Resolution No. 2012-188RESOLUTION NO. 2012-188
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON AMENDING RESOLUTION NO. 2012-114 REGARDING
THE CONTINUED PAYMENT OF PREMIUMS FOR MEDICAL -
DENTAL INSURANCE FOR RETIRED EMPLOYEES DURING THE
2012-2013 FISCAL YEAR FOR THE PUBLIC PURPOSE OF
REDUCING THE COST OF GOVERNMENT BY ENCOURAGING
EARLY RETIREMENT
WHEREAS, the City Council of the City of Vernon (the "City")
grants certain retiree medical benefits on a fiscal year basis
("retiree medical benefits"); and
WHEREAS, on June 19, 2012, the City Council of the City of
Vernon adopted Resolution No. 2012-114.approving the continued payment
of premiums for medical -dental insurance for retired employees during
the 2012-2013 fiscal year and in an effort to reduce expenditures
granted specific retiree medical benefits to employees who retire
during fiscal year 2012-2013, only, ("FY 2012/13 retiree medical
benefits"), in order to provide an incentive for early retirement by
eligible employees; and
WHEREAS, by memorandum dated October 2, 2012, the Director
of Human Resources has recommended that the City Council of the City
of Vernon amend Resolution No. 2012-114 to meet the public purpose of
reducing the structural costs of government by providing an incentive
for early retirement and to provide certain clarifications; and
WHEREAS, the City Council of the City of Vernon wishes to
establish the retiree medical benefits and to further declare and to
establish that the offer of FY 2012/13 retiree medical benefits is not
a vested right, in that the offer will expire at the conclusion of the
FY 2012/13 fiscal year and may not be offered by the City Council in
the next fiscal year.
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 each of the recitals set forth above is true
and correct and that there is a public purpose in establishing this
program, specifically, reducing the structural costs of government by
encouraging early retirement.
SECTION 2: The City Council of the City of Vernon hereby
adopts and establishes the FY 2012/13 retiree medical benefits stated
below, and further declares that the FY 2012/13 retiree medical
benefits are applicable to City employees who retire during fiscal
year 2012-2013, only, and do not apply to their spouses or other
dependents, nor to employees who retire before the first day of
FY 2012/2013, nor to employees who retire after the last day of
FY 2012/2013, are that the offer of these benefits is not a vested
right for future years and is made for this 2012/2013 fiscal year,
only:
A. The City will pay up to $1,000, per month, toward
the insurance premium cost for the City's medical -
dental insurance program for full-time, regular
employees who retire from the City during FY 2012-
2013, at age fifty (50), or later, with at least
twenty (20) years of continuous, uninterrupted
service with the City•. The City shall continue to
pay said amount toward the stated coverage for each
such retired employee until the sixty fifth (65tn)
birthday of that retired employee except as stated
herein. Should the retired employee decline or
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fail to pay any difference between the $1,000 and
the actual cost of the insurance premium for the
City's medical -dental insurance program for any
three (3) consecutive months, or, should the
coverage otherwise lapse for any reason other than
City's non-payment, then the City's obligation to
make further payment under the FY 2012/13 retiree
medical benefits program shall automatically
terminate and cease, without the need for further
notice. The City's obligation to make any payment
under the FY 2012/13 retiree medical benefits
program shall automatically terminate and cease
upon the death of the retired employee.
B. Any full-time regular employee who retires from the
City during FY 2012-2013 before the age of fifty
(50), with at least twenty (20) years of
continuous, uninterrupted service with the City
will be permitted to pay his/her health insurance.
premium for the City's medical -dental insurance
program at the same basic insurance type and level
held by that retired employee prior to his/her date
of retirement. Upon the fiftieth (50th) birthday of
that retired employee, if and only if the .retired
employee has continued to participate in the City's
medical -dental insurance plan without lapse, then
the City will pay up to $1,000, per month, toward
the stated level of insurance premium cost for the
City's medical -dental insurance program for each
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retired employee, until the sixty fifth (65tn)
birthday of that retired employee, except as stated
herein. Should the retired employee decline or
fail to pay any difference between the $1,000 and
the actual cost of the insurance premium for the
City's medical -dental insurance program for any
three (3) consecutive months or, should the
coverage otherwise lapse for any reason other than
City's non-payment, then the City's obligation to
make further payment under the FY 2012/13 retiree
medical benefits program shall automatically
terminate and cease without the need for further
notice. The City's obligation to make any payment
under the FY 2012/13 retiree medical benefits
program shall automatically terminate and cease
upon the death of the retired employee.
C. As a part of FY 2012/13 retiree medical benefits, a
retired employee who receives medical -dental
insurance benefits pursuant to subsections A, or B,
above, and upon his or her sixty fifth (65th)
birthday, shall apply for Medicare coverage,
whereupon the City insurance will become
supplemental coverage, if applicable and if the
retired employee elects to continue that
supplemental coverage. The City will pay up to
$500, per month, toward the City's medical -dental
insurance as supplemental insurance, to Medicare,
only, because the City will not be the primary
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insurance carrier as of the sixty fifth (65th)
birthday of that retired employee. Should the
retired employee decline or fail to pay any
difference between the $500.and the actual cost of
the insurance premium for supplemental coverage for
any three (3) consecutive months or should the
coverage otherwise lapse for any reason other than
City's non payment, then the City's obligation to
make further payment under the FY 2012/13 retiree
medical benefits program shall automatically .
terminate and cease without the need for further
notice. The City's obligation to make any payment
under the FY 2012/13 retiree medical benefits
program shall automatically terminate and cease
upon the death of the retired employee.
D. An employee who retires from the City during
FY 2012-2013, with a minimum of ten (10) years, but
fewer than twenty (20) years, of continuous
uninterrupted service with the City will be
permitted to pay the premiums, at the sole cost and
expense of the retired employee, to participate in
the City's medical -dental insurance program, for
which they are otherwise eligible, until the sixty
fifth (65th) birthday of that retired employee, at
which time Medicare will become the primary
insurance carrier. Said retired employee may elect
to pay, at their sole cost and expense, all costs
for the City's medical -dental insurance, for which
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they are otherwise eligible, as supplemental
insurance to Medicare thereafter.
SECTION 3: The City Council of the City of Vernon hereby
declares that, establishing the FY 2012/2013 retiree medical benefits
neither modifies nor alters any retiree medical benefits provided for
in any prior fiscal year and that employees who retired pursuant to
prior offers of retiree medical benefits have a vested right in such
retiree medical benefits, all as defined by the program in effect
during FY 2011-2012.
SECTION 4: For any eligible employee to participate in the
FY 2012/13 retiree benefits, they must agree to waive participation in
any other City retirement, medical insurance program, excepting those
benefits required by law or otherwise provided by law.
SECTION 5: The Acting City Clerk of the City of Vernon
shall certify to the passage, approval and adoption of this
resolution, and the Acting City Clerk of the City of Vernon shall
cause this resolution and the Acting City Clerk's certification to be
entered in the File of Resolutions of the Council of this City.
APPROVED AND ADOPTED this 2nd day of October, 2012.
AT T ST
Dan Reed, Acting City Clerk
Name: William J. Davis
Title:aa-y,!�/ Mayor Pro-Tem
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Dana Reed, Acting City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 2012-188,
was duly passed, approved and adopted by the City Council of the City
of Vernon at a regular meeting of the City Council duly held on.
Tuesday, October 2, 2012, and thereafter was duly signed by the Mayor
or Mayor Pro-Tem of the City of Vernon.
Executed this day of October, 2012, at Vernon, California.
Dana Reed, Acting City Clerk
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R E C F r IV `�� - GQ�VBLY 1 191'
SEP 242012 :STAFF REPORT
CITY CLERK'S OFFICC
HUMAN RESOURCES DEPARTME
DATE: October 2, 2012
TO: Honorable Mayor Pro Tem and City Council
FROM: Teresa McAllister, Director of Human Resources
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RECEIVE
SEP 17 2012
CITY ADMINISTRATION
RE: Payment of Medical and Dental Health Premiums for Retirees for Fiscal Year
2012-2013
Background
Each fiscal year, the City Council of the City of Vernon approves the City's payment of health
premiums for medical and dental insurance for certain categories of retired employees.
On June 19, 2012 City Council adopted Resolution No. 2012-114 approving the continuous
payment of medical and dental insurance premiums for retired employees applicable for Fiscal
Year 2012-2013.
Additional clarification of the policy is required to ensure appropriate application and
dissemination to both current and retired employees on the two -tiered system. Resolution No.
2012-114 is revised to provide clarity on the intent of the policy as follows:
1. In an effort to reduce expenditures and to meet the public purpose of reducing the
structural costs of government, the City Administrator recommended that the City
Council of the City of Vernon grant specific retiree medical benefits to employees who
retire during fiscal year 2012-2013, only in order to provide an incentive for early
retirement by eligible employees.
a. The offer of FY 2012-2013. retiree medical benefits is not a vested right, in that
the offer will expire at the conclusion of the FY 2012-2013 and may not be
offered by the City Council in the next fiscal year.
b. The age for eligibility under the retiree medical -dental premiums is reduced to
fifty (50)
c. Provides employees the option to select among a PPO or HMO plan.
d. The City shall pay up to $1,000 per month for employees with at least twenty (20)
years of continuous uninterrupted service with the City until they reach Medicare
eligibility.
e. The City shall offer employees who retire from the City with a minimum of ten
(10) years, but fewer than (20) years of continuous service the option to pay their
premiums at the City's medical -dental insurance cost until they reach Medicare
eligibility.
2. Employees who retired prior to July 1, 2012 shall have a vested right in the retiree
medical -dental benefits as defined by the program in effect 2011-2012.
Recommendation
It is recommended that for Fiscal Year 2012-2013 the attached resolution be approved,
authorizing the payment of medical and dental insurance premiums for employees who retired
from the City of Vernon.
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: October 29, 2012
TO: Teresa McAllister, Director of Human Resources
FROM: Ana Barcia; Deputy City Clerk k
RE: Resolution No. 2012-188 — A Resolution of the City Council of the City of Vernon
Amending Resolution No. 2012-114 Regarding the Continued Payment of Premiums for
Medical -Dental Insurance for Retired Employees During the 2012-2013 Fiscal Year for
the Public Purpose of Reducing the Cost of Government by Encouraging Early Retirement
Transmitted herewith is a copy of Resolution No. 2012-188 referenced above, which was approved by
City Council on October 2, 2012.
Thank you.
offiWe
Attachment
c: Resolution No. 2012-188
Veronica Avendano
Karina Rueda