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TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
1) Provide Staff with direction regarding the assignment to the Finance Advisory Committee regarding the analysis of the City’s employee retirement plan and employee post-retirement health insurance; and
2) Authorize an additional budget appropriation during FY05-06 of $25,000 for the retention of pension and benefit consultants to assist Staff and the FAC during the preparation of the Analysis described in this report and ADOPT RESOLUTION NO. 2006- , A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES AMENDING RESOLUTION NO. 2005-53, THE BUDGET APPROPRIATION FOR FY05-06,
BACKGROUND AND DISCUSSION:
During the Budget Policy Workshop on April 29, 2006, the City Council directed Staff and the Finance Advisory Committee (the “FAC”) to study possible changes to the City's employee retirement plan, as well as the possibility of providing post-retirement health insurance. The City Council asked that the analysis include all of the impacts, both fiscal and non-fiscal, of different retirement plan alternatives, including the possibility of requiring employees to make contributions to the existing pension plan (the “Analysis”). The Analysis and report should be presented to the City Council with sufficient time to consider prior to the adoption of the FY07-08 Budget. Staff seeks clarification and direction regarding the Proposed Scope and Budget Adjustment that follows.
Proposed Scope – Analysis Of Employee Retirement Plan And Employee Benefit Plans
Staff suggests that the Analysis shall include:
1) Various options regarding the retirement plan, including the possibility of requiring employees to make contributions to the existing pension plan or making no changes to the current plan;
Proposed Budget Adjustment For FY05-06 In The Amount Of $25,000 For The Retention Of Pension And Benefit Consultants To Assist Staff And The FAC During The Preparation Of The Analysis
Staff proposes a budget adjustment for FY05-06 in the amount of $25,000 for the retention of pension and benefit consultants to assist Staff and the FAC during the preparation of the Analysis. Although most all of the services would be performed by the pension and benefit consultants during FY06-07, the approval of the proposed budget adjustment would enable Staff to immediately retain the consultants to begin working with Staff during the preparation of the draft scope of the assignment for presentation to the FAC at its meeting on July 26, 2006. In the event Staff and the FAC determines that additional support will be required by pension and benefit consultants prior to completion of the assignment, Staff will bring back a second request for a budget adjustment.
It’s expected that the pension and benefit consultants will be retained in late June or early July 2006. Staff would work with the consultants to prepare a draft scope of the assignment for presentation to the FAC at its meeting on July 26, 2006. Staff expects that the pension and benefit consultant shall present a draft of its analysis to the FAC at a meeting in November 2006. Staff expects that the FAC will present its recommendation to the City Council in February 2007. The timeline should allow sufficient time for further revision of the analysis or the FAC recommendation prior to conducting the FY07-08 Budget Policy Workshop in April 2007.
The proposed budget appropriation for the retention of pension and benefit consultants would decrease Estimated General Fund reserves by $25,000 during FY05-06. Staff has attached the FY 05-06 Statement of Estimated General Fund Reserves.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES AMENDING RESOLUTION NO. 2005-53, THE BUDGET APPROPRIATION FOR FY05-06