The URL can be used to link to this page

Home My WebLink AboutAuthorize the Finance Department to Approve the Public Emplo V/L(-eZCJ9) F-/rJ Council/Agency Meeting Held: 7 S as Deferred/Continued to: pproved ❑ Conditionally Approved ❑ Denied t Cl 's Sig ure rr / Council Meeting Date: 7/5/2005 Departme t ID Number: FN 05-003 CITY OF HUNTINGTON BEACH ,- REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR CITY COUNCIL MEMBERS CD SUBMITTED BY: PEN �OPECRETu� FT, DPA, CITY ADMINISTRATOR rr": PREPARED BY: DANIEL T. VILLELLA, CPA, FINANCE OFFICER % � <� _J SUBJECT: PREPAYMENT OF PERS EMPLOYER CONTRIBUTIONS Statement of Issue,Funding Source, Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The Public Employees Retirement System (PERS) is offering a 3.66% discount to agencies that pay 100% of the employer's contribution for the 2005-2006 PERS fiscal year. Funding Source: Cash is available within the various funds that usually have PERS obligations. Any amounts paid prior to the obligation date for these benefits in the fiscal year 2005-2006 are considered prepayments of expenses and can be refunded if necessary. Recommended Action: Authorize Daniel T. Villella, CPA, Finance Officer to approve the Public Employees Retirement System LUMP SUM PAYMENT REQUEST for fiscal year 2005-2006 authorizing the lump sum prepayment of PERS Retirement Employer's Contribution in the amount of $9,186,409 for Safety employees and $2,811,513 for Miscellaneous employees to be paid by July 15, 2005. Alternative Action(s): Make the traditional twenty-six biweekly payments throughout the twelve months. REQUEST FOR ACTION MEETING DATE: 7/5/2005 DEPARTMENT ID NUMBER:FN 05-003 Analysis: The city has been advised that PERS is offering a 3.66% discount to agencies paying 100% of the employer's share for the 2005-2006 fiscal year by July 15, 2005. Based on this information, the city requested the PERS Actuarial & Employer Services Division to calculate the lump sum payment for the Safety employees (Attachment 1) and the Miscellaneous employees (Attachment 2). This information is based on the most recent annual valuation and assumes payment made between July 1 and July 15, 2005. The amount of pre-payment required is approximately 3.66% less than the total of the twenty- six biweekly payments. This reduced amount was calculated by PERS discounting future payments by their expected rate of return of 7.75%. The table below shows that the City will save a gross amount of$456,244 and, after reducing the City Treasurer's expected investment rate of return of 3.25%, a net amount of$265,695: Safety Miscellaneous Total Full Amount $9,535,740 $2,918,426 $12, 454,166 Discount Amount 9,186,409 2,811,513 11,997,922 Gross Savings $ 349,331 $ 106,913 $ 456,244 Est. Lost Interest <190,549> Net Savings $ 265,695 With your approval, the Finance Officer can approve the LUMP SUM PAYMENT REQUESTs and a check will be processed in the amount of $11,997,922 ($9,186,409 — Safety; $2,811,513 — Miscellaneous). Environmental Status: Not applicable. Attachment(s): City Clerk's Page Number No. Description 1. Prepayment of the Employer Contributions for Fiscal Year 2005-2006 — Safety Plan 2. Prepayment of the Employer Contributions for Fiscal Year 2005-2006 — Miscellaneous Plan G:\FINANCE\RCA\RCA PERS Pre-Payment.doc -2- 6/15/2005 9:26 AM ATTACHMENT # 1 Actuarial & Employer Services Division P.O. Box 942709 Sacramento, CA 94229-2709 Telecommunications Device for the Deaf-(916) 795-3240 FAX(916)795-3005 June 6, 2005 Employer Number : 0097 Employer Name : CITY OF HUNTINGTON BEACH Rate Plan: SAFETY Re: Prepayment of the employer contributions for fiscal 2005-2006 Dear Ms. Russell: As requested, 2005-2006 employer contribution rate information on your lump sum payment follows. If you are aware of others interested in this information (i.e. payroll staff,county court employees, port districts,etc.),please inform them. The information is based on the most recent annual valuation and assumes payment made between July 1 and July 15, 2005 and no further contractual or financing changes taking effect before June 30, 2006. The change in your 2005/2006 employer contribution rate after you make the proposed lump sum payment, is displayed in the"Change to Total Employer Rate"line below. As of June 30, 2003 $ % 2005-06 Required Employer Contribution $9,535,740 29.957% 2005-06 Discounted Employer Contribution* 9,186,409 * N/A 2005-06 Revised Employer Contribution 0 0.000% Change to Total Employer Contribution Rate 29.9570/o * Par this amount tseee attachment). Your pre-payment 2005-2006 Employer Contribution is from your June 30, 2003 actuarial valuation report. It has been reduced by a half year interest credit at the 7.75%actuarial assumed interest rate(resulting in an approximate 3.66% discount). To the extent your actual 2005-2006 payroll differ from our assumptions, we anticipate the differences will be reflected in your 2008=2009 and later employer caQ—tdbution rates,_ _______ To initiate this change, the enclosed Lump Sum Payment Request must be completed and returned to the Fiscal Services Division with a wire transfer or a check between July 1 and July 15. A copy should be sent to us. If you have questions, please call (888) Ca1PERS(225-7377). Richard Santos Associate Pension Actuary, CalPERS Richard_Santos@calpers.ca.gov enc. Actuarial&Employer Services Division P.O. Box 942709 Sacramento, CA 94229-2709 Telecommunications Device for the Deaf-(916)795-3240 FAX(916)795-3005 LUMP SUM PAYMENT REQUEST Please complete and return this form to the following address,with a copy to the address above. Ca1PERS Fiscal Services Division Attn: Susan Patchett P O Box 1982 Sacramento,CA 95809-1982 If a wire transfer is being used,it should go to the following account: ABA#121000358 Bank of America,San Francisco,CA Credit State of California,CalPERS Account# 1482-80005 Please e-mail Susan Patchett and your actuary on the day of the wire(Susan_Patchett@calpers.ca.gov). Employer Name: CITY OF HUNTINGTON BEACH Employer Number: 0097 Member Group or Plan: SAFETY PLAN Coverage Group affected by the Payment: 74001, 75001, 76001 Amount: $9,186,409 Purpose: To prepay the 2005/2006 employer contribution rate Base(s)to which payment is applied: N/A In recognition of our payment please revise our employer contribution rate effective July 1, 2005: Name and Title: (Please Print): --- Signature: Date: -- Mailing Address: Street Address: City/State/Zip: Telephone Number: Fax Number: E-mail Address: ATTACHMENT #2 Actuarial & Employer Services Division P.O. Box 942709 Sacramento, CA 94229-2709 Telecommunications Device for the Deaf-(916) 795-3240 FAX(916) 795-3005 June 6, 2005 Employer Number : 0097 Employer Name : CITY OF HUNTINGTON BEACH Rate Plan: MISCELLANEOUS Re: Prepayment of the employer contributions for fiscal 2005-2006 Dear Ms. Russell: As requested, 2005-2006 employer contribution rate information on your lump sum payment follows. If you are aware of others interested in this information (i.e.payroll staff,county court employees, port districts,etc.), please inform them. The information is based on the most recent annual valuation and assumes payment made between July 1 and July 15, 2005 and no further contractual or financing changes taking effect before June 30, 2006. The change in your 2005/2006 employer contribution rate after you make the proposed lump sum payment, is displayed in the"Change to Total Employer Rate"line below. As of June 30, 2003 $ 2005-06 Required Employer Contribution $2,918,426 7.182% 2005-06 Discounted Employer Contribution* 2,811,513 * N/A 2005-06 Revised Employer Contribution 0 0.000% Change to Total Employer Contribution Rate 7.182% * Par this amount tsee attachment). Your pre-payment 2005-2006 Employer Contribution is from your June 30, 2003 actuarial valuation report. It has been reduced by a half year interest credit at the 7.75%actuarial assumed interest rate (resulting in an approximate 3.66% discount). To the extent your actual 2005-2006 payroll differ from our assumptions, we anticipate the differences will be reflected in _your 2008-2009 and later employer contribution rates. To initiate this change, the enclosed Lump Sum Payment Request must be completed and returned to the Fiscal Services Division with a wire transfer or a check between July i and July 15. A copy should be sent to us. If you have questions, please call (888) CaIPERS (225-7377). Richard Santos Associate Pension Actuary, CalPERS Richard_Santos@calpers.ca.gov enc. Actuarial&Employer Services Division P.O. Box 942709 Sacramento, CA 94229-2709 Telecommunications Device for the Deaf-(916)795-3240 FAX(916)795-3005 LUMP SUM PAYMENT REQUEST Please complete and return this form to the following address,with a copy to the address above. CalPERS Fiscal Services Division Attn: Susan Patchett P O Box 1982 Sacramento,CA 95809-1982 If a wire transfer is being used,it should go to the following account: ABA#121000358 Bank of America,San Francisco,CA Credit State of California,CaIPERS Account# 1482-80005 Please e-mail Susan Patchett and your actuary on the day of the wire(Susan_Patchett@calpers.ca.gov). Employer Name: CITY OF HUNTINGTON BEACH Employer Number:0097 Member Group or Wan: MISCELLANEOUS PLAN Coverage Group affected by the Payment: 70001 Amount: $2,811,513 Purpose: To prepay the 2005/2006 employer contribution rate Base(s)to which payment is applied: N/A In recognition of our payment please revise our employer contribution rate effective July 1, 2005: Name and Title: (Please Print): Date: - — Mailing Address: Street Address: City/State/Zip: Telephone Number: Fax Number: E-mail Address: RCA ROUTING SH ET INITIATING DEPARTMENT: FINANCE SUBJECT: Prepayment of the PERS Employer Contributions COUNCIL MEETING DATE: July 5, 2005 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Attached ❑ Contract/Agreement (w/exhibits if applicable) Not Applicable (Signed in full by the City Attorney) Subleases, Third Party Agreements, etc. Attached ElNot Applicable (Approved as to form by City Attorney) Certificates of Insurance (Approved b the CityAttorne Attached ❑ pproved y y) Not Applicable Fiscal Impact Statement (Unbudget, over $5,000) Attached ❑Not Applicable Bonds (If applicable) Attached ❑Not Applicable Attached ❑ Staff Report (If applicable) Not Applicable Commission, Board or Committee Re ort If applicable Attached El p ( pp ) Not Applicable Find in s/Conditions for Approval and/or Denial Attached El g pp Not Applicable EXPLANATION FOR:MISSING ATTACHMENTS REVIEWED:_: RETURNED FORWARDED Administrative Staff ( ) Assistant City Administrator (Initial) City Administrator (Initial) ( ) ( ) City Clerk ( ) EXPLANATION FOR'RETURN OF ITEM: Only)(Below Space For City Clerk's Use RCA Author: Villella, ext. 5225 JUL-05-2005 TUE 08:23 AM K & S AIR CONDITIONING FAX NO. 714 685 1-280 P. 01 HUNTINGTON BEACH TOMORROW P. O. BOX 865, HUNTINGTON BEACH, CA 92648 "?Making a difference today for Huntington Beach tomorrow PHONE: (714) 840-401 5 E-MAIL: INFO@HBTOMORROW.ORG www.hbtomorrow.org July 3, 2005 Mayor Jill Hardy and City Council o CZ: City of Huntington Beach 2000 Main Street Huntington Beach, California 92468 Subject: Payment of PERS Employer Contributions J Y (July 5, 2005 Agenda Item E-2) � �- Dear Mayor Hardy and City Council Members: The staff report on Agenda Item E-2 states that funding sources are available within various funds that usually have PERS obligations to meet the 2005-2006 $12-million PERS payment. HBT respectfully requests the City Council to direct the City Administrator to provide the Council with a report, available to the public, that projects amounts of future PERS obligations in Huntington Beach and details how the city will pay for these obligations. HBT would like the report to inform citizens as to whether these funding sources can also be used to fund the pothole filling, graffiti removal and arterial sidewalk cleaning that residents continue to complain about. Or are citizen services now being impacted by the City's employee fund pension contributions? The Grand Jury report, `Another County Crisis", criticized both recent County Boards of Supervisors for raising the county's pension contributions by nearly 300% and former Boards for failing to establish pension reserves in good economic times. When we read about the fiscal problems caused by increased pension benefits in the county and other cities in the state, it's natural for citizens to become concerned about the situation in Huntington Beach. Very truly yours, H TIN TO EACH TOMORROW Davi G o Presi nt C: City Clerk City Administrator HB Independent HB Wave JUL-05-2005 08:23 714 685 1280 95% P.01