Bad financial news hit the City of Riverbank just before Christmas. It was serious enough for city management to call a special meeting on Tuesday, Dec. 21 for a budget update.
Finance Director Marisela Hernandez advised Riverbank City Council members that there would be hefty increases for 2011-12 in their employees' health insurance, retirement and union pension costs.
The current insurance cost is due to rise by 38 percent for an additional cost to the city of about $193,000, she said. Another, new insurance plan the city is exploring would cost only 30 percent more for an additional cost to the city of $141,000.
For the California Public Employees Retirement System (CalPERS), the rate will rise from its current $10.213 percent to 11.227 percent for the 2011-2012 fiscal year for a cost increase of almost $35,000 for the city. The total cost for the city will be 11.227 percent or $387,000 and for its employees 7 percent or $241,000.
For union pensions, recent investment losses will require a higher contribution from employers to make up the difference, so rates will increase by 10 percent per year for the next 10 years.
The current rate is $.93 per hour and will go to $1.03 for a $16,000 increase in city costs for the coming fiscal year and an increase projected over 10 years of $180,000.
City options for handling increased costs, she added, include early retirement incentives such as offering two years of PERS plus medical coverage and leaving positions vacant; establishing more furlough days for the next fiscal year; and exploring the feasibility of consolidating departments.
Finance Director Marisela Hernandez advised Riverbank City Council members that there would be hefty increases for 2011-12 in their employees' health insurance, retirement and union pension costs.
The current insurance cost is due to rise by 38 percent for an additional cost to the city of about $193,000, she said. Another, new insurance plan the city is exploring would cost only 30 percent more for an additional cost to the city of $141,000.
For the California Public Employees Retirement System (CalPERS), the rate will rise from its current $10.213 percent to 11.227 percent for the 2011-2012 fiscal year for a cost increase of almost $35,000 for the city. The total cost for the city will be 11.227 percent or $387,000 and for its employees 7 percent or $241,000.
For union pensions, recent investment losses will require a higher contribution from employers to make up the difference, so rates will increase by 10 percent per year for the next 10 years.
The current rate is $.93 per hour and will go to $1.03 for a $16,000 increase in city costs for the coming fiscal year and an increase projected over 10 years of $180,000.
City options for handling increased costs, she added, include early retirement incentives such as offering two years of PERS plus medical coverage and leaving positions vacant; establishing more furlough days for the next fiscal year; and exploring the feasibility of consolidating departments.
