Resolution No. 7984r °
RESOLUTION NO. 7984
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON REAFFIRMING ITS INTENT TO AUTHORIZE THE
PROCUREMENT OF CERTAIN LIFE INSURANCE POLICIES FOR
THE CITY ADMINISTRATOR AND RATIFYING SUCH ACTIONS,
AND AMENDING SALARY RESOLUTIONS NOS. 7796, 7562,
7359, AND 7165
WHEREAS, according to Chapter 2.1 of the Vernon Charter,
"[t]he city shall have full power and authority to adopt, make,
exercise and enforce all legislation, laws, and regulations and to take
all actions in respect to municipal affairs, without limitation, which
may lawfully be adopted, made, exercised, taken or enforced under the
Constitution of the State of California subject only to such
limitations as may be provided by this Charter and
WHEREAS, the Vernon Charter provides general authority for
the City Council in the area of compensation for officials and
employees. According to Chapter 6.3, "[c]ompensation for the city
administrator shall be set by the city council"; and
WHEREAS, Section 2.7-2 of the Vernon City Code states that
"[t]he city administrator shall receive such compensation and expense
allowances as the council shall, from time to time, determine, and
such compensation and expenses shall be a proper charge against such
funds of the city as the council shall designate"; and
WHEREAS, there are no provisions in the Vernon Charter or
the Vernon City Code that prohibit the City Council from providing its
employees with life insurance as part of their compensation package;
and
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WHEREAS, the decision to include life insurance policies in
the City Administrator's compensation package is well within the City
Council's authority; and
WHEREAS, the City Administrator's performance has been
evaluated annually and the City Council has attempted to compensate
him according to the value that the City Council believes he provides
to the City; and
WHEREAS, since at least 1983, the City Council has also
authorized a "whole life" (now referred to as "universal life")
insurance policy for the City Administrator; and
WHEREAS, in 1983, such a life insurance policy was acquired
from United Olympic Life Insurance Company, in the policy coverage
amount of $50,000; and
WHEREAS, the City Council's authorization for the universal
life insurance was documented in the City's Salary Resolution No. 5018
which was approved on June 30, 1983; and
WHEREAS, on October 18, 1983, after evaluating the City
Administrator's performance, the City Council authorized pursuant to
Resolution No. 5056, an increase in the universal life insurance policy
from $50,000 to $100,000, as part of the City Administrator's
compensation package; and
WHEREAS, thereafter, on June 28, 1984, the coverage for the
universal life insurance policy that had been acquired from United
Olympic Life Insurance Company, was increased to $200,OOO by acquiring
another life insurance policy from Pacific Standard Life Insurance, in
the policy coverage amount of $100,000, with an additional annual
premium in the amount of $487.00; and
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WHEREAS, the City Council's authorization for the increased
universal life insurance coverage was documented in the City's Salary
Resolution No. 5120, which was approved on June 28, 1984; and
WHEREAS, in 1985, after evaluating the City Administrator's
performance, the City Council authorized pursuant to Resolution No.
5180 another increase in the universal life insurance policy from
$200,000 to $210,000, as part of the City Administrator's compensation
package; and
WHEREAS, thereafter, in 1988, the coverage for the universal
life insurance policies that were acquired from United Olympic Life
Insurance Company and Pacific Standard Life Insurance, was increased to
$310,000; and
WHEREAS, the City Council's authorization for the increased
universal life insurance coverage was documented in the City's Salary
Resolution No. 5564, which was approved on November 8, 1988; and
WHEREAS, in 1995, after evaluating the City Administrator's
performance, the City Council, once again, authorized an increase in
the universal life insurance policy coverage to $500,000, as part of
the City Administrator's compensation package; and
WHEREAS, thereafter, in 1995, such a life insurance policy
was obtained from Bankers Security Life Insurance Society ("Bankers
Life"), with an annual premium in the amount of $16,070; and
WHEREAS, the City Council's authorization for the increase in
the life insurance coverage was documented in the City's Salary
Resolution No. 6704, which was approved on November 7, 1995; and
WHEREAS, in 1998, after another evaluation of the City
Administrator's performance, the City Council approved an increase in
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his compensation package, which included an increase in the universal
life insurance policy coverage from $500,000 to $1,000,000; and
WHEREAS, thereafter, in August of 1998, the existing
universal life insurance coverage with Bankers Life, which is now known
as Reliastar Life Insurance Company ("Reliastar"), was increased to
$1,000,000, which resulted in an increase in the annual premium from
$16, 070, to $36, 000; and
WHEREAS, the increased Reliastar annual premium payments for
1998, 1999, 2000 and 2001, have been included in the City Council's
meeting agendas and have been reviewed and audited by the City Clerk's
office and the City Council, and then duly approved by the City
Council; and
WHEREAS, the cost for the annual universal life insurance
premiums have been included in the City's annual budgets, which have
been duly approved by the City Council every fiscal year since 1998;
and
WHEREAS, in connection with the City Council's evaluation of
the City Administrator's performance in August of 1998, the City
Council approved an increase in his compensation package, which
included the provision of a "term" life insurance policy with coverage
in the amount of $100,000, which was separate and apart from the
universal life insurance policy referenced above; and
WHEREAS, thereafter, on August 26, 1998, such a life
insurance policy was acquired from Hartford Life Insurance Company,
which required the payment of an annual premium in the amount of
$3, 600; and
WHEREAS, the approval for the checks for payment of the
Hartford Life Insurance Policy annual premium for 1998, 1999, 2000 and
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2001, have been included in the City Council meeting agendas and have
been duly reviewed and audited by the City Clerk's office and the City
Council, and then duly approved by the City Council; and
WHEREAS, the cost for the annual premiums for the term life
insurance policy has also been included in the City's budgets, which
have been duly approved by the City Council every fiscal year since
1998; and
WHEREAS, it has been the City's practice and intent to
include all aspects of the City Administrator's compensation in the
City's Salary Resolutions; and
WHEREAS, the City's staff has, however, recently noticed, in
connection with a Public Records Act request by the Los Angeles Times,
that the approval of the $100,000 "term" life insurance policy in 1998
and the increase in the "universal" life insurance policy in that same
year, unlike the past City Council authorizations for the life
insurance policies relating to the City Administrator, were not
reported by the staff person attending the City Council meeting to the
City Attorney's office, in order to have such action reflected in the
next City Salary Resolution; and
WHEREAS, because the City is required by law (see Government
Code Section 54957) to discuss personnel matters in a closed session of
a City Council meeting, and has, therefore, evaluated its employees and
negotiated the City Administrator's salary and benefits in closed
session, the City's staff has had difficulty locating the minutes
and/or other City records that document the City Council's action in
1998 regarding the "term" life insurance policy, and the latest
increase in the coverage for the "universal life" insurance policy; and
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r
WHEREAS, the City Council is aware of its prior authorization
relating to said policies, and was aware that, starting in 1998, the
Hartford Life Insurance and the increased Reliastar Life Insurance
annual premiums were being paid as part of the City Administrator's
compensation package, and agrees that such payments were proper charges
against the City's funds; and
WHEREAS, the City staff's failure in 1998 to properly record
the City Council's actions relating to the approval of the "term" life
insurance policy and the increase in the "universal life" insurance
policy for the City Administrator, was the result of a clerical error;
and
WHEREAS, the City Council desires to reaffirm its previous
intent to authorize the provision of the "term" life insurance policy,
as well as the increase in the "universal life" insurance policy from
$500,OOO to $1,000,000, as part of the City Administrator's
compensation package, and to confirm the authorization of such
expenditures by ratifying such prior approvals in 1998, 1999, 2000,
and 2001
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
determines and decrees that in 1998, it intended to authorize the
procurement of a $100,000 "term" life insurance policy as part of the
City Administrator's compensation package, and that, by approving the
payment of the annual life insurance premiums of $3,600 to Hartford
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Life Insurance Company in 1998, 1999, 2000, and 2001, consistent with
its prior authorization, the City Council again intended to, and did,
approve the procurement and continuation of that life insurance policy
for the City Administrator.
SECTION 3: The City Council of the City of Vernon also
hereby reaffirms its prior intent to authorize the procurement of the
$100,000 "term" life insurance policy and hereby ratifies its prior
approval of that policy in 1998, which was obtained from Hartford Life
Insurance Company on August 26, 1998, and which has been maintained
since that time, as part of the City Administrator's compensation
package.
SECTION 4: The City Council of the City of Vernon hereby
determines and decrees that in 1998, it also intended to authorize and
increase the "whole life/universal life" insurance policy coverage for
the City Administrator that had previously been authorized and
recorded in the City's Salary Resolutions, from $500,000 to $1,000,000
and that, by approving the payment of the annual life insurance
premiums of $36,000 to Reliastar Life Insurance Company in 1998, 1999,
2000, and 2001, consistent with its prior authorization, the City
Council again intended to, and did, approve the procurement and
continuance of that increased life insurance coverage for the City
Administrator.
SECTION 5:
The City Council also hereby reaffirms its prior
intent to authorize the increase in the "universal life" insurance
policy in 1998 from $500,000 to $1,000,000, which was obtained from
Reliastar Life Insurance Company in August of 1998, and which has been
maintained since that time, and hereby ratifies its prior approval of
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such increased life insurance policy coverage, as part of the City
Administrator's compensation package.
SECTION 6: To avoid any uncertainty about the City
Council's intent, with regard to the "universal life" insurance policy
coverage increase, the prior City Salary Resolutions are hereby
amended as follows:
A. Section 24(13) of Resolution No. 7796, which was adopted
on June 27 2001, shall be amended read: "The City shall pay the cost
of a "universal life" insurance policy with coverage in the amount of
$1, 000, 000."
B. Section 24(13) of Resolution No. 7562 which was adopted
on June 27, 2000, shall be amended read: "The City shall pay the cost
of a "universal life" insurance policy with coverage in the amount of
$11000, 000."
C. Section 27(e)(13) of Resolution No. 7359, which was
adopted on June 29, 1999, shall be amended read: "The City shall pay
the cost of a "universal life" insurance policy with coverage in the
amount of $1,000,000, effective August of 1998."
SECTION 7: To avoid any uncertainty about the City
Council's intent, with regard to the City Council's authorization of
the "term" life insurance policy, the prior City Salary Resolutions
are hereby amended as follows:
A. Section 24(14) is hereby added to Resolution No. 7796,
which was adopted on June 27 2001, and shall read as follows: "The
City shall pay the cost of a "term" life insurance policy with
coverage in the amount of $100,000."
B. Section 24(14) is hereby added to Resolution No. 7562,
which was adopted on June 27 2000, and shall read as follows: "The
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City shall pay the cost of a "term" life insurance policy with
coverage in the amount of $100,000."
C. Section 27(e)(14) is hereby added to Resolution No. 7359,
which was adopted on June 29 1999, and shall read as follows: "The
City shall pay the cost of a "term" life insurance policy with
coverage in the amount of $100,000, effective August 26 1998."
SECTION 8: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 19th day of June, 2002.
ATTEST:
r
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MAItURG, ayor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
7984, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, June 19,
2002, and thereafter was duly signed by the Mayor of the City of
Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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s �y
SUPPORTING
DOCUMENTS
June 27, 2002
Mr. Robert Lopez and
Mr. Rich Connell
LOS ANGELES TIMES
202 West First Street
Los Angeles, California 90012
Re: Public Records Request
Gentlemen:
We have continued to conduct research regarding the outstanding
requests that have been made by the Los Angeles Times. The following
is additional information pertaining to the life insurance questions.
1. Documents establishing the "authorization" for the Hartford Life
Insurance $100,000 term policy
This policy was inadvertently omitted from the City's Salary
Resolutions. The policy was obtained in August 1998, after Mr.
Malkenhorst'$ compensation package was evaluated. Such reviews
typically take place in closed session under Section 54957 of the
California Government Code. Any action taken in such closed session is
then reported during open session. I have typically transcribed from
notes regarding such action preparing them as official minutes that are
then supposed to be put into the Salary Resolution. Nevertheless,
after completing my research, it appears that because of a clerical
oversight this was not incorporated into the Salary Resolution.
X
At r
Mr. Robert Lopez and June 27, 2002
Mr. Rich Connell page 2
2. The Reliastar Life Insurance Policy
It has also been discovered that the coverage amount that is
stated in the current Salary Resolution for the Reliastar Policy is
inaccurate. The correct amount is actually $1,000,000, not $500,000,
as reflected.
As with the Hartford Policy, this benefit was finalized in 1998, after
the prior year's approval of Mr. Malkenhorst's compensation package was
reviewed and adjusted. Such authorization would have gone through the
same process under Government Code Section 54957. Unfortunately, as
with the Hartford Policy, this item, which would have been approved at
the same time as the "term" insurance policy, was inadvertently omitted
from the Salary Resolution.
These matters were addressed by the City Council at their meeting on
June 19, 2002. At that time, the City Council passed Resolution No.
7984, which reaffirms its intent regarding authorization of said life
insurance policies. A copy of that Resolution is enclosed.
Gentlemen I apologize for the delay in providing this information but
it has taken some time to conduct the necessary research. Further, the
City Council needed to be made aware of the matter as it stood so that
they could consider all of the facts in order to take whatever action
they deemed proper.
Very truly yours,
CITY OF VERNON
Gloria Orosco
Chief Deputy City Clerk