The City and Borough of Wrangell is working with a Denver-based consultancy firm to determine the cost of eliminating PERS employees at Thomas Bay Power Authority via a “termination study” that will show the cost of eliminating seven positions at the organization – a move recommended in a Southeast Alaska Power Agency commissioned report issued last year by D. Hittle and Associates.
According to Borough Finance Director Jeff Jabusch, the city undertook the study to assist SEAPA.
“Last fall, the SEAPA folks requested permission from us to do the study, but because we are the employer with PERS, we’re the ones that have to request the study,” Jabusch said. “So, SEAPA asked us to request that of the state retirement system.”
Jabusch said he then sent the information to Buck Consultants, a Colorado firm retained regularly by the State of Alaska, but in this case, Southeast Alaska Power Agency, to perform the study.
Based off data provided to Buck Consultants, the TBPA employees covered under PERS earn a calculated annual salary equaling $448,323.20 among the group of seven. The employees range from an office manager position, to operators at the Tyee Lake Hydroelectric project, to the plant foreman.
“There is also a general manager position that would be eliminated,” Jabusch writes in his report to Buck’s David Slishinsky. “The last general manager retired on 12/30/2011. They have had a temporary person fill that position until they could find a permanent replacement. This temporary employee is not being paid in PERS at the moment. We have been told that if he works past May of this year, we will be required to enter him in PERS.”
Jabusch also said performing a study of this nature might help the city in understanding the nature of any possible future layoffs among its ranks.
“I think it is good to have all the information so you don’t find out later that it was going to cost this or that,” Jabusch added. “I am curious because I know the City and Borough of Wrangell in 2008 agreed with the state to start helping fund part of the liability that all the cities in Alaska have. It was also learned that the retirement system was under funded. So, the agreement was that the state would help us, and they put in a requirement we do these on anyone coming out of, or dropped from PERS. If the retirement system was fully paid, we wouldn’t be doing this.”
According to Jabusch, the City and Borough of Wrangell itself has never performed a study of this nature because it has not had to lay off any of its employees covered under the PERS system.
According to SEAPA CEO Trey Acteson, his agency paid approximately $3,000 for the study, which was undertaken after he assured the Borough Assembly and former mayor Jeremy Maxand late last year that he would look into the matter.
The results of the study, Jabusch added, should be back in about a month’s time.
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