Karen Bancroft, Director of Human Resources
Attachments: Resolution to Grant Another Designated Period for Two Years Additional
Service Credit
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FOR INFORMATION ONLY
(CITY COUNCIL SERIES)
A RESOLUTION TO GRANT ANOTHER DESIGNATED PERIOD
FOR TWO YEARS ADDITIONAL SERVICE CREDIT
WHEREAS, the City Council of the City of Santa Monica 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 THE CITY COUNCIL OF THE
CITY OF SANTA MONICA does seek to add another designated period, and does
hereby authorize this Resolution, indicating a desire to add a designated period from
August 13, 2003 through November 11, 2003 for eligible members in the classifications
of Traffic Operations Superintendent, Open Space Administrator, Library Literacy
Program Coordinator, City Manager?s Office Administrator, and Legal Secretary (in the
City Attorney?s Office).
The City Clerk shall certify to the adoption of this Resolution, and thenceforth and
thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
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__________________________
MARSHA JONES MOUTRIE
City Attorney
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