CC 2012-12-11_08.b. Amendment to Full Flex Cafeteria PlanMEMORANDUM
FROM:
CITY COUNCIL ~
ANGELA KRAETSCH, DIRECTOR OF ADMINISTRATIVE SERVICES~
TO:
BY: KAREN SISKO, HUMAN RESOURCES MANAGER
SUBJECT: CONSIDERATION OF A RESOLUTION ADOPTING AN AMENDMENT
TO THE FULL FLEX CAFETERIA PLAN SECTION 125
DATE: DECEMBER 11, 2012
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 Management Group,
the Arroyo Grande Police Officers' Association ("AGPOA") and Service Employees
International Union, Local 620 ("SEIU"), the International Association of Fire Fighters,
Local 4403 ("IAFF"),and the Five Cities Fire Authority Management Group.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The FY 2012-13 budget includes an increase of approximately $98,000 for medical
costs when compared to the prior Fiscal Year. The actual cost associated with the
increase in rates is difficult to quantify in comparison to the prior year due to the
reorganization of the Maintenance Services Department, the addition of an Engineer
position, and the increase in Five Cities Fire employees related to the SAFER grant. No
additional appropriation is required.
Minimal staff time is projected to make the changes.
BACKGROUND:
In 2008, the City implemented the equal contribution plan under the CaiPERS 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 was adopted on
November 13, 2007 for the Management Group and the IAFF with an effective date of
January 1, 2008. An amendment to the plan document was adopted on August 12,
2008, with an effective date of January 1, 2009 to include employees represented by
the AGPOA and SEIU.
Item 8.b. - Page 1
CITY COUNCIL
CONSIDERATION OF A RESOLUTION ADOPTING AN AMEDNMENT TO THE FULL
FLEX CAFETERIA PLAN SECTION 125
DECEMBER 11, 2012
PAGE 2
ANALYSIS OF ISSUES:
Under the CaiPERS 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 CaiPERS. 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
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
2013 are the only items changed in the amendment. The adjustment is necessary
because increased amounts are not issued to the City by CaiPERS until August for the
upcoming year.
Although the City Council is not included in the City's Cafeteria Plan they have elected
to receive the same rates allowed for Management employees.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
Approve staffs 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 CaiPERS 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 agreements.
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, December 6, 2012. The
Agenda and report were posted on the City's website on Friday, December 7, 2012. No
public comments were received.
Item 8.b. - 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 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,
the Service Employees International Union, Local 620, the unrepresented Management,
the International Association of Fire Fighters, Local 4403, and the Five Cities Fire
Authority Management group 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, the Service Employees International Union, Local 620, and the
International Association of Fire Fighters, Local 4403 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 2013, marked Exhibit "A", and incorporated herein by this
reference.
2. An amendment is made to the City Council Medical Rate Allowance as set forth in
Exhibit "B" attached hereto and incorporated herein by this reference.
3. The terms of this Resolution as contained in Exhibits "A" and "B" shall become
effective January 1, 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 December, 2012.
Item 8.b. - 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.b. - 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 January
1, 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
Employee Benefit
Employee Only $650.38
Employee Plus One $1,204.71
Employee Plus Two or more $1,545.96
If employee waives medical coverage (cash $550.03
back option)
ARROYO GRANDE SERVICE EMPLOYEES INTERNATIONAL
UNION, LOCAL 620 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).
Item 8.b. - Page 5
Amendment to Full Flex Cafeteria Plan Section 125
Page 2
INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS,
LOCAL4403EMPLOYEES
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 Only $626.33
Employee Plus One $1 '156.61
Employee Plus Two or more $1,483.43
If employee waives medical coverage (cash $525.98
back option)
CITY OF ARROYO GRANDE
BY: -------------------------------Steven Adams, City Manager
Item 8.b. - Page 6
Exhibit "B"
MEDICAL RATE ALLOWANCE
ARROYO GRANDE CITY COUNCIL
With Medical Coverage Total Monthly rates
Employee Only~-----------l-$:.....:6=-=2=-=6...:....:.3=-=3~----l
Employee Plus One $1,156.61
Employee Plus Two or more $1,483.43
Item 8.b. - Page 7
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