June 27, 2022 Breaking News, Latest News, and Videos

CalPERS Amendment May Save Santa Monica Up To $5.4 Million Annually:

Hoping future Santa Monica taxpayers – and council members – do not pay the price for poor fiscal planning, the City Council unanimously adopted a resolution to amend the contract between the California Public Employees’ Retirement System (CalPERS) and City Hall on Tuesday, potentially saving the coastal municipality as much as $5.4 million per year by 2032.

Council members also unanimously approved, in its first reading, an ordinance that would authorize the contract amendment between City Hall and the CalPERS Board.

The amendment, once adopted in second reading, will “establish a second tier of benefits for employees” who are classified as miscellaneous (non-safety) and hired on July 2, which is the first day of the City of Santa Monica’s payroll period. CalPERS benefits will remain the same for employees in miscellaneous (non-safety) classifications who are hired before or on July 1.

“Our pension strategy is three-fold,” City Manager Rod Gould said. “Changing the pensions that are offered our future employee is one piece; changing what our employees pay for their pension is the second; and, paying off our unfunded liability to the extent that we can is our third.”

According to Human Resources Director Donna Peter, the amended agreement, once in effect, would alter how City employees earn retirement benefits when they retire at 55.

Currently, if a City employee retires at age 55, they will earn 2.7 percent of “the 12 highest paid consecutive months,” multiplied by the number of years served (up to 30 years). On July 1, the figure will change to two percent of “the 12 highest paid consecutive months.”

Also, current City employees and those hired through July 1 “would also continue to share the cost of additional retirement benefits.” City Hall would be reimbursed 6.7 percent “of the earnings reportable to CalPERS on a pre-tax basis” and “would continue … to pay and report the value of Employer Paid Member Contributions (EPMC).”

Those hired by the City on July 2 and after will not be eligible for EPMC even though the pre-tax employee contribution is higher.

“Employees in the second tier would not be eligible for EPMC as they would be contributing 7 percent of the employee’s contribution on a pre-tax basis,” the staff report to council members stated. “They would not be required to reimburse the City a percentage of reportable earnings unless otherwise negotiated.”

Council member Bobby Shriver supported the amendment, but prodded staff for not including a detailed financial analysis in its report to the dais.

“This is the single biggest controllable expense of the city,” Shriver said.

He added staff should be required to make a thorough financial analysis in matters such as where much is at stake so that stakeholders can be informed and council members can make the best policy decisions.

“I think that the council’s policy ought to be that whenever there is an amendment to any pension document or any discussion of pension payments that we show this community and the council a detailed analysis of that. It’s an enormous sum of money in play,” Shriver said. “I just think that should be our ‘no exceptions’ policy.”

Gould agreed, adding that an in-depth financial analysis was not included in the staff report presented to Shriver and his colleagues on March 27 because council members had already considered a relevantly similar breakdown last year when City Hall and key public employees negotiated the new CalPERS terms in a cost-cutting effort.

As part of that negotiation, public safety employees – such as police officers and firefighters – heeded a request to pay more into their respective pensions.

The City Manager pointed out as a result of last year’s negotiations and once the approved ordinance is in effect, Santa Monica will experience a significant savings in the long-run.

“It will be some time before there is a significant changeover in workforce,” Gould said. “Nonetheless, we believe that these savings will accrue at about $269,000 per year, topping out at approximately $5.4 million per year in pension savings when the full workforce turnover occurs, probably in 20 years. This change really doesn’t help us balance the budget much in the immediate term. Your successors several times over will thank you for taking this action.”

According to Peter, the approved ordinance will be on the council’s agenda for a second reading and formal adoption at its April 24 meeting.

Council member Pam O’Connor was not present at the March 27 meeting.

in News
Related Posts

The Los Angeles Real Estate Market May Finally Be Slowing Down

June 24, 2022

June 24, 2022

Real estate sales drop 21 percent in past year By Dolores Quintana The Los Angeles real estate market is showing...

Redevelopment Complete of Former Westside Pavilion Macy’s

June 24, 2022

June 24, 2022

Developer announces complete of West End at Pico and Overland Developer HLW, on behalf of GPI Companies and in partnership...

Mayor Himmelrich’s Tax Transfer Measure Is Favored to Qualify for the November Election

June 24, 2022

June 24, 2022

In a cursory review, the City Clerk’s office verified 10,277 of the over 11,000 signatures  By Dolores Quintana Santa Monica...

Active Shooter Training Set for Santa Monica Middle School Friday

June 23, 2022

June 23, 2022

Drill to take place at John Adams Middle School Friday morning By Sam Catanzaro ​​An active shooter training will take...

Metro Church and Cafe Fundraising To Keep Space in Santa Monica

June 23, 2022

June 23, 2022

Non-profit church and coffee shop shut down following false vermin complaint By Dolores Quintana Metropolis Santa Monica is a multi-use...

New Coffee Shop Open on Montana Avenue

June 23, 2022

June 23, 2022

Go Get ‘Em Tiger up and running on corner of Montana and 10th  By Dolores Quintana A new coffee shop...

15-Year Department Veteran Selected as Santa Monica’s Next Director of Library Services

June 22, 2022

June 22, 2022

Erica Cuyugan leads Santa Monica Public Library After performing a nationwide search, the City of Santa Monica recently selected Erica...

Cardboard City Returning to Santa Monica This Weekend

June 22, 2022

June 22, 2022

5,000 square foot innovative pop-up art installation returns June 25 with opening ceremony  Cardboard City, a 5,000 square foot innovative...

The Book Jewel Celebrates Pride Month as a Community

June 22, 2022

June 22, 2022

Westchester bookstore hosting series of events this month The Book Jewel in Westchester is hosting several events this month that...

Santa Monica Resident Injured in Apartment Fire

June 21, 2022

June 21, 2022

Pico Neighborhood apartment catches fire last week By Sam Catanzaro A Santa Monica resident was injured in an apartment fire...

Bonin Requests Lease Extension for a Bridge Home Homeless Shelter

June 21, 2022

June 21, 2022

Motion currently pending in City Council committee  By Sam Catanzaro Los Angeles City Councilmember Mike Bonin is pushing to extend...

Mountain Lion Killed by Vehicle Near the Same Spot Her Mother Was Fatally Struck in 2018

June 21, 2022

June 21, 2022

P-54 killed on Las Virgenes Road last Friday By Sam Catanzaro Not too far from where her mother was hit...

Rent Board Has Approves Highest Rental Increase In 40 Years: Santa Monica Beat – June 20th, 2022

June 20, 2022

June 20, 2022

Local news and culture in under 5 minutes.* Rent Board Has Approves Highest Rental Increase In 40 Years * Recreational Marijuana...

Santa Monica Families Earning Upwards of $190,000 Can Qualify for Mortgage Relief

June 17, 2022

June 17, 2022

State expands California Mortgage Relief Program By Sam Catanzaro Santa Monica families earning upwards of $190,000 can qualify for mortgage...