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2011/2012 through FY 2013/2014 budgets is $2.13M (each partner city realizes <br /> approximately one half of the savings). <br /> Pension — Retirement Formula: <br /> Fire personnel currently have the 3% @ 50 pension program. In discussing the <br /> potential of a different pension program for new employees, the parties <br /> considered the following factors: costs of alternate CaIPERS programs, the role <br /> of salary/benefits package in the ability to attract and retain quality applicants <br /> particularly in light of competition by municipalities that vie with Livermore and <br /> Pleasanton for fire personnel candidates. The City's goal of negotiating a less <br /> costly retirement program considered the pre-2001 retirement benefit of 2%@50, <br /> with retirement calculations based on the single highest year of earnings. The <br /> alternative studied was the 3%@55 program, with the less costly option of basing <br /> retirement calculations on the average of 3 highest years' of earnings. The <br /> 3%@55 program is only minimally higher than the City's pre-2001 retirement <br /> benefit (see attached estimated savings chart). The agreement reached is to <br /> implement the 3%@55 program with the retirement calculation based on the 3 <br /> highest years' earnings. The program will realize substantial savings over the <br /> long term for the City once all employees are on the less costly retirement <br /> program. In addition, it allows the Fire Department to remain competitive in <br /> attracting and retaining high quality candidates and maintains consistency in <br /> having the two public safety departments, Police and Fire, on the same <br /> retirement program. Mr. John Bartel, President and Chief Actuary of Bartel and <br /> Associates, will be present at the City Council meeting to respond to any <br /> questions related to the topic of pension plans and its cost. (Savings over the <br /> term of the contract have not been included in the Financial Statement section of <br /> this report.) Additional savings are anticipated long term as reflected in Exhibit A. <br /> Retiree Medical: <br /> Currently fire personnel who retire receive medical plan benefits for the employee <br /> and spouse calculated on a percentage based on years of service with the City. <br /> The new agreement reached modifies the benefit from two parties to employee <br /> only, and terminates when the employee becomes Medicare eligible (currently at <br /> age 65). Over the years, this will result in a significant reduction to the cost of <br /> retiree medical for the LPFD. The estimated cost savings to the LPFD for this <br /> item is $67K through the FY 2013/2014 budget. (Savings over the term of the <br /> contract have not been included in the Financial Statement section of this report.) <br /> Similar to the savings associated with the retirement formula, additional savings <br /> are anticipated long term as reflected in Exhibit B. <br /> Other changes: <br /> Discussion was held and agreements were reached related to operational matters such <br /> as work schedules, leave issues and certification incentives. The total cost of this <br /> package to the City of Pleasanton is approximately $416K over the term of the contract. <br /> CONCLUSION <br /> This topic introduces the key elements of the successor MOU with the International <br /> Association of Firefighters, Local 1974 representing non-management sworn fire <br /> Page 3 of 4 <br />