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SR-602-004 (4) f:\person:misc/council/staffrpt/council47 Santa Monica, California Council Meeting: June 26, 2001 TO: Mayor and City Council FROM: City Staff SUBJECT: Resolution of the City Council of the City of Santa Monica Electing to be Subject to Public Employees Medical and Hospital Care Act only with = respect to the Non-PERS Elected Officials Category and Fixing the Employers Contribution for Employees and the Employers Contribution for == Annuitants at Different Amounts INTRODUCTION This report recommends that the City Council adopt the attached Resolution electing to be subject to the Public Employees Medical and Hospital Care Act with respect to non-PERS = enrolled elected officials and reaffirming that the Citys contribution for active employees = and elected officials and the Citys contribution for annuitants (retirees) and survivors will = be set at different amounts. The attached resolution complies with the procedure required by CalPERS. BACKGROUND The City currently offers medical insurance plans that are underwritten by CIGNA and Kaiser to its non-safety employees. Coverage under those plans is also provided for Council members. Due to unanticipated medical insurance premium increases for the 2001 medical plan year, the Citys Health Insurance Committee, comprised of = representatives from all of the Citys non-safety bargaining units, met during late 2000 and = 1 early 2001 for the purpose of exploring other medical insurance plan options in an effort to control the escalating cost of medical insurance for non-safety employees. DISCUSSION In April, 2001, the City Council approved a recommendation by the Health Insurance Committee and staff to elect to have the City contract with the California Public Employees Retirement System (CalPERS) to offer the CalPERS HealthCare program to = all non-safety employees. The recommendation also included that the Citys contribution = for annuitants (retirees) be set at the lowest rate allowed by CalPERS. In order to extend CalPERS medical insurance coverage to City Council members, the City must adopt a resolution specifically electing to have its non-PERS elected officials covered by the Public Employees Medical and Hospital Care Act. It is intended that the CalPERS = health program become available to Council members in the non-PERS elected officials category effective July 1, 2001. The resolution also restates that the Citys contribution = for active employees and elected officials and the Citys contribution for annuitants = (retirees) and survivors will be set at different amounts. BUDGET/FINANCIAL IMPACT Sufficient funds will be included in the FY2001-2002 budget to cover the costs associated with this change. 2 RECOMMENDATION It is recommended that the City Council adopt the attached resolution electing to be subject to the Public Employees Medical and Hospital Care Act with regard to City = employees in the non-PERS elected officials category and to fix the employers = contribution for employees and non-PERS elected officials and the employers = contribution for annuitants (retirees and survivors) at different amounts. Prepared By: Karen Bancroft 3 RESOLUTION NUMBER _______ (CCS) (CITY COUNCIL SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ELECTING TO BE SUBJECT TO PUBLIC EMPLOYEES? MEDICAL AND HOSPITAL CARE ACT ONLY WITH RESPECT TO THE NON-PERS ELECTED OFFICIALS CATEGORY AND FIXING THE EMPLOYER?S CONTRIBUTION FOR EMPLOYEES AND THE EMPLOYER?S CONTRIBUTION FOR ANNUITANTS AT DIFFERENT AMOUNTS WHEREAS, Government Code Section 22850.3 provides that a contracting agency may elect upon proper application to participate under the Public Employees? Medical and Hospital Care Act with respect to a recognized employee organization only; and WHEREAS, Government Code Section 22754 (g) defines any Special District as a contracting agency, and WHEREAS, Government Code Section 22857 provides that a contracting agency may fix the amount of the employer?s contribution for employees and the employer?s contribution for retired employees and survivors at different amounts provided that the monthly contribution for retired employees and survivors shall be annually increased by an amount not less than 5 percent of the monthly contribution for employees, until such time as the amounts are equal; and WHEREAS, a Special District is hereby defined as a non-profit, self-governed public agency within the State of California, and comprised solely of public employees performing a governmental rather than proprietary function, and WHEREAS, the City of Santa Monica, hereinafter referred to as Special District is 4 an entity meeting the above definition; and WHEREAS, the Special District desires to obtain for members of the non-PERS elected officials category, who are active and retired from the agency, the benefit of the Act and to accept the liabilities and obligations of an employer under the Act and Regulations; WHEREAS, Government Code Section 53208.5 (b) prohibits any elective member of a legislative body whose service first commences on and after January 1, 1995, from receiving health and welfare benefits greater than the most generous schedule of benefits being received by any category of non-safety employees; and WHEREAS, Government Code Section 53201 (c)(2) prohibits a local agency that did not provide benefits to former elective members of a legislative body before January 1, 1994, from providing benefits after January 1, 1994, unless the members participate on a self-pay basis; and WHEREAS, Government Code Section 53201 (c)(1) provides that a legislative body that provided benefits to former elected members shall not provide benefits to any person first elected to a term of office that begins on or after January 1, 1995, unless the member participated on a self-pay basis or was fully vested prior to January 1, 1995; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City as Special District hereby elects to be subject to the provisions of the Act. SECTION 2. The employer?s contribution for each employee shall be the amount necessary to pay the full cost of his or her enrollment, including the enrollment of his or her family members in a health benefits plan up to a maximum of $16.00 per month. SECTION 3. The employer?s contribution for each retired employee or survivor shall be the amount necessary to pay the cost of his or her enrollment, including the enrollment of his or her family members, in a health benefits plan up to a maximum of $1.00per month. SECTION 4. The employer?s contribution for each retired employee or survivor shall be increased annually by five (5) percent of the monthly contribution for employees, until such time as the contributions are equal; and that the contributions for active and retired employees and survivors shall be in addition to those amounts contributed by the Special District for administrative fees and to the Contingency Reserve Fund. 5 SECTION 5. The City Council hereby appoints and directs the Director of Personnel to file with the Board of Administration of the Public Employees? Retirement System a verified copy of this Resolution, and to perform on behalf of said Special District all functions required of it under the Act and Regulations of the Board of Administration. SECTION 6. Coverage under the Act will be effective on July 1, 2001. SECTION 7. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: __________________________ MARSHA JONES MOUTRIE City Attorney 6