HomeMy WebLinkAbout2009-12-01; City Council; 20055; Modify Requirments Separation Incentive Plan PARSCITY OF CARLSBAD - AGENDA BILL
AB# 20,055
MTG. 12/1/09
DEPT. HR
AUTHORIZATION TO MODIFY REQUIREMENTS
C/~\D OCD A D AT"lf~\M IKIfNCKIT'l\/C Dl AM /CID\rUK obrAKAl IUN INObN I IVb rLAN (olr)
AGREEMENTS THROUGH THE PUBLIC
AGENCY RETIREMENT SYSTEM (PARS)
DEPT. HEAD **KU-
CITY ATTY. (&&
CITY MGR. hj^
RECOMMENDED ACTION:
Adopt Resolution No. 2009-300 modifying the participation requirements for employees
participating in the Separation Incentive Plan (SIP) through the Public Agency Retirement
System (PARS).
ITEM EXPLANATION:
In April 2002 the City of Carlsbad established a Separation Incentive Plan (SIP) through the
Public Agency Retirement System (PARS). This plan is intended for use in situations where
strategic staffing decisions have to be made, such as when a proposed reorganization of a
City department requires the elimination of a current job classification or when the assigned
duties of a particular position have changed so dramatically that an employee no longer
possesses the necessary skills to perform the job. In such instances, it has proven beneficial
to the City to have the flexibility to offer supplemental retirement options to employees who
have made positive, historic contributions to the organization. The SIP allows for a positive
means of ending the employment relationship, resulting in a "win-win" for both parties.
In an effort to reduce expenses and to reduce the number of full-time staff, the City has used
PARS SIP agreements on several occasions to eliminate positions, consolidate jobs and to
downsize the workforce. These early retirement options have been offered to employees who
meet certain requirements, and one such requirement is that the employee must have a
minimum of ten years of service with the City of Carlsbad. Staff recommends a slight
modification to this requirement to allow additional flexibility under the plan. It is suggested
that the City Manager (serving as the Plan Administrator) be given the authority to offer a
PARS SIP to employees who have less than ten years of service with the City. This will allow
the City Manager to use his/her discretion to offer a separation incentive to an employee if it
makes good business sense to do so.
Background
The City of Carlsbad established a Separation Incentive Plan (SIP) through the Public
Agency Retirement System (PARS) on April 1, 2002. When it was first established it was
specifically directed at management employees; the program was then expanded in June
2005 to include non-management employees. Participation in the PARS SIP is currently
subject to the following recommended parameters:
DEPARTMENT CONTACT: Julie Clark 760-602-2438 Julie.Clark@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
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• that the employee be eligible to participate in the PARS SIP as indicated in the PARS
Trust Agreement with the City of Carlsbad,
• that due to the strategic objectives and operational needs of the City, the employee's
position will be eliminated or restructured to the degree that the employee does not
possess the necessary skills for the position,
• that the employee has worked for the City a minimum of ten (10) years and is eligible
for retirement under the CalPERS retirement plan,
• that the full cost of the SIP be covered by the participating department's approved
personnel budget,
• that the action results in cost savings and/or increased efficiencies for the department,
• that the City Attorney, the Finance Director, and the Human Resources Director have
analyzed the respective legal, financial, and staffing implications and each
recommends the action, and
• that the City Manager (and when applicable, the City Attorney), after considering the
recommendations, approves the action.
During these difficult economic times, the City is continuing to look for ways to reduce the
size of the workforce and to restructure departmental operations where appropriate. To that
end, it would provide additional flexibility to the City Manager to offer PARS SIP agreements
to employees with less than ten years of service, if it can be shown that offering such an
agreement to a particular employee makes financial sense for the City. One such example of
this may be a situation in which an employee has previous work experience with another
agency that participates in the CalPERS retirement system. Such an employee meets the
minimum number of years to retire from CalPERS (currently five years) but would not be
eligible under the PARS SIP due to the current requirement of ten years of service with the
City of Carlsbad. In order to address situations of this nature, staff is recommending that the
third bullet point above be modified slightly to read as follows:
• that the employee is eligible for retirement under the CalPERS retirement plan,
• that the employee has worked for the City a minimum of ten (10) years, unless
economic conditions warrant a lesser number of years of service
This program allows the City to offer packages to individual employees or any class or group
of employees that the City feels would benefit from such a program. Eligibility for the
program is determined by the City and may vary in individual circumstances. The PARS SIP
is not a guaranteed privilege for any employee and is available only at the discretion of the
City.
FISCAL IMPACT:
There is no fiscal impact associated with this administrative change.
ENVIRONMENTAL IMPACT:
This amendment is statutorily exempt from CEQA pursuant to Public Resources Code
Section 21080(b)(1).
EXHIBITS:
1. Resolution No. 2009-300
EXHIBIT 1
1 RESOLUTION NO. 2009-300
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA MODIFYING REQUIREMENTS
3 FOR SEPARATION INCENTIVE PLAN (SIP) AGREEMENTS
4 THROUGH THE PUBLIC AGENCY RETIREMENT SYSTEM
(PARS).
5
WHEREAS, to fulfill its mission of providing top quality services, the City of
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Carlsbad continually strives through its strategic goals to improve the efficiency and
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effectiveness of its operations; and
9 WHEREAS, these efforts occasionally require the City to eliminate positions or to
10 restructure positions such that the incumbents no longer possess the necessary skills for
11 the positions; and
12 WHEREAS, the City is currently a member of the Public Agency Retirement
13 Systems (PARS); and
14 WHEREAS, PARS offers its member agencies a variety of products and services,
including retirement incentive programs, such as a Separation Incentive Plan (SIP); and
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WHEREAS, a PARS SIP is a qualifying governmental plan under relevant sections
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of the Internal Revenue Code (§§ 401 (a) and 501 (a)) and the California Government
1 o
Code (§§ 53215 et seq.); and
20 WHEREAS, a PARS SIP provides the City with the flexibility, in appropriate cases
21 of offering incentives in lieu of discharging employees whose positions are being
22 eliminated or significantly restructured due to the implementation of the City's strategic
23 goals and objectives; and
24 WHEREAS, a PARS SIP is administered by Phase II Systems, the PARS Trust
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Administrator, and
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1 WHEREAS, it is in the best interest of the City to modify the recommended eligibility
2 requirements to include employees who have worked for the City of Carlsbad for less than
ic11 yc
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Carlsbad
ten years, provided that economic conditions warrant a lesser number of years of service.
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as follows:
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1. That the participation by an employee in the SIP be subject to the following
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parameters:
a. The employee is eligible to participate in the PARS SIP agreement as stated
10 in the PARS SIP Trust Plan document;
11 b. Due to the strategic objectives and operational needs of the City, the
12 employee's position is being eliminated or restructured such that the employee no longer
possesses the necessary skills for the position;
14 c. The employee is eligible for retirement under the CalPERS retirement plan;
d. The employee has worked for the City a minimum of ten (10) years,
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unless economic conditions warrant a lesser number of years of service,
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e. The full cost of the employee's participation in the SIP is covered by the
approved budget of the department in which the employee works;
20 f- The employee's participation in the SIP will result in cost savings and/or
21 increased efficiencies for the department;
22 g. The City Attorney, the Finance Director, and the Human Resources Director
23 have analyzed the respective legal, financial, and staffing implications and each
ri A
recommends the action; and
25 h. The City Manager (or when applicable, the City Attorney), after the
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considering the recommendations, approves the action.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
of the City of Carlsbad on the 1st day of December, 2009, by the following vote to wit:
AYES: Council Members Lewis, Kulchin, Hall, Packard and Blackburn.
NOES: None.
ABSENT: None.
ORRAlNE M.A/^OOD, City Clerk Q