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HomeMy WebLinkAboutS24 - Supplemental MOUs with Employee Associations & LeagueApril 25, 2000 Agenda Item S24 CITY OF NEWPORT BEACH HUMAN RESOURCES DEPARTMENT TO: Mayor and City Council FROM: Sharon Wood, Assistant City Manager SUBJECT: Supplemental Memoranda of Understanding with Newport Beach City Employees Association, Employees League, and Professional and Technical Employees Association Regarding Employee Benefit Plan Changes RECOMMENDATION Approve Supplemental Memoranda of Understanding (MOUs) with the Newport Beach City Employees Association, Employees League, and Professional and Technical Employees Association. DISCUSSION The City Council discussed employee benefit plan changes at a closed session in July 1999, and provided staff with direction to meet and confer with employee associations on the following issues. • Flexible Benefits (Cafeteria) Plan • Retiree Medical Insurance Plan • Revised Personnel Manual • 2% @ 55 Retirement Plan • Supplemental Retirement Programs With the exception of the 2% @ 55 retirement plan, all employee associations, both safety and miscellaneous, are concerned with these issues. The City's negotiating team worked with all the employee associations simultaneously to maintain as much consistency as possible among employee groups. We have reached tentative agreement with the three miscellaneous employee associations, and supplemental MOUs with them are now recommended for approval by the City Council. As the Council is aware, we are in negotiation with the safety groups regarding a 3% @ 50 retirement plan, and the parties have agreed to combine that issue with those listed above. The Police Employees Association has non -swom employees who are not eligible for 3% @ 50, and that association is currently considering a supplemental MOU that will provide 2% @ 55 for those employees. The 2% m 55 retirement plan is a benefit that is very important to the miscellaneous employees. It is a good time for Newport Beach to offer it to them, as PERS has indicated that there will be no employer contribution rate for eight years, assuming current rules and regulations. Newport Beach has had a limited flexible benefits plan for many years, in that employees may choose from among several medical and dental plans. If the cost of the plans they choose is less than the contribution agreed to by the City ($450 per month as of July 1, 2000), employees do not receive any cash. Only those employees who have health coverage from other sources are able to opt out and receive $200 per month. The plan on which we have reached tentative agreement is a full cafeteria plan, under which all employees will receive cash if their health premiums and other cafeteria selections are lower than the City's contribution. With this plan, the City will spend the same amount for all employees within a bargaining unit. In exchange for these two benefit improvements, the three associations have agreed to changes in the retiree medical program that will help the City control its costs and will help protect this program over the long term. The associations reaffirmed their agreement (as provided in existing MOUs) to pay 25% of the actual costs of the program, agreed to pay an additional $10 per employee per month to meet the program's unfunded liabilities, and agreed to a cap of $400 on retiree medical insurance contributions. The City also is to contribute to the unfunded liabilities, with $20 per employee per month. Finally, the City and the associations have agreed to continue discussions on supplemental and /or individual retiree medical insurance accounts. All of the employee associations provided comments on the draft Employee Policy Manual, as have the Civil Service Board and the department directors. The City Attorney is in the process of revising the Manual in response to comments, and we will continue to meet and confer with the associations on this issue. Attachments: 1) Supplemental MOU with Newport Beach City Employees Association 2) Supplemental MOU with Newport Beach Employees League 3) Supplemental MOU with Newport Beach Professional and Technical Employees Association E SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING This supplemental Memorandum of Understanding amends the Memorandum of Understanding between the City of Newport Beach and the Newport Beach City Employees Association dated July 1, 1998 through June 30, 2001. Except as modified by this supplemental MOU, all the provisions of the Memorandum of Understanding between the City and the Newport Beach City Employees Association remain unchanged. The City and the Newport Beach City Employees Association agree as follows: A. RETIREMENT The City will immediately commence the process of amending its contract with the Public Employees' Retirement System to implement the 2% at 55 Retirement Program. The ongoing cost of this retirement change shall be home by the City. B. CAFETERIA PLAN Effective July, 2000, or as soon as possible thereafter, the City shall implement an IRS qualified Cafeteria Plan. The City contribution toward the Cafeteria Plan shall be $434. In addition, the City shall contribute a total of $16 towards medical insurance. Employees shall have the option of allocating Cafeteria Plan contributions towards the City's existing medical,dental and vision insurances/programs. The City and the Newport Beach City Employees Association will cooperate in pursuing additional optional benefits to be available through the Cafeteria Plan. Any unused funds shall be payable to the employee as taxable cashback. Employees shall be allowed to change coverages in accordance with plan rules during regular open enrollment periods. C. RETIREE MEDICAL PROGRAM An employee is eligible for retiree medical benefits after seven years of service if the employee retires from the City and is a PERS annuitant. Effective immediately, the City shall implement the $400 cap for retiree medical insurance contributions as currently provided for in the Memorandum of Understanding between the City and the Newport Beach City Employees Association. In accordance with existing agreements, the City and active employees shall be responsible for 3 /4ths (1/2 City and 1/4 actives) of retiree medical insurance cost. Retirees shall be responsible for the remaining 1/4. Concurrent with implementation of 2% at 55 and the Cafeteria Plan, the employee's share of the retirement contribution in accordance with the formulas set forth above shall be $27.47 per month. Subsequent contribution levels shall be set in July, annually, in accordance with the formula described above. CEA Page 2 2. In addition to the contributions in C I above, concurrent with implementation of 2% at 55 and the Cafeteria Plan, current employees shall contribute $10 per month and the City shall contribute $20 per employee per month to accumulate funds to meet unfunded retiree medical liabilities. This contribution shall continue until the liability is fully funded. 3. The City shall maintain separate, interest bearing accounts for current and reserve retiree medical funding. Statements of these accounts shall be available to all affected employee organizations. D. CONTINUING DISCUSSIONS The City and the Newport Beach City Employees Association agree to continue discussions, in conjunction with other affected employee organizations, on possible implementation of other supplemental and/or individual retiree medical insurance accounts. Except as provided herein, the Memorandum of Understanding between the City and the Newport Beach City Employees Association remains in full force and effect. This supplemental Memorandum of Understanding shall be incorporated into the Memorandum of Understanding between the City and Association for the contract period beginning July 1, 1998 through June 30, 2001. FOR THE CITY OF NEWPORT BEACH FOR THE NEWPORT BEACH CITY EMPLOYEES ASSOCIATION SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING This supplemental Memorandum of Understanding amends the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Employees League dated July 1, 1998 through June 30, 2001. Except as modified by this supplemental MOU, all the provisions of the Memorandum of Understanding between the City and the Newport Beach Employees League remain unchanged. The City and the Newport Beach Employees League agree as follows: A. RETIREMENT The City will immediately commence the process of amending its contract with the Public Employees' Retirement System to implement the 2% at 55 Retirement Program. The ongoing cost of this retirement change shall be home by the City. B. CAFETERIA PLAN Effective July, 2000, or as soon as possible thereafter, the City shall implement an IRS qualified Cafeteria Plan. The City contribution toward the Cafeteria Plan shall be $434. In addition, the City shall contribute a total of $16 towards medical insurance. Employees shall have the option of allocating Cafeteria Plan contributions towards the City's existing medical,dental and vision insurances /programs. The City and the Newport Beach Employees League will cooperate in pursuing additional optional benefits to be available through the Cafeteria Plan. Any unused funds shall be payable to the employee as taxable cashback. Employees shall be allowed to change coverages in accordance with plan rules during regular open enrollment periods. C. RETIREE MEDICAL PROGRAM An employee is eligible for retiree medical benefits after seven years of service if the employee retires from the City and is a PERS annuitant. Effective immediately, the City shall implement the $400 cap for retiree medical insurance contributions as currently provided for in the Memorandum of Understanding between the City and the Newport Beach Employees League. In accordance with existing agreements, the City and active employees shall be responsible for 3 /4ths (1/2 City and 1/4 actives) of retiree medical insurance cost. Retirees shall be responsible for the remaining 1/4. Concurrent with implementation of 2% at 55 and Cafeteria Plan, the employee's share of the retirement contribution in accordance with the formulas set forth above shall be $27.47 per month. Subsequent contribution levels shall be set in July, annually, in accordance with the formula described above. League Page 2 2. In addition to the contributions in CI above, concurrent with implementation of 2% at 55 and the Cafeteria Plan, current employees shall contribute $10 per month and the City shall contribute $20 per employee per month to accumulate funds to meet unfunded retiree medical liabilities. This contribution shall continue until the liability is fully funded. The City shall maintain separate, interest bearing accounts for current and reserve retiree medical funding. Statements of these accounts shall be available to all affected employee organizations. D. CONTINUING DISCUSSIONS The City and the Newport Beach Employees League agree to continue discussions, in conjunction with other affected employee organizations, on possible implementation of other supplemental and/or individual retiree medical insurance accounts. Except as provided herein, the Memorandum of Understanding between the City and the Newport Beach Employees League remains in full force and effect. This supplemental Memorandum of Understanding shall be incorporated into the Memorandum of Understanding between the City and Association for the contract period beginning July 1, 1998 through June 30, 2001. FOR THE CITY OF NEWPORT BEACH FOR THE NEWPORT BEACH EMPLOYEES LEAGUE SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING This supplemental Memorandum of Understanding amends the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Professional and Technical Employees Association dated July I, 1998 through June 30, 2001. Except as modified by this supplemental MOU, all the provisions of the Memorandum of Understanding between the City and the Newport Beach Professional and Technical Employees Association remain unchanged. The City and the Newport Beach Professional and Technical Employees Association agree as follows: A. RETIREMENT The City will immediately commence the process of amending its contract with the Public Employees' Retirement System to implement the 2% at 55 Retirement Program. The ongoing cost of this retirement change shall be borne by the City. B. CAFETERIA PLAN Effective July, 2000, or as soon as possible thereafter, the City shall implement an IRS qualified Cafeteria Plan. The City contribution toward the Cafeteria Plan shall be $434. In addition, the City shall contribute a total of $16 towards medical insurance. Employees shall have the option of allocating Cafeteria Plan contributions towards the City's existing medical,dental and vision insurances /programs. The City and the Newport Beach Professional and Technical Employees Association will cooperate in pursuing additional optional benefits to be available through the Cafeteria Plan. Any unused funds shall be payable to the employee as taxable cashback. Employees shall be allowed to change coverages in accordance with plan rules during regular open enrollment periods. C. RETIREE MEDICAL PROGRAM An employee is eligible for retiree medical benefits after seven years of service if the employee retires from the City and is a PERS annuitant. Effective immediately, the City shall implement the $400 cap for retiree medical insurance contributions as currently provided for in the Memorandum of Understanding between the City and the Newport Beach Professional and Technical Employees Association. In accordance with existing agreements, the City and active employees shall be responsible for 3 /4ths (1/2 City and 1/4 actives) of retiree medical insurance cost. Retirees shall be responsible for the remaining 1/4. Concurrent with implementation of 2% at 55 and the Cafeteria Plan, the employee's share of the retirement contribution in accordance with the formulas set forth above shall be $27.47 per month. Subsequent contribution levels shall be set in July, annually, in accordance with the formula described above. Proffrech Page 2 2. In addition to the contributions in C1 above, concurrent with the implementation of 2% at 55 and the Cafeteria Plan, current employees shall contribute $10 per month and the City shall contribute $20 per employee per month to accumulate funds to meet unfunded retiree medical liabilities. This contribution shall continue until the liability is fully funded. The City shall maintain separate, interest bearing accounts for current and reserve retiree medical funding. Statements of these accounts shall be available to all affected employee organizations. D. CONTINUING DISCUSSIONS The City and the Newport Beach Professional and Technical Employees Association agree to continue discussions, in conjunction with other affected employee organizations, on possible implementation of other supplemental and/or individual retiree medical insurance accounts. Except as provided herein, the Memorandum of Understanding between the City and the Newport Beach Professional and Technical Employees Association remains in full force and effect. This supplemental Memorandum of Understanding shall be incorporated into the Memorandum of Understanding between the City and Association for the contract period beginning July 1, 1998 through June 30, 2001. FOR THE CITY OF NEWPORT BEACH FOR THE NEWPORT BEACH PROFESSIONAL AND TECHNICAL EMPLOYEES ASSOCIATION