pages: CityCouncil/2011-03-29.pdf, 5
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CityCouncil | 2011-03-29 | 5 | The Controller responded staff does not have the full information on that, but it could be the case. Councilmember Johnson stated PERS having a little more transparency would be nice. Mayor Gilmore stated the public needs to realize PERS takes gains and losses without feeling it; when PERS has a loss, the costs are passed on to the cities, counties and agencies in the retirement system; PERS takes no risk as an investment entity and does not have incentive to be very careful. The Controller continued the presentation. Councilmember Johnson stated staff is creating a benchmark by not adding employees; however, employees retire and the City will be hiring new people, which adds to the cost. The Controller stated the PERS averages the number of retirees per year, how long the retirees are living, and the number of active employees; if the number of employees drops, there is a smaller base to spread the PERS cost over; the rate could go up because there would be a smaller base to spread the costs over; continued the presentation. Councilmember deHaan stated that he does not see exposed to the General Fund when we talk about lawsuits; SunCal could be going against the project, but it usually comes out of General Fund, but he thinks it was put in the ARRA; the City has other exposures; inquired how the amount is taken care of. The Controller responded the costs are taken care of several different ways; the City Attorney's budget in the General Fund is designed to cover some costs; Risk Management insurance is in a separate internal service fund; departments all pay a pro rata charge; the idea is enough reserves are built up over time to cover a one year hit; continued the presentation. The Acting City Manager began to give her portion of the presentation. Mayor Gilmore requested clarification on the Controller's statement about PERS costs going up when there are salary reductions or reductions in the workforce. The Controller stated PERS costs go down, but the rate could potentially go up because there is a smaller base over which to spread costs; for example, the PERS costs could go down by $200,000, but the rate could increase a percent or two; reductions in work force lower salary and benefit costs. The Acting City Manager stated reducing the workforce would create a savings; continued the presentation. Special Meeting Alameda City Council 5 March 29, 2011 | CityCouncil/2011-03-29.pdf |