HomeMy WebLinkAboutCC AG PKT 2007-09-24 #K
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AGENDA REPORT
DATE:
September 24, 2007
TO:
Honorable Mayor and City Council
O'-vavid Carmany, City Manager
FROM:
BY:
Andrew J. Tse, Personnel Manager
SUBJECT: APPROVAL OF RESOLUTIONS FIXING THE
EMPLOYER CONTRIBUTION UNDER THE PUBLIC
EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT
FOR THE MANAGEMENT, CONFIDENTIAL AND
NON-REPRESENTED; THE ORANGE COUNTY
EMPLOYEES ASSOCIATION; THE SEAL BEACH
POLICE OFFICERS ASSOCIATION; AND THE SEAL
BEACH POLICE MANAGEMENT ASSOCIATION
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SUMMARY OF REOUEST:
The purpose of this report is to request Council consideration to approve resolutions fixing
the employer contribution under the Public Employees' Medical and Hospital Care Act
(pEMHCA). These resolutions amend the City's contribution method towards health care
from the unequal method to the equal method under PEMHCA.
BACKGROUND:
On August I, 1988, the City Council of the City of Seal Beach adopted Resolution Number
3798, electing to be subject to the Public Employees' Medical and Hospital Care Act
(pEMHCA), and fixing the employer contribution for employees and the employer
contribution for annuitants at different amounts. The proposed resolutions would equalize
the City's required contribution for both employees and annuitants at the minimum amount
allowed under PEMHCA, which is $97.00 for calendar year 2008.
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In 2006, the California Stale Legislature passed AB 2544 which amended the required
contribution formula for agencies under the unequal contribution method. The formula was
amended to require agencies to increase their contribution towards the cost of retiree
(annuitant) health care coverage based on the number of years participating in PEMHCA at
a 5% increment per year. The City of Seal Beach became a member in 1988, which places
the City at the 20111 year mark or 100% contribution level on January 1,2008. What this
Agenda Item k
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means is that generally a city that joined PEMHCA in 1988 would be required to contribute
the same monthly amount towards health care coverage for its active employees as well as
its retirees starting on January 1, 2008. However, the bill does place a cap on the annual
required increase. That annual cap is a maximum of a $100 increase in the monthly
contribution. Following that fonnula, the City would be at full contribution for retirees by
2016, at which time the City's projected unfunded liability for health care would be $12.3
million.
Agencies with a Full Flex Cafeteria Plan for its health care program and with an equal
contribution method are not impacted by AB 2544. In an effort to address the potentially
devastating impacts of the AB 2544 mandate on the City's financial future, efforts were
undertaken with the assistance of the City's consultant, ABD Insurance, to implement a Full
Flex Cafeteria Plan. To maximize the benefits the implementation of the Cafeteria Plan, it is
necessary for the City to amend its contribution method from the unequal to the equal
method for retirees and to set the equal contribution at the minimum authorized by law for
both employee and retirees. The proposed resolutions would establish the City's employer
contribution, for both employees and retirees, at the PEMHCA minimum as designated by
the California Public Employees' Retirement System, which is $97 for calendar year 2008.
Full-time active employees are provided an amount under the Full Flex Cafeteria Plan to
purchase health care, dental, vision, and other voluntary programs. The cafeteria plan and
the change in the City's contribution method would not be effective until January 1, 2008.
There will be no change to the existing annuitants.
. FINANCIAL IMPACT:
There is no fiscal impact for the adoption of the proposed resolutions. The projected
initial investment of implementing the Full Flex Cafeteria Plan is estimated to be
$30,000. The implementation of the Full Flex. Cafeteria Plan however will reduce the
City's unfunded liability for health care from the current actuarial projection of $12.3
million by as much as 50%.
RECOMMENDATION:
It is recommended that the City Council adopt the following resolutions:
1. Resolution No. _ - "A RESOLUTION OF TIlE CITY COUNCIL OF TIlE
CITY OF SEAL BEACH, CALIFORNIA FlXlNG TIlE EMPLOYER
CONTRffiUTION UNDER TIlE PUBUC EMPLOYEES' MEDICAL AND HOSPITAL
CARE ACT FOR MANAGEMENT, CONFIDENTIAL AND NON-REPRESENTED."
2. Resolution No._ - "A RESOLUTION OF TIlE CITY COUNCIL OF THE
CITY OF SEAL BEACH, CALIFORNIA FlXlNG THE EMPLOYER
CONTRIBUTION UNDER THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL
CARE ACT FOR THE ORANGE COUNTY EMPLOYEES ASSOCIATION."
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3. Resolution No._ - "A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SEAL BEACH, CALIFORNIA FIXING THE EMPLOYER
CONTRIBUTION UNDER THE PUBUC EMPLOYEES' MEDICAL AND HOSPITAL
CARE ACT FOR THE SEAL BEACH POUCE OFFICERS ASSOCIATION."
4. Resolution No._ - "A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SEAL BEACH, CALIFORNIA FIXING THE EMPLOYER
CONTRIBUTION UNDER THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL
CARE ACT FOR THE SEAL BEACH POLICE MANAGEMENT ASSOCIATION."
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RESOLUTION NUMBER
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SEAL BEACH, CALIFORNIA. FIXING THE EMPLOYER
CONTRIBUTION UNDER THE PUBLIC EMPLOYEES'
MEDICAL AND HOSPITAL CARE ACT FOR THE
MANAGEMENT, CONFIDENTIAL AND NON.REPRESENTED
WHEREAS, the Oovemment Code, Section 22892(a) provides that a local agency
contracting under the Public Employees' Medical BIId Hospital Care Act
shall fix the amount of the employer contribution at an amount not less
than the amount required under Section 22892(b) of the Act; and
WHEREAS, the City of Seal Beach is a local agency contracting under the Act for
participation by members of management, confidential and non-
represented.
TIlE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE:
SECTION 1.
That the employer contribution for each employee or annuitult shall
be the amo1Dlt necessary to pay the full cost of hislher enrollment,
including the enrollment of bis/her family members in a health
benefits plan up to a maximum of the Public Employees' Medical
and Hospital Care Act minimum III designated by the California
Public Employees' Retirement System; Plus administrative fees and
Contingency Reserve Fund Assessments.
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PASSED, APPROVED AND ADOPTED by the City C01Dlcil of Seal Beach, at a regular
meeting held on the 24th day of Seutember .2007 by the following vote:
AYES: Councilmembers
NOES: C01Dlcilmembers
ABSENT: Couneilmembers
ABSTAIN: Couocilmemhers
Mayor
ATTEST:
City Clerk
STATEOFCAUFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH I
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1. Linda Devine, City Clerk for the City of Seal Beach, California, do hereby certify that
the foregoing resolution is the original copy of Resolution Number _ on file in the
office of the City Clerk, plllsed, approved, and adopted by the City Council of the City of
Seal Beach, at a regular meeting held on the 24th day of Sentember .2007.
City Clerk
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RESOLUTION NUMBER
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEAL BEACH, CALIFORNIA, FIXING THE EMPLOYER
CONTRIBUTION UNDER THE PUBLIC EMPLOYEES'
MEDICAL AND HOSPITAL CARE ACT FOR THE ORANGE
COUNTY EMPLOYEES ASSOCIATION
WHEREAS, the Government Code, Section 22892(a) provides that a local agency
contracting under the Public Employees' Medical and Hospital Care Act
shall fix the amount of the employer contribution at an amount not less
than the amount required under Section 22g92(b) of the Act; and
WHEREAS, the City of Seal Beach is a local agency contracting under the Act for
participation by members of the Orange County Employees Association.
TIlE CITY COUNCIL OF TIlE CITY OF SEAL BEACH DOES HEREBY RESOLVE:
SECTION 1.
That the employer contribution for each employee or annuitant shall
be the amount necessary to pay the full cost of hislher enrollment,
including the enrollment of hislher family members in a health
benefits plan up to a maximum of the Public Employees' Medical
and Hospital Care Act minimum as designated by the California
Public Employees' Retirement System; Plus administrative fees and
Contingency Reserve Fund Assessments.
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PASSED, APPROVED AND ADOPTED by the City Council of Seal Beach, at a regular
meeting held on the 24th day of SeDtember ,2007 by the following vote:
AYES: Councilmembers
NOES: Counciimernbers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE I SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk for the City of Seal Beach, California, do herehy certify that
the foregoing resolution is the original copy of Resolution Number _ on file in the
office of the City Clerk, passed, approved, and edopted by the City Council of the City of
Seal Beach, at a regular meeting held on the 24th day of S..,'.m"". . 2007.
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City Clerk
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RESOLUTION NUMBER
A RESOLUTION OF THE CITY COUNCn. OF THE CITY
OF SEAL BEACH, CALIFORNIA, FIXING THE EMPLOYER
CONTRIBUTION UNDER THE PUBLIC EMPLOYEES'
MEDICAL AND HOSPITAL CARE ACf FOR THE SEAL
BEACH POLICE OFFICERS ASSOCIATION
WHEREAS, the Government Code, Section 22892(a) provides that a local agency
contracting under the Public Employees' Medical and Hospital Can: Act
shall fix the amount of the employer contribution at an amount not less
than the amount required under Section 22892(b) of the Act; and
WHEREAS, the City of Seal Beach is a local agency contracting under the Act for
participation by members of the Seal Beach Police Officers Association.
THE CITY COUNCIL OF TI:lE CITY OF SEAL BEACH DOES HEREBY RESOLVE:
SECTION 1.
That the employer contribution for each employee or annuitant shall
be the amount necessary to pay the full cost of hislher enrollment,
including the enrollment of hislher family members in a health
benefirs plan up to a maximmn of the Public Employees' Medical
and Hospital Care Act minimum as designated by the California
Public Employees' Retirement System; Plus administrative fees and
Contingency Reserve Fund Assessments.
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PASSED, APPROVED AND ADOPTED by the City Council of Seal Beach, at a regular
meeting held on the 24th day of Seotember .2007 by the following vote:
AYES: Councilrnembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
ATTEST:
Mayor
City Clerk
STATEOFCALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Unda Devine, City Clerk for the City of Seal Beach, California, do hereby certify that
the foregoing resolution is the original copy of Resolution Number _ on file in the
office of the City Clerk, passed, approved, and adopted by the City Council of the City of
Seal Beach, at a regular meeting held on the 24th day of Scotember , 2007.
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City Clerk
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RESOLUTION NUMBER
A RESOLUTION OF THE CITY COUNCll. OF THE CITY
OF SEAL BEACH, CALIFORNIA, FIXING THE EMPLOYER
CONTRIBUTION UNDER THE PUBUC EMPLOYEES'
MEDICAL AND HOSPITAL CARE ACT FOR THE SEAL
BEACHPOUCE MANAGEMENT ASSOCIATION
WHEREAS, the Government Code, Section 22892(a) provides that a local agency
contracting under the Public Employees' Medical and Hospital Care Act
shan fix the amount of the employer contribution at an amount not less
than the amount required under Section 22892(b) of the Act; and
WHEREAS, the City of Seal Beach is a local agency contracting under the Act for
participation by members of the Seal Besch Police Maoagement
Association.
THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE:
SECTION 1.
That the employer contribution for each employee or annuitant shall
be the amount necessary to pay the fun cost of hislher enrollment,
including the enrollment of hWher family member> in a health
benefits plan up to a maximum of the Public Employees' Medical
and Health Care Act minimum as designated by the California
Public Employees' Retirement System; Plus administrative fees and
Contingency Reserve Fund Assessments.
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PASSED, APPROVED AND ADOPTED by the City Council of Seal Besch, at a regular
meeting held on the 24th day of Senlember . 2007 by the following vole:
AYES: Counci1members
NOES: Counciimemhers
ABSENT: Couneilmembers
ABSTAlN: Councilmembers
Mayor
ATTEST:
City Clerk
STATEOFCAllFORNlA }
COUNTY OF ORANGE } S8
CITY OF SEAL BEACH }
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I, Linda Devine, City Clerk for the City of Seal Beach, California, do hereby certify that
the foregoing resolution is the original copy of Resolution Number _ OIl file in the
office of the City Clerk, passed, approved, and adopted by the City Council of the City of
Seal Beach, at a regular meeting held on the 24th day of Semember . 2007.
City Clerk