HomeMy WebLinkAboutAgenda Packet - May 10, 1995 - CC OF AZU$A
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Finance Department • 213 E. Foothill Blvd. • P.O. Box 1395 • Azusa,CA 91702-1395
(818) 334-5125
AGENDA ITEM
TO: HONORABLE MAYOR AND MEMBERS OF HE CI r COUNCIL
(19
FROM: GEOFF CRAIG, DIRECTOR OF FINANCE
VIA: HENRY GARCIA, CITY ADMINISTRATOR ii
DATE: MAY 10, 1995
SUBJECT: AMENDMENT TO PERS CONTRACT
Background
In preparing the proposed budget for Fiscal Year 1995-96, staff is working with the various
departments and employee units to develop ways in which to meet a significant shortfall of
forecasted revenues through the reduction and/or postponement of expenditures. Two employee
units,the Middle Management Association and the Azusa City Employees' Association, are working
closely with Management on ways in which to balance the budget through postponement of the
scheduled July 1 cost-of-living increase in return for an update to the City's contract with the Public
Employees' Retirement System. The City must now indicate its possible intended amendment in
order for this option to remain viable through June 30. A draft Resolution on Intention and a
corresponding draft Ordinance are presented for passage by Council; doing so does not commit the
City to making the proposed amendment.
/( I
Honorable Mayor and Members of the City Council
May 10, 1995
Page 2
Findings
As staff predicted in February during the Mid-Year Budget Review, the City will experience
roughly an$800,000 decline in General Fund revenues for Fiscal Year 1995-96. Most of the decline
is in Sales Tax collections. Finance recommends that the City operate within its means, and in
preparing the proposed budget for Fiscal Year 1995-96, has been working with the various
departments and employee units to develop ways in which to meet the shortfall through the
reduction and/or postponement of expenditures. Two employee units, the Middle Management
Association and the Azusa City Employees' Association, are working in very good faith with
Management on ways in which to balance the budget through postponement of the scheduled July
1 cost-of-living increase.
The City has received informal advice from representatives of the Public Employees' Retirement
System (PERS) that the City's recruitment could be stronger if the City were to update its PERS
contract with regard to the retirement formula or the final compensation measurement period. To
implement "single highest year" would be too expensive for the City to consider at this time.
However, the City could update to either the "2% at age 55" retirement formula or the "inclusion
of employer-paid member contributions during the final compensation period" option at a cost of
about 2-1/2%of reported wages. Moreover, if the City acts now, to aid in balancing the budget, the
former amendment could be effective June 30 with billing deferred until July 1, 1996. This is a
savings of roughly$200,000 in Fiscal Year 1995-96 and a net cost of$25,000 in Fiscal Year 1996-
97. Further details are still being negotiated:
Fiscal Year 1995-96 Fiscal Year 1996-97 Total
Postpone COLA $(200,000) $(100,000) $(300,000)
Update PERS -0- 125,000 125,000
TOTAL $(200,000) $ 25,000 $(175,000)
In order to preserve through June 30 its PERS contract amendment options, while concluding its
negotiations with the employee units and balancing the budget, the City must now indicate its
tentative intentions. Staff has prepared a draft Resolution and a corresponding draft Ordinance that
are attached for Council perusal. Staff recommends that Council pass them because to do so does
not commit the City to making the proposed amendment, yet it preserves the option for possible
implementation in balancing the budget for Fiscal Year 1995-96.
Honorable Mayor and Members of the City Council
May 10, 1995
Page 3
Recommendation
Staff recommends that Council:
1. Pass the attached Resolution of Intention to Approve an Amendment to the Contract
Between the Board of Administration of the Public Employees' Retirement System and the
City Council of the City of Azusa, and
2. Introduce the attached Ordinance of the City Council of the City of Azusa Authorizing an
Amendment to the Contract Between the City Council of the City of Azusa and the Board
of Administration of the California Public Employees' Retirement system and
GJC:pap
f councit\pecsamd.595
RESOLUTION NO. 95—C67
RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO THE
CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY
COUNCIL OF THE CITY OF AZUSA
WHEREAS, the Public Employees' Retirement Laws permits the participation of public
agencies and their employees in the Public Employees' Retirement System by the execution of a
contract, and sets forth the procedure by which said public agencies may elect to subject themselves
and their employees to amendments to said Law; and
WHEREAS,one of the steps in the procedures to amend this contract is the adoption by the
governing body of the public agency of a resolution giving notice of its intention to approve an
amendment to said contract, which resolution shall contain a summary of the change proposed in
said contract; and
WHEREAS, the following is a statement of the proposed change:
"To provide 2% @ 55 Full and Modified formula for Local Miscellaneous
Members, including an extension of the funding period to the year 2016."
NOW, THEREFORE, BE IT RESOLVED that:
Section 1. The City Council of the City of Azusa does hereby give notice of intention to approve
an amendment to the contract between the said governing body and the Board of Administration of the
Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "exhibit" and
by this reference made a part hereof.
Section 2. The City Clerk shall certify to the adoption of the resolution.
APPROVED AND ADOPTED this 15th day of MAY , 1995.
.456t
'MAYOR
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the
City of Azusa at a regular meeting thereof,held on the 15th day of MAY , 1995 by
the following vote of Council:
AYES: COUNCILMEMBERS: BARDISON,MADRID,NARANJO,BEEBE,ALEXANDER
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
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CITY CIR1K
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