June 13, 2006

SUBJECT:      AMENDMENT OF CITY’S CONTRIBUTION FOR PERS MEDICAL INSURANCE FOR SEIU MEMBERS

REPORT IN BRIEF

This report recommends that the City Council, in accordance with the Memorandum of Understanding (MOU) with Service Employees International Union, Local 715 (SEIU), amend the City’s contribution to the Public Employees’ Retirement System (PERS) for medical  insurance under the Public Employees’ Medical and Hospital Care Act (PEMHCA) as provided by Government Code Sections 22892 (a) and 22892 (b) to increase the maximum monthly contribution for SEIU members from $248.92 to $259.01, effective January 1, 2006.

BACKGROUND

PEMHCA regulations require a contracting agency to adopt a resolution which has been approved by its legislative body and filed with the PERS Board, establishing the new contribution.  When the SEIU MOU was adopted by Council on April 11, 2006, the resolution included the medical contribution for the July 1, 2005 MOU effective date.  This action updates the rate revision effective the pay period that includes January 2006, to coincide with the medical rate increase.

EXISTING POLICY

The PEMHCA regulations require compliance from public agencies contracting with PERS to set the employer’s contribution towards basic medical insurance by resolution of the City Council.

FISCAL IMPACT

The cost of this amendment has been provided for through the approval of the Memorandum of Understanding with SEIU and incorporated into the recommended Fiscal Year 2006/2007 Base Budget. The modest costs for Fiscal Year 2005/2006 can be absorbed within the current budget.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.

ALTERNATIVES

1.       Adopt the resolution amending the City’s contribution for medical  insurance with PERS to conform to the Public Employees’ Medical and Hospital Care Act, and to amend the Salary Resolution to reflect the change in contribution from $248.92 to $259.01, effective January 1, 2006.

2.       Do not adopt the resolution amending the City’s contribution for medical insurance with PERS and thereby fail to comply with the Public Employees’ Medical and Hospital Care Act.

RECOMMENDATION

Staff recommends approval of Alternative #1: Adopt the resolution amending the City’s contribution for medical insurance with PERS to conform to the Public Employees’ Medical and Hospital Care Act, and to amend the Salary Resolution to reflect the change in contribution from $248.92 to $259.01, effective January 1, 2006.

Reviewed by:

Erwin Young Director of Human Resources

Prepared by: Myriam Castaneda, Human Resources Supervisor

Approved by:

Amy Chan

City Manager

Attachments

A.       PERS Resolution (.pdf)

B.       Amendment to Salary Resolution (.pdf)