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City of Palo Alto (ID # 3236)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/5/2012
City of Palo Alto Page 1
Summary Title: Resolution to Fix Employer Medical Contributions for FCA
Title: Adoption of Resolution of Intent to Fix the Employer's Contribution
Under the Public Employee's Medical and Hospital Care Act with Respect to
Members of the Palo Alto Fire Chiefs' Association and Rescinding Resolution
No. 8666.
From: City Manager
Lead Department: Human Resources
Recommendation
Staff recommends that Council adopt the attached resolution fixing the City of Palo Alto’s
healthcare premium costs under the Public Employees’ Medical and Hospital Care Act
(PEMHCA) for Palo Alto’s Fire Chiefs’ Association.
BACKGROUND
The City of Palo Alto contracts with CalPERS to provide its employees with healthcare. On
March 5, 2012, Council approved the new Memorandum of Agreement for the Palo Alto Fire
Chiefs’ Association (FCA). This unit currently has four (4) budgeted full-time positions and
includes the classifications of Battalion Chief and Emergency Medical Services Director. A
critical bargaining objective has been to continue reducing medical costs which until earlier this
year, the City had paid the entire premium amount and carried the risk for all premium
increases for the employees in this group. A key structural change to City employee
compensation plans has been to implement employee medical contributions.
DISCUSSION
In an ongoing effort to address escalating medical costs, agreement was reached providing for
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employee contributions toward medical premiums for actives and future retirees from this unit.
Under the provisions of the new MOA adopted in March 2012, members started contributing
10% toward medical premiums with the City picking up the remaining 90% of the total premium
cost. For active employees in FCA this became effective March 10, 2012. There have been no
retirements in this unit since that date, however in order to implement the Memorandum of
Agreement provisions for any future retiree in this bargaining group, the CalPERS contract
amendment process requires Council to approve the attached resolution so that they can
administer the updated benefit provisions.
RESOURCE IMPACT
The active employee contribution of 10% toward medical effective March 10, 2012 was
estimated to provide $1,845 in savings for FY 12. In FY 13, the savings will be approximately
$5,998. The FY 13 Adopted Budget does not require adjustment to accommodate this contract
amendment.
POLICY IMPLICATIONS
This recommendation is consistent with City Council direction to achieve structural
changes in employee compensation for short-term and long-term savings.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act (CEQA).
Attachments:
Reso Fire Chiefs Employer Contribution (PDF)
** NOT YET APPROVED **
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Resolution No. ________
Resolution of Intention of the Council of the City of Palo Alto to Fix
the Employer’s Contribution Under the Public Employees’ Medical
and Hospital Care Act for Palo Alto Fire Chief’s Association
R E C I T A L S
A. Government Code Section 22892(a) provides that a local agency contracting
under the Public Employees' Medical and Hospital Care Act shall fix the amount of the
employer's contribution at an amount not less than the amount required under Section
22892(b)(1) of the Act; and
B. City of Palo Alto, hereinafter referred to as Public Agency is local agency
contracting under the Act for participation by members of the Palo Alto Fire Chiefs.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. That the employer’s contribution for each employee or annuitant shall
be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of
his/her family members in a health benefits plan up to a maximum of Government Code 22892
per month, plus administrative fees and Contingency Reserve Fund Assessments.
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** NOT YET APPROVED **
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SECTION 2. That the City of Palo Alto has full complied with any and all applicable
provisions of Government Code Section 7507 in electing the benefits set forth above.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ _____________________________
Sr. Deputy City Attorney City Manager
_____________________________
Director of Human Resources
_____________________________
Director of Administrative Services