Loading...
SR-6-R (9) f2eco1f q Z3 Z- UmW'C{~ h~g~ ccS (lR JAN f 3 !198 f \mou amend local 1109.1997.bancroft pms Council Meeting: January 13, 1998 Santa Monica, California TO Mayor and CIty CounCIl FROM: City Staff SUBJECT Adoption of Resolution Amending Memorandum of Understanding between the City of Santa MOnica and the Santa MOnica Firefighters, Local 1109, IAFF INTRODUCTION This report requests that CounCil adopt the attached Resolution authorizing the City Manager to execute an amendment to the Memorandum of Understanding (MOU) between the City of Santa MOnica and the Santa MOnica Firefighters, Local 1109 IAFF, (Local 1109) to provide for a monthly employee contnbutlon towards the cost of medical Insurance coverage Under the proposed amendment, the employee medical Insurance premium contribution Will result In a cIty-paid contnbutlon of the same amount Into a Post Employment Health Plan BACKGROUND The current Memorandum of Understanding (MOU) between the CIty and Local 1109 has been In effect since July 1, 1996. Under the terms of the MOU, a Post Employment Health Plan (PEHP) was Implemented. The Internal Revenue Service rules and regulations requIre that non-taxed contnbutlons mto the PEHP be employer contributions. Under the terms of the current MOU, the City makes contnbutlons Into the PEHP Local 1109 wishes to amend the MO U to Increase the city-paid fir< JAN 1 3 1998 contributions Into the PEHP. In return for an Increase In the City's contribution Into the PEHP, Local 11 09 employees have agreed to make a contribution of the same amount towards the cost of city-provided medical Insurance. Currently, the City pays the entire medical Insurance premium on behalf of each employee and his/her eligible dependents. Per the attached amendment to the MOU between the City and Local 1109, the Increase In the City's contribution Into the PEHP would be directly offset by employee medical Insurance premIum contributions BUDOI;T/FINANCIAL IMPACT There Will be no financial Impact for the City as a result of the proposed modifications to the agreement between the City and Local 1109. RECOMMENDATION It IS recommended that Council authorize the City Manager to execute the attached amendment to the MOU between the City and Local 1109. Prepared by: Karen Bancroft , . ~cf4t~f?,f RESOLUTION NO. 9232 (CITY COUNCIL SERIES) AMENDMENT TO THE MEMORANDUM OF UNDERSTANDING BETWEEN CITY OF SANTA MONICA, CALIFORNIA AND SANTA MONICA FIREFIGHTERS, LOCAL 1109 IAFF WHEREAS, the Memorandum of Understanding between the City of Santa MOnica and the Santa MOnica FIrefighters, Local 1109 IAFF (Local 1109) has been In effect since July 1, 1996 and WHEREAS, Section 3.01 (Health Insurance) provides for a medical Insurance program and the establishment of a Post Employment Health Plan (PEHP); WHEREAS, the City of Santa MOnica and the Santa MOnica Firefighters, Local 1109 IAFF wish to modify Section 3 01 of the eXisting Memorandum of Understanding with regard to the Post Employment Health Plan and the city-prOVided medical Insurance program; NOW, THEREFORE, both parties to the Memorandum of Understanding between the City of Santa MOnica and the Santa MOnica Firefighters, Local 1109 IAFF, agree to modify the eXisting Memorandum of Understanding to replace Subsection A (Medical Insurance) of Section 3 01 (Health Insurance) with the follOWing language I . t Subject to the provIsions of thIs Section, the City shall contract wIth the Public Employees I 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 health Insurance benefits available under the Public Employees' Medical and Hospital Care Act, as set forth In Section 22761, et. sea., of the California Government Code (hereinafter referred to as the PERS Program). The health Insurance benefits available under the PERS Program shall replace any other health Insurance benefits available under non-PERS Program health Insurance benefits maintained through the City, prOVided, however, that the City shall contInue to prOVide to all employees covered by thiS Agreement and eligible dependents the benefits avaIlable under the eXisting dental Insurance plans malntamed by the City, With the City to pay 100% of the premium for said dental Insurance plans, prOVIded that employees and dependents partiCipate In the City-provided dental Insurance plans Each employee desJrlng 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 electmg medical coverage under the PERS Program (a Participating Employee"), a composite medical Insurance premium for the 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 \ t and any contingency reserves required by PERS, for all Partlclpatmg 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 and then subtracting from that quotient $110. 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 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 contnbutlon 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 contnbute 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 cafetena plan the lesser of (I) $459, which IS the City's medical Insurance contribution cap of $475 per month less the $1 6 per month contribution to PERS, and (II) the difference between (a) the composite monthly Insurance premium as calculated In the third paragraph of thiS Section 3.01 and (b) the $16 contribution 1 set forth In the fourth full paragraph of thIs SectIon 3.01. 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 contnbutlon 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 defmed In the third full paragraph of this Section 3.01 plus $110. In the event the cost of the PERS Program option IS greater than the sum of the (1) CIty's contnbutlon to the cafetena plan pursuant to this paragraph and the $1 6/month contribution to PERS, the difference shall be paid through one of the follOWIng two arrangements selected by Local 1109: (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 contnbutlon made by the City to the cafeteria plan shall be paid by the employee upon whose behalf the contnbutlon to the cafetena plan IS made Pursuant to the terms of the cafetena plan, any eligible employee electmg 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 contnbutlon to the cafetena plan on his/her behalf. In the event the monthly composite medical Insurance premium IS less than the City's medlcalmsurance premium contributIon cap, which IS set at $475 per month, ~ the difference Will be contributed by the City on behalf of each eligible employee Into a Post Employment Health Plan (PEHP) Each eligible employee will have his/her own trust account established In PEHP. As regards the tax liability prOVISion of the second and fifth full paragraph of this Section 3 01, the City warrants that the cafeteria plan IS a bona fide IRS Section 125 cafetena 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 pertamlng to tax liability shall have no effect. Effective July 1, 1997, the maximum amount of the City's contribution to the cafeteria plan shall be the difference between (a) the highest medical Insurance premium contribution "cap" established for any of the City's other bargaining units for FY97-98 and (b) $16.00. In the event the monthly composite medical Insurance premium IS greater than the City's medical Insurance premium contribution cap, as descnbed above, the difference between the monthly composite medical Insurance premium and the City's Contnbutlon cap shall be paid through one of the follOWing two arrangements selected by Local 1109 (a) direct payroll deduction by each covered employee or (b) direct payment by Local 1109. ;; If the City IS required by PERS to make payments for contingency reserves, 100% of those costs shall be Included In the calculation of the composite monthly Insurance premium. Local 1109 shall be obligated to pay to PERS 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 PERS for administrative fees for covered employees and therr 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 ehglble dependents, either {a} the City shall be reimbursed for the aggregate Increased cost obtained by multiplYing the amount of the required contnbutlon In excess of $16.00 by the total number of retIree annuitants participating In the PERS Program (1) by direct payment from Local 1109 or (2) by redUCing the amount of the City's cafeteria contribution on behalf of active employees, on a pro-rata baSIS, or (b) Local 1109 shall have the alternative option to cause the City to discontinue to contract for Insurance benefits With PERS under the PERS Program and, Instead, to allow all active and retired employees and eligible dependents to enroll In one of the non-PERS Program medical Insurance plans offered by the City. In the event that Local 1109 exerCises thIS latter option, the City shall pay up to the highest Insurance premium contnbutlon "cap" established for any of the City's other . bargaining Units for the fiscal year In which the change occurs for active employees and eligible dependents provided that employees covered hereunder partiCipate In the City-offered medical Insurance programs The CIty's oblIgation to SUbsidize Insurance premiums for retirees would cease In the event that Local 1109 exercises Its option to cause the City to discontinue to contract for Insurance benefits With PERS under the PERS Program If the "composite" Insurance premium established for non-PERS medical Insurance programs prOVided by the CIty should Increase as a result of Local 1109 employees gOing back mto the non-PERS medrcal rnsurance programs, Local 1109 Will be obligated to cover the total additional cost to the City (a) through drrect payroll deduction by the employee electing said coverage, calculated on a pro-rata basrs, or (b) by direct payment from Local 1109 It IS agreed that the Intent of thiS SectIon IS (a) to prOVide an option for employees under the MOU to select the PERS FIre Fighter Plan; and lb) to provide a City Insurance premium contribution. It IS not the Intent of the parties to reqUire such employees to remain In the PERS general plan In the event the Frre Fighter Plan IS canceled or merged. The parties agree that they Will meet and confer regarding health Insurance matters In the event of any of the follOWing contingencies: (a) If the PERS Fire Fighter Plan IS canceled by PERS; or (b) If the costs of the PERS Fire Fighter Plan (including any admmistratlve fees and contIngency reserves reqUired by PERS) exceed the City's Insurance premium contribution ("cap"). It IS the Intent of the City, In the event of such problems arising With the PERS Firefighter Plan, to permit and to faCIlitate the return of all City Firefighter employees covered by PERS to a medical Insurance plan then currently provided by the City to Its other employees, If such a return would not create a breach of the City's PERS contract. 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 and the Santa MOnica Firefighters, Local 1109, IAFF, shall remain In full force and effect. IN WITNESS WHEREOF, the parties have executed thiS ModificatIOn to the Memorandum of Understanding between the City of Santa MOnica and the Santa MOnica Firefighters, Local 1109, IAFF, as of the date of the adoption of thiS modIfication by City CouncIl. SANTA MONICA FIREFIGHTERS LOCAL NO. 1109, IAFF CITY OF SANTA MONICA ~-~~$ ~orge Menta, President By ~~~c~ Dan Matthks, Vice President Ji. L.)( - Rlc::zar " mer, Board of Directors _~9. ~J Steve Wells, Board of Directors fl.:L ~ ,-- ~ Dirk Ball/oard of Jlrec~~r~ / C:1}/ /f? '/;A~/:0 '1ffb/ Ker+.fiOKdr,-S6ard of Directors APPROVED AS TO FORM: Attest. :/\ .~' I ' ~ ~ , j illUvl ' ~ ,I-/![ &J /1Lt{.{.4 Marsha Jones N/1outne City Attorney &noJ~. Crty Clefk 0 iflre mou amend . 997i Adopted and approved this 13th of January, 1998 A--~-~ Robert Holbrook, Mayor I, Mana M Stewart, City Clerk of the City of Santa MOnica, do hereby certify that the foregoing Resolution 9232 (CCS) was duly adopted at a meeting of the City CounCil held on the 13th of January, 1998 by the follOWing vote Ayes Councllmembers Ebner, Feinstein, Genser, Greenberg, Holbrook, O'Connor, Rosenstein Noes Councllmembers None Abstain Councllmembers None Absent Councllmembers None ATTEST '-- ~ ;~oA- '.. Mana M Stewart, City Clerk