sr-092810-3jCity Council Meeting: September 28, 2010
Agenda Item: ~,S
To: Mayor and City Council
From: Donna C. Peter, Director of Human Resources
Subject: Resolution Authorizing the City Manager to Execute a Memorandum of
Understanding Setting the Terms and Conditions of Medical Insurance
Coverage with the Coalition of Santa Monica City Employees
Recommended Action
Staff recommends that City Council adopt the attached Resolution authorizing the City
Manager to execute a Memorandum of Understanding (MOU) establishing the terms
and conditions of medical insurance coverage with the City's miscellaneous employee
(non-safety) bargaining units, the participants of the Executive Pay Plan and the Santa
Monica Firefighters, Local 1109 (IAFF) as represented by the Coalition of Santa Monica
City Employees.
Executive Summary
The current Memorandum of Understanding (MOU) expired June 30, 2010. Per the
terms and conditions of that MOU, negotiations with the Coalition for a successor MOU
has resulted in a new agreement. Sufficient funds are included in the current 2010-2011
fiscal year adopted budget for the City's contributions towards medical insurance
premiums and the monthly contributions into the medical trusts.
This agreement will result in three changes to the existing structure of employee
benefits provided by the City of Santa Monica to the represented employees:
1) Effective January 1,2011, employees will begin contributing a flat dollar amount
towards the cost of their medical insurance.
2) City costs for medical insurance for permanent part-time employees hired after
July 1, 2010 will be limited to the cost of one of the HMO plans available.
3) A comprehensive employee wellness plan will be implemented. Funding for this
plan will be shared by the Coalition and the City.
Discussion
Through the meet and confer process, the City and the Coalition of Santa Monica City
Employees, comprised of representatives from the City's miscellaneous employee (non-
safety) bargaining units (Management Team Associations, Supervisory Team
Associates, Administrative Team Associates, Municipal Employees Association, Public
Attorneys Union, Public Attorneys' Legal Support Staff Union, United Transportation
Union (Local 1785), Executive Pay Plan Participants) and the Santa Monica
Firefighters, Local 1109 (IAFF), agreed to a Memorandum of Understanding (umbrella
agreement) setting forth the terms and conditions of medical insurance coverage for
their employee groups.
As part of the negotiation process, staff conducted a market survey of medical benefits
using nine established comparable cities. All nine cities required employees to share in
the cost of their medical benefits.
The term of the umbrella agreement is 18 months, from July 1, 2010 through December
31, 2011. The provisions of the agreement are as follows: the City shall contribute
towards medical premiums an amount equal to the actual cost of the medical insurance
premium for the medical plan that an eligible employee is enrolled in, less any required
employee contributions. Effective January 1, 2011, each- active eligible employee will
contribute apre-tax monthly flat dollar amount towards the medical premium for their
City-provided medical insurance plan. During the term of the agreement, the
reserve/trust account established in 2005 will be utilized to subsidize a portion of the
employee's contribution.
Permanent part-time City employees will have the option of electing from one of the
City-provided HMO medical insurance plans. Permanent part-time City employees may,
at their option, pay the difference between the premium of the less costly HMO medical
insurance plan and the PPO-type Plan plus any employee contribution for the selected
plan.
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The City will implement a comprehensive wellness program, which will include
incentives and services to promote the well being and healthiness of employees. A
portion of the cost to establish and maintain the wellness program will be funded by the
reserve/trust account in an amount not to exceed $95,000.
The MOU also provides for continuing City contributions into existing medical trusts that
are to be used to reimburse all or part of the health insurance premiums for eligible
retirees and dependents. During the term of the MOU, the City will continue to
contribute $142/month on behalf of each eligible active non-sworn employee into a
medical trust established and administered by the non-sworn employees. The City will
also continue to contribute $142/month on behalf of each eligible active employee
represented by Local 1109 (Firefighters) into a medical trust established and
administered by Local 1109.
Financial Impacts & Budget Actions
The provisions contained in this agreement will result in an overall savings of
$1,091,262 over the term of the agreement. Sufficient funds are included in the current
2010-2011 fiscal year budget for the City's contributions towards medical insurance
premiums and the monthly contributions into the medical trusts. No additional
appropriation or budget action will be necessary. Budget authority for. FY2011-2012 will
be requested in the annual budget cycle for City Council approval.
Prepared by: Grace Quitzon, Acting Senior Human Resources Analyst
Approved:
Forwarded to Council:
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Donna C. Peter Rod Gould
Director, Human Resources City Manager
Attachments:
A. Resolution
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Reference Resolution No.
10532 (CCS).