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HomeMy WebLinkAboutCC AG PKT 2007-10-22 #Z e AGENDA REPORT DATE: October 22, 2007 TO: Honorable Mayor and City Council FROM: David N. Carmany, City Manager BY: Andrew J. Tse, Personnel Manager SUBffiCT.: RESOLUTION NO. - A resolution of the City Council of the City of Seal Beach approving the side letters of agreement with the Seal Beach Professional Technical Supervisor Association (CEA) the Orange County Employees Association (OCEA), and the Executive/Mid- Management Team amending respective provisions in the Memorandum of Un den tanding adopted by Resolution Number 5482 to implement the full flex cafeteria plan and amendments to the health care program. e ~UMMAR'X OF REOUEST: The purpose of this report is to request CO\D1Cil consideration to approve the side letters of agreement with the Seal Beach Professional Technical Supervisory Association (CEA), the Orange County Employees Association (OCEA), and the Executive/Mid-MaIlagement Team, amP.TliHng respective provision in the Memorandum ofUnderstBndil1g adopted by Resolution Number 5482 to implement the full flex cafeteria plan and amendments to the health care program. BACKGROUND: In 2006, the California State Legislature passed AB 2544 which required 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 20th year mark or 100",4 contribution level on January 1, 2008. e 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, with the assi~ of the City's consultant, ABD Insurance, the City Manager's Office conducted workshops for employees and met in good faith with the City's various labor groups to reach agreements on implementing a full flex cafeteria plan and to amend the health care program. Agenda Item .z. e October 22, 2007 Agenda Report - Approving of Amendment to Healthcare Program Page 2 The amendment would amend the health care program as follows: Commencing January I, 2008 . Implementation of Full Flex Cafeteria Plan for Active Employees . No changes for existing annuitants . Employees hired on or after January I, 2008 will receive the PEMHCA minimum as desigJ'Ated by PERS as an annuitant . City's contribution towards annuitant healthcare for the ExecutivelMid-Management po~ons that retire after December 31, 2009 will be the average of the two lowest cost PEMHCA plans or Kaiser HMO, whichever is greater. FINANCIAL IMPACf: 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 and amending the health care program; however will reduce the City's unfunded liability for health care from the current actuarial projection 0[$12.3 million by approximately 40%. e RECOMMENDATION: It is recommended that the City Council adopt the following resolution: 1. Resolution No. - "A resolution of the City Council of the City of Seal Beach approving the side letters of agreement with the Seal Beach Professional Technical Supervisory Association (CEA) the Orange County Employees Association (OCEA) and the Executive/Mid-Management Team amending respective provisions in the Memorandum ofUnderstadning adopted by Resolution Number 5482 to implement the full flex cafeteria plan and amendments to the health care program." APPROVED: cr-F~ David N. Carman ,City Manager e Attachments: Resolution Number Amendment to Terms and Condition of Employment - ExecutivelMid-Management Side letter Agreement - Seal Beach Professional Technical Supervisory Association (CEA) Side Letter Agreement - Orange County Employees Association (OCEA) e RESOLUTION NUMBER_ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH APPROVING THE SIDE LETtERS OF AGREEMENT WITH THE SEAL BEACH PROFESSIONAL TECHNICAL SUPERVISORY ASSOCIATION (CEA), THE ORANGE COUNTY EMPLOYEES ASSOCIATION (OCEA), AND THE EXECUTIVIl'JMID-MANAGEMENT TEAM AMENDING RESPECfIVE PROVISIONS IN THE MEMORANDUM OF UNDERSTANDING ADOPTED BY RESOLUTION NUMBER 5481 TO IMPLEMENT THE FULL FLEX CAFETERIA PLAN AND AMENDMENTS TO THEHEALTHCARE PROGRAM WHEREAS, the City has conductod workshops and met in good faith with its vlIious labor grouP' to implement a full flex cafeteria plan and amendments to tbe health care program; SlId WHEREAS, the City bas "",ched agreement with its Ishor groups by placing the amendments before the City Council for ratification.. NOW, THEREFORE, the City Council of the City of Seal Beach hereby reaolves: Section 1. The amendments arc sdoptccl and approved sod will amend the pertinent provisions of the Memorandum of Understanding sdoptccl by Resolution Number 5482 for the Seal Beach Professional Technical Supervisory Associllion (CEA), the Orange County Employees Associllion (OCEA), and the ExccutivclMid-Management Team, effective on Janusry I, 2008. e Section 2. Except as provided. for in Section I. there are no other corrections, changes or amendments. PASSED, APPROVED AND ADOPTED by the City Councilor Seal Beach, at a regu1ar meeting held on the 22nd day of October. 2007 by the following vote: " AYES: COUNCn.MBMBERS NOES: COUNCn.MBMBERS ABSENT: COUNCn.MBMBERS ABSTAIN: COUNCILMEMBERS Mayor ATTEST: City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devin.. City Clerk for the City of Seal Beach, California, do b.....by certify that the foregoing resolution i. the original copy of Rcaolution Number_ on file in the office of the City Clerk, pused, approved, and adopted by the City Council of the City of Seal Beach at a regullt meeting held on the 22nd day of October. 2007. e City Clerk e Agenda Item *Z "CEA, OCEA & Exec./Mid-Mgmt. Team" Side Letters of Agreement will be delivered under separate cover e e CITY OF SEAL BEACH OFFICE OF THE CITY MANAGER SIDE LETTER AGREEMENT SEAL BEACH PROFESSIONALJTECHNICAL BARGAINING UNIT (CEA) Pursuant to the re-opener clause contained in Section 26 of the 2006-2009 Memorandum of Understanding Between the City of Seal Beach and Seal Beach Supervisors & Professional Employees Association, dated July 24, 2006, (hereinafter referred to as "MOU') representatives of the City met with the Board of the Seal Beach ProfessionallTechnical bargaining unit in good faith, and reached an agreement with regard to the City's adoption of a full flex cafeteria plan, to the alteration of the City's contract with the Califomia Public Employees' Retirement System (CaIPERS) to modify the City's contribution method and amount towards coverage under the Public Employees' Medical and Hospital Care Act (PEMHCA), and to other changes necessary to effect the parties' intent. This Agreement amends certain provisions of the MOU, as follows: 1. Under "Section 3 INSURANCE PROGRAMS' A. The title of Paragraph A. of Section 3, "Health and Dental', is deleted and the following title is substituted in its place: "Health Care Coverage". B. Effective January 1, 2008, the language of Subparagraph 2 of Paragraph A. of Section 3 shall be deleted and the following language shall be substituted in its place: "The City shall contribute to the cost of medical coverage for each eligible employee and his/her dependents, an amount not to exceed the Califomia Public Employees' Medical and Hospital Care Act (PEMHCA) minimum contribution. For calendar year 2008, CalPERS has established the minimum PEMHCA contribution at ninety-seven dollars ($97.00) per month per employee. The City shall contribute an equal amount towards the cost of medical coverage under PEMHCA for both active eligible employees and eligible retirees. The City shall implement a full flex cafeteria plan for eligible employees, in accordance with the criteria provided to the Association during negotiations. For employees participating in the City's full flex cafeteria plan, each employee shall receive a monthly flex dollar allowance to be used for the purchase of benefits under the full flex cafeteria plan. The monthly flex dollar allowance shall be: For employee only: $550 For employee and one dependent: For employee and two or more dependents: $850 $1,100 A portion of the monthly flex dollar allowance is identified as the City's contribution towards PEMHCA. Thus, for example, in calendar year 2008, a single employee's monthly flex dollar allowance is $550.00, of that $550.00, $97.00 has been designated by the City as its required PEMHCA contribution to CaIPERS. The monthly flex dollar allowance may only be used in accordance with the terms of the full flex cafeteria plan. C. Effective January 1, 2008, the language of Subparagraph 3 of Paragraph A. of Section 3 shall be deleted and the following language shall be substituted in its place: "Employees meeting the waiver criteria and electing to waive enrollment in the City's full flex cafeteria plan are eligible to receive $310.00 per month (after providing proof of medical insurance through an alternative medical plan not offered by the City)". D. Effective January 1, 2008, the language of Subparagraph 6 of Paragraph A. of Section 3 shall be deleted and the following language shall be substituted in its place: "Full-time employees of the City who have completed thirty (30) days of uninterrupted service shall be enrolled in the full flex cafeteria plan on the first day of the next succeeding month." E. Effective January 1, 2008, the language of Subparagraph T of Paragraph A. of Section 3 shall be deleted and the following language shall be substituted in its place: "Employees who change classification from full-time to part-time provisional, hourly or seasonal shall not be eligible for participation in the full flex cafeteria plan." F. Effective January 1, 2008, the language of Subparagraph 8 of Paragraph A. of Section 3 shall be deleted and the following language shall be substituted in its place: "City shall not contribute a flex dollar amount for any employee during any month the employee is on leave of absence without payor who is absent from regular duties without authorization, for a full calendar month. City shall contribute a flex dollar amount for eligible employees receiving temporary payment from Workers' Compensation Insurance." G. The language of Subparagraph 9 of Paragraph A. of Section 3 is deleted. 2. Under "Section 4. RETIREE HEALTH PLAN": A. The language of Paragraph A. of Section 4 shall be deleted and the following language shall be substituted in its place: "All full-time employees incumbent in position classifications represented by the Association shall have the option upon retirement, through the Public Employees' Retirement System Health Program (PERS), to continue participation in the City's health insurance program at the employee's expense." B. Effective January 1, 2008 the language of Paragraph B of Section 4 shall be deleted and the following language shall be substituted in its place: "(1) All full-time incumbents in position classifications represented by the Association, who were hired on before December 31, 2007, and who retire with 20 or more combined years of employment with the City shall, upon retirement, be provided with individual health insurance coverage through the Public Employees Retirement System Health Program (PERS). If said employee has 30 or more combined years of employment with the City upon retirement, eligible dependent health insurance coverage shall also be provided through the Public Employees Retirement System Health Program. The City shall contribute to the cost of the selected coverage consistent with the appropriate level as specified in Section 3- A.2 of this Resolution. An employee with a service retirement as of July 1, 1999, and with 30 or more combined years of employment with the City upon retirement may also receive an increase to the health insurance cap in effect at the time of his/her retirement (not to exceed $175 per month in additional contributions), until Medicare begins at age 65 with lower supplemental insurance rates. This additional contribution to the cap is to accommodate increases in health insurance plans over the term of the employee's retirement. (2) All full-time incumbents in position classifications represented by the Association who were hired on or after January 1, 2008, and who retire from the City, shall be eligible to receive a City contribution not to exceed the Califomia Public Employees' Medical and Hospital Care Act (PEMHCA) minimum employer contribution towards health coverage under PERS, as determined by PERS from time to time." 3. The language of Section 26 shall be deleted and the following language shall be substituted in its place: "Upon request of the City, the Association agrees to reopen negotiations on retiree benefits, including but not limited to, the subject of alternative health insurance vehicles and retirement health savings accounts (HSA - H~ - VEBA - etc.). At the request of the Association, after July 1, 2008, the City agrees to reopen negotiations on the subject of the amount of the monthly flex dollar allowance associated with the City's full flex cafeteria plan." For the City: o-~ David Carmany, Ci Manager c4lo- Andrew J. Tse, ersonnel Manager I1U4-. Kathleen McGlynn, Rec,tion P .'~ /' , /,/", /'. . ~~C . /'{l~ '1::'Ucy Ag~eC~ Secretary CITY OF SEAL BEACH OFFICE OF THE CITY MANAGER SIDE LETTER AGREEMENT ORANGE COUNTY EMPLOYEES ASSOCIATION (OCEA) Pursuant to the re-opener clause contained in Section 21 of the 2006-2009 Memorandum of Understanding Between the City of Seal Beach and Orange County Employees Association, dated July 24, 2006, (hereinafter referred to as "MOU") representatives of the City met with the Board of the Orange County Employees Association bargaining unit in good faith, and reached an agreement with regard to the City's adoption of a full flex cafeteria plan, to the alteration of the City's contract with the Califomia Public Employees' Retirement System (CaIPERS) to modify the City's contribution method and amount towards coverage under the Public Employees' Medical and Hospital Care Act (PEMHCA), and to other changes necessary to effect the parties' intent. This Agreement amends certain provisions of the MOU, as follows: 1. Under "SECTION 8. HEALTH. DENTAL. LIFE & DISABILITY INSURANCE": A. The title of Section 8, "HEALTH. DENTAL. LIFE & DISABILITY INSURANCE", is deleted and the following title is substituted in its place: "HEALTH CARE COVERAGE: LIFE & DISABILITY INSURANCE". B. Under "Paraaraoh A. Coveraae - Health Insurance": (1). The title of paragraph A of Section 8, "Coveraae - Health Insurance", is deleted and the following title is substituted in its place: "Health Care Coveraae". (2). Effective January 1, 2008, the language of Paragraphs A2 and A3 of shall be deleted and the following language shall be substituted in its place: "The City shall contribute to the cost of medical coverage for each eligible employee and his/her dependents, an amount not to exceed the California Public Employees' Medical and Hospital Care Act (PEMHCA) minimum contribution. For calendar year 2008, CalPERS has established the minimum PEMHCA contribution at ninety-seven dollars ($97.00) per month per employee. The City shall contribute an equal amount towards the cost of medical coverage under PEMHCA for both active eligible employees and eligible retirees. The City shall implement a full flex cafeteria plan for eligible employees in accordance with the criteria provided to the Association , during negotiations. For employees participating in the City's full flex cafeteria plan, each employee shall receive a monthly flex dollar allowance to be used for the purchase of benefits under the full flex cafeteria plan. The monthly flex dollar allowance shall be: For employee only: For employee and one dependent: For employee and two or more dependents: $550 $850 $1,100 A portion of the monthly flex dollar allowance is identified as the City's contribution towards PEMHCA. Thus, for example, in calendar year 2008, a single employee's monthly flex dollar allowance is $550.00, of that $550.00, $97.00 has been designated by the City as its required PEMHCA contribution to CaIPERS. The monthly flex dollar allowance may only be used in accordance with the terms of the full flex cafeteria plan. (3). Effective January 1, 2008, the language of Paragraph A5 of Section 8 shall be deleted and the following language shall be substituted in its place: "Employees meeting the waiver criteria and electing to waive enrollment in the City's full flex cafeteria plan are eligible to receive three hundred and ten dollars ($310) per month (upon showing proof of health insurance coverage under an alternative plan). Election forms are available in the Personnel Office." (4). Effective January 1, 2008, the language of Paragraph A8 of Section 8 shall be deleted and the following language shall be substituted in its place: "Full-time employees of the City who have completed thirty (30) days of uninterrupted service shall be enrolled in the full flex cafeteria plan on the first day of the next succeeding month." (5). Effective January 1, 2008, the language of Paragraph A9 of Section 8 shall be deleted and the following language shall be substituted in its place: "Employees who change classification from full-time to part-time provisional, hourly or seasonal shall not be eligible for participation in the full flex cafeteria plan." (6). Effective January 1, 2008, the language of Paragraph A 10 of Section 8 shall be deleted and the following language shall be substituted in its place: "City shall not contribute a flex dollar amount for any employee during any month the employee is on leave of absence without payor who is absent from regular duties without authorization, for a full calendar month. City shall contribute a flex dollar amount for eligible employees receiving temporary payments from Workers' Compensation Insurance." C. Under .Paraaraoh B. Retirement Health Insurance": (1). Effective January 1, 2008, the language of Paragraph B2 of Section 8 shall be deleted and the following language shall be substituted in its place: "(a) All full-time employees who were hired on or before December 31,2007, and who retire with twenty (20) or more combined years of employment with the City shall, upon retirement, be provided with individual health insurance coverage. If said employee has thirty (30) or more combined years of employment with the City upon retirement, eligible dependent health insurance coverage shall also be provided. The City shall contribute monthly to the cost of the selected coverage consistent with the appropriate level as specified in Article VIII, Section 1 B of this Memorandum of Understanding. (b) All full-time employees who were hired on or after January 1, 2008, and who retire from the City, shall be eligible to receive a City contribution not to exceed the Califomia Public Employees' Medical and Hospital Care Act (PEMHCA) minimum employer contribution towards health coverage under CalPERS, as determined by CalPERS from time to time." 2. Under "SECTION 21. ENTIRE MEMORANDUM OF UNDERSTANDING": The language of Section 21 E is deleted and the following language is substituted in its place: "City and Association agree to reconvene during the term of this MOU to discuss retiree benefits, including but not limited to, the implementation of HSA, HRA, or VEBA programs for employee and retiree medical premiums. At the request of the Association, after July 1, 2008, the City agrees to reopen negotiations on the subject of the amount of the monthly flex dollar allowance associated with the City's full flex cafeteria plan." ~' ~~ Bill Moran, Electrician CITY OF SEAL BEACH OFFICE OF THE CITY MANAGER AMENDMENT TO TERMS AND CONDITION OF EMPLOYMENT HEAL THCARE PROGRAM EXECUTIVE/MID-MANAGEMENT Representatives of the City met with all full-time employees in good faith, and reached an agreement with regard to the City's adoption of a full flex cafeteria plan, to the alteration of the City's contract with the California Public Employees' Retirement System (CaIPERS) to modify the City's contribution method and amount towards coverage under the Public Employees' Medical and Hospital Care Act (PEMHCA), and to other changes necessary to effect the parties' intent. This amendment updates certain provisions of the Terms and Conditions of Employment, as follows: 1. Under "SECTION 2. HEALTH. DENTAL. LIFE & DISABILITY INSURANCE": A. The title of Section 2, "INSURANCE PROGRAMS", is deleted and the following title is substituted in its place: "HEALTH CARE COVERAGE: LIFE & DISABILITY INSURANCE". 8. Under "Paraaraoh A. Health and Dental": (1). The title of paragraph A of Section 2, "Health and Dental", is deleted and the following title is substituted in its place: "Health Care Coveraae". (2). Effective January 1, 2008, the language of Paragraphs A2. and A3 of Section 2 shall be deleted and the following language shall be substituted in its place: "The City shall contribute to the cost of medical coverage for each eligible employee and his/her dependents, an amount not to exceed the California Public Employees' Medical and Hospital Care Act (PEMHCA) minimum contribution. For calendar year 2008, CalPERS has established the minimum PEMHCA contribution at ninety-seven dollars ($97.00) per month per employee. The City shall contribute an equal amount towards the cost of medical coverage under PEMHCA for both active eligible employees and eligible retirees. The City shall implement a full flex cafeteria plan for eligible employees in accordance with the criteria provided to the Association during negotiations. For employees participating in the City's full flex cafeteria plan, each employee shall receive a monthly flex dollar allowance to be used for the purchase of benefits under the full flex cafeteria plan. The monthly flex dollar allowance shall be: For employee only: For employee and one dependent: For employee and two or more dependents: $550 $850 $1,100 A portion of the monthly flex dollar allowance is identified as the City's contribution towards PEMHCA. Thus, for example, in calendar year 2008, a single employee's monthly flex dollar allowance is $550.00, of that $550.00, $97.00 has been designated by the City as its required PEMHCA contribution to CaIPERS. The monthly flex dollar allowance may only be used in accordance with the terms of the full flex cafeteria plan. (3). Effective January 1, 2008, the language of Paragraph A4 of Section 2 shall be deleted and the following language shall be substituted in its place: "Employees meeting the waiver criteria and electing to waive enrollment in the City's full flex cafeteria plan are eligible to receive three hundred and ten dollars ($310) per month (upon showing proof of health insurance coverage under an alternative plan). Election forms are available in the Personnel Office." (4). Effective January 1, 2008, the language of Paragraph A7 of Section 2 shall be deleted and the following language shall be substituted in its place: "Full-time employees of the City who have completed thirty (30) days of uninterrupted service shall be enrolled in the full flex cafeteria plan on the first day of the next succeeding month." (5). Effective January 1, 2008, the language of Paragraph A8 of Section 2 shall be deleted and the following language shall be substituted in its place: "Employees who change classification from full-time to part-time provisional, hourly or seasonal shall not be eligible for participation in the full flex cafeteria plan." (6). Effective January 1, 2008, the language of Paragraph A9 of Section 2 shall be deleted and the following language shall be substituted in its place: "City shall not contribute a flex dollar amount for any employee during any month the employee is on leave of absence without payor who is absent from regular duties without authorization, for a full calendar month. City shall contribute a flex dollar amount for eligible employees receiving temporary payments from Workers' Compensation Insurance." C. Under "Section 3. Retirement Health Plan": (1). Effective January 1, 2008, the language of Paragraph Band C of Section 3 shall be deleted and the following language shall be substituted in its place: "(B) All incumbents in the Executive Management position classification with who retire after December 31, 2007, and on or before December 31, 2009, with twenty (20) or more combined years of employment with the City shall, upon retirement, be provided with individual and eligible dependent health insurance coverage through the PERS Healthcare Program. If said employee has thirty (30) or more combined years of employment with the City upon retirement, eligible dependent health insurance coverage shall also be provided. The City shall contribute monthly to the cost of the selected coverage consistent with the appropriate level as specified in Attachment 1 to this amendment. (C) All incumbents in the Mid-Management position classification with who retire after December 31, 2007, and on or before December 31, 2009, with twenty (20) or more combined years of employment with the City shall, upon retirement, be provided with individual health insurance coverage through the PERS Healthcare Program. If said employee has thirty (30) or more combined years of employment with the City upon retirement, eligible dependent health insurance coverage shall also be provided. The City shall contribute monthly to the cost of the selected coverage consistent with the appropriate level as specified in Attachment 1 to this amendment. (C-1) All full-time employees who were hired before January 1, 2008, and who retire after December 31, 2009, with twenty (20) or more combined years of employment with the City shall, upon retirement, be provided with individual health insurance coverage. If said employee has thirty (30) or more combined years of employment with the City upon retirement, eligible dependent health insurance coverage shall also be provided. The City shall contribute monthly to the cost in an amount equal to the premium rate for the lowest cost medical plan offered by CalPERS (for a retiree who is not Medicare eligible) or for the lowest cost Medicare supplemental plan offered by CalPERS (for a retiree who is Medicare eligible). Thus, for example, an incumbent who retired in 2012 with 20 years of service at age 50 would receive a Attachment: (1) City contribution equal to the premium rate for employee only coverage under the lowest cost CalPERS medical plan. (C-2) All full-time employees who were hired on or after January 1, 2008, and who retire from the City, shall be eligible to receive a City contribution not to exceed the California Public Employees' Medical and Hospital Care Act (PEMHCA) minimum employer contribution towards health coverage under CalPERS, as determined by CalPERS from time to time." Retiree Health Insurance Caps ATTACHMENT 1 To AMENDMENT OF TERMS AND CONDITIONS OF EMPLOYMENT EXECUTIVE/MID-MANAGEMENT RETIREE HEALTH INSURANCE CAPS FOR CALENDAR YEARS 2008 and 2009 A. Effective January 1, 2008, the Retiree Health Insurance Caps shall be: (1) For Executive Management Employee with 20 or more years of combined service (Retiree and spouse) $1,004.57/month (2) For Mid-Management Employee with 20 or more years of combined service (Retiree only) $654.79/month (2) For Mid-Management Employee with 30 or more years of combined service (Retiree plus dependent cost) $1,004.57/month B. The City's employer contribution towards PEMHCA is included in each of the insurance caps listed above. Thus, for example, in calendar year 2008, a single retiree's monthly insurance cap is $654.79, of that $654.79, $97.00 has been designated by the City as its required PEMHCA contribution to CaIPERS. C. Effective January 1, 2009, the dollar amounts in Paragraph A shall be increased by an amount equal to the percentage of increase of OC basic plans as published by CaIPERS.