RIVERSIDE TRANSIT AGENCY 1825 Third Street Riverside, CA April 23, 2009

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1 RIVERSIDE TRANSIT AGENCY 1825 Third Street Riverside, CA April 23, 2009 TO: THRU: FROM: SUBJECT: Summary: BOARD OF DIRECTORS Larry Rubio, Chief Executive Officer Laura Murillo, Director of Human Resources Authorization to Amend the California Public Employees Retirement System (CalPERS) Contract to Offer Two Years Additional CalPERS Service Credit for Employees who Elect to Retire During Designated Period Last month the Board of Directors approved to begin the process of amending the CalPERS contract to offer two years additional CalPERS service credit in anticipation of June layoffs. As a review, under Government Code Section 20903, CalPERS allows contracting agencies, such as RTA, who are facing impending mandatory transfers, layoffs or demotions, to amend their contracts to provide two years additional service credit to members who retire during a designated period. The Agency estimates approximately 22 coach operators and three maintenance employees will be laid off as a result of the upcoming service modifications. Currently, it is unclear how many administrative employees may be affected. Staff is hopeful the number of layoffs will be reduced by normal attrition and attrition through the CalPERS retirement incentive. Therefore, staff proposes all eligible employees be offered this retirement incentive opportunity. To qualify, employees must have reached age 50, have at least 5 years of CalPERS service credit, be employed with the Agency at least one day during the designated period and retire within the designated period. Although there will be approximately 117 eligible employees by the end of the designation period, staff anticipates only a fraction of these employees will retire. The designated period must be between 90 and 180 days and therefore staff is proposing a 90 day period to begin April 25, 2009 and end July 23, To finalize the process of amending the CalPERS contract, the following documents, which are attached, must be completed and submitted to CalPERS:

2 Fiscal Impact: Recommendation: 1. Form CON-13 Resolution Authorizing An Amendment to the Contract 2. Amendment to Contract 3. Form CON-5 Certification of Final Action of Governing Body As outlined in last month s staff report, based on the CalPERS formula for calculating the future cost to the Agency as a result of offering the retirement incentive, staff estimates the cost to be $209, per year amortized over twenty years. The increase to the employer contribution is estimated to be 1.26 percent. The cost would be included in the Agency s employer contribution rate commencing with the fiscal year starting two years after the end of the retirement designated period. This cost assumes all 117 eligible employees would retire. Therefore, the cost may change depending on how many employees actually retire. Again, staff expects a small percentage of eligible employees will actually retire. The future cost increase to the employer contribution would be budgeted appropriately beginning in fiscal year Given the scenario of all 117 eligible employees accepting retirement incentive, staff estimates a potential savings for the Agency as follows: Annual Salary of 117 Eligible Employees $5,636, Additional Employer Contribution Cost Over 20yrs - $4,188, Total Savings Of Up To $1,447, Authorize to amend the California Public Employees Retirement System (CalPERS) contract to offer two years additional CalPERS service credit for employees who elect to retire during designated period by approving the following: 1. Adopt and authorize the Chairman of the Board of Directors to approve: Form CON-13 Resolution Authorizing An Amendment to the Contract Amendment to Contract 2. Adopt and authorize the Clerk of the Board to approve: Form CON-5 Certification of Final Action of Governing Body

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