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CC 2013-08-27_08.e. Amending Cafeteria Plan for AGPOAMEMORANDUM TO: CITY COUNCIL FROM: BY: DEBORAH MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES~ KAREN SISKO, HUMAN RESOURCES MANAGER ~ SUBJECT: CONSIDERATION OF A RESOLUTION ADOPTING AN AMENDMENT TO THE FULL FLEX CAFETERIA PLAN SECTION 125 FOR THE ARROYO GRANDE POLICE OFFICERS' ASSOCIATION FOR 2013 DATE: AUGUST 27, 2013 RECOMMENDATION: It is recommended the City Council adopt a resolution establishing an amendment to the Full Flex Cafeteria Section 125 Plan ("Cafeteria Plan") for the Arroyo Grande Police Officers' Association ("AGPOA") for 2013. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: There will be a decrease in cafeteria plan costs of approximately $5,400 for the period of September 1, 2013 through December 31, 2013. Minimal staff time is projected to make the changes. BACKGROUND: In 2008, the City implemented the equal contribution plan under the CalPERS Health Benefit Program to control costs of retiree medical insurance. In doing so, the City was required to provide a Cafeteria Plan to its employees. Under a Cafeteria Plan, employees are given flex dollars to spend on their benefits, which include medical, dental, and vision insurance. An employee may opt out of medical coverage only if they can provide proof of other coverage. The Cafeteria Plan for the AGPOA was adopted on August 12, 2008, with an effective date of January 1, 2009. ANALYSIS OF ISSUES: Under the CalPERS Health Benefit Program equal contribution plan, the City is required to provide the same benefit to active employees as retired employees. The amount designated is the minimum amount required by CalPERS. In 2013, the minimum is $115.00. This amount is increased annually by a cost of living adjustment. Under the Cafeteria Plan, the City designates this minimum amount as the medical contribution Item 8.e. - Page 1 CITY COUNCIL CONSIDERATION OF A RESOLUTION ADOPTING AN AMEDNMENT TO THE FULL FLEX CAFETERIA PLAN SECTION 125 FOR THE ARROYO GRANDE POLICE OFFICERS' ASSOCIATION FOR 2013 AUGUST 27, 2013 PAGE2 towards active employees. Under the equal contribution plan, this same amount is then designated as the retiree medical contribution. The City's contributions towards the Cafeteria Plan are negotiated with each bargaining unit. The Cafeteria Plan rates for the AGPOA for 2013 are the only items changed in the amendment. The adjustment is necessary because the Memorandum of Understanding with the AGPOA has just been approved and has a change in the City's contribution amount. ALTERNATIVES: The following alternatives are provided for the Council's consideration: Approve staff's recommendation by adopting the resolution; Modify as appropriate and approve staff's recommendation; or Provide direction to staff. ADVANTAGES: The Cafeteria Plan was established in conjunction with the CalPERS Health Benefit Program equal contribution plan for employee groups to assist in managing future retiree medical costs. Approval of staff's recommendation will maintain the City's medical benefits consistent with contractual obligation set forth in the terms of the existing labor agreement. The change will result in a reduced cost and be consistent with the City's other labor groups. DISADVANTAGES: There are no disadvantages to the Cafeteria Plan. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Thursday, August 22, 2013. The Agenda and report were posted on the City's website on Friday, August 23, 2013. No public comments were received. Attachment: 1. Amendment to the Full Flex Cafeteria Plan Section 125 Plan Document. Item 8.e. - Page 2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING AN AMENDMENT TO THE FULL FLEX CAFETERIA PLAN SECTION 125 TO UPDATE THE CAFETERIA PLAN RATES FOR THE ARROYO GRANDE POLICE OFFICERS' ASSOCIATION FOR 2013 WHEREAS, the City Council of the City of Arroyo Grande ("City") deems it in the best interest of the City and the employees in the Arroyo Grande Police Officers' Association (AGPOA) to amend the Full Flex Cafeteria Plan Section 125 to update the cafeteria plan rates for 2013; and WHEREAS, the City has met and conferred with the Arroyo Grande Police Officers' Association and incorporated the Cafeteria Plan provisions into their respective Memorandums of Understanding; and WHEREAS, a copy of the City of Arroyo Grande Full Flex Cafeteria Plan Section 125 is on file in the Administrative Services Department. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande that: 1. An amendment is made to the Full Flex Cafeteria Plan Section 125 to update the cafeteria plan rates for the AGPOA marked Exhibit "A", and incorporated herein by this reference. No other rates were changed. 2. The terms of this Resolution as contained in Exhibit "A" shall become effective August 30, 2013. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of I 2013. Item 8.e. - Page 3 RESOLUTION NO. PAGE2 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Item 8.e. - Page 4 Exhibit "A" AMENDMENT This document amends and replaces Appendix B of the City of Arroyo Grande Full Flex Cafeteria Plan Section 125 Document. This amendment shall become effective August 30, 2013. Appendix B shall now read: APPENDIX B FLEX-DOLLAR ALLOWANCE ARROYO GRANDE MANAGEMENT EMPLOYEES With Medical Coverage Total Monthly Employee Benefit Employee Only $626.33 Employee Plus One $1, 156.61 Employee Plus Two or more $1,483.43 If employee waives medical coverage (cash $525.98 back option_}__ _______ ARROYO GRANDE POLICE OFFICERS' ASSOCIATION EMPLOYEES With Medical Coverage Total Monthly Em~lo}'!e Benefit Employee Only $626.33 Employee Plus One $1, 156.61 Employee Plus Two or more $1,483.43 If employee waives medical coverage (cash $525.98 back option) ARROYO GRANDE SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 620 EMPLOYEES With Medical Coverage Total Monthly Emplo~ee Benefit Employee Only --$626.33 ~Employee Plus One $1, 156.61 ·- Employee Plus Two or more $1,483.43 If employee waives medical coverage (cash $525.98 back option) Item 8.e. - Page 5 Amendment to Full Flex Cafeteria Plan Section 125 Page 2 INTERNATION ASSOCIATION OF FIRE FIGHTERS, LOCAL 4403 EMPLOYEES With Medical Coverage Total Monthly Employee Benefit Employee Only $635.02 Employee Plus One $1,174.02 Employee Plus Two or more $1,506.04 If employee waives medical coverage (cash $534.67 back option) FCFA MANAGEMENT GROUP With Medical Coverage Total Monthly Employee Benefit Employee Onl~ $626.33 Emplo~ee Plus One $1, 156.61 Employee Plus Two or more $1,483.43 If employee waives medical coverage (cash $525.98 back option) CITY OF ARROYO GRANDE Steven Adams, City Manager Item 8.e. - Page 6