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Resolution No. 2012-217RESOLUTION NO. 2012-217 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AMENDING RESOLUTION NO. 2012-188 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, on October 2, 2012, the City Council of the City of Vernon adopted Resolution No. 2012-188, amending 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 certainclarifications; and WHEREAS, by memorandum dated October 25, 2012, the Director of Human Resources has recommended that the City Council of the City of Vernon amend Resolution No. 2012-188, authorizing up to $1,000 toward the payment of medical and dental insurance premiums for eligible employees, and their eligible dependents, and up to $500 toward the payment of medical and dental insurance premiums for employees with at least ten (10) years of service plus 5% for each additional full year of service above 10 years of service, for employees who retire from the City of Vernon during FY 2012/13, and that the offer be extended as an option to safety and safety management groups, at their discretion, in addition to the related options provided in the Vernon Firefighters Association ("VFA") Memorandum of Understanding and the Vernon Police Officers' Benefit Association ("VPOBA") Memorandum of Understanding; 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; and WHEREAS, this Resolution amends and supersedes Resolution No. 2012-188, as of the date of the adoption of Resolution No. 2012-188. 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 - 2 - year 2012-2013, and their eligible dependents, and do not apply 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, and 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, safety and safety management 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 (65th) 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 - 3 - program shall automatically terminate and cease upon the death of the retired employee. B. Any full -.time regular employees, safety and safety management employees who retire 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 retired employee, until the sixty fifth (65th) 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 - 4 - 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 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 - 5 - 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. The City will pay up to $500, per month, plus 5% for each additional full year.of service above 10 years, toward the insurance premium cost for the City's medical -dental insurance program for full- time regular employees, safety and safety management employees, who retire from the City during FY 2012-2013, at age fifty (50), or later, with at least ten (10) 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 (65th) birthday of that retired employee except as stated herein. Should the retired employee decline or fail to pay any difference between the City's payment 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 - 6 - any payment under the FY 2012/13 retiree medical benefits program shall automatically terminate and cease upon the death of the retired employee. 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 Interim City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the Interim City Clerk of the City of Vernon shall cause this resolution and the Interim City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 6th day of November, 2012. Name: Wi iam J. Davis Title: Mayor AT E T: Dan Reed, Interim City Clerk - 7 - STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) I, Dana Reed, Interim City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2012-21'7, 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, November 6, 2012, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this day of November, 2012, at Vernon, California. 1 Da a Reed, Interim City Clerk (SEAL) - 8 - cc 4"Ve� RECEIVED RECEIVE® OCT 3 0 2012 OCT 3 1 2012 CITY ADMINISTRATION CITY CLERK'S OFFICE STAFF REPORT HUMAN RESOURCES DEPARTMENT DATE: October 30, 2012 TO:. Honorable Mayor and City Council FROM: Teresa McAllister, Director of Human,.Resources. "Y RE: Payment of Medical and Dental Health Premiums for Retirees for Fiscal Year 2012-2013 Background 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. On October 2, 2012 City Council adopted Resolution No..2012-188 approving the continuous payment of medical and dental insurance premiums for retired employees applicable for Fiscal Year 2012 2013. To further enhance the offer of early retirement and encourage employees to take advantage of the retiree medical incentive program offered, it is recommended that the retiree medical benefits provided pursuant to Resolution No. 2012-188 be extended to include eligible dependents and up to $500 per month for employees and their eligible dependents with 10 yearn of continuous uninterrupted service plus, 5% for each additional full year of service above 10 years (example; 12 years of service = 65% or $650.00). Currently the City pays up to $1,000 per month for employee only with twenty (20) years of continuous service. The City's offer to pay up to $1,000 per month for employees and eligible dependents with at least twenty (20) years of continuous uninterrupted service and up to $500 per month for employees and eligible dependents with at least ten (10) years of service is a practical approach to increase participation for those employees who may consider early retirement, but are apprehensive due to the potential loss of current medical coverage for their eligible dependent(s). Subsequently, after having met and conferred with the Vernon Safety Groups and Safety Management Groups, it is recommended that the above retiree medical and dental health premiums be offered as an option to safety and safety management employees at their discretion in addition to the retiree medical options provided in the following documents: • Vernon Firemen's Association (VFA) Memorandum of Understanding (MOU) effective July 1, 2012 through June 30, 2014 (Resolution No. 2012-94). . • Vernon Police Officers Benefit Association (VPOBA) Memorandum of Understanding effective July 1, 2012 through June 30, 2014 (Resolution No. 2012-95). • Resolution No. 2012-115, which adopts the Compensation costs and related benefits of the Police and Fire Management Groups. This offer is for those employees who retire from the City during FY2012/2013 only, are age fifty (50) or later, with at least ten (10) years of continuous uninterrupted service with the City of Vernon. Recommendation It is recommended that the attached resolution be approved, authorizing up to $1,000 toward the payment of medical and dental insurance premiums for eligible employees (and their eligible dependents) and up to $500 toward the payment of medical and dental insurance premiums for employees with at least ten (10) years of service plus 5% for each additional full year of service above 10 years of service who retire from the City of Vernon during FY 2012/2013, and that the offer be extended as an option to safety and safety management groups at their discretion in addition to the related options provided in the VFA MOU (Resolution No. 2012-94), VPOBA MOU (Resolution No. 2012-95), and Resolution No. 2012-115, as subsequently amended.