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Home My WebLink About4.2 Rev Personnel System STAFF REPORT CITY CLERK File #700-40 CITY COUNCIL DATE: October 2, 2012 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJECT: Revisions to the Personnel System Prepared by Angelica Smith, Administrative Analyst II EXECUTIVE SUMMARY: This Staff Report identifies proposed changes to the City’s current Personnel System. The proposed modifications are based on the need to amend the City’s medical contribution rate for the 2013 calendar year and to reflect the adoption of the City’s retirement contract with the Board of Administration of the California Public Employees’ Retirement System (CalPERS) implementing Employee Cost Sharing of Additional Benefits as defined in Section 20516 of the California Public Employees Retirement Law (PERL). The proposed medical contribution rate increase is effective with the January 1, 2013 premium statements from CalPERS. Sufficient funds have been established by the adoption of the Fiscal Year 2012-2013 Budget to cover City paid health and welfare benefits. RECOMMENDATION : Staff recommends the City Council adopt the following Resolutions: Resolution Fixing Employer’s Contribution Rate Under the Public Employees’ Medical and Hospital Care Act; Resolution Fixing Employer’s Contribution Rate Vesting Requirement for Future Retirees under the Public Employees’ Medical and Hospital Care Act; and, Resolution Amending the Benefit Plan. Submitted By Reviewed By Human Resources DirectorParks & Community Services Director DESCRIPTION: The City currently contracts with the California Public Employees’ Retirement System (CalPERS) for the provision of health benefits as do a number of other public agencies. CalPERS allows each participating agency to designate the amount to be contributed by the employer. The City is required by CalPERS to contribute the same premium amount for current (active) employees as it does for retired employees. At the start of the current benefit plan period, the City contributed a maximum amount toward each employee’s medical premium that ITEM NO. 4.2 Page 1 of 2 was equal to the full-family rate for Kaiser. In each subsequent year any increase to the full- family rate for Kaiser was split 50/50 between the City and employees. During Fiscal Year 2012-2013, the City will continue the current health contribution program with a 50/50 split with employees of the increase to the Kaiser Family premium. Presently, the City contributes a maximum of $1,254.68 per month per employee/retiree for medical insurance. Premium amounts that exceed the City’s maximum contribution are paid directly by the employee/retiree. If an employee’s/retiree’s actual cost of coverage is less than the maximum contribution, the employee does not receive a cash-out of the difference. Based on the agreed 50/50 split of the increase to the Kaiser Family premium the City will increase its contribution from $1,254.68 to $1,330.51 per month effective January 1, 2013. As required by CalPERS, the City must adopt two separate CalPERS Resolutions fixing the employer’s contribution under the Public Employees’ Medical and Hospital Care Act (PEMHCA). The attached Resolution (Attachment 1) increase the City’s contribution from $1,254.68 per month to $1,330.51 for current (active) employees. Attachment 2 is the contribution rate for those employees who were hired after April 1, 2004 and eligible for the City’s plan under vesting requirements for future retirees. This rate is set by the State (State Annuitant 100/90 formula), and in 2013 the maximum amount is $1,515.00 per month and paid to future retirees based on a vesting schedule. It is also necessary for the City to amend the City’s Benefit Plan (Attachment 3) establishing the maximum medical insurance contribution at $1,330.51 effective January 1, 2013. Premium adjustments in future years will require the adoption of Resolutions based on the 50/50 split formula or other method. On September 18, 2012, the City Council adopted an Amendment to the Contract with the Board of Administration of California Public Employees’ Retirement System (CalPERS) to provide Employee Cost Sharing of Additional Retirement Benefits. The attached Resolution (Attachment 3) adopts changes to the City’s Benefit Plan to incorporate the City’s CalPERS contract amendment and establishes the City’s 2013 health care contribution rate. NOTICING REQUIREMENTS/PUBLIC OUTREACH: Not Applicable ATTACHMENTS: 1. Resolution Fixing Employer’s Contribution Rate Under the Public Employees’ Medical and Hospital Care Act 2. Resolution Fixing Employer’s Contribution Rate Vesting Requirement for Future Retirees under the Public Employees’ Medical and Hospital Care Act 3. Resolution Amending the Benefit Plan Page 2 of 2 RESOLUTION NO. XX - 12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * FIXING THE EMPLOYER'S CONTRIBUTION UNDER THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT WHEREAS , Government Code Section 22892(a) provides that a local agency contracting under the Public Employees' Medical and Hospital Care Act shall fix the amount of the employer's contribution at an amount not less than the amount required under Section 22893(1) of the Act; and WHEREAS , the City of Dublin is a local agency contracting under the Act. NOW THEREFORE BE IT RESOLVED that the employer's contribution for each employee or annuitant shall be the amount necessary to pay the cost of his/her enrollment, including the enrollment of his/her family members, in a health benefit plan, up to a maximum of $1,330.51 dollars per month plus administrative fees and Contingency Reserve Fund assessments. BE IT FURTHER RESOLVED that the changes contained herein shall be effective January 1, 2013. nd PASSED, APPROVED AND ADOPTED this 2 day of October, 2012, by the following votes: AYES : NOES : ABSENT : ABSTAIN : ________________________________ Mayor ATTEST : _______________________________________ City Clerk ATTACHMENT 1 RESOLUTION NO. XX – 12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * FIXING THE EMPLOYER'S CONTRIBUTION VESTING REQUIREMENT FOR FUTURE RETIREES UNDER THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT WHEREAS , Government Code Section 22892(a) provides that a local agency contracting under the Public Employees' Medical and Hospital Care Act shall fix the amount of the employer's contribution at an amount not less than the amount required under Section 22893 (1) of the Act; and WHEREAS , the City of Dublin is a local agency contracting under the Act. NOW THEREFORE BE IT RESOLVED that the employer's contribution for each active and retired employee first hired on or after April 1, 2004 shall be the amount necessary to pay the cost of his/her enrollment, including the enrollment of his/her family members, in a health benefit plan, up to a maximum of $1,515.00 dollars per month plus administrative fees and Contingency Reserve Fund assessments. BE IT FURTHER RESOLVED that the changes contained herein shall be effective January 1, 2013. nd PASSED, APPROVED AND ADOPTED this 2 day of October, 2012, by the following votes: AYES : NOES : ABSENT : ABSTAIN : _______________________________ Mayor ATTEST : _______________________________________ City Clerk ATTACHMENT 2 RESOLUTION NO. XXX –12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * AMENDING THE BENEFIT PLAN WHEREAS, the Personnel System Rules requires the City Council to adopt a Benefit Plan; and WHEREAS , the Benefit Plan prescribes the current benefits provided to employees by the City. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby amend Resolution 109-91 and subsequent amendments to include the following: Section 2. Medical Insurance: All City employees who are members of the California Public Employees Retirement System (CalPERS) shall be eligible to select from plans administered by the Public Employees Medical and Hospital Care Act (PEMHCA). Beginning with the January 1, 2013 premium, the City of Dublin will contribute a maximum of up to $1,330.51 per month premium, exclusive of administrative charges, towards medical insurance. If the cost of coverage exceeds the amount of the City contribution, the additional cost will be paid by the employee through payroll deductions or at the employee’s option to the extent allowed by Section 4 of the Benefit Plan. Section 9. Retirement: Paragraph 1: (Unchanged). Paragraph 2: (Unchanged). Paragraph 3: (Unchanged). Paragraph 4: Effective October 20, 2012, and pursuant to Article 2 - Contract Provisions, Section 20516 of the California Public Employees Retirement Law (PERL) Employee Cost Sharing of Additional Benefits has been adopted up to a maximum of 4.072%. The City shall apply the provisions of Internal Revenue Code (IRC) 414(h) (2) to all eligible payroll deductions for employee CalPERS contributions. Employee Cost Sharing of Additional Benefits shall begin at a rate of 1.75%. In future years, increases to Employee Cost Sharing of Additional Benefits shall be determined during a review of the February Consumer Price Index (CPI) – All Urban Wage Earnings and the City’s Fiscal Year budget process; not to exceed the maximum of 4.072%. nd PASSED, APPROVED AND ADOPTED this 2 day of October, 2012, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ Mayor ATTEST : _______________________________________ City Clerk ATTACHMENT 3