CC - Item 5C - Transition to Calpers Health Insurance0 0
ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: OLIVER C. CHI, INTERIM CITY MANAGER
DATE: AUGUST 28, 2007
SUBJECT: TRANSITION TO CALIPERS HEALTH INSURANCE
SUMMARY
On June 12, 2007, the City Council voted to direct staff to begin the process of transitioning away
from CaIPERS as the City's health benefits provider to Cigna. Later, on August 14, 2007, the City
Council deferred taking action on the authorizing resolution needed to finalize the City's transition
out of CaIPERS health.
Based on that deferral, the City was unable to meet the August 20, 2007 deadline to submit an
authorizing resolution to CaIPERS to formalize the transition to a private health insurance provider.
This means that the City will have to stay with CalPERS as the City's health benefit provider.
Staff also met with the Rosemead Employee Association (REA) to discuss this matter and have
drafted a new Memorandum of Understanding (MOU) to reflect the update and changes that have
been made to employee benefits.
Staff Recommendation
Staff recommends that the City Council authorize a transition back to CalPERS as the City's health
insurance provider and approve the new MOU between the City of Rosemead and the REA
(Attachment A).
ANALYSIS
As part of the transition away from CaIPERS health insurance, -the City Council authorized the
implementation of a cafeteria plan benefit amount of $1,350 / month for employees to purchase
health insurance, vision insurance, and dental insurance. The benefit amount was set at that level
in an effort to provide employees with the most comprehensive level of coverage available.
With the transition back to CaIPERS as the City's health insurance provider, it is important to go
back and revisit that cafeteria plan benefit amount. Health insurance rates between CaIPERS and
Cigna are different, with the CalPERS rates being roughly 23% higher than the health insurance
offered by Cigna.
On August 22, 2007, staff met and conferred with members of the Rosemead Employee
Association (REA). After discussions regarding this increase in cost for health insurance rates, the
REA agreed to support an increase in the cafeteria plan to $1,600 / month, which is roughly an
18% increase and less than the total increase in cost for health insurance through CaIPERS. To
increase the cafeteria amount to this new level will cost $228,000 / year.
APPROVED FOR CITY COUNCIL AGENDA: 0.
0
E
City Council Report
August 28, 2007
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That modification, along with the transition back to CalPERS as the City's health insurance
provider, was codified in an updated MOU between the City and the REA (Attachment A).
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Attachment A: Updated MOU Between The City & The REA
•
2007-2008
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF ROSEMEAD
AND
THE ROSEMEAD EMPLOYEE ASSOCIATION
CONTENTS
ARTICLE 1.
PREAMBLE
- PAGE 1
ARTICLE 2.
RECOGNITION & EFFECTIVE DATES
PAGE 1
ARTICLE 3.
CONSTITUTIONALITY.
PAGE 1
ARTICLE 4.
IMPLEMENTATION.
PAGE I
ARTICLE 5.
NON-DISCRIMINATION
PAGE 1
ARTICLE 6.
GENDER
PAGE 1
ARTICLE 7.
SALARIES.
PAGE 1
ARTICLE 8.
HEALTH INSURANCE PROVIDER________________________________________________
PAGE 1
ARTICLE 9.
CAFETERIA-STYLE HEALTH, WELFARE, & SAVINGS BENEFIT
_______PAGE 1
ARTICLE 10.
RETIREMENT HEALTH PLAN-..
PAGE 2
ARTICLE 11.
RETIREMENT PROGRAM,
PAGE 2
ARTICLE 12.
ENHANCED RETIREMENT PROGRAM
PAGE2
ARTICLE 13.
DEFERRED COMPENSATION PROGRAM,
PAGE 2
ARTICLE 14.
VACATION LEAVE
-------PAGE 2
ARTICLE 15.
VACATION BUYBACK.
PAGE 3
ARTICLE 16.
CITY-RECOGNIZED HOLIDAYS
PAGE 3
ARTICLE 17.
FLOATING HOLIDAYS
PAGE 3
ARTICLE 18.
OVERTIME / COMPENSATORY TIME _
_______PAGE 3
ARTICLE 19.
ADMINISTRATIVE LEAVE
PAGE 3
ARTICLE 20.
FLEXIBLE SCHEDULING
PAGE 4
ARTICLE 21.
SICK LEAVE,
PAGE 4
ARTICLE 22.
BEREAVEMENT LEAVE
PAGE 4
ARTICLE 23.
JURY LEAVE
PAGE 4
ARTICLE 24.
PATERNITY LEAVE
PAGE 4
ARTICLE 25.
SHORT-TERM DISABILITY
PAGE 4
ARTICLE 26-
LONG-TERM DISABILITY
PAGE 4
ARTICLE 27.
LIFE INSURANCE
PAGE4
ARTICLE 28.
TUITION REIMBURSEMENT.
PAGE 4
ARTICLE 29.
WELLNESS PROGRAM
PAGE4
ARTICLE 30.
EMPLOYEE ASSISTANCE PROGRAM _
PAGE 5
ARTICLE 31.
RETIREMENT HEALTH SAVINGS ACCOUNT
PAGE 5
ARTICLE 32.
FLEXIBLE BENEFIT PLAN (SECTION 125)___________________________________
PAGE 5
ARTICLE 33.
DIRECT DEPOSIT PAYROLL
PAGE 5
ARTICLE 34.
MEDICARE / SOCIAL SECURITY
PAGE 5
ARTICLE 35.
PERMANENT-PART TIME EMPLOYEES
PAGE 5
ARTICLE 36.
MISCELLANEOUS COMMITMENTS
PAGE 5
• •
ARTICLE 1: PREAMBLE
This Memorandum of Understanding is prepared between representatives of the City Manager of
the City of Rosemead and the Rosemead Employee Association. Full consideration has been
given to salaries, employee benefits, and other terms and conditions of employment. Pursuant to
the provisions of Section 3505.1 of the Government Code of the State of California, said parties
agree to this Memorandum of Understanding effective July 1, 2007.
ARTICLE 2: RECOGNITION & EFFECTIVE DATES
This Memorandum of Understanding shall become effective July 1, 2007 and will continue in
effect until such time that a new agreement is negotiated. The Rosemead Employee Association
shall be officially recognized as the representative body for all employees of the City of
Rosemead. This Memorandum of Understanding represents the full and complete understanding
between the parties related to the subject matter set forth herein and all preliminary negotiations
of whatever kind or nature are merged herein.
ARTICLE 3: CONSTITUTIONALITY
If any section, subsection, subdivision, sentence, clause, or phrase of this Memorandum of
Understanding is for any reason held to be illegal or unconstitutional, such decision shall not
affect the validity of the remaining portion of this Memorandum of Understanding.
ARTICLE 4: IMPLEMENTATION
This Memorandum of Understanding constitutes a mutual recommendation by the parties to the
City Council that one or more resolution be adopted accepting this Memorandum of
Understanding and effecting the changes enumerated herein relative to wages, benefits, and
other terms and conditions of employment for the employees of the City of Rosemead. It is
expressly intended that the duties, responsibilities, and functions of the City in the operation of its
functions shall in no manner be impaired, subordinated, or negated by any provisions of this
agreement.
ARTICLE 5: NON-DISCRIMINATION
It is agreed that neither the Rosemead Employee Association nor the City shall discriminate
against any employee because of race, religious creed, national origin, age, sex, disability, sexual
orientation, or any other legally protected status.
ARTICLE 6: GENDER
Whenever the masculine or feminine form of any word is used in this Memorandum of
Understanding, it also includes the other gender unless clearly indicated in the context.
ARTICLE 7: SALARIES
All full-time, permanent part-time, part-time, and seasonal employees will receive the following
across the board wage adjustments:
Effective pay period including 7/1/07 - 4%
ARTICLE 8: HEALTH INSURANCE PROVIDER
The City shall contract with CalPERS to serve as the health insurance provider for the City of
Rosemead.
ARTICLE 9: CAFETERIA-STYLE HEALTH, WELFARE, & SAVINGS BENEFIT
Beginning with the first pay cycle in September, 2007, the City will provide each employee with
$1,600 per month for use towards enrolling in any of the City offered health plans, dental plans,
and vision plans. Any unused remainder can be put into a deferred compensation plan, taken as
a cash disbursement, or used for the purchase of any City sponsored insurance, long-term care,
or long-term saving program. Employees can also choose to take the entire benefit as deferred
compensation or cash, but must first show proof of health insurance through another source.
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ARTICLE 10: RETIREMENT HEALTH PLAN
For all full-time employees hired on or before July 1, 2007, who have 20 years or more of service
with the City of Rosemead, and who retire from the City, an allocation of up to $1,000 / month will
be given to pay for health care benefits for the duration of their retirement. If the health insurance
program selected by the employee costs more than $1,000 / month, the City will only cover the
first $1,000 / month of the cost of the selected program. Once employee reaches age 65 or
becomes eligible for Medicare coverage, the employee will transition to Medicare coverage, with
the City picking up the remaining cost of health insurance coverage up to a maximum of $1,000 /
month.
For all full-time employees hired on or before July 1, 2007, who have 12-19 years of service with
the City of Rosemead, and who retire from the City, an allocation of up to $500 / month will be
given to pay for health care benefits for the duration of their retirement. If the health insurance
program selected by the employee costs more than $500 / month, the City will only cover the first
$500 / month of the cost of the selected program.
The above retirement health contributions will only be in effect for full-time employees employed
with the City as of July 1, 2007. When employee reaches 65 years of age, or becomes eligible
for Medicare, said employees will transition to Medicare coverage and the City will continue to
contribute towards the cost of health care coverage during the duration of the employees
retirement according to the program as defined in Article 10. Furthermore, it is expressly noted
that the retirement health contribution can be used towards health coverage for the employee,
their spouse, and / or any eligible dependent.
ARTICLE 11: RETIREMENT PROGRAM
Employees will be enrolled in the City's retirement program through CalPERS. Effective July 1,
2007, the City will begin providing the 2.7%@55 benefit with one-year final compensation option.
In addition, the City will continue to contribute the employee's share to the retirement system.
ARTICLE 12: ENHANCED RETIREMENT PROGRAM
The City will continue offering an enhanced retirement package through PARS. Full-time
employees who retire from Rosemead after working 20 years for the City will have their pension
formula enhanced to 3%@55, with the provision that the maximum pension allowance that
employee's can accrue through PARS will be 90% of their final pay.
ARTICLE 13: EMPLOYER FUNDED DEFERRED COMPENSATION PROGRAM
For all full-time employees, the City will set-up and begin contributing into a deferred
compensation account a percentage of the employee salary based on years of service. That
funding formula will be as follows:
• 0 - 4 Years: 1% of salary contributed into a deferred compensation account.
• 5 - 9 Years: 2% of salary contributed to a deferred compensation account.
■ 10 - 14 Years: 3% of salary contributed to a deferred compensation account.
• 15 - 19 Years: 4% of salary contributed to a deferred compensation account.
• 20+ Years: 5% of salary contributed to a deferred compensation account.
ARTICLE 14: VACATION LEAVE
All full-time employees will be entitled to a paid vacation of 100 hours (10 days) following one
year of employment. Employees may begin taking your accrued vacation after six months on the
job. From the second year of employment until completion of the thirteenth year, employees will
be entitled to 140 (14 days) hours of paid vacation. Beginning with the fourteenth year, and every
year thereafter, employees will be entitled to 160 hours (16 days) of vacation.
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• •
ARTICLE 15: VACATION BUYBACK
Any full-time employee who takes 40 consecutive hours of vacation during the course of the year
will be eligible to have the City buyback up to 80 hours of vacation time.
ARTICLE 16: CITY-RECOGNIZED HOLIDAYS
The following days shall be recognized and observed as paid holidays:
1. New Year's Day (January 1')
2. Martin Luther King's Birthday (the third Monday in January)
3. Presidents' Birthday (the third Monday in February)
4. Memorial Day (the last Monday in May)
5. Independence Day (July 4'h)
6. Labor Day (the first Monday in September)
7. Veteran's Day (November 11`h)
8. Thanksgiving Day
9. Christmas Day (December 25"')
ARTICLE 17: FLOATING HOLIDAYS
Employees will receive 20 floating holiday hours per year. Those hours must be used before the
end of the calendar year or they will be lost.
ARTICLE 18: OVERTIME / COMPENSATORY TIME
Beginning on July 1, 2007, compensatory time-off (CTO) will no longer be provided to any
employee. Instead, non-exempt employees that work overtime shall be paid for those overtime
hours at a rate of 1.5 times their regular pay rate.
Those employees that have accrued CTO prior to July 1, 2007 shall be allowed to keep those
hours. Use of CTO earned shall be granted so that it does not unduly disrupt the operations of
the City. Terminating employees shall be compensated for accrued compensatory hours.
Furthermore, employees who have accrued CTO may elect to sell back to the City up to 20 hours
of CTO per year. Said sell back shall take place during the second pay period in December of
each year and will be paid at the employee's hourly rate at the time the CTO is sold back to the
City. In addition, accrued CTO for any terminating employee will be paid out at the employee's
hourly rate at the time of termination.
ARTICLE 19: ADMINISTRATIVE LEAVE
On January 1, 2008, and every January 1 thereafter, employees working in a position classified
as exempt or management will be allocated an allotment of Administrative Leave according the
following schedule:
Any Administrative Leave hours that have not been used by December 31 of a calendar year will
be lost. However, any employee working in a position classified as exempt or management, and
who has utilized or plans to utilize at least'/2 of their allocated Administrative Leave by December
31, will be offered the opportunity to sell back to the City any of their remaining Administrative
Leave hours. Said sell back shall take place during the second pay period in December of each
year and will be paid at the employee's hourly rate at the time the administrative leave is sold
back to the City. Furthermore, any Administrative Leave on the books for a terminating employee
shall be paid out at the employee's hourly rate at the time of termination.
For the purposes of participating in the City's Administrative Leave sell back program, those
employees classified exempt must have utilized at least 30 hours of Administrative Leave, and
those employees classified as management must have utilized at least 40 hours of Administrative
Leave.
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ARTICLE 20: FLEXIBLE SCHEDULING
Depending on an employee's area of assignment, an alternate work schedule may be arranged
given supervisor approval. This could include the possibility of utilizing a flextime or
telecommuting from an offsite location.
ARTICLE 21: SICK LEAVE
Employees will accrue ten hours of sick leave per month. In addition, any new employees may
bring with them up to 200 hours of accrued sick leave from their previous agency, if the previous
employer did not otherwise compensate the employee.
ARTICLE 22: BEREAVEMENT LEAVE
In the event of the death of a member of an employee's immediate family (defined as spouse,
parent, grandparent, sibling, children, grandchildren, mother-in-law, father-in-law, sister-in-law,
brother-in-law, step-relatives, or member of the household, domestic partner or child of a
domestic partner), employees will be entitled to four (4) paid days off for bereavement leave.
ARTICLE 23: JURY LEAVE
Employees required to serve on a jury will be entitled to their regular compensation for up to 80
hours provided that fees for jury service are deposit with the finance department.
ARTICLE 24: PATERNITY LEAVE
New fathers wishing to do so may use up to 40 hours of accrued sick leave for paternity leave.
ARTICLE 25: SHORT-TERM DISABILITY
The City will provide employees with a short-term disability plan to protect against cases where a
non-work-related illness or injury is sustained which results in an inability to work for a short
period of time. In these cases, employees will receive 66% of their base salary after 14 days, and
continued payment until the employee is medically able to return to work, or has to begin utilizing
long term disability, or until the employee reaches the age of 65, whichever comes first. The
maximum short-term disability benefit amount will be $8,000 per month.
ARTICLE 26: LONG-TERM DISABILITY
The City will provide employees with a long-term disability plan to protect against cases where a
non-work-related illness or injury is sustained which results in an inability to work for a long period
of time. In these cases, employees will receive 66% of their base salary after 45 days, and
continued payment until the employee is medically able to return to work, or until the employee
reaches the age of 65, whichever comes first. The maximum long-term disability benefit amount
will be $8,000 per month.
ARTICLE 27: LIFE INSURANCE
Employees will receive an accidental death & dismemberment and life insurance policy of
$100,000.
ARTICLE 28: TUITION REIMBURSEMENT
Full-time employees will be eligible for tuition reimbursement of up to $5,000 per fiscal.
Reimbursable expenses must be approved by the City Manager and will include items such as
registration, tuition, textbooks, and parking.
ARTICLE 29: WELLNESS PROGRAM
The City will reimburse full-time employees up to $500 per year toward the cost of a
fitness/exercise or health related program, provided that the employee develops and submits to
the personnel officer a personal wellness plan. Once submitted, the employee must engage in an
exercise program on a regular basis and/or be involved in a program to improve health (i.e.
weight reduction, smoking cessation, etc). Qualifying fitness and exercise activities include but
are not limited to: nautilus, aerobics, tennis, racquetball, swimming, golfing, and bicycling.
Equipment required for participation in these activities will be considered on a case by case basis.
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•
•
ARTICLE 30: EMPLOYEE ASSISTANCE PROGRAM
The City will provide employees with access to an Employee Assistance Program.
ARTICLE 31: RETIREMENT HEALTH SAVINGS ACCOUNT
Upon retirement, employees may convert accrued sick leave up to $20,000 for deposit in a
retirement health savings account. This is an optional program for employees to consider.
ARTICLE 32: FLEXIBLE BENEFIT PLAN (SECTION 125)
The City will offer employees a flexible benefit plan which will allow individuals to pay for certain
expenses (child care, unreimbursed medical expenses, insurance premiums) with pre-tax dollars.
ARTICLE 33: DIRECT DEPOSIT PAYROLL
Employees will be provided with an option to authorize the automatic deposit of each paycheck
into an individuals checking, savings or credit union account.
ARTICLE 34: MEDICARE / SOCIAL SECURITY
If Federal Medicare / Social Security is mandated by Congress, the contribution designated by
law to be the responsibility of the employee shall be paid in full by the employee.
ARTICLE 35: PERMANENT-PART TIME EMPLOYEES
Employees designated as permanent-part time will receive all of the benefits accrued full-time
employees with the following exceptions:
■ Cafeteria-Style Health, Welfare, & Savings Benefit
A benefit amount of $600 per month will be provided.
■ Tuition Reimbursement
A maximum reimbursement amount of $2,500 per year will be provided.
• Wellness Plan
A maximum reimbursement amount of $250 per year will be provided.
• City Paid Deferred Compensation
Permanent-Part Time Employees will not be eligible for this benefit.
■ Retirement Health Plan
Permanent-Part Time Employees will not be eligible for this benefit.
ARTICLE 35: MISCELLANEOUS COMMITMENTS
The City commits to the following miscellaneous activities during the 2007-2008 fiscal year:
• Create job descriptions for every position in the City.
■ Create a formalized Personnel Rules & Regulations Manual.
■ Create formalized Administrative Policies.
■ Conduct salary surveys to better determine pay rates.
■ Conduct an FLSA audit.
■ Conduct a PERS audit to determine employee eligibility for retirement benefits.
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