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Home My WebLink AboutITEM VIII-B-2 i, CI7YOF_ * * ~ AGENDA BILL APPROVAL FORM ~t --WASHINGTON A enda Sub'ect: Resolution No. 4644 Date: Se tember 28, 2010 Department: Attachments: Resolution No. 4644 Budgef Impact: Human Resources ' Administrative Recommendation: City Council adopt Resolution No. 4644. Background Summary: Resolution authorizing the city council to pay the employer's portion of past retirement credits for council members not including interest. When council members are elected to the office of City Council, they are entitled, by state law, to participate in the public employment retirement system which would entaiF contributions by the employee as well as contributions by the employer. Many times council members have chosen notto participate in the system at the time that they first could, and the law does allow Councilmembers to later join, including catching up for prior service credits. However, unless the City Council; by a majority vote, approves , payment of the employer contribution, which eould include interest, those costs, on fop of the employee contribufion, would fall on the shoulders of the City Councilmembers. State law does allow the City to pay its portion of fhose past retirement credits plus interest for the employer contribution amounts, if approved by a majority of the City Caunc'il. In such a situation; the Councilmember would have to pay the employee contribution amounts. It was requested ttthat a resolution be presenfed which would authorize paymenf of back-employer contributions for past retirement credits, leaving only the employee contribution amounts, plus interest; for the Councilmembers to pay to be fully funded on the retirement system. A1004-1 A4.1.7 Reviewed by Council S Committees: Reviewed by Departments 8 Divisions: El Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O ❑ Airport 0 Finance ❑ Cemete.ry ' O Mayor Hearing Examiner ~ Municipal Serv. - ❑ Finance ❑ Parks . ❑ Human Services ❑ Planning & CD p Fire O Planning p Park Board ❑PublicWorks ❑ Legal ❑ Police. ❑ Planning Comm. ❑ Other ❑ Public Works ❑ Human Resources Action: - Committee Approval; ❑Yes ❑No Council Approval: OYes ❑No • Call for Public Hearing Referred to Uritil Tabled Until Councilmember: Backus Staff: Heineman Meetin Date: October 4, 2010 Item Number: VI11.6.2 AUBURN * MORE THAN YOU 1MAGINED RESOLUTION NO. 4 6 4 4 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBU,RN, WASHINGTON, AUTHORIZING THE CITY TO PAY THE EMPLOYER CONTRIBUTIONS FOR COUNCILMEMBERS WISHING TO PARTICIPATE IN THE WASHINGTON STATE DEPARTMENT OF RETIREMENT SYSTEMS FOR PAST RETIREMENT CREDITS WHEREAS, elected councilmembers are_ entitled to participate in the retirement programs .for public_ employees of, the Washington State Department of Retirement Systems; and WHEREAS; participation , in the retirement program involves an employer contribution as well as an employee contribution; and WHEREAS, participation in the retirement system by councilmembers is not required; and WHEREAS, if, after-the-fact, the members of the City Council wish to participate in the retirement system, the councilmember would have to pay back-contribution amounts for both the employer and the employee, plus interest; and 1NHEREAS, the regulations ofi the Washington State Department of Retirement Systems allow a City Council to approve, by a majority vote, payment of back- contribution amounts for the employer's share and intecest; and WHEREAS, in recognition of the contribution that councilmembers make for the City and acknowledging, as well, that participation in,the retirement system is a right of _ the councilmember, it is in the best interests of the City to pay the back-contributions of the employer contribution amounfs for past retirement credits, leaving the councilmember fo pay the employee contributions and interesf for past retirement credits. - NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, HEREBY RESOLVES asfollows: Section 1. That if currently serving councilmembers for the City, of Auburn, Washington, choose fo participate in the retirement programs for public employees. of the 1Nashington State Department of Retirement Systems, the City shall pay back= con.fributions of the employer contributions, as provided for in the rules for local officials ofithe Washington State Department of Retirement Systems. Resolution No. 4644 September 28, 2010 Page 1 of 2 Section 2. That this Resolution shall authorize the City's payment of the employer contributions for back-payment amounts for past retirement credits, as determined by the Washington State Department of Retirement Systems, as set forth on the document listing such amounts attached hereto, matked as Exhibit "A" _and incorporated herein by this reference, for councilmembers wishing to participafe in the City retirement system for prior service, with the councilmember paying his or her back- payment amounts for past retirement credits for the employee contribution amounts, plus interesf. "Henceforth, effective January 1; 2011, any new councilmembers or existing councilmembers who have not previously participated in the retirement programs for public employees of the Washington State Department of Retirement . Systems who wish to participate in the retirement programs for past retirement credits shall be responsible for payment. of back-contribution amounfs for the employer contributions, employee contributions and interest. For the purposes of this Resolution 'iback-contribution amounts" refers to the retirement program contributions for past elective service. Section 1That the Mayor is authorized to ;take such administrat'ive steps as are necessary to implement the directives. of this legislation, including development of a standardized reporting form to accommodate tracking of elected city councilmember service hours used to calculate retirement credits, which standardized reporting form shall be approved by the City Council. Section 4. That this Resolution shall be effective upon passage and signatures hereon. Passed by the .City Council this day of , 2010. PETER B. LEWIS, MAYOR ATTEST: Danielle E;. Daskam, City Clerk APP VED S TO FOR . iel B. , ity Attorne Resolution No. 4644 September 28, 2010 Page2of2 COUNCIL MEMBER AND CITY CONTRIBUTIONS TO PERS Estimated contributions by Councilmembers and City for PERS Credit for All Past Service Thru September 2010 Member Cont Member Interest Employer Int Total Member Payment Employer Cont Total Councilmember Wagner $6,150.38 $10,157.85 $15,912.66 $32,220.89 $9,423.33 $41,644.22 Deputy Mayor Singer $3,409.37 $3,733.37 $5,914.38 $13,057.12 $5,122.58 $18,179.70 Councilmember Backus $2,226.94 $642.23 $836.70 $3,705.87 $3,061.92 $6,767.79 Councilmember Norman $921.12 $378.92 $467.02 $1,767.06 $1,167.52 $2,934.58 Councilmember Peloza $921.12 $378.92 $467.02 $1,767.06 $1,167.52 $2,934.58 Councilmember Hau en $842.16 $2,136.47 $3,232.78 $6,211.41 $1,274.64 $7,486.05 Councilmember Partridge na na na na na na Total $14,471.09 $17,427.76 $26,830.56 $58,729.41 $21,217.51 $79,946.92 The law allows that for prior service credit, the Council and the City may agree on which pays back interest. The above chart shows the costs to the member to pay his/her back contribution, plus his/her back interest, plus the City's back interest (green column). There is also a blue column showing the City contribution amount per council member. Interest in the amount of 1.375% is applied quarterly and compounded. Therefore, for those members who have been in office for a longer period of time, interest may exceed contributions. Estimated contributions by Councilmembers and City for PERS Credit for Current Term Service Thru September 2010 Member Cont Member Interest Member Total Employer Contribution Employer Interest Em lo erTotal Councilmember Wa ner $342.27 $11.64 $353.91 $465.93 $15.85 $481.78 Deputy Mayor Singer $2,045.81 $259.48 $2,305.29 $2,971.47 $984.71 $3,956.18 Councilmember Backus $342.27 $11.64 $353.91 $465.93 $15.85 $481.78 Councilmember Norman $1,450.69 $184.00 $1,634.69 $2,107.03 $272.80 $2,379.83 Councilmember Peloza $1,450.69 $184.00 $1,634.69 $2,107.03 $272.80 $2,379.83 Councilmember Hau en $1,450.69 $184.00 $1,634.69 $2,107.03 $272.80 $2,379.83 Councilmember Partridge $342.27 $11.64 $353.91 $465.93 $15.85 $481.78 Total $7,424.69 $846.40 $8,271.09 $10,690.35 $1,850.66 $12,541.01 Per Department of Retirement Systems (9/29/10), when computing PERS contributions for current term of service, the employee and the employer must pay their share of both the back contribution and back interest. The above chart shows the total cost for each member (green) and the total City cost for each member (blue). Exhibit A Resolution 4644 September 30, 2010