R-9781
RESOLUTION NO. 9781 (CCS)
(CITY COUNCIL SERIES)
AMENDMENT TO THE
MEMORANDUM OF UNDERSTANDING
BETWEEN
CITY OF SANTA MONICA, CALIFORNIA
AND
SANTA MONICA FIREFIGHTERS, LOCAL 1109, IAFF
WHEREAS, the term of the current Memorandum of Understanding between the
City of Santa Monica and the Santa Monica Firefighters, Local 1109, IAFF (Local 1109)
does not expire until June 30,2003 and
WHEREAS, the City of Santa Monica and Local 11 09 wish to modify Sections 3.01
of this Memorandum of Understanding effective as of January 1, 2001 ;
NOW, THEREFORE, both parties to the Memorandum of Understanding between
the City of Santa Monica and Local 1109 agree to modify the existing Memorandum of
Understanding to make the following revisions to Subsection A (Medical Insurance) of
Section 3.01 (Health Insurance):
Section 3.01. Health Insurance:
Subsection A is hereby deleted in its entirety. It is hereby replaced with the following
language to read:
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Subject to the provisions of this Section, the City shall contract with the Public
Employees' Retirement System (PERS) to make available to those employees and
their eligible dependents and to 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 PERS Program).
Each employee desiring to be covered hereunder may contribute, on a pre-tax
basis, monies into an Internal Revenue Code Section 125 plan established for the
purpose of enabling employees to pay the employee portion of the total cost of
medical insurance coverage on a pre-tax basis.
For employees and their dependents electing medical coverage under the PERS
Program ("Participating Employee"), a composite medical insurance premium forthe
PERS Program shall be set at the beginning of each medical plan year and shall be
derived by dividing (a) the total monthly premiums, including any administrative fees
and any contingency reserves required by PERS, for all Participating employees
and dependents covered hereunder based on their elections pursuant to the fifth
paragraph by (b) the number of Participating employees covered hereunder as of
that date. The City will create 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 Participating employee,
regardless of family status or medical plan selected. The composite monthly
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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 employees are hired,
those employees will receive the same medical insurance premium contribution as
other employees covered by this MOU. The cost of coverage under the PERS
Program for each retiree annuitant shall be the actual premium established by
PERS for the type of coverage elected by the retiree annuitant.
The City shall contribute toward the payment of premiums under the PERS Program
on behalf of each eligible employee and, to the extent required by law, each eligible
retiree annuitant, the sum of $16.00 per month.
In addition, each month the City shall contribute on behalf of each eligible employee
toward a cafeteria plan the amount of the City's medical insurance contribution cap
($475 for FYOO-01 )Iess $135 and the $16 per month contribution to PERS. [For
FYOO-01, the City contribution will be $475 - $151 (Le.,$135 + $16), or $324]. Each
eligible employee shall have the right to elect medical coverage from those available
underthe 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 PERS Program options. Irrespective of the actual cost of medical coverage
under the PEM and HCA, the cost of each option under the PERS program (the
"PERS Program Option") is the monthly composite medical insurance premium
defined in the third full paragraph of this Section 3.01. In the event the cost of the
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PERS 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 PERS,
the difference shall be paid through one of the following two arrangements selected
by Local 11 09: (a) payment to first be made from the employee's 125 Plan account
with any additional payments required to be made by direct payroll deduction by
each employee or (b) direct payment by Local 1109. 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 cash payment equal to the City contribution to the
cafeteria plan on his/her behalf.
Starting as of January 1, 2001, and ending as of payroll period beginning on
June 30, 2002, the City agrees to pay any medical insurance premiums that are in
excess of the City's monthly medical insurance contribution cap of $475 less $151
($135 + the $16 per month contribution to PERS). As of payroll period starting June
30,2002, the use of a composite medical insurance premium will be discontinued,
and the cost of medical insurance will be the actual premium charged by PERS for
the medical insurance plan option selected by each employee who participates in
the PERS Program. In addition, the City's contribution to the cafeteria plan will be
as described in the following paragraph.
Starting as of the payroll period beginning on June 30, 2002, the amount of the City
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cafeteria plan contributions shall be based on each employee's coverage eligibility
level - i.e., single coverage, employee + one dependent coverage or family
coverage. For employees who are eligible for single coverage, the City will
contribute $299 less $151 ($135 + the $16 contribution to PERS), or $148, per
month; for employees who are eligible for employee + one dependent coverage, the
City will contribute $550 less $151 ($135 + the $16 contribution to PERS), or $399,
per month; and for employees who are eligible for family coverage, the City will
contribute $699 less $151 ($135 + the $16 contribution to PERS), or $548, per
month into a cafeteria plan. In the event the premium charged for the PERS
Program medical plan selected by the employee is greater than the sum of the (1)
City's contribution to the cafeteria plan and the $16 per month contribution to PERS,
the difference shall be paid through one of the following two arrangements selected
by Local 11 09: (a) payment to first be made from the employee's 125 Plan account
with any additional payments required to be made by direct payroll deduction by
each employee on an after-tax basis, or (b) direct payment by Local 11 09. 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.
An employee who is fully covered by his/her spouse's health insurance plan, may
elect not to receive medical coverage pursuant to the options available under the
PEM and HCA and shall be entitled to a cash payment equal to the City's
contribution to the cafeteria plan for an employee who eligible for single coverage
prior to the deduction of $151.00. An employee who chooses this cash payment
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option must provide proof of full coverage under his/her spouse's health insurance
plan. The parties agree that the limitation set forth herein to receive the cash
payment option (Le., that the employee must be fully covered by his/her spouse's
health insurance) is sufficient to avoid inclusion of the cash payment in the FLSA
regular rate of the employee as set forth at 29 C.F.R. ~ 778.215(a)(5).
If the City is required by PERS to make payments for contingency reserves and/or
obligated to pay administrative fees for covered employees and their eligible
dependents and retirees annuitants and eligible dependents, 100% of those costs
shall be added to the monthly insurance premium for each medical insurance plan
option, described above, on a prorata basis. The resulting total amount will be
considered the premium for the medical insurance coverage elected by the
employee.
The City has established a Post Employment Health Plan (PEHP) for employees
covered herein. There shall be no City-paid contributions into the PEHP.
Contributions to said plan shall be made by all Local 1109 employees through
payroll deduction. Local 11 09 shall notify the City, in writing, the amount which will
be contributed by each Local 1109 employee into the PEHP. As of the payroll
period beginning on June 30, 2002, instead of the $110 per month that employees
covered herein are currently contributing, per the direction of Local 1109,
employees will contribute $10 per month into the PEHP. Upon written notification
from Local 11 09, contributions into the PEHP can be changed or discontinued.
The City shall contribute $135 on behalf of each eligible employee covered by this
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Agreement into a trust to be established and administered by Local 1109 in
accordance with federal and state laws. The trust will be used to pay all or part of
insurance premiums for eligible retirees and dependents. Local 1109 shall be
responsible for all costs associated with establishing and administering the 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 PERS Program. In addition, as
of the payroll period beginning on June 30, 2002, each employee covered herein
shall contribute $100 per month into the trust. The City shall not be responsible for
any tax liability associated with employee contributions to the trust. Upon written
notification from Local 1109, the employee contribution into the trust can be
modified during the term of this agreement.
As regards the tax liability provision ofthe second, fifth and eighth full paragraph of
this Section 3.01, 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
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provision pertaining to tax liability shall have no effect.
Effective January 1 , 2003 and each January 1 st thereafter, the City contributions into
the cafeteria plan outlined in the eighth full paragraph of this provision shall be
increased by the higher of (a) two (2) times the percentage increase in the CPI-W
(Urban Wage Earners & Clerical Workers) for Los Angeles-Riverside-Orange Co.,
California, published by the U.S. Department of Labor, Bureau of Labor Statistics
for the year ending the preceding November or (b) the average percentage increase
in medical insurance premiums, weighted to reflect the actual enrollment of
employees covered herein, for the medical insurance plans offered through the
CalPERS HealthCare program. However, in no event shall said adjustment exceed
eight percent (8%).
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 PERS Program (1) by direct payment from Local 11 09 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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The parties understand that COBRA participants who, prior to electing COBRA
coverage, were covered by plans available to this bargaining unit shall continue to
be covered by those plans, or by the successors to those plans, and said coverage
shall be the financial responsibility of the COBRA participant.
Except as expressly modified herein, all other terms and conditions set forth in the
Memorandum of Understanding between the City of Santa Monica Local 11 09 shall remain
in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Memorandum of Understanding between the City of Santa Monica and the Local 11 09 as
of the date of the adoption of this modification by City Council.
C
SANTA MONIC~
j ,
By: ~
Susan . McCarthy
City Manager
APPROVED AS TO FORM:
L~
~~.~...~
Attest
City Clerk
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Adopted and approved this 9th day of July, 2002.
I, Maria M. Stewart, City Clerk of the City of Santa Monica, do hereby
certify that the foregoing Resolution No. 9781 (CCS) was duly adopted at a
meeting of the Santa Monica City Council held on the 9th of July, 2002, by the
following vote:
Ayes: Council members:
Holbrook, O'Connor, Bloom, Genser, Mayor
Pro Tem McKeown, Mayor Feinstein
Noes: Council members:
None
Abstain: Council members:
None
Absent Council members:
Katz
~TTEST: _
G.---~~~ .~~
Maria Stewart, City erk