08.d. Golden Handshake ProgramMEMORANDUM
TO: CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
SUBJECT: CONSIDERATION OF CALPERS GOLDEN HANDSHAKE PROGRAM
DATE: MAY 22,2012
RECOMMENDATION:
It is recommended the City Council approve the cost and use of the CalPERS
"Golden Handshake" program for individuals in the Lead Worker classification.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
It is anticipated that one employee in this classification will participate in the Golden
Handshake program. The total cost over 20 years will be approximately $55,180 with
an annual cost of approximately $2,750. The annual savings in salary and benefits is
roughly $81,000. It will be recommended to hire one additional part-time
maintenance worker as a result of the vacancy, making the total projected annual net
savings approximately $55,000. It is likely that the majority of this savings will be in
the Water and Sewer Funds.
BACKGROUND:
Recommendations to restructure the Recreation and Maintenance Services
Department were presented to, and approved by, the City Council at the April 24'h
meeting. At that time, staff informed the Council that recommendations would be
made in phases as staffing assignments were assessed and determined. Therefore,
this recommendation is a follow-up and consistent with those recommendations.
ANALYSIS OF ISSUES:
One of the Lead Workers has expressed an interest in the Golden Handshake
program. It has been determined that eliminating this position can generate
additional savings and help address objectives established in the maintenance
services assessment. The proposal has been discussed with both the remaining
supervisor and union representatives, all of which have concurred with the proposed
change.
The loss of position will likely require transfer of one maintenance worker from the
Utilities Division, which would be replaced with the addition of one part-time position.
Agenda Item 8.d.
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CITY COUNCIL
CONSIDERATION OF CALPERS GOLDEN HANDSHAKE PROGRAM
MAY 22,2012
PAGE 2
The loss of position will likely require transfer of one maintenance worker from the
Utilities Division, which would be replaced with the addition of one part-time position.
As a result, much of this savings will likely be created in the Water and Sewer Funds.
While this will not help address the General Fund shortfall, it will help address
projected shortfalls that also exist in those funds. The Lead Worker position is
proposed to be filled by an existing maintenance worker. One full-time maintenance
worker position will be eliminated, which will meet the CalPERS requirement of a net
loss of one position.
CalPERS requires the costs be presented at a public meeting and then a Resolution
be adopted at the following meeting to approve participation. Therefore, the
Resolution will be provided to the Council for final approval at the June 12, 2012
meeting.
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
1. Approve staffs recommendations;
2. Do not approve the Golden Handshake program; or
3. Provide staff other direction.
ADVANTAGES:
The recommendations will generate cost savings, increase efficiency, enable
additional restructuring to improve operations, and provide promotional opportunities
for existing staff.
DISADVANTAGES:
There will be an overall reduction of staffing and a loss of existing expertise and
knowledge.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICA'TION AND COMMENTS:
The agenda was posted in front of City Hall on Thursday, May 17, 2012 and on the
City's website on May 18, 2012.
Attachment:
1. CalPERS Two-Years Additional Service Credit Cost
Agenda Item 8.d.
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Attachment 1
CALPERS TWO YEARS ADDITIONAL SERVICE CREDIT COST
Salary Savings: $182.395 Cost: $1 15,071.27
Classification
Maintenance Services Lead Person
Maintenance Services Lead Person
Maintenance Services Lead Person
Total Annual Payroll For Miscellaneous
Employees: $3,269,232
Annual Cost For All Eligible
Employees:
Annual Pay Rate
$60,313
$58,836
$63,246
$1 15,071113.24 = $8.6911$3,269,232 = 0.0026584 (increase in PERS rate)
0.0026584 X $3,269.232 = $8.691
Annual Salary Savings $1 82,395
Cost Factor
0.64
0.64
0.67
Approx. Cost Over 20 Years $8,691 X 20 = $173,820
Annual Cost For Those Committed $36,525113.24 = $2.7591$3,269.232 = 0.0008439 (increase in PERS rate)
0.0008439 X $3,269232.00 = $2,759
Annual Salary Savings $58.836
Approx. Cost Over 20 Years $2,759 X 20 = $55,180
No Survivor
Allowance
0.97
0.97
0.97
COLA
3.4, or 5%
No
No
No
Additional Employer
Contributions
$37,442.31
$36,525.39
$41,103.58
Agenda Item 8.d.
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Agenda Item 8.d.
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