HomeMy WebLinkAboutRESOLUTION 1989-76Suggested by: City Council
City of Kenai
RESOLIJ'TIONNO. 89-76
A R~SOLUTION OF THE COUNCIL OF THE CITYOFK~NAI, ALASKA, ELECTING TO PARTICIPATE
IN TH~ R~TIRF/~NT INCENTIVE PROGRAM (PROGRAM), CHAPTER 89, SLA 1989, AND
AUTHORIZING THECITYOFK~NAI TO ENTER INTO ANAGR~EHENTWITH THE ADMINISTRATOR
OF THE PUBLIC F/~PLOTEES' ~TI~NT SYSTEM (PERS) TO FUND TH~ COST OF
PARTICIPATION IN THE PROG~UJ~.
WHEREAS, the City of Kenai finds it necessary to reduce costs in this period of
declining revenues; and,
WHE~.AS, the City of Kenai is seeking ways to reduce costs without having to lay
off or terminate qualified employees; and,
WHE~.AS, the City of Kenai is an employer in the Public F~uployees' Retirement
~¥stem and eligible to participate in the ~J~TI~HT INCENTIVE PROG~JLM under
Chapter 89, SLA 1989, which took effect on June 2, 1989.
NOW, THE~FORE BE IT RESOLV~D BY TH~COUNCIL OF THE CITY OFKENAI, ALASKA, that:
for the purposes of Chapter 89, SLA 1989, the ~TIRF/~ENT INCENTIVE
PROG~U/~, the City of Kenai, Organizational Unit, as shown on the
attached list dated November 21, 1989, is designated as elig~J01e to
participate in the Program and all eligible employees in the Unit
may participate in the Program if they so choose;
e
through its participation in the Program, there will be an overall
personal services cost .savings to.the-.F~ployer sufficient to-fund
each eligible employee's participation in the
it is understood that the total cost for designating the City of
Kenai Organizational Untt'as eligible to participate in the Program
is $107,986 (prior to final adjustments) and must be paid to the PERS
within three (3) years;
it is understood that an administrative fee of $756 (.7 percent of
the total cost in Item 3, above) will be paid to the PERS within
thirty days of the signing of the agreement; and,
the Finance Director of the City of Kenai is authorized to enter into
a financial agreement with the PERS to implement the Program and to
commit Employer funds for the costs of the Program.
1
PASSED BY TI~E COUNCIL OF THE CITY OF K~NAI, ALASKA,
1989 ·
this 21st day of November,
ATTEST:
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
--' RETIREMENT'"-INCENT I V E' PROGR'AM'
- ' 'AGREEMENT
Agreement between the Public Employees' Retirement System (hereinafter referred
to as the System) and the ·
(hereinafter referred to as the~~)Ye at ng to par c pat on o .' e
Employer's employees tn the Retirement Incentive Program hereinafter referred
to as the Program).
WHEREAS, the Employer has applted to exercise the provisions of Chapter 89,
SLA 1989 by_ designating O~,~,~..:~,~f.',,..,,/_ ~.; .~._. ~ ~'~.,_ ~_ ~'~,.z~d
participate tn the Program, and
WHEREAS, the governing body by resolution has certified that participation tn
the Program by the Unit will result in a savings to the agency in personal
services costs in accordance with Chapter 89, SLA 1989; and
WHEREAS, the Employer has attached to this agreement:
1. A 11sting of all employees tn the Unit to include:
a) each employee's Social Security Number;
b)
an indication next to each employee's name as to whether or .not
that employee is eligible to participate tn the Program; and
c)
d)
an indication next to each eltgtble employee's name as to
whether or not that employee has irrevocably waived his or her
right to parttct-pate'tn'the Program; and
the cost of participation tn the Program for each employee whO'-'
has not waived the right to participate in the Program.
Stgned notifications of termination and application for retirement
for those employees who have elected.to participate tn the Program.
Signed waivers for those employees who have waived their right to
participate in the Program. ·
THEREFORE, the Employer and System agree as follows:
The System shall perform all acts as required or authorized by the
provisions of the Act to include the processing and appointment to
retirement of all employees in the Unit who are eligible, who have
not waived the right to participate, and who make timely application
as required under the Act.
6/602/062903-9/1
The Employer is indebted to the System for the cost of the incentive
for all employees in the Unit who retire under the Retirement
Xncentive Program. That amount may be as much as: $ ~-~..J.9~' I '
The Employer is also indebted to the System for the costs of
administra, t. ion of the.Prpgram, a first installment of which is
payable within thirty (30) days of signing this agreement. That
first installment is equal to seven-tenths of one percent of the
maximum cost of the RIP and is: $ ~,;~r' . Additional payments
for costs of administration may be r~quired' but in no case will the
total exceed two percent of the maximum cost of the Program.
3. The Employer agrees to reimburse the System in the following manner:
an initial payment ofi $ ~_~ (which is greater, than or
equal to the first ns~of the administrative fee),
before , and, if any indebtedness remains,
1. a first installment payment equal to at least one-third of
the_ indebtedness, including interest*, payable b.y August 1,
197/ ; a second in.s. tallment equal to at least one half of any
remaining outstanding indebtedness, including interest*,
payable by August 1, 199~ , and a third installment equal to
the remaining indebtedness, including interest*, payable by
August 1, 19~.L.
a lump sum equal, to the sum of the participant costs and the
payment of administrative costs specified in number two above.
It is agreed that any adjustments resulting in either addi-
tional costs or refunds will be made after the close of the
window period.
* The interest, at the System rate, will be determined by the System based on
_.the_date of..this .agreement, the total outstanding indebtedness, and the dates
of the payments. Payments must commence no later than August 1, 1991.
It is understood and agreed by both parties
System will be adjusted to reflect the actual
individuals retired, following the close of
The Employer shall be notified of any further
that payments to the
costs incurred for the
the incentive period.
payment or refund due.
It is understood and agreed by both parties that amounts owed the
System under this agreement take priority over other obligations of~
the Employer to the maximum extent permitted by law, and that any
amounts due the Employer from the State may be attached by the
System.
ESTIMATED SAV IN$S
Number .of designated employees:
Total cost tf destgnatedemployees .rematn
for three years:
DedUct* es ttma ted' cos t 'to replace'* emp l°Yees
over three years:
Gross savtngs over a three-year pertod:
Deduct total estimated employer costs of Program:
Net savtngs:
For the Employer
.... re gent
$tgnatu df Deslg~ted' Employer 'A, .......
,, Date ,,
For the Retirement System
Approved: ·
'~tgna~ure of-/~dm'tn~'~tratoF
' "D'at*e '
MEMO TO:
FROM:
DATE:
SUBJECT:
Kenai City Council
Charles A. Brown, Finance Director
November 13, 1989
RETIREMENT INCENTIVE PROGRAM (R.I.P.)-
At your November 21, 1989, Council Meeting, you will find a ~esolution
authorizing participation in the R.I.P. Attached to the resolution
is the list of six employees in the organizational unit and a draft of
the agreement with PERS.
After Council adopts the resolution, I will distribute information,
including R.I.P. applications and waiver forms, to the employees in
the unit. After allowing a short time for them to either apply for
R.I.P. or waive participation in R.I.P., I will complete'the agreement
and send it to PERS. Council should understand that the dollar
amounts in the agre~aent will change: first, based on employee
waivers, and again based on final cost adjustments computed by PERS.
Eligible employees have until March 31, 1990, to decide if they want
to participate in R.I.P. However, I must send in the R.I.P. agreement
long before that so that those employees who may want to retire soon
may do so. For any employee who does not sign a waiver within a week
or two of notification, we will tentatively assume that they will
participate.
After April 1, 1990, but before June 30, 1990, I will propose an
ordinance to appropriate money to pay PERS for the Cityts cost.
will suggest that we pay PERS in lump sum, rather than in three
payalentS with interest. -' '
I
Attached to this memo you will find a complete list analyzing costs
relating to all 18 e~ployees that appeared on the Statets list. I
have not made this last part of the resolution~ I wanted to avoid
confusion and the possibility that some employees might think they are
eligible because they are on the Starers list. I draw your attention
to the last employee (Janet Ruotsala) on the full list dated November
9, 1989. As I have said many t~es, I do not give any assurances that
replacement salaries for the City Manager, City Attorney, an~ City.
Clerk are correct. Those salaries will be set by Council, perhaps a
future Council. Janet has questioned the proposed replacement
salaries of $40,000, $42,000, and $44,000 for the 3-year period.. She
has suggested that replacement salaries of $39,000, $40,000, and
$41,000 are more reasonable. A workpaper which is also attached to
this memo shows that the lower replacement salaries would result in a
savings of $738 (as opposed to a loss of $6,845 using the higher
replacement salaries originally proposed).
pa~e 2 .... =-- memo aha has not had
' is at ~unicipal League as I am writing
understand that she will present
Janet res. I If Council
~,_~ ~ ~ubstantiate her fi~ ~. ,aoo council Meeting. . ....
way), then the ~oilowa-~
the esolution:
r . ~_ ~i~natea o=gani~ational
Unit (the list 9a=~o.~'~. Routsala in accoraance with
soh~ion) to ~nC~uae ~ ~..an ana $41,000.
of $86,395),
3. Amend Section 4 of the resolution to reaa $756 (instead of
$605). ts stated in the draft agreement will also change
en though the_am°un .
EV · '-- ~e net savings
by lncreas~n~
the resolution and need not be amen~e~.
Attachment
I
I ~.i L.~\ ~ I :'-- ~ , i ~ ~ : I . : I
I ~ ' ,~"~ '1 ~ ,~ ~ ~ ~ ~ ~ I ~ I
I
,= ~: j.: ;...,: .:, . . .'.
~ ~ ~ ' . ~ ~ ~ ' · ' ..;:.
"1 l'l /I/' t I/ l'/
~ ~ ~ ,~ ~ ~ .'~ I I / / . / / / / I /
~ ~ ~ , ~ ~ !~ , ~ I I I / t / / / / I · /
.. -1 ~'._1",.; "~ .~" .1,".1-I _J.._i .1 ./.. 1 .... I... 1.l ...... /I: ..... I
J-' J J't-1 I .... I-/
. ~I:'t~t ! ' · .: '
~ I~ I~ s~ ~ ~ :~ t .1:.:!~:1-t. I / I / I / /
-/ ~ ' .J- i !~ '
. .~.-' .,....:,,. :..:..,-..'.'...?.'', ~':.~... :.~...:.,.}.:...: .,:.".~, :}.:-?.,.'.~.': ,~ ~:..;,:..,~..:,:,','.~.';',...:,.~.~,:..' ~..:.::.::.:.~¢:..,.,,;. :.~:,./,.~- . . ... . .. -~ -..,. -.,..~- .... -~.,~.-,:. ",.:...~ ....
i