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Home My WebLink About55A - EM EMPLOYEESREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 5, 2012 TITLE: RESOLUTION PERTAINING TO EXECUTIVE MANAGEMENT EMPLOYEES J 1M CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1s` Reading ? Ordinance on 2"d Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER Adopt a Resolution regarding certain terms and conditions of employment pertaining to Executive Management employees. DISCUSSION It is the City's desire that unrepresented Executive Management (EM) employees be subject to the following adjustments in wages and benefits: 1) CalPERS Retirement: Effective January 1, 2012, CaIPERS miscellaneous unrepresented Executive Management employees will make additional contributions to CalPERS for the cost of the 2.7% @ 55 retirement benefit, for a total contribution of 8%. Effective January 1, 2012, CaIPERS safety unrepresented Executive Management employees (e.g., Police Chief and Fire Chief) will make additional contributions to CaIPERS for the cost of the 3% @ 50 retirement benefit, for a total contribution of 9%. 2) Vacation Cash Out: Executive Management employees will defer the cash-out of longevity vacation leave time for the remainder of fiscal year 2011-12. 55A-1 Resolution Pertaining to March 5, 2012 Page 2 FISCAL IMPACT Executive Management Employees There is a cost savings of $ 65,655 to the City for increased CalPERS contributions and deferral of longevity vacation cash-out for the remainder of the fiscal year. There are additional ongoing savings of $51,095 for increased CalPERS contributions. Edward S. aya Executive Director Personnel Services Agency Francisco Gutierrez Executive Director Finance & Management Services Agency 55A-2 RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA TO AMEND RESOLUTION NO. 91-066 TO AMEND THE BASIC COMPENSATION PLAN FOR CERTAIN CLASSIFICATIONS OF EMPLOYMENT DESIGNATED AS UNREPRESENTED EXECUTIVE MANAGEMENT BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Section 1004, Article X of the City Charter of the City of Santa Ana requires the City Manager to prepare, install and maintain a position classification and pay plan subject to civil service rules and regulations and the approval of the City Council. B. On July 1, 1991, the City Council passed and adopted Resolution No.91- 066, re-establishing the Basic Classification and Compensation Plan for classifications of employment designated as unrepresented Executive Management (EM). The City Council has amended Resolution No. 91- 066 on numerous occasions since its adoption. C. On March 19, 2001, the City Council passed and adopted Resolution No. 2001-022, authorizing the amendment of the City's contract with the California Public Employees' Retirement System (CaIPERS) to provide the Section 22362.2 (3% at 50 Full Formula) retirement benefit for local safety members, including incumbents in the unrepresented Executive Management classifications of Fire Chief and Police Chief. D. On May 7, 2007, the City Council passed and adopted Resolution No. 2007-041, amending Resolution 91-066, to provide unrepresented Executive Management local miscellaneous employees with the same California Public Employees' Retirement System (CaIPERS) 2.7% at 55 retirement benefit as provided to several employee bargaining units, including the Santa Ana Management Association (SAMA), effective January 1, 2009. E. On January 1, 2011, the incumbent in the CaIPERS safety member, unrepresented Executive Management classification of Fire Chief began paying one and forty-three 'hundredths percent (1.43%) of his salary towards the employee's individual retirement contribution. 55A-3 F. On December 1, 2011, the incumbent in the CaIPERS safety member, unrepresented Executive Management classification of Police Chief began paying four and forty-two hundredths percent (4.42%) of his salary towards the employee's individual retirement contribution. G. On January 4, 2011, in an on-going effort to maintain the City's financial stability in a difficult economic climate, the City Council adopted Resolution No. 2011-001, authorizing the City Manager to, among other things, defer longevity vacation and management vacation cash out for FY 2010-11 for unrepresented Executive Management officers and employees. H. It is now the City's desire that unrepresented Executive Management officers and employees shall be subject to the following adjustments in wages and benefits: Effective January 1, 2012, CalPERS safety unrepresented Executive Management employees shall pay nine percent (9%) of the employer contribution to CaIPERS for their retirement benefits as cost sharing pursuant to Government Code section 20516(f). All employee contributions for retirement benefits are paid to the employer cost (i.e., employer contribution) in accordance with Government Code section 20516(f). 2. Effective January 1, 2012, CalPERS miscellaneous unrepresented Executive Management employees shall pay eight percent (8%)* of the employer contribution to CalPERS for their retirement benefits as cost sharing pursuant to Government Code section 20516(f). All employee contributions for retirement benefits are paid to the employer cost (i.e., employer contribution) in accordance with Government Code section 20516(f). * Percentage equal to the percentage paid by classifications represented by SAMA. 3. Continue to defer longevity vacation and management vacation cash out for the remainder of FY 2011-2012. It is now desired to amend Council Resolution No. 91-066 to effect these changes for unrepresented Executive Management employees. Section 2: That Resolution No. 91-066, as amended, is hereby further amended as follows: That Section 6.1 Retirement Plan Contributions, as amended, is hereby further amended to read as follows: 55A-4 A. General. The terms of the existing contracts between the City and the California Public Employees' Retirement System (CaIPERS) governing the City retirement benefits for eligible affected management employees are incorporated by reference herein. The City shall continue to make contributions to CaIPERS in accordance with its contracts with CaIPERS for eligible affected employees covered by said contract as amended. B. Deferred Retirement. The City will continue to make payment to CaIPERS on behalf of each eligible affected employee in an amount required to pay one hundred percent (100%) of the employee's individual retirement contribution which is equal to eight percent (8%) for CaIPERS miscellaneous members and equal to nine percent (9%) for CaIPERS safety members. Such payments shall be credited to the individual employee's PERS account. Such payments are not increases in base salary and no salary rate range applicable to any of the employees covered by this Resolution shall be changed or deemed to have been changed by reason thereof. As a result, the City will not treat these payments as ordinary income and thus will not withhold federal or state income tax from said payments. The City previously received a ruling from the Internal Revenue Service confirming that such payments are deferred compensation and not ordinary income. In the event that the City receives a new ruling from the Internal Revenue Service that such payments are ordinary income of the employees instead of deferred compensation, the City's obligation to make such payments shall discontinue and in place thereof the base salary of each said employee shall forthwith be increased by eight percent (8%) for CaIPERS miscellaneous members and nine percent (9%) for CaIPERS safety members. For the purpose of reporting an employee's compensation to CaIPERS, the City shall include these payments as if they were a part of the employee's base salary. C. 3% at 50 Service Retirement Benefit for CaIPERS Safety Members. The City agreed to amend its contract with CaIPERS to provide safety members, unrepresented Executive Management employees with the 3% at 50 Service Retirement Benefit effective July 1, 2001. D. 2.7% at 55 Service Retirement Benefit for CaIPERS Miscellaneous Members. The City agreed to amend its contract with CaIPERS to provide miscellaneous members, unrepresented Executive Management employees with the 2.7% at 55 Service Retirement Benefit effective January 1, 2009. E. Employee Contribution for Retirement Benefit. 1. Effective January 1, 2012, CaIPERS safety members, unrepresented Executive Management employees shall pay nine percent (9%) of the employer contribution to CaIPERS for their retirement benefits as cost sharing pursuant 55A-5 to Government Code section 20516(f). All employee contributions for retirement benefits are paid to the employer cost (i.e., employer contribution) in accordance with Government Code section 20516(f). 2. Effective January 1, 2012, CalPERS miscellaneous members, unrepresented Executive Management employees shall pay eight percent (8%)* of the employer contribution to CalPERS for their retirement benefits as cost sharing pursuant to Government Code section 20516(f). All employee contributions for retirement benefits are paid to the employer cost (i.e., employer contribution) in accordance with Government Code section 20516(f). * Percentage equal to the percentage paid by classifications represented by SAMA. Section 3: That except as amended by this Resolution, all other provisions of Resolution No. 91-066, as amended, shall remain in full force and effect. Section 4: This Resolution shall be operative from and after January 1, 2012. ADOPTED this 5th day of March, 2012. Miguel A. Pulido Mayor APPROVED AS TO FORM: City Attorney's Office By: Joseph Straka Interim City Attorney AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers Councilmembers Councilmembers Councilmembers 55A-6 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2012- to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana 55A-7 55A-8