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Home My WebLink AboutAGENDA REPORT 2007 1107 CC REG ITEM 10S City Council Mepfln,_ ACTION: -- MOORPARK CITY COUNCILX: AGENDA REPORT TO: Honorable City Council FROM: Deborah S. Traffenstedt, Administrative Services Director DATE: November 1, 2007 (CC Meeting of 11/7/07) SUBJECT: Consider Addendum to Memorandum of Understanding (MOU) with Service Employees International Union AFL-CIO, CLC Local 998 to Amend Section 503, Retirement Health Savings Benefit BACKGROUND On June 21 , 2006, the City Council approved a Memorandum of Understanding (MOU) ending June 30, 2008, with Service Employees International Union AFL-CIO, CLC Local 998. The Union has requested amendment of the retirement health savings benefit provisions in Section 503 of the MOU, and a draft Addendum to the MOU has been prepared (see Attachment 1 , draft Addendum, and Attachment 2, amendment request from SEIU). DISCUSSION Staff supports revising Section 503 of the MOU as requested by the Union. The requested revision to the language in Section 503 of the MOU is in response to recent changes mandated by the Internal Revenue Service that have made the Retirement Health Savings Plan (RHSP) deferred compensation program less attractive in comparison to other deferred compensation plans, such as the 457. One such change to the RHSP includes a restriction on beneficiaries. For example, if an employee enrolled in a RHSP deferred compensation plan died without a spouse or dependent child or parent, the assets in their plan account could not go to any other beneficiary. There are also new restrictions on use of the funds, as well as the requirement that all elective features must be removed. Only mandatory contribution amounts may be continued. As a result, staff is recommending that the MOU be amended to allow the retirement health savings benefit payment to be deposited into an employee's 457 deferred compensation plan account, or if the maximum contribution limit for the year (including catch-up provision) has been reached, the retiring employee may elect to receive the retirement health savings benefit payment in cash. Section 503 is proposed to be amended as shown through the use of legislative format as follows: Sec. 503 RETIREMENT MEDICAL BONUSHEALTH SAVINGS BENEFIT: This retirement benefit applies to regular full-time employees and any regular part-time employee provided the same medical insurance benefit as a full-time employee for the employee portion of the City's contribution. At the time of voluntary separation for retirement from the City's retirement system (CaIPERS), and after no less than 15 years (180 months) of (u uW`Y-f Q Honorable City Council November 7, 2007, Regular Meeting Page 2 cumulative service with the City of Moorpark, the City shall pay$75.00 for each full month of service into the €employee's Retirement-Health 457 deferred compensation account, and after no less than 20 years (240 months) of cumulative service with the City of Moorpark, the City shall pay $100.00 for each full month of service into the employee's--R--_457 457 deferred compensation account. Regular part-time employees must complete the same number of hours required for a full-time employee to be eligible for RHSPthe retirement health savings benefit rr+betion, at a ratio determined bythe actual number of hours worked, including paid leave, with two thousand eighty (2,080) hours equivalent to one (1) year of service. Oee—exceptiei t iii': ^G-um3 l tiye -_proms^vvns stated' in the i reeeed+r+g paragr�h-sha be-that-for-any regular-e wrttee- h-ft --less 11 0 than 15- ot - t�.t.ty-.....of month of caY 1 irT+TtV tc-_.pI__, +e_s FRHSP If the retirinci employee has already reached the maximum contribution limit for the year in their deferred compensation plan account, including catch-up provision, he/she may elect to receive the retirement health savings benefit payment in cash upon approval of the City Manager. The City Council approved similar changes to the retirement health savings benefit in the Management Benefits Resolution in July 2007. Staff is requesting that the City Council authorize the City Manager to sign the Addendum to the MOU, with the final language to be approved by the City Manager. STAFF RECOMMENDATION Authorize the City Manager to sign the Addendum to the MOU with the final language to be approved by the City Manager. Attachments: 1. Draft Addendum to MOU 2. MOU Amendment Request from SEIU dated 10/31/07 Honorable City Council November 7, 2007, Regular Meeting Page 3 DRAFT ADDENDUM TO JUNE 2006 MEMORANDUM OF UNDERSTANDING BETWEEN SERVICE EMPLOYEES INTERNATIONAL UNION AFL-CIO, CLC, LOCAL 998, AND CITY OF MOORPARK THIS ADDENDUM to the Memorandum of Understanding, made and entered into this day of November, 2007, by and between Service Employees International Union AFL-CIO, CLC, Local 998 ("Local 998") and the City of Moorpark("City"), a Municipal corporation, located in the County of Ventura, State of California,which is entered into with reference to the following recitals. RECITALS WHEREAS, Local 998 entered into a Memorandum of Understanding ("MOU")with the City, effective from date of ratification by both the employees and the City Council in June 2006 up to and including Midnight, June 30, 2008; and WHEREAS, on November 7, 2007, the City Council authorized the City Manager to approve an amendment to the MOU to incorporate revisions to the retirement health savings benefit provisions in Section 503. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS, BENEFITS AND PREMISES CONTAINED HEREIN, THE PARTIES AGREE TO THE FOLLOWING REVISIONS TO THE MOU: Section 503 of the MOU is hereby amended in its entirety and is replaced with the following language: Sec. 503 RETIREMENT HEALTH SAVINGS BENEFIT: This retirement benefit applies to regular full-time employees and any regular part-time employee provided the same medical insurance benefit as a full-time employee for the employee portion of the City's contribution. At the time of voluntary separation for retirement from the City's retirement system (CaIPERS), and after no less than 15 years (180 months) of cumulative service with the City of Moorpark, the City shall pay$75.00 for each full month of service into the employee's 457 deferred compensation account, and after no less than 20 years (240 months) of cumulative service with the City of Moorpark, the City shall pay$100.00 for each full month of service into the employee's 457 deferred compensation account. Regular part-time employees must complete the same number of hours required for a full-time employee to be eligible for the retirement health savings benefit, at a ratio determined by the actual number of hours worked, including paid leave, with two thousand eighty (2,080) hours equivalent to one (1) year of service. Honorable City Council November 7, 2007, Regular Meeting Page 4 If the retiring employee has already reached the maximum contribution limit for the year in their deferred compensation plan account, including catch-up provision, he/she may elect to receive the retirement health savings benefit payment in cash upon approval of the City Manager. Except as amended by this Addendum, all of the provisions of the MOU shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the MOU between Local 998 and the City to be executed the day and year first above written. ON BEHALF OF THE CITY: ON BEHALF OF LOCAL 998: Steven Kueny, City Manager Danny Carrillo, SEIU Local 998 Member Representative ATTEST: Deborah S. Traffenstedt John Casillas, SEIU Local 998 City Clerk Unit Representative Teresa Jones, Local 998 Unit Representative Mario Riley, Local 998 Elected Negotiator OCT-31-2007 16:49 From: To:Cita of Moorpark P.2/2 LOCAL 998 POTMOMM October 31, 2007 Steven Kueny SE1U City Manager Stronger Together City of Moorpark 799 Moorpark Ave. Moorpark,CA 93021 Re: Request to.Reopen MOU, Section 50.,Retirement Medical Bonus Dear Mr. .Kue.ny: At a recent SEIU membership meeting, members voted to disconlinue participating in the current Retirement:Health Savings Plan ([ISP) due to upcoming changes and certain program restrictions. SEIU would like to reopen the current MOU, Section 503, Retirement Medical Bonus. SEW would also like to discuss changing the present City procedure of City contributions into the RF1SP and directing these contributions into another deferred compensation phan such as the 457. We understand this change was recently made for the management: unit and feel your General Bargaining Unit employees would better benefit. with this change also. All current language in this Section could remain the. same other than the placement of these contributions; a 457 Plan instead of the RFISP. Please contact me when we may be able to meet to further discuss this request. Members of the past bargaining team would also he involved with these discussions. I can be reached at (805) 644-8291 ext. 23 or by email at danny.carrilloZse.iu721.ora. Sin rely, Danny Carri to SERVICE EMPLOYEES SEIU Worksite Organizer INTERNATIONAL UNION AFL-CIO 2977 Fasunan Avenue, C: Sandra Stewart, SEIU Ventura Regional Director Unit 30 SEIU City of Moorpark Stewards Ventura CA 93003 Deborah S.Traffenstedt, Administrative Services Director 805 644 8291 F:ix P05 644 7843 .wj h 3 e-mail-seiulg(La199A org ry�-I wet)-wwwseiulocal998 org , �y �K., 4 A