R-9664
RESOLUTION NO. 9664 (ees)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AUTHORIZING THE CITY MANAGER
TO EXECUTE A MEMORANDUM OF UNDERSTANDING
SETTING THE TERMS AND CONDITIONS OF MEDICAL INSURANCE COVERAGE
WITH
MANAGEMENT TEAM ASSOCIATES, SUPERVISORY TEAM ASSOCIATES,
ADMINISTRATIVE TEAM ASSOCIATES, MUNICIPAL EMPLOYEES ASSOCIATION,
PUBLIC ATTORNEYS' UNION, UNITED TRANSPORTATION UNION (LOCAL 1785),
PUBLIC ATTORNEYS' LEGAL SUPPORT STAFF UNION AND
EXECUTIVE PAY PLAN PARTICIPANTS
WHEREAS, the City administration and representatives of the City's
miscellaneous employee (non-safety) bargaining units have met and conferred under the
terms of Ordinance No. 801 (CCS) and have reached agreement on the terms and
conditions of medical insurance coverage; and
WHEREAS, Section 2.06 of Ordinance No. 801 (CCS) of the City of Santa
Monica requires preparation of a written Memorandum of Understanding between the
administration and employees if an agreement can be reached; and
WHEREAS, Section 2.06 of Ordinance No. 801 (CCS) further provides that
any such Memorandum of Understanding shall not be binding unless and until presented
to the governing body for determination; and
WH EREAS, the purpose of the Memorandum of Understanding is to promote
and provide harmonious relations, cooperation, and understanding between the City and
its miscellaneous employee (non-safety) bargaining units;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
Section 1. The City Council of the City of Santa Monica does hereby approve
and authorize the City Manager to execute the Memorandum of Understanding setting the
terms and conditions of medical insurance coverage for miscellaneous (non-safety) City
employees which has been ratified by the City's miscellaneous employee (non-safety)
bargaining units, a copy of which is attached hereto.
Section 2. The provisions setting the terms and conditions of medical
insurance coverage, currently contained in the separate Memorandums of Understanding
between the City and the following bargaining units will be superceded by the attached
Memorandum of Understanding: Management Team Associates, Supervisory Team
Associates, Administrative Team Associates, Municipal Employees Association, Public
Attorneys' Union, United Transportation Union (Local 1785), Public Attorneys' Legal
Support Staff Union and Executive Pay Plan participants.
Section 3. 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:
(medical insurance.umbrella agreement.Council Resolulion.061201)
Adopted and approved this 12th of June, 2001.
I, Maria M. Stewart, City Clerk of the City of Santa Monica, do hereby
certify that the foregoing Resolution No. 9664 (CCS) was duly adopted at a
meeting of the Santa Monica City Council held on the 12th of June, 2001, by the
following vote:
Ayes: Council members:
Noes: Council members:
Abstain: Council members:
Absent: Council members:
O'Connor, McKeown, Genser, Mayor
Feinstein
None
None
Holbrook, Katz, Mayor Pro T em Holbrook
ATTEST:
MEMORANDUM OF UNDERSTANDING
(UMBRELLA AGREEMENT)
SETTING THE TERMS AND CONDITIONS OF MEDICAL INSURANCE COVERAGE
FOR ALL MISCELLANEOUS CITY EMPLOYEES
BETWEEN
CITY OF SANTA MONICA
AND
MANAGEMENT TEAM ASSOCIATES, SUPERVISORY TEAM ASSOCIATES,
ADMINISTRATIVE TEAM ASSOCIATES, MUNICIPAL EMPLOYEES ASSOCIATION,
PUBLIC ATTORNEYS' UNION, UNITED TRANSPORTATION UNION(LOCAL 1785),
PUBLIC ATTORNEYS' LEGAL SUPPORT STAFF UNION AND
EXECUTIVE PAY PLAN PARTICIPANTS
The term of this Agreement shall be from July 1, 2001 through
June 30, 2004. Employees covered hereunder shall be all
miscellaneous (i. e., non-safety) City employees covered by the
California Public Employees' Retirement System (Ca1PERS) and
represented by the Coalition, which is comprised of the following
City bargaining units: Administrative Team Associates (ATA) ,
Management Team Associates (MTA) , Municipal Employees Association
(MEA), Public Attorneys Union (PAU), Public Attorneys' Legal
Support Staff Union (PALSSU), Supervisory Team Associates (STA) and
United Transportation Union, Local (UTU). This Agreement shall
also cover members of the Executive Pay Plan (EPP). This Agreement
shall not cover or pertain to safety (i.e., Police and Fire)
employees covered by CalPERS. However, this Agreement shall apply
to a successor recognized employee organization for any bargaining
unit which is a member of the Coalition as of July 1, 2001.
Subject to the provisions of this Section, the City shall contract
with the California Public Employees' Retirement System (CalPERS)
to make available to those miscellaneous employees and their
eligible dependents and to miscellaneous eligible retirees and
dependents to the extent required by law the medical insurance
benefits available under the Public Employees' Medical and Hospital
Care Act, as set forth in Section 22761, et. seq., of the
California Government Code (hereinafter referred to as the CalPERS
Program) .
Each employee covered hereunder desiring to be covered hereunder
may contribute, on a pre-tax basis, monies into an Internal Revenue
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Code Section 125 plan established for the purpose of
employees to pay health insurance costs which
responsibility of the employee.
enabling
are the
For active miscellaneous employees and their dependents who are
eligible to participate in the medical insurance plans provided
under the CalPERS Program ("Eligible Employee"), a composite
medical insurance premium for the CalPERS Program shall be set at
the beginning of each medical plan year. For the purpose of
calculating the composite medical insurance premium, only the cost
of the least expensive Preferred Provider Option (PPOl medical
insurance plan will be used in those cases where an employee elects
coverage under another PPO medical insurance plan. The composite
medical insurance premium shall be derived by dividing (a) the
total monthly premiums, including any administrative fees and/or
contingency reserves required by CalPERS, for all eligible
employees plus any cash-in-lieu of insurance payments made to
employees electing to not participate in the CalPERS Program and
any premiums paid to CalPERS on behalf of retiree annuitants by (b)
the number of eligible employees as of that date, which would
include employees electing the cash-in-lieu option. The City will
establish a "composite" monthly insurance premium, as described in
this paragraph, in the administration of the medical insurance
program; and such composite premium will be the same for every
eligible employee, regardless of family status or medical plan
selected. The composite monthly insurance premium shall be set
once a year and shall have no effect on the payment of the City's
insurance premium contribution. If new eligible employees are
hired, those employees will receive the same medical insurance
premium contribution as other employees covered by this Agreement.
The cost of coverage under the CalPERS Program for each
miscellaneous retiree annuitant shall be the actual premium
established by CalPERS for the type of coverage elected by the
retiree annuitant.
The City shall contribute toward the payment of premiums under the
CalPERS Program on behalf of each eligible active employee who
elects to participate in the CalPERS Program the sum of $16.00 per
month. The City shall contribute toward the payment of premiums
under the CalPERS Program on behalf of each eligible miscellaneous
retiree annuitant the minimum amount required by the CalPERS, not
to exceed the $16.00 per month contribution made by the City on
behalf of each active employee.
In addition, each month the City shall contribute on behalf of each
eligible active miscellaneous employee toward a cafeteria plan the
amount of the composite medical insurance premium, described in the
fourth full paragraph of this Agreement, not to exceed the City
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medical insurance contribution cap of $475 per month less the $16
per month contribution to CaIPERS. Each eligible employee shall
have the right to elect medical coverage from those available under
the Public Employees Medical and Hospital Care Act (PEM and HCA) .
Each eligible employee can use this City contribution to cover all
or a portion of the cost of medical insurance for the employee and
his/her eligible dependents under one of the CalPERS Program
options. Regardless of the actual cost of medical coverage under
the PEM and HCA, the cost of each option under the CalPERS program
(the "CaIPERS Program Option") is the monthly composite medical
insurance premium defined in the fourth full paragraph of this
Agreement. However, those employees who elect a PPO medical
insurance plan other than the least expensive PPO medical insurance
plan offered by CalPERS will be required to pay, through payroll
deduction, the difference between the premium of the PPO medical
insurance plan selected and the PPO premium which would have been
incurred had the employee selected the least expensive PPO medical
insurance plan. In the event the cost of the CalPERS Program Option
is greater than the sum of the (1) City's contribution to the
cafeteria plan pursuant to this paragraph and the $16/month
contribution to CalPERS / the difference shall be paid by each
eligible employee through a payroll deduction or a contribution
from the employee's 125 plan account. Any tax liability
associated with the contribution made by the City to the cafeteria
plan shall be paid by the employee upon whose behalf the
contribution to the cafeteria plan is made. Pursuant to the terms
of the cafeteria plan, any eligible employee electing not to
receive medical coverage pursuant to the options available under
the PEM and HCA shall be entitled to a lump sum monthly cash
payment in the amount of $150.00, with the difference between the
City contribution to the cafeteria plan on the employee's behalf
and the $150.00 lump sum payment being used to offset the premiums
incurred under the CalPERS Program for current program
participants.
From July 1/ 2001 through June 30, 2004, the City shall contribute
$142 per month on behalf of each eligible active miscellaneous
employee covered by this Agreement into a trust to be established
and administered by the employees covered hereunder in accordance
with federal and state laws. Until such time that the Trust has
been established, the City will place the City contributions
towards the Trust in an interest bearing account. Once the Trust
has been established, those contributions and all accrued interest
on those contributions will be deposited by the City in the
appropriate Trust account. The trust will be used to pay all or
part of insurance premiums for eligible retiree annuitants and
dependents. The employees covered hereunder shall be responsible
for all costs associated with establishing and administering the
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trust. City contributions to said trust shall be governed by
applicable federal and state laws. The City shall not be
responsible for any tax liability associated with contributions to
and/or payments made from the trust. The monthly contribution for
an active employee will only be made for each month that the
employee is eligible to receive medical insurance coverage under
the CalPERS Program. Under the terms of this Agreement, City
contributions to the trust shall cease as of June 30, 2004.
As regards the tax liability provision of the third and sixth fuil
paragraph of this Agreement, the City warrants that the cafeteria
plan is a bona fide IRS Section 125 cafeteria plan. The regular
and intended effect of the implementation of the plan, under
current law, is to enable employees to choose between the receipt
of benefits which are not subject to either State or Federal income
tax and benefits which are subject to tax without the choice
resulting in a taxable event. Thus, the tax liability provision
shall be interpreted to mean that, in the event of a change in IRS
regulations or tax law that makes cafeteria benefits taxable, the
employee (not the City) is responsible for the taxes. In the
absence of such a change, the provision pertaining to tax liability
shall have no effect.
If the City is required by CalPERS to make payments for contingency
reserves, 100% of those costs shall be included in the calculation
of the composite monthly insurance premium.
Employees covered hereunder shall be obligated to pay to CalPERS
all of the amounts required for administrative fees for covered
employees and their eligible dependents and retiree annuitants and
eligible dependents. The amount required by CalPERS for
administrative fees for covered employees and their dependents and
retiree annuitants and eligible dependents shall be included in the
calculation of the composite monthly insurance premium established
for active employees covered hereunder.
If during the term of this Agreement the City shall be required to
pay an amount greater than $16.00 per month for health insurance
premiums on behalf of each retiree annuitant and any eligible
dependents, the City shall be reimbursed for the aggregate
increased cost obtained by multiplying the amount of the required
contribution in excess of $16.00 by the total number of retiree
annuitants participating in the CalPERS prograrn (1) by direct
payment from the employees covered hereunder or (2) by reducing the
amount of the City's cafeteria contribution on behalf of active
employees, on a pro-rata basis.
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IN WITNESS WHEREOF, the parties hereto have caused this Memorandum
of Understanding to be executed this day of June, 2001.
ADMINISTRATIVE TEAM ASSOCIATES
Lauralee Asch, President
~AGEMENT TEAM ASSOCIATES
Renee Cowhig, President
MUNICIPAL EMPLOYEES ASSOCIATION
David Shirey, President
PUBLIC ATTORNEYS' UNION
David Armstrong, PAU Representative
PUBLIC ATTORNEYS' LEGAL SUPPORT
STAFF UNION
Judy Silverman, PALSSU Representative
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CITY OF SANTA MONICA
Susan E. McCarthy
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
SUPERVISORY TEAM ASSOCIATES
Carl Olson, President
UNITED TRANSPORTATION UNION (LOCAL 1785)
Percival Palmer, General Chairman
EXECUTIVE PAY PLAN
Craig Perkins, EPP Representative
(F: \labor\MOU\MOV .medical insurance .miscellaneous employees. 2001-2004)
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