HomeMy WebLinkAboutA002 - Council Action Form dated June 11, 1991 ITEM /
DATE
COUNCIL ACTION FORM
SUBJECT: Ordinance Amending Utility Retirement System
BACKGROUND:
At its April 23rd meeting, the City Council received a report from the Utility
Retirement System Board outlining their long range plan for this system over
the next five+ years. Following that presentation, the Council directed the
City Attorney to prepare an ordinance which would implement the recommended
first-year changes to this system. A question was raised by Councilmember
Parks, however, regarding the advisability of lowering the normal retirement
age to 62.
The Utility Retirement System Board discussed this issue in greater length at
its May 30th meeting. Included among their deliberations was a report on this
same subject from Employee Relations Director Paul Gierasch to the City Manag-
er (copy attached). The Board ultimately determined that its highest priorities
were for the system to move to a 2.1% basic retirement benefit and for the
system to include a 1.25% annual inflationary adjustment, in that all other
improvements were secondary to these multi-year goals. The Board then passed
a motion to shift the "early retirement at age 62" item back to its list of
secondary priorities, and withdraw its recommendation that the Council include
the early retirement ordinance change at this point in time.
ALTERNATIVES
1. Approve all three of the utility retirement system ordinance changes
which were previously recommended, including improvements to the basic
retirement, inflationary adjustment for disability retirees, and early
retirement at age 62.
2. Approve the two changes which were more recently recommended by the
Utility Retirement Board--i.e. , the increase in basic retirement benefit
and the inflationary adjustment for disability retirees.
3. Do not approve the recommended changes to the Utility Retirement System
ordinance.
MANAGER'S RECOMMENDED ACTION:
It is the recommendation of the City Manager the City Council adopt alternative
#2, approving the Utility Retirement System benefit improvements in the area of
basic retirement and inflationary cost increase for disability retirees.
The City Manager respects and support the Retirement Board's making this
difficult recommendation. Even though many of the system members are in
favor of the early retirement change, the City Manager concurs that improve-
ments to the basic benefit plan so as to keep pace with IPERS basic retirement
benefit improvements is most important. The annual inflationary adjustment for
disability retirees is also supported, since disability retirees could presently
continue on disability for many years with no cost of living adjustment.
The City Manager again emphasizes that future year's improvements to the
system which could be made in conformity with the Board's long range plan
should be contingent upon:
1. The Council's comfort level with the amount of funds required to
finance further benefit upgrades, not to exceed the current 15.60 0
contribution rate (8.89 o City/6.71 o employee);
2. actual implementation of IPERS Plan improvements compared to our
Utility Retirement system (actual implementation of scheduled IPERS
adjustment could be modified due to political or financial considera-
tion; and,
3. inclusion of appropriate progressive features into the disability
portion of the Utility Retirement System.
COUNCEL ACTION•
(Steve, please feel free to add anything else you want to this.)