AgdaPkt 2018-05-07 Joint SA PFA - Laserfiche WebLink

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allocated to San Carlos at an 80% confidence level. For example, if the actuarial report determines that the cost of workers compensation at 80% confidence level is $1,000,000, with 65 positions allocated to Redwood City and 18 positions allocated for San Carlos, the total cost to San Carlos would be 21.69% (or 18 out of 83 total employees) of $1,000,000, or $216,900. Unfunded Pension Liability Fire Department employees serving San Carlos under this agreement receive pension benefits through the California Public Employee’ Retirement System (CalPERS). Over the first five years of the agreement, San Carlos has paid an increasing share of unfunded pension liability costs associated with employees providing service under the agreement and currently pays 40% of the Unfunded Rate. Redwood City and San Carlos have agreed on a proposed payment structure for San Carlos’s share of the unfunded pension liability for the duration of the second agreement. Year 1: 45% of the “Unfunded Rate” or its equivalent as shall be provided by CalPERS Year 2: 60% of the “Unfunded Rate” or its equivalent as shall be provided by CalPERS San Carlos has contracted for an actuarial study to determine San Carlos’ share of the CalPERS Unfunded Liability for years 3-5 of the proposed contract. The study is projected to be completed in the summer of 2018. The two cities will re-open negotiations to evaluate the results of the actuarial to determine the rate for years 3-5. If these negotiations are not complete by year 3, the 60% “Unfunded Rate” will continue until an agreement is reached. If the 60% rate extends beyond year 2 and the eventual agreed-upon amount for years 3-5 is different than 60%, the difference will be reconciled through the true-up process. Truck Company Services In the previous five-year contract, San Carlos contracted for 21 full-time employees, which included a relief firefighter position on each of the three shifts that could backfill vacancies in either Redwood City or San Carlos. As a result, Redwood City provided truck services at no charge to San Carlos in consideration of Redwood City’s ability to utilize relief staff in Redwood City stations. In the proposed contract, it is recommended to eliminate the three relief staff positions and backfill any vacancies with overtime. The primary reason for this change is to reduce the overall pension costs since overtime is not considered in pension calculations. The full cost of employee salaries and benefits for a Firefighter is now 1.69 times the hourly salary rate, whereas the overtime costs are only 1.5 times the hourly salary rate. In light of the elimination of relief staff, Redwood City will charge San Carlos for providing Truck Service as outlined in Exhibit “C” of the contract. For the first year of the contract, the cost of the truck services will be $400,000. The cost of Truck Service will increase annually based on the percentage of labor cost increases. 6.1.D. - Page 2