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CITY COUNCIL AGENDA ITEM NO. 16

Meeting Date: June 22, 2004

Subject/Title: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD ELECTING TO ESTABLISH A HEALTH BENEFIT VESTING REQUIREMENT FOR FUTURE RETIREES UNDER PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT AND A RESOLUTION AMENDING MEMORANDA OF UNDERSTANDING FOR THE BRENTWOOD POLICE OFFICERS’ ASSOCIATION, EMPLOYEES’ ASSOCIATION (MISCELLANEOUS OFFICE AND PUBLIC WORKS DIVISION), AS WELL AS AGREEMENTS FOR DEPARTMENT HEADS AND MID-MANAGEMENT EMPLOYEES.

Prepared by: John Stevenson, City Manager

Submitted by: John Stevenson, City Manager

RECOMMENDATION
Adopt a resolution to establish a health benefit vesting requirement for future retirees under Public Employees’ Medical and Hospital Care Act and adopt a resolution amending Memoranda of Understanding (MOU) for the Brentwood Police Officers’ Association (BPOA), Brentwood Police Lieutenants, Employees’ Association (Miscellaneous Office and Public Works Divisions), as well as amended agreements for Department Heads and Mid-Management employees.

PREVIOUS ACTION
The City Council approved Resolution No. 2877 ratifying the amendments to the MOU between the City and Employees’ Association (Miscellaneous Office and Public Works Divisions), Department Heads, Brentwood Police Lieutenants, and Mid-Managers beginning July 1, 2003-June 30, 2008. Resolution No. 2885 ratified the amendments to the BPOA’s 2003-2008 MOU. The City Council also approved Resolutions No. 3024 and 3025 adjusting the employer health benefits contribution as provided in 2003-2008 bargaining unit labor agreements.

BACKGROUND
In response to the growing number of retirees and the increasing costs of health benefits associated with this benefit, staff explored options to control future costs. The solution is to increase the vesting requirement for future retirees. The new vesting schedule requires a minimum ten years of service credit with CalPERS, five of the ten years must be earned through employment with the City of Brentwood. This scenario provides the minimum 50% benefit. Up to 100% of the maximum allowance set by the State may be earned for twenty or more years of CalPERS covered service.

Staff met and conferred with the bargaining units and employee groups to discuss the value and implications of the vesting requirement for future retirees. All of the units agreed to implementation of the vesting requirement for future retirees. In exchange for this amendment to retiree health benefits, staff and the bargaining units tentatively agreed to revise the January 1, 2005 City contribution for health benefits. The original MOU agreements provided for the City and employees to share the rate increases to the full family Kaiser rate 50/50, until the city’s contribution is equal to that of the Kaiser plan, employee plus one dependent. The revised split between employees and the City would be 70/30, until the City’s contribution is equal to that of the Kaiser plan, employee plus one dependent. The city’s contribution will remain at the Kaiser plan, employee plus one dependent rate for the remainder of the term of the five-year MOUs that began July 1, 2003 and end June 30, 2008.

FISCAL IMPACT
Projected costs associated with these changes include an increased medical contribution by the City of approximately $51,000 in 2005 and a potential total increase in annual medical expenses by the City of approximately $670,000 over the next 13 years, at which point costs associated with this change are projected to end. Projected savings are expected to total $31,000,000 over the next 46 years, and exceed $100,000,000 over the next 96 years.

Attachments:
Resolutions
Amended MOU Pages

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD ELECTING TO ESTABLISH A HEALTH BENEFIT VESTING REQUIREMENT FOR FUTURE RETIREES UNDER PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT

WHEREAS, Government Code 22825.5 provides that a local agency contracting under the Public Employees’ Medical and Hospital Care Act may amend its resolution to provide a post retirement vesting requirement, and

WHEREAS, City of Brentwood is a local agency contracting under the Act, and

WHEREAS, City of Brentwood certifies, unrepresented employees (City Manager, City Attorney, Department Heads) are not represented by a bargaining unit and there is no applicable memorandum of understanding, and

WHEREAS, City of Brentwood certifies, certain employees are represented by a bargaining unit and subject to memoranda of understanding as follows: Brentwood Police Officers’ Association, Brentwood Police Lieutenants, Employees’ Association (Miscellaneous Office and Public Works Divisions), and Mid-Management employees, and

WHEREAS, The credited service for purposes of determining the percentage of employer contributions shall mean service as defined in Section 20069, except that not less than five years of that service shall be performed entirely with the City of Brentwood, and

WHEREAS, The contribution for active employees cannot be less than what is defined in Section 22825.

NOW, THEREFORE BE IT RESOLVED That the employer’s contribution for each retired employee first hired on or after the effective date of this resolution shall be as listed:

Code Bargaining Unit Contribution per Month
100 Brentwood Police Officers’ Association 100/90 Formula
101 Brentwood Police Lieutenants 100/90 Formula
102 Employees’ Association Miscellaneous Office Div. 100/90 Formula
103 Employees’ Association Public Works Div. 100/90 Formula
104 Mid-Management Employees 100/90 Formula

BE IT FURTHER RESOLVED That the percentage of employer contribution payable for post retirement health benefits for each retired employee shall be based on the employee’s completed years of credited service based upon Government Code Section 22825.5; plus administrative fees and Contingency Reserve Fund assessments; and,

BE IT FURTHER RESOLVED That coverage under the Act be effective on August 1, 2004.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 22nd of June, 2004 by the following vote:

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD RATIFYING THE AMENDMENTS TO THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND EMPLOYEES’ ASSOCIATION (MISCELLANEOUS OFFICE AND PUBLIC WORKS DIVISIONS), BRENTWOOD POLICE OFFICERS’ ASSOCIATION, BRENTWOOD POLICE LIEUTENANTS, DEPARTMENT HEADS, AND MID-MANAGERS FOR FISCAL YEARS 2003-2008

WHEREAS, The Brentwood Employees’ Association (Miscellaneous Office and Public Works Division), Department Heads, Brentwood Police Lieutenants, and Mid-Management employees have met with the City Manager and have conferred in good faith regarding a vesting requirement for future retirees, and

WHEREAS, the aforementioned bargaining units and employee groups agreed to implement the vesting requirement for future retirees, and

WHEREAS, in exchange for implementation of the vesting requirement for future retirees, the City agrees to share the cost of future health benefits premium increases 70/30 with eligible employees according to the terms specified in approved Memorandum of Understanding, and

WHEREAS, the revised Memorandum of Understanding is entered into pursuant to the Meyers-Milias-Brown Act (California Government Code Sections 3500-3510) and has been jointly prepared by the aforementioned entities.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood hereby adopts a resolution and approves the amended 2003-2008 Memorandum of Understanding with the aforementioned Employees’ Associations, Department Heads, Brentwood Police Lieutenants and Mid-Management employees for fiscal years beginning 2003/2004 – 2007/2008 and authorizes the terms and conditions therein to be implemented effective immediately.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on June 22, 2004 by the following vote:

Mid-Managers June, 2004

This document represents a summary of major items on which the Mid-Managers Group and the City’s Negotiating Team have met and conferred in good faith and have reached tentative agreement.

Effective July 1, 2003, the city agrees to pay the health insurance contribution of $611.41 per month. Over the course of the subsequent years covered by the agreements, the city will gradually adjust the city’s health insurance contribution to cover the cost of the Kaiser employee, plus one dependent. Tying the city’s contribution eventually to employee, plus one dependent will provide consistency to the benefits package and aids in reducing items subject to negotiations in the future. Increases in full family Kaiser, effective January 1, 2004, will be split 50% - 50% with the employee. Increases in full family Kaiser, effective January 1, 2005, and thereafter will be split 70% - 30% with the employee until the Kaiser employee plus one level of coverage is reached.

The undersigned representatives of the Mid-Managers Group and the City Negotiating Team have reached agreement on the above salary and benefits adjustments this
_______ day of June, 2004. These items will be presented to the full City Council for approval at the City Council meeting of June 22, 2004 or as soon thereafter as possible.

BRENTWOOD MID-MANAGERS CITY OF BRENTWOOD

Becky Bridgen, Representative

 John Stevenson, City Manager

Paul Eldredge, Representative

Karen L. Stein, Assistant City Manager

Jeff Zilm, Representative

Miscellaneous Office Group June, 2004

This document represents a revision to the City’s contribution for health insurance, on which the Miscellaneous Office Group and the City’s Negotiating Team have met and conferred in good faith and have reached agreement.

Effective July 1, 2003, the city agrees to pay the health insurance contribution of $611.41 per month. Over the course of the subsequent years covered by the agreements, the city will gradually adjust the city’s health insurance contribution to cover the cost of the Kaiser employee, plus one dependent. Tying the city’s contribution eventually to employee, plus one dependent will provide consistency to the benefits package and aids in reducing items subject to negotiations in the future. Increases in full family Kaiser, effective January 1, 2004, will be split 50% - 50% with the employee. Increases in full family Kaiser, effective January 1, 2005, and thereafter will be split 70% - 30% with the employee until the Kaiser employee plus one level of coverage is reached.

The undersigned representatives of the Miscellaneous Office Group and the City Negotiating Team have reached agreement on the above salary and benefits adjustments this
_____ day of June, 2004. These items will be presented to the full City Council for approval at the City Council meeting of June 22, 2004 or as soon thereafter as possible.

BRENTWOOD MISCELLANEOUS
OFFICE GROUP CITY OF BRENTWOOD

Larry Edge, President John Stevenson, City Manager

Becky Bruno, Vice President Karen L. Stein, Assistant City Manager

BRENTWOOD POLICE OFFICERS’ ASSOCIATION

SECTION X HEALTH INSURANCE

10.01 The City shall provide medical coverage for employees. The City shall pay additional premium amounts as follows:

Date of Change City Contribution Amount
July 1, 2003 $611.41 per month

Over the course of the subsequent years covered by the agreement, the City will gradually adjust the City’s health insurance contribution to cover the cost of the Kaiser employee, plus one dependent. All increases in full family Kaiser for sworn employees will be split 70% (city) - 30% (employee) with the employee until the Kaiser employee, plus one dependent premium level is reached. Non-sworn employees will share the increase in full family Kaiser, effective January 1, 2004, with the City 50% - 50%. Increases in full family Kaiser, effective January 1, 2005 and thereafter will be split 70% - 30% with the employee until the Kaiser employee plus one level of coverage is reached.

The BPOA and City agree to reopen negotiations at the end of year three of this agreement to discuss the goal of Kaiser employee, plus one dependent premium level to confirm that this is still the direction that the City desires to take, and to confirm that this goal is not having a profound affect on Police Officer recruiting that cannot be overcome by pay and other benefits.

The employees shall agree to pay any excess premium costs through a payroll deduction of the employee chosen plan.

10.02 The City shall provide vision care through Vision Services Plan (VSP) effective July 1, 1999 that provides vision care services through participating providers. See benefits summary for details on the plan.

10.03 Effective July 1, 1999, retiree medical is available through the Cal PERS Health Benefits Plan. In accordance with Cal PERS requirements, retirees receive a monthly premium allowance equal to that of active City of Brentwood employees.

SECTION XI DENTAL INSURANCE

The City shall pay full dental coverage for all full-time police employee personnel and their family. In the event that during the period of this Memorandum of Understanding, the premiums required to maintain the current level of dental benefits are increased, the City shall pay such increased premium amounts.

SECTION XII LIFE INSURANCE

The City shall pay the premium for $20,000 of term life insurance with $100,000 accidental death coverage for all members of this bargaining unit.

SECTION XIII DISABILITY INSURANCE

The City shall pay all the costs of a long-term disability insurance plan. The plan furnished by the City for Sworn personnel shall be equal, or superior, to the benefits provided by the long term disability insurance plan available through P.O.R.A.C. for Police Officers, which plan has a 30 day waiting period, before disability benefits commence being paid. The L.T.D. insurance plan for non-sworn personnel shall have a 30-day waiting period.

The undersigned representative of the Brentwood Police Officers’ Association and the City Negotiating Team have reached agreement on the above benefits adjustments this _______ day of June, 2004. These items will be presented to the full City Council for approval at the City Council meeting of June 22, 2004 or as soon thereafter as possible.

BRENTWOOD POLICE OFFICERS’
ASSOCIATION CITY OF BRENTWOOD

Walter O’Grodnick, Representative

John Stevenson, City Manager

Karen L. Stein, Assistant City Manager

PUBLIC WORKS ASSOCIATION

SECTION 9

HEALTH, WELFARE AND RETIREMENT

9.1 Medical Benefit

Employees of this bargaining unit will receive a City contribution each month towards their medical insurance premium as follows: Effective July 1, 2003, the city agrees to pay the health insurance contribution of $611.41 per month. Over the course of the subsequent years covered by the agreements, the city will gradually adjust the city’s health insurance contribution to cover the cost of the Kaiser employee, plus one dependent. Tying the city’s contribution eventually to employee, plus one dependent will provide consistency to the benefits package and aids in reducing items subject to negotiations in the future. The increase in full family Kaiser, effective January 1, 2004, will be split 50%-50% with the employee. Increases in full family Kaiser, effective January 1, 2005 and thereafter will be split 70%-30% with the employee until the Kaiser employee plus one level of coverage is reached.

9.2 Dental Benefit

Employees of this bargaining unit and eligible dependents will receive dental insurance. Effective July 1, 1999, coverage includes orthodontic benefits at 50% for adults and children up to a $2,000 maximum lifetime benefit. Refer to plan document for additional details.

9.3 Life Insurance

Effective July 1, 1992, the City shall provide a group term life insurance policy of $20,000 with $40,000 for accidental death/dismemberment.

The undersigned representatives of the Public Works Association and the City Negotiating Team have reached agreement on the above benefits adjustments this _____ day of June, 2004. These items will be presented to the full City Council for approval at the City Council meeting of June 22, 2004 or as soon thereafter as possible.

PUBLIC WORKS ASSOCIATION CITY OF BRENTWOOD

Patrick Swaggerty, President

John Stevenson, City Manager

Dustin Bloomfield, Representative

Karen L. Stein, Assistant City Manager
 

City Administration
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