This report recommends that the City Council, in accordance with the Memorandum of Understanding (MOU) with the Sunnyvale Employees Association (SEA), amend the City's contribution to the Public Employees' Retirement System (PERS) for health insurance under the Public Employees' Medical and Hospital Care Act (PEMHCA) as provided by Government Code Section 22825.6 by amending, effective January 1, 2000, the maximum contribution per month for annuitants (retirees) who were previously represented by SEA from $446.36 to $444.07 per month.

Further, this report recommends correcting a previous error in the calculation of the contribution amount for annuitants previously represented by the Communication Officers Association (COA) and the Public Safety Officers Association (PSOA), by amending effective May 1, 2000, the maximum contribution per month for annuitants (retirees) who were previously represented by COA from $457.90 to $456.94 per month, and the maximum contribution per month for annuitants (retirees) who were previously represented by PSOA from $453.58 to $451.18 per month.

This action will also amend the Salary Resolution to reflect the new contribution for these annuitants.

The contract with PERS under PEMHCA requires that contributions to annuitants medical insurance by the City be the same as for active employees and requires a contracting agency to have a resolution which has been approved by its legislative body (City Council) filed with the PERS Board establishing the new contribution. This contribution becomes effective on the first day of the second month following the month in which the resolution is received by PERS.

This change is in accordance with the Public Employees' Medical and Hospital Care Act provisions requiring compliance of agencies contracting with PERS and the employee organizations in which the basic medical insurance contribution is calculated by a formula in which the medical contribution is the same for active employees and annuitants.

Since the calculated maximum total the City contributes for medical insurance for active employees represented by SEA will be $444.07 per month effective January 9, 2000, the maximum basic contribution for medical insurance is $444.07 per month for annuitants.

Since the calculated maximum total the City contributes for medical insurance for active employees represented by COA is $456.94 per month, the maximum basic contribution for medical insurance is $456.94 per month for annuitants.

Since the calculated maximum total the City contributes for medical insurance for active employees represented by PSOA is $451.18 per month, the maximum basic contribution for medical insurance is $451.18 per month for annuitants.

The cost of this amendment has been provided for in the Fiscal Year 2000/2001 Base Budget.

Employee and public contact is by publication on the City Council Agenda.

Alternative #1; adopt the resolution amending the City's contribution for health insurance with PERS to conform with the Public Employees' Medical and Hospital Care Act, and MOU provisions.