HomeMy WebLinkAboutAgenda Report - March 19, 2003 I-06CITY OF LODI
COUNCIL COMMUNICATION
AGENDA A `II' R Adopt Resolution to set a fixed employer's contribution for retirees under the
Public Employees' 'Medical and Hospital Care Act (PETAFICA)
MEETING DATE: E: Wednesday, Marey 19, 200
SUBMITTED v Flurnan Resources Director
.ECI.i1Vi:MENACTION, 'chat the City Council approve the Resolution to set a teed- amount of
the employers' contribution at ars arriount not less than the amount
required tinder Section 22825 of the PEI, HCA.
BACKGROUND F RI A' ION- In February of 2001, the City was faced with losing its access
to medical care in l..,odi tender the inedicai plan. in puce. In a matter of weeps, in concent with the.. employee
bargaining units, the City- agreed to contract with Ca1PERS for medical insurance coverage. It was further
decided by the C:i.ty and shared and discussed with Cal.PERS and retirees that we provide the minimum
contribution to the medical costs for annuitants as rewired by PI`MHCA (not to exceed $16.00).
In the beginning of this year, P M14CA was amended. and increased fi-orn $16.00 to $9700 over a five-year
period to be, fully irnplernented in 2008. After a review of our current billing relative to this change, we
learned that the model resolution provided to us by Ca1PERS does not provide for a maxi urn employer
contribution capped at $16.00 but an escalating contribution that is being increased to include the entire
medical premium (100%). Currently, the City is providing varying contributions for retirees, ranging from
$18.05 to $63.91 per month,
T'he resolution that the City relied upon and adopted was provided by CaIPERS, 'rhe language is vague and
< nnbiguou.s but understood to provide for the City's intent as corrimunicated to CaIPERS. After a recent
review by ffie la,,NFfirm of Liebert, Cassidy, and W'1iitniore, it was recommended that the City obtain legal
opinion as to the appropriateness of C-a.]PERS' actions and whether the City can recoup its unauthorized
contributions,
Notwithstanding the legal issue, it is recommended that the City Council set the einployer contribution
prospectively for retirecs.
APPROVED
H. Dixon Flynn -- City Mara er
F(-/JTY OF LOD
COUNCIL U I TI N
rile Cost for fiXillg the City's contribution at aiii i.mum and maximum levels is as follows:
If the City monthly contribulioiA is $16,001 the ani-tual cost -will be $19,968.00
it the City monthly contribution is as currently paid, the ai-i ual cost will be $54,684.00.
FUNDING, Inter -fund transfers
Vicky Atle e. F i€zanc e Dir ct r
cc: City Attorney
`"Nar
submitted,
ii R € urces Directory
Vhn -- City Manager
WHEREAS, Government Code Section 22825,6 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
22825 of the Act; and
WHEREAS, the City of Lodi 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 $16.00 per month, plus administrative fees and Contingency Reserve Fund
assessments,
Dated: March 19, 2003
I hereby certify that Resolution No, 2003-48 was passed and adopted by the Lodi
City Council in a regular meeting held March 19, 2003, by the following vote -
AYES: COUNCIL MEMBERS — Beckman, Land, and Mayor Hitchcock
SUSAN J. BLACKSTON
City Clerk