HomeMy WebLinkAbout05/18/2004, C4 - RESOLUTION TO INCLUDE DEPARTMENT HEADS, MANAGERS AND CONFIDENTIAL EMPLOYEES IN THE RETIREE MEDICAL iiijjr
I
Chi
council Mm-d°°DMs-ins -cam
acEnaa Repoat ItmNoba c
CITY OF SAN LUIS O B I S P O
FROM: Monica Moloney,Director of Human Resourcestl
Prepared by: Karen Jenny, Risk Manager(
SUBJECT: RESOLUTION TO INCLUDE DEPARTMENT HEADS, MANAGERS AND
CONFIDENTIAL EMPLOYEES IN THE RETIREE MEDICAL TRUST FUND
CAO RECOMMENDATION
Adopt a resolution authorizing participation of department heads, managers and confidential
employees in the Retiree Medical Trust Fund established by the San Luis Obispo City
Employees' Association (SLOCEA).
DISCUSSION
City paid health insurance benefits after retirement has long been an interest of city employees.
Because of its expense to the City, we have attempted over the past several years to find creative
ways to increase compensation for the purposes of calculating retirement. This gives retirees
more income with which they can purchase their own insurance or defray whatever other
expenses they have after retirement. A source of funding for retirees specifically dedicated to
health insurance and other medical expenses continues to be of great interest to employees.
During negotiations last fall SLOCEA expressed an interest in establishing a trust fund for medical
expenses for retirees. The ,trust fund has two significant advantages for employees: 1)
contributions into the trust fund are tax deferred; 2) since benefits from the fund can only be used
for medical expenses,the benefits are also tax-exempt when received.
SLOCEA approached the department head and management group and the confidential
employees about participating in the trust fund. Following an informational meeting with
representatives of SLOCEA and the trust fund consultant, department heads, managers and
confidential employees voted to participate in SLOCEA's Retiree Medical Trust Fund, when it is
established effective July 1, 2004. Appointed Officials and Department Heads with a safety
retirement classification (i.e. Police Chief and Fire Chief) will not participate in the trust fund.
Contributions to the trust fund will be from a payroll deduction of$25 per person per pay period
beginning the first pay period in July, 2004 from all non-safety department heads, management
employees and confidential employees. They will additionally pay$3.25 per person per pay period
to SLOCEA to reimburse SLOCEA's additional costs for expanding participation in the trust fund.
The appointed officials and the Police and Fire Chiefs will not participate.
Resolution to Include Department Heads, Managers and Confidential Employees in the Retiree
Medical Trust Fund Page 2
The City is not involved in the establishment or administration of the trust fund. The trust fund
will be administered by a Board of Trustees composed of SLOCEA members and management
representatives. SLOCEA and the Board of Trustees are solely responsible for obtaining any
necessary IRS approvals, establishing and administering the trust fund. The City's sole
responsibility will be to forward the designated amounts to the trust.
FISCAL IMPACT
The cost and expenses of the trust fund will be funded by the employees with no cost to the City for
implementation or administration. Contributions to the trust fund will be from participating
employees through payroll deduction.
ALTERNATIVES
Since the cost will be funded by the participating employees, no alternatives are presented.
ATTACHMENT
Resolution
G:Wgenda Reports\Retuee Medical Trust Fund For Managers And Department Heads.Doc
ATTACHMK
RESOLUTION NO. (2004 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
.AUTHORIZING PARTICIPATION OF DEPARTMENT HEADS, MANAGEMENT
EMPLOYEES,AND CONFIDENTIAL EMPLOYEES IN THE RETIREE MEDICAL TRUST
FUND ESTABLISHED BY THE SAN LUIS OBISPO CITY EMPLOYEES' ASSOCIATION
WHEREAS, the San Luis Obispo City Employees' Association (SLOCEA) is establishing a
Retiree Medical Benefit Trust (Trust) to provide for health insurance and other medical expense
reimbursement to unit employees after retirement,effective July 1, 2004; and
WHEREAS, department heads, management employees, and confidential employees have
expressed interest in participating in the Trust as a group, and SLOCEA is willing to include them;
and
WHEREAS, the Trust will be administered separately by a Board of Trustees composed of
participants in the Trust, and the City's sole responsibility is to forward the designated amounts to
the Trust;and,
WHEREAS, the cost and expenses of the Trust will be funded by the participating
employee groups.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Department heads, management employees and confidential employees are
authorized to participate in the Retiree Medical Benefit Trust. Appointed officials and department
heads with a safety retirement classification (i.e., Police Chief and Fire Chief) are excluded from
participation in the Trust.
SECTION 2. The Trust will be funded by a$25 per person per pay period payroll deduction
effective the first pay period in July, 2004. Any future contribution increases to the Trust negotiated
by SLOCEA will be binding to all participants.
SECTION 3. Department heads, management employees and confidential employees will
also have a payroll deduction of$3.25 per person per pay period as associate members of SLOCEA
for the sole purpose of participation in the Trust.
SECTION 4. The Director of Finance and Information Technology is authorized to make
the payroll deductions and forward same to the Trust and SLOCEA.
Upon motion of seconded by ,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of , 2004.
R
(24-3
ATTAC
Resolution No. (2004 Series)
Page 2
David F. Romero,Mayor
ATTEST:
Lee Price, C.M.C.
City Clerk
APPROVED AS TO FORM:
Jo th . Lowell
City Attorney