The Kenai City Council adopted a resolution that would authorize the city manager to execute an amendment to the city’s participation agreement with the Public Employees’ Retirement System (PERS) to remove the ‘program or project employee’ category of employees from participation effective July 1, 2022. City employees participate in PERS unless specifically removed by plan amendment.
City Manager Paul Ostrander tells the city council:
“The way our code is currently written, temporary employees can only be employed for a maximum of six months. This new category of employee would allow us to hire someone on a temporary basis for a project of some type. The current example is our grants writer position. The grants writer position that we have now, we can only fund that position for six months at a time. This would allow us to fund that position for, say three to five years even, because that’s the time that we’re expecting this infrastructure investment and jobs act money to be available, so we want to have that grant writer on for that certain period of time. It allows us additional flexibility beyond that.”
The city now wishes to remove the ‘program or project employee’ category from PERS, according to Ostrander:
“It means that this will be a fully benefited position except that they will not be in the PERS system. The reason that makes sense for the city is if we have a position that is in PERS, if we ever remove that position, and it’s a unique position within the city, we’re subject to what’s called a termination study. That termination study potentially puts the city on the hook to pay the PERS portion of that employee in essentially perpetuity. This allows us to bring someone on for a certain period of time outside of PERS so that when that project ends and they’re terminated or they leave employment, we won’t be subject to that termination study.”
The city has amended its participation agreement a total of six times to remove designated categories of employees from participation in PERS, including all elected officials, recreation center worker, visitor center worker, and janitor.
Because the city never has employed a ‘program or project employee,’ removing this category of employees from participation in PERS will ensure a termination study is not required should a position under the category later be eliminated and creates no ongoing PERS liability to the city.