HomeMy WebLinkAboutStaff Report 3324
City of Palo Alto (ID # 3324)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/10/2012
City of Palo Alto Page 1
Summary Title: PEMHCA for PAPOA
Title: Adoption of Resolution of Intent to Set the Employer's Contribution
Under the Public Employee's Medical and Hospital Care Act with Respect to
Members of the Palo Alto Police Officers' Association and Rescinding
Resolution No. 8896
From: City Manager
Lead Department: Human Resources
Recommendation
Staff recommends that Council adopt the attached resolution setting the City of Palo Alto’s
healthcare premium costs under the Public Employees’ Medical and Hospital Care Act
(PEMHCA) for Palo Alto’s Police Officers Association (PAPOA) to clarify that the City’s health
care coverage for PAPOA retirees is currently at the Blue Shield Bay Area Basic plan rate.
Background
The City of Palo Alto contracts with the California Public Employees Retirement System
(CalPERS) to provide its employees with healthcare. In 2009, Council approved a resolution to
fix the City’s healthcare premium rate for Palo Alto Police Officers Association (PAPOA)
members at the second highest plan for all current employees as well as future retirees. At that
time, reducing the City contributions from the highest level plan for future PAPOA retirees to
the amount of the second highest Bay Area Basic health plan premium offered by CalPERS was
a major step to containing future City-paid healthcare costs. This action was consistent with the
City’s similar agreement with other employee groups at that time.1 However, in a recent review
of these contributions the City and CalPERS discovered that CalPERS was contributing the
1 The City currently contributes 90% of the Blue Shield Bay Area Basic health plan rate for other employee groups;
however, as noted in the discussion section, the City and PAPOA are currently completing impasse procedures over
this proposed change for PAPOA.
City of Palo Alto Page 2
wrong amounts in 2012 CalPERS has requested this new resolution to clarify the proper
reimbursement amount.
Discussion
The City and PAPOA are currently engaged in impasse and fact-finding procedures over the
issue of City contributions to retiree medical benefits for future retirees. However, until that
issue is resolved, the City must maintain the status quo, which is a City contribution for retirees
in the full amount of the Blue Shield Bay Area Basic plan rate. The CalPERS contract amendment
process requires Council to approve a resolution to fix the employer contribution. Council
approved resolution #8896 on January 12, 2009. However, because the resolution stated that
the City of Palo Alto would pay up to the Blue Shield Bay Area health plan rate instead of stating
that Palo Alto would pay up to the Blue Shield Bay Area Basic health plan, similar to the amount
Palo Alto was paying for active employees, CalPERS reported that it paid some PAPOA retirees
in the wrong amounts in 2012. This revised resolution has been requested by CalPERS to
correct their billing in 2012 and in addition will serve as direction from the City to calculate the
correct employer contributions effective January 1, 2013 until a new agreement is reached with
PAPOA on City contributions toward retiree medical benefits.
Resource Impact
The FY 13 Adopted Budget does not require adjustment to accommodate this contract
amendment. This revision affects how PERS administers the current benefit but not what the
City has currently budgeted to provide for it.
Policy Implications
This resolution will allow CalPERS to correctly implement the current benefit for PAPOA
retirees.
Environmental Review
This is not a project under the California Environmental Quality Act (CEQA).
Attachments:
Resolution to Fix Contribution PEMHCA (DOC)
NOT YET APPROVED
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121204 sh 8262025
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 with Respect to Members of the Palo Alto
Police Officers’ Association and Rescinding Resolution No. 8896
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 Police Officers’
Association.
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 the Blue Shield Bay Area
Basic Plan per month, plus administrative fees and Contingency Reserve Fund Assessments.
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.
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NOT YET APPROVED
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121204 sh 8262025
SECTION 3. Resolution No. 8896 is hereby rescinded.
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