Sorry, the keys have been dormant the past few days. I’ve been dealing with my semi-annual bronchial cold, cough, etc. Not sure what it is, really, as I don’t usually bother going to the doctor for it. But, it does have a tendency to put me down for a few days.
No Planning Commission meeting this week. However, the Tustin City Council is holding a special meeting to take the place of their cancelled August 21st meeting. There is not much to discuss as most of the items are run-of-the-mill issues regarding the Tustin Housing Authority and the Successor Agency to the RDA payouts. We keep an eye on the numbers to make sure there is no hanky-panky. If you see something we missed, let us know.
The real reason the Council decided to have a special meeting is the lone regular business item.
Item 4, Implementation of the Public Agency Retirement Services Early Retirement Program, is supposedly designed to lower operating costs during the coming year by giving older, long term, employees who are eligible to retire, an incentive to leave (as if getting away from Tustin Tammany Hall isn’t enough). This incentive, known as a supplemental retirement program, comes as an additional payout that can take several forms, apparently. The cost of the program is a staggering $3.4 million dollars paid out over five years. The city claims it will save a net $4.5 million over the same period. There is also the issue of paying off accrued leave for the 35 employees who have decided to avail themselves of this plan that will add another $714,000 to the initial cost.
If the city’s figures are true and these savings can be realized, then the plan would be a good thing, right? But, these figures do not factor in the cost of hiring new employees into some positions and the retention, through the extra-help process of others, who could wind up taking retirement, advantage of this program and come back to work for the city as extra help, double-dipping up to 1,000 hours a year plus benefits. Also, the city fails to identify how many of the positions would remain vacant. None of that discussion is included in the Agenda Report for the item.
The Director of Human Resources, Kristi Recchia, was kind enough to break down the classifications of the 35 potential participants (out of 86 who were eligible). Most are in Public Works where 15 employees have opted in. There could be some savings in this area if some or all of the positions are left vacant.
The next highest number is in the police department with 9 individuals identified. This is where replacement becomes more of a necessity than an option. It is safe to assume that at least half this number come from public safety ranks. All of them surely come under 3%@50. The other half are likely dispatchers or other necessary positions the department will not be able to work without. That being the case, it is likely there will be no cost savings from this area of the city government. In fact, the city just recently took on additional liability by giving Police Chief Scott Jordan a 5% boost in salary to keep him from going elsewhere (like that would happen).
Much of the savings being touted is through the Public Employee Retirement System itself. For all of the affected employees, the city says it will save 13.7% per employee in retirement contributions as well as eliminating the city’s obligation to pay a portion of the employee’s contribution. This is, of course, because of new contracts that place new public safety hires in a lower tier with higher contributions.
Overall, the city is likely to see some savings from implementing this plan. However, the real cost and savings have yet to be determined by other actions the city will take this year. Each employee position they deem necessary to fill, diminishes the total savings from the plan. The right side of the dais, however, will still be able to claim victory because of the overall reduction to PERS costs. And, one has to wonder if that isn’t the real reason for offering the program to begin with.