January 21, 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

Anti-Vaccine and Mask Rally Coming to Santa Monica This Weekend

January 20, 2022

January 20, 2022

Ocean Avenue protest will draw 300-400 people Saturday By Sam Catanzaro 300-400 people are expected to attend an anti-vaccine and...

Popular Taco Spot Coming to Santa Monica

January 19, 2022

January 19, 2022

Tacos Tu Made opening in former Obica space By Dolores Quintana A popular taco spot is opening its first Santa...

Arrest Made in Murder of Brianna Kupfer

January 19, 2022

January 19, 2022

Shawn Laval Smith in police custody By Sam Catanzaro Police have arrested a man suspected of the murder of Brianna...

Police Say Suspect in Brianna Kupfer Murder Case Has Been Seen in Santa Monica

January 19, 2022

January 19, 2022

UPDATE: Shawn Laval Smith, the suspect responsible for the murder of Brianna Kupfer is in custody, after being located and...

160 Santa Monica City Employees Have Confirmed COVID Infections

January 19, 2022

January 19, 2022

Public Works employees record most cases among workforce By Dolores Quintana Among Santa Monica city employees there are a total...

Effort to Recall LA City Councilmember Mike Bonin Falls Short

January 19, 2022

January 19, 2022

Final tally 1,350 signatures short of required amount  By Dolores Quintana The group that attempted to recall Los Angeles City...

World’s Largest Wildlife Crossing Set to Break Ground

January 18, 2022

January 18, 2022

Crossing over the 101 Freeway set to break ground this spring By Sam Catanzaro The world’s largest wildlife crossing will...

Santa Monica Unified Among Top School Districts in California

January 18, 2022

January 18, 2022

SMMUSD earns high marks in Niche survey By Sam Catanzaro The Santa Monica-Malibu Unified School District (SMMUSD) is among the...

Los Angeles Homeless Count Postponed Amid COVID-19 Surge

January 18, 2022

January 18, 2022

LAHSA count to take place February 23 for Westside By Sam Catanzaro On Friday, the Los Angeles Homeless Services Authority...

Anti-Semitic Fliers Linking Jewish People to Anti-Vaxx Movement Posted at Santa Monica Schools

January 17, 2022

January 17, 2022

Police investigation incidents at Eddison, Will Rogers, McKinley and Grant elementary schools By Sam Catanzaro Santa Monica police are investigating...

Demolition Delayed For Parking Lot 3 Due to Injunction: Santa Monica Beat – January 17th, 2022

January 17, 2022

January 17, 2022

Local news and culture in under 5 minutes.*  New Covid Policies For SMMUSD Unvaccinated Students*  Demolition Delayed For Parking Lot...

Tsunami Leaves Santa Monica Undamaged

January 17, 2022

January 17, 2022

Volcanic explosion in Tonga sends small tsunami to West Coast over the weekend By Sam Catanzaro A tsunami that reached...

Tsunami Advisory Issued, Lifted for Santa Monica

January 15, 2022

January 15, 2022

Update: the National Weather Service canceled the tsunami advisory at 12:37 a.m. January 16. No damage expected for Santa Monica...

Santa Monica Vons’s Development Sees Design Changes

January 14, 2022

January 14, 2022

Santa Monica’s 710 Broadway development design changes shown in new renderings By Dolores Quintana The 710 Broadway Project developer has...

Bel Air Megamansion ‘The One’ Is Finally Being Put up for Sale

January 14, 2022

January 14, 2022

$295 million asking price for infamous property By Dolores Quintana The One, the most famous of all the megamansions and...