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Resolution No. 2013-006RESOLUTION NO. 2013-06 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AMENDING RESOLUTION NO. 2012-217 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 certain clarifications; and WHEREAS, on November 6, 2012, the City Council of the City of Vernon adopted Resolution No. 2012-217, 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; and WHEREAS, by memorandum dated January 8, 2013, the Director of Human Resources has recommended that the City Council of the City of Vernon amend Resolution No. 2012-217, to make certain clarifications to Resolution No. 2012-217, 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 further declare that the offer of FY 2012/13 retiree medical benefits is not a vested right for employees who continue to be employed by the City on or after July 1, 2013, 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, the Retiree Medical and Dental Benefit program offered in FY 2012/13 is a vested right for those qualifying employees who retire during FY 2012/13 and timely exercise the right, only; and WHEREAS, this Resolution amends and supersedes both Resolution No. 2012-188, and Resolution No. 2012-217, as of the date of the adoption of Resolution No. 2012-188. - 2 - 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, 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 employees who. continue to be employed by the City on or after July 1, 2013 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. - 3 - 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. 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 - 4 - the stated level of insurance premium cost for the City's medical -dental insurance program for each 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 (65tn) 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 - 5 - 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 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 50 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 - 6 - 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 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 the Retiree Medical and Dental Benefit program offered in FY 2012/13 is a vested right for those qualifying employees who retire during FY 2012/13 and timely exercise the right, only. SECTION 4: The City Council of the City of Vernon hereby declares that the offer of FY 2012/13 retiree medical benefits is not a vested right for employees who continue to be employed by the City on or after July 1, 2013, 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. SECTION 5: 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 - 7 - 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 6: Eligible employees may not participate in the FY 2012/13 retiree benefits, during any time period they are receiving other City of Vernon medical insurance benefits. SECTION 7: 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. ATTESXF : APPROVED AND ADOPTED this 8th day of January, 2013. Name: Will' m J. Davis ed, Interim \City Clerk Title: Mayor / A4ac�Pr�T 8 - .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. 2013-06, was duly passed, approved and adopted by the City Council of the City of Vernon at a special meeting of the City Council duly held on Tuesday, January 8, 2013, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this day of January, 2013, at Vernon, California. Da Reed, Interit City Clerk (S EAL ) - 9 - CITY CLERK'S OFFICE INTEROFFICE MEMORANDUM DATE: January 10, 2013 TO: Rory Burnett, City Treasurer William Fox, Finance Director Teresa McAllister, Director of Human Resources FROM: Deborah Juarez, Records Management Assistant J�J RE: Resolution No. 2013-06 — A Resolution of the City Council of the City of Vernon Amending Resolution No. 2012-217 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. 2013-06 referenced above, which was approved by City Council on January 8, 2013. Thank you. Attachment c: Veronica Avendano Raquel Franco Karina Rueda Resolution No. 2013-06 RECEIVED RF-camvEr) DEC 2 o 2012 CITY AJIVIINISTRAT101� DEC262012 CITY CLERK'S OFFICE STAFF REPORT HUMAN RESOURCES DEPARTMENT DATE: January 8, 2012 TO: Honorable Mayor and City Council FROM: Teresa McAllister, Director of Human Resource RE: Payment of Medical and Dental Health Premiums for Retirees for Fiscal Year 2012-2013 (Clarification to Resolution No. 2012-2171 Recommendation It is recommended that the City Council find that approval of the attached resolution which makes clarification to the Retiree Medical and Dental Premiums is exempt under the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment. It is recommended that for Fiscal Year 2012-2013 the attached resolution be approved, which makes clarifications to Resolution No. 2012-217, authorizing the payment of medical and dental insurance premiums for employees who retire from the City of Vernon. Background On November 6, 2012, the City Council of the City of Vernon adopted Resolution No. 2012-217, authorizing 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. Concerns have been expressed from several employees who wish to take advantage of the incentive program, that the language contained in the Resolution could be interpreted differently. After reviewing the Resolution, City staff concurs that the language could be more specific to ensure consistent dissemination and application in subsequent years. This report is to clarify in the resolution the City's intent of the 2012/13 Retiree Medical and Dental Program. As such, the specific retiree medical -dental benefits offered for FY 2012/13 is not;a vested right for employees who continue to be employed by the City on or after July 1, 2013, in that the offer will expire at the conclusion of the FY 2012/2013 fiscal year, and may not be offered by the City Council in the next fiscal year. However, the Retiree Medical and Dental Benefit Program offered in FY 2012/13 is a vested right for those qualifying employees who retire during FY 2012/2013 and timely exercise the right, only. Fiscal Impact There is no fiscal impact as a result of this clarification.