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Home My WebLink AboutAgenda Packet - June 15, 1995 - CC 1111 liffarffla 0 OF AZUSA 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 TIE CITY COUNCIL FROM: GEOFF CRAIG, DIRECTOR OF FINANCE Ij! t VIA: HENRY GARCIA, CITY ADMINISTRATORS ,�- //6 DATE: JUNE 15, 1995 SUBJECT: AMENDMENT TO PERS CONTRACT Background As a balancing measure for 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. All non-safety employee units 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. Negotiations are proceeding very well. The City must now indicate its tentative intended amendment in order for this option to remain viable through June 30. An Ordinance and a corresponding Urgency Ordinance are presented for passage by Council; if negotiations are not concluded they will be rescinded. C o v-' Honorable Mayor and Members of the City Council June 15, 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. All non-safety employee units 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 fmal 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 fmal 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- 125000 125000 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 Ordinance and a corresponding draft Urgency Ordinance that are attached for Council perusal. Staff recommends that Council pass them because to do so preserves the option for possible implementation in balancing the budget for Fiscal Year 1995-96. Honorable Mayor and Members of the City Council June 15, 1995 Page 3 Recommendation Staff recommends that Council: 1. Adopt after second reading 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. 2. In order to ensure the effectiveness prior to July 1, 1995 adopt the attached Urgency Ordinance 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. GJC:pap f council\persamd.595 URGENCY ORDINANCE NO. 95-013 AN URGENCY 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 THE CITY COUNCIL OF THE CITY OF AZUSA does ordain as follows: SECTION 1. That 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 is hereby authorized, a copy of said amendment being attached hereto marked "Exhibit A", and by such reference made a part hereof as though herein set out in full. SECTION 2. The Mayor of the City of Azusa is hereby authorized, empowered and directed to execute said amendment for and on behalf of the said agency. SECTION 3. This Ordinance shall take effect immediately and shall expire in thirty (30) days. The reason for the urgency is that this measure deals with the finances of the City and must be effective on or before June 30, 1995 in order to achieve the budgetary savings. If the Ordinance is not effective by then, the California Public Employees' Retirement System figuress shall expire, the entire process will have to be repeated and the potential savings may be lost. PASSED AND APPROVED this 20th day of June , 1995. /Qijq&_ 61-1e/CettiA, MAYOR I,ADOLPH SOLIS, City Clerk of the City of Azusa, do hereby certify that the foregoing Urgency Ordinance No. 95-013 was regularly introduced and placed upon its first reading at a meeting of the City Council on the 20th day of June , 1995 and adopted by the following vote, to wit: AYES COUNCILMEMBERS:HARD ISON,MADRID,NARANJO,BEEBE,ALEXANDER NOES COUNCILMEMBERS:NONE ABSENT • COUNCILMEMBERS:NONE i TY CLERK f ordinance 1pers2%55.ord ORDINANCE NO. 95-012 AN 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 THE CITY COUNCIL OF THE CITY OF AZUSA does ordain as follows: SECTION 1. That 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 is hereby authorized, a copy of said amendment being attached hereto marked "Exhibit A", and by such reference made a part hereof as though herein set out in full. SECTION 2. The Mayor of the City of Azusa is hereby authorized, empowered and directed to execute said amendment for and on behalf of the said agency. SECTION 3. This Ordinance shall take effect thirty(30)days after the date of its adoption, and prior to the expiration of fifteen(15) days from passage thereof shall be published at least once in the Azusa Herald, a newspaper of general circulation, published and circulated in the City of Azusa and thenceforth and thereafter the same shall be in full force and effect. PASSED AND APPROVED this 20th day of June , 1995. 6 o MAYOR I,ADOLPH SOLIS, City Clerk of the City of Azusa, do hereby certify that the foregoing Ordinance No. 95-012 was regularly introduced and placed upon its first reading at a meeting of the City Council on the 5th day of June , 1995. That thereafter said Ordinance was duly adopted and passed at a regular/special meeting of the City Council on the 20th day of June , 1995 by the following vote, to wit: AYES • COUNCILMEMBERS: HARD ISON,MADRIDT,,NARANJO,BEEBE,ALEXANDER NOES • COUNCILMEMBERS: NONE ABSENT COUNCILMEMBERS: NONE xi7"/.7, / ITY CLE la/(' f:ordinance\per,2%55 old