CC Resolution 2011-012RESOLUTION NO. 2011 - 012
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LA QUINTA, CALIFORNIA, ADOPTING THE CITY OF
LA QUINTA FISCALLY RESPONSIBLE REDUCTION PLAN
(FRRP)
WHEREAS, the City of La Quinta's multi -year Financial Plan currently
identifies a structural budget deficit; and
WHEREAS, the City Council finds it to be in the fiscal interest of the City of
La Quinta (the "City") and its employees to consider the provision of a Fiscally
Responsible Reduction Plan ("FRRP") to eligible employees who wish to voluntarily
exercise their option to separate from City service; and
WHEREAS, under the FRRP, eligible employees are offered participation in a
supplementary retirement plan; and
WHEREAS, the City of La Quinta is a member of the Public Agency
Retirement System ("PARS") Trust for the purpose of providing tax qualified
retirement benefits; and
WHEREAS, the PARS Trust has made available a supplementary retirement
plan (the "PARS Supplementary Retirement Plan"), supplementing CaIPERS and
qualifying under the relevant sections of the Internal Revenue Code and the
California Government Code.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
La Quinta, California, as follows:
1. The City Council does hereby adopt the FRRP, including the PARS
Supplementary Retirement Plan, as described in Exhibit A to this Resolution,
effective 07—I5 2011.
2. The FRRP must have sufficient plan participation to meet the City's fiscal,
managerial and operational objectives. If the objectives are not reached, the
City may withdraw the FRRP. If the City withdraws the FRRP as to some or
all eligible employees, all resignations of employees from whom the offer
was rescinded will be automatically revoked. If the City elects to go forward
with the FRRP, the PARS Supplementary Retirement Plan shall be
implemented, in which case such plan is intended to be a permanent as
distinguished from a temporary program, but the City reserves, in its sole
and absolute discretion, the right to determine which, if any, employees shall
be eligible to participate in the Plan, and the date or dates of their eligibility.
Resolution No. 2011-012
Fiscally Responsible Reduction Plan
Adopted: February 15, 2011
Page 2
3. The City Council hereby appoints the City Manager or his designee as the
City's Plan Administrator for the FRRP and the PARS Supplementary
Retirement Plan, and the individual authorized to determine when and under
what parameters the FRRP may be offered in the future, subject to City
Council approval.
4. The City's Plan Administrator is hereby authorized to execute the PARS legal
and administrative documents on behalf of the City to implement the PARS
Supplementary Retirement Plan and to take whatever additional actions are
necessary to maintain the City's participation in PARS. The Plan
Administrator is further authorized to take whatever additional actions are
required to administer the PARS Supplementary Retirement Plan. In addition,
if the City's Plan Administrator finds that the FRRP benefit must be limited
under Section 415 of the Internal Revenue Code, then the Plan Administrator
will implement replacement benefit programs at no additional cost to the
City.
PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta
City Council held on this 15" day of February 2011, by the following vote:
AYES: Council Member Evans, Franklin, Henderson, Sniff, Mayor Adolph
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
VERONICA JE OI
--City of La Quin."ta,
i
(CITY SEAL)
VTECINO, CMC, City Clerk
California
V IOW
DON ADOL H, Ma r
City of La Quinta, California
Resolution No. 2011-012
Fiscally Responsible Reduction Plan
Adopted: February 15, 2011
Page 3
APPROVED AS TO FORM:
M.*AfTHERINE NSON,Ci ttorneyCitya, Californi
2011 PARS Fiscally Responsible Reduction Plan EXHIBIT A
City of La Quinta
General Employees & Directors
Revised February 15, 2011_ver 8
With regard to the PARS Fiscally Responsible Reduction Plan for 2011, the City proposes the
following:
1.0 Eligibility
1.1 Those Full-time General Employees who:
a) are employed by the City as of February 15, 2011;
b) are sixty (60) years of age as of December 31, 2011;
c) have at least ten (10) years of public service as of June 30, 2011; if over 65,
employee receives an additional '/z year of service credit for purposes of
eligibility;
d) have at least five (5) years of City service as of June 30, 2011;
e) Resign from City employment effective no later than June 30, 2011; and
f) Retire under PERS effective no later than July 1, 2011.
1.2 Those Full-time Directors (excluding the City Manager) who:
g) are employed by the City as of February 15, 2011;
h) are fifty-five (55) years of age as of December 31, 2011;
i) have at least ten (10) years of public service as of June 30, 2011;
j) have at least five (5) years of City service as of June 30, 2011;
k) Resign from City employment effective no later than June 30, 2011; and
1) Retire under PERS effective no later than July 1, 2011.
2.0 Participation Requirements
2.1 Participating employees shall submit all required PARS enrollment materials
and City Letter of Resignation to PARS on or before the deadline date of April 1,
2011. Resignations of participants are irrevocable as of the enrollment deadline
and may not be rescinded unless the City withdraws the incentive pursuant to
Paragraph 2.2 below.
Prepared by PARS (Public Agency Retirement Services) Page I
2011 PARS Fiscally Responsible Reduction Plan EXHIBIT A
City of La Quinta
General Employees & Directors
Revised February 15, 2011_ver 8
2.2 If after the close of the enrollment window the City determines that the plan does not
meet the City's fiscal and operational objectives, the City may withdraw the incentive,
provided it notifies the employees of the withdrawal of the incentive on or before April
20, 2011. If the City withdraws the incentive for employees, Letters of Resignation will
be automatically rescinded.
2.3 Participation in the retirement incentive requires:
a. Submission of required PARS enrollment materials and City Letter of
Resignation to PARS by April 1, 2011;
b. Resignation from City employment effective no later than June 30, 2011;
and
c. Retirement from PIERS on or before July 1, 2011.
3.0 Incentive Payments
3.1 Regarding the basic incentive under this plan:
a) The basic, unmodified benefit shall be a monthly cash payment for the lifetime of
the participant.
b) The monthly cash payment amount shall equal one -twelfth of six percent (6.00%)
of Final Pay.
c) For purposes of this plan, Final Pay shall be defined as the employee's current
base annual salary as of June 30, 2011 exclusive of any additional pays (i.e.
longevity pay, differential pay, special duty pay, special assignment pay,
educational incentive pay and CaIPERS EPMC Contributions, if applicable).
3.2 Alternative monthly forms of payment of equivalent present value to the basic benefit
shall be offered. They shall include:
a) Joint -and -survivor payments;
b) Payments made for the life of the participant, subject to a ten year minimum; and
c) Fixed term payments of from five (5) to fifteen (15) years. These payments are
guaranteed to the participant for the full term selected.
3.3 The amount of monthly payment shall be fixed as of April 1, 2011 and shall not be
subject to increase thereafter.
rreparea oy rAres (ruDuc Agency Retirement Services) Page 2
2011 PARS Fiscally Responsible Reduction Plan EXHIBIT A
City of la Quinta
General Employees & Directors
Revised February 15, 2011_ver 8
3.4 The choice of form of payment (and the choice of payment beneficiary if choosing a
joint and survivor form of payment) shall become final as of April 1, 2011 and shall not
be subject to change thereafter.
3.5 PARS benefits are to commence August 1, 2011 (retroactive to July 1, 2011).
4.0 Contract Administrator
4.1 The Contract Administrator for the FRRP shall be PARS.
4.2 In the event the plan is cancelled due to insufficient participation, the Employer shall
pay PARS a one-time fee of $5,000.
4.3 The fee for PARS shall be 5.5% of plan contributions to the PARS Trust for services
related to the FRRP.
Prepared by PARS (Public Agency Retirement Services) Page 3
2011 PARS Fiscally Responsible Reduction Plan EXHIBIT A
City of La Quinta
General Employees & Directors
Revised February 15, 2011_ver 8
Projected Timeline:
1. City Council approval of PARS FRRP
2. Enrollment Packets Distributed at Orientation
3. Employee Orientation Meeting
4. Employee Enrollment Workshop
5. Enrollment Window Closes/City receives list
6. City provides any replacement/reclassification info
7. City receives Post -Analysis from PARS
8. Plan Administrator announces approval/rescission
9. City funds FRRP
10. Employees Resign from City employment
11. Employee Retire under PERS
12. PARS Benefits Commence
February 15, 2011
February 16, 2011
February 16, 2011
March 31, 2011
April 1, 2011
no later than April 5, 2011
no later than April 8, 2011
no later than April 20, 2011
on or before July 10, 2011
on or before June 30, 2011
no later than July 1, 2011
August 1, 2011 (retro to July 1)
Prepared by PARS (Public Agency Retirement Services) Page 4