CC - Agenda 06-12-07a
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•
Rosemead
City Council
AGENDA
June 12, 2007
4:00 PM
City Hall Conference Room
8838 E. Valley Boulevard, Rosemead, Califomia 91770
John Tran, Mayor
John Nunez, Mayor Pro Tem
Margaret Clark, Councilmember
Polly Low, Councilmember
Gary Taylor, Councilmember
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ROSEMEAD CITY COUNCIL AGENDA
•
June 12, 2007
• CALL TO ORDER - 4:00 PM
• PLEDGE OF ALLEGIANCE - Councilmember Clark
• INVOCATION - Councilmember Taylor
• ROLL CALL - Councilmembers Clark, Low, Taylor, Mayor Pro Tern Nunez, Mayor Tran
1. PUBLIC COMMENT FROM THE AUDIENCE
2. ADMINSTRATIVE MATTERS
A. Benefits Modification
At our May 29, 2007 meeting staff was directed to bring back additional details for City
Council review as it relates to the proposed changes in the City's benefits package. In
addition, staff was asked to provide a more detailed breakdown of the cost savings
associated with the move. To comply with GASB 45, the City worked with Milliman
Consultants and Actuaries, a firm that conducts actuarial valuations for a variety of
jurisdictions. The valuation shows that the City's total liability for its retirement health
benefit is $9,850,614.
Based on negotiations with the Rosemead Employee Association (REA), a new benefits
package was agreed upon. The cost to implement this new benefits package is estimated
to be around $1,632,167.As part of the agreement reached with the REA, retirement health
care coverage would be eliminated for any employee hired after July 1, 2007. In addition,
retirement health care coverage for existing employees would be limited. In speaking with
our actuary, this means that our retirement health care liability would be significantly
reduced. When taken together, this means that the City could potentially save around $8.2
million by implementing the new benefits plan. The true cost savings can be determined
once an actuary completes a new valuation for the City's limited retirement health care
package.
Recommendation: That the City Council take the following action:
1) Approve the MOU with the Rosemead Employee Association.
2) Direct staff to bring back for City Council approval all necessary authorizing resolutions
to implement the provision contained in the Memorandum of Understanding.
Alternatives to Staff Recommendation:
1) Take no action and keep the City's existing benefits plan and benefits provider.
2) Approve a modified version of the negotiated benefits agreement with the REA.
3) Refrain from transitioning to a new benefits provider and stay with all of the City's
existing health insurance carriers.
4) Decide to transition only some of the City's benefits to new health insurance providers.
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ROSEMEAD CITY COUNCIL AGENDA
0
June 12, 2007
B. Personnel Changes: FY 2007-2008
The 2007-2008 budget details an expenditure plan for all City operations and capital
improvement projects totaling $37.2 million. This spending plan also projects revenues of
$33.2 million and reflects a reduction in fund balance of $4 million. The General Fund
budget is $16.2 million, or 44% of the City's total budget. It is important to note that the
General Fund reserves will decrease by $1.4 million; however, overall General Fund
reserve levels will remain healthy at $21.1 million. There are a total of nine new positions
that are included in this budget for City Council review. The new positions proposed include:
1) Assistant to the City Manager
2) People Manager
3) Public Communications Manager
4) Assistant Planner
5) Accounting Manager
6) Public Safety Coordinator
7) Administrative Assistant (Public Safety Services Department)
8) Management Analyst (CDBG & HOME programs)
9) Grants Specialist (CDGB & HOME programs)
Recommendation: That the City Council provide direction.
C. PARS Alternate Retirement System
The City of Rosemead is required, on behalf of each part-time employee, to contribute to
Social Security an amount equal to 6.2% of his or her salary. The employee also
contributes 6.2% to Social Security for a combined contribution of 12.4°/x. The United
States Congress adopted the Omnibus Budget Reconciliation Act (OBRA) in 1990. OBRA
mandated that all part-time, seasonal, and temporary employees participate in a Qualifying
Retirement System in lieu of Social Security. Congress specifically provided alternatives
with statutory language spelling out the minimum requirements for alternate systems. The
Public Agency Retirement System (PARS) offers an alternate retirement system (ARS)
that meets the statutory requirements as specified by Congress.
Under the PARS ARS program, part-time employees who work less than 100 hours per
fiscal year can enroll, By enrolling, the total contribution to the retirement system for these
employees will be 7.5% rather than the 12.4% mandated by Social Security. The 7.5%
contribution rate can be split equally between the employee and the employer, meaning
that the employee would contribute 3.75% to the program, and the employer would
contribute 3.75% to the program. This program could save the City around $15,000 per
year. In addition employees would be able to take home additional salary under the plan
because of the reduced contribution rate (see Attachment A for additional details).
Recommendation:
That the City Council approve Resolution 2007-21 providing for PARS as an alternative
retirement system for part-time, seasonal, and temporary employees.
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ROSEMEAD CITY COUNCIL AGAA 0June 12, 2007
3. CONSENT CALENDAR
A. Approval of the 2007.08 Annual Budget Activity/Accounts
Recommendation: That the City Council approve the 2007-08 Annual Budget
Activity/Accounts
4. MATTERS FROM THE MAYOR & CITY COUNCIL
5. MATTERS FROM THE CITY MANAGER & STAFF
& ADJOURNMENT
The next regular meeting is scheduled for June 12, 2007 at 7:00 p.m.
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