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2003-161RESOLUTION NO. 2003R- 161 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING TWO (2) LETTERS OF UNDERSTANDING BETWEEN THE CITY OF ANAHEIM AND ANAHEIM MUNICIPAL EMPLOYEES ASSOCIATION, GENERAL AND CLERICAL UNITS, ESTABLISHING RETIREMENT HEALTH SAVINGS PLANS WHEREAS, the Human Resources Director has recommended in a staff report dated August 5, 2003, that the City Council approve two (2) Retirement Health Savings Plan Adoption Agreements for employees in the General and Clerical Units represented by the Anaheim Municipal Employees Association and, approve two (2) Letters of Understanding between the City of Anaheim and the Anaheim Municipal Employees Association, General and Clerical Units, to establish a Retirement Health Savings (RHS) Plan; and WHEREAS, the City Council of the City of Anaheim does find that approving the Retirement Health Savings Plan Adoption Agreements and approving two (2) Letters of Understanding for employees in the General and Clerical Units represented by the Anaheim Municipal Employees Association, serves the interests of the City by enabling it to provide reasonable security regarding such employees' health needs during retirement and by assisting in the attraction and retention of competent personnel; and WHEREAS, the City of Anaheim and the Anaheim Municipal Employees Association have met and conferred to reach an agreement concerning a defined contribution Post- Retirement Medical Plan; and WHEREAS, the Anaheim Municipal Employees Association is in agreement with the recommendation contained in said Letters of Understand; and WHEREAS, as a result thereof, the Letters of Understanding dated July 18, 2003 between the parties have been prepared and signed, and WHEREAS, the City Council of the City of Anaheim does find that it is in the best interest of the City of Anaheim to approve said Letters of Understanding with the Anaheim Municipal Employees Association. BE IT FURTHER RESOLVED by the City Council of the City of Anaheim, that the City hereby approves the Adoption Agreements, copies of which are attached hereto and incorporated by reference herein. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Anaheim that the Letters of Understanding dated July 18, 2003, between the Anaheim Municipal Employees Association and the City of Anaheim, a copy of which is attached hereto and incorporated by reference herein, are hereby approved. BE IT FURTHER RESOLVED that the City Treasurer, as Plan Administrator, is authorized to sign the Adoption Agreements on behalf of the City. F:\OT2796VK.DOC BE IT FURTHER RESOLVED that this Resolution shall be effective upon the date of adoption by the City Council. THE FOREGOING RESOLUTION is approved and adopted by the City Council this 5th day of Au_~ust ,2003. MAYOR OF THE OF ANAHEIM ATTEST: C4'I-Y' CLERKCOF THE CITY OF ANAHEIM APPROVED AS TO FORM: ~ JACK/~ITE, C~/YtTTO 'Y F:\OT2796VK.DOC LETTER OF UNDERSTANDTNG between the ANAHEZM MUNZCPAL EMPLOYEES ASSOC[ATZON, General & Clerical Units and the CITY OF ANAHEIM The Anaheim Municipal Employees Association, General and Clerical Units (AMEA), and the City of Anaheim (ANAHEIM) have met and conferred and have reached an agreement concerning a defined contribution Post-Retirement Medical Plan (Retirement Health Savings Account, or "RHSA'~ for employees hired prior to January 1, 2002. The PARTIES have reached an understanding, as follows: 1. AMEA and ANAHEIM agree that for employees hired on or after .lanuary 1, 2002, an Integral Part Trust ("Plan") for reimbursement of qualified medical expenses shall be established. AMEA and ANAHEIM agree that the City of Anaheim Deferred Compensation Committee members shall serve as trustees on behalf of participating employees. AMEA and ANAHEIM further agree that qualified medical expenses are those expenses authorized under the provisions of Internal Revenue Code Section 213, excepting only those specific expenses the parties mutually agree to exclude. 2. AMEA and ANAHEIM agree that employees hired prior to .~anuary 1, 2002, shall be allowed the opportunity to elect to participate in the Plan. Such election may be made prospectively at any time. A mandatory pre-tax contribution of one percent (1%) of an employee's gross biweekly pay shall be deposited to the individual employee Retirement Health Savings Account (RHSA). Once made, such election shall be irrevocable. AMEA and ANAHEIM agree that employees shall be given an opportunity each year to elect to contribute (in increments of 1/2 hour) sick leave hours to be earned prospectively in the upcoming calendar year. Employees shall be required to accrue a minimum of one (1) hour of earned Sick Leave time per pay period. The remaining balance earned per pay period shall be available for deferral to the individual employee's Retirement Health Savings Account as designated by the employee. Such deferrals shall be converted to cash at the employee's base rate of pay and deposited into the employee's individual RHSA as they are earned. AMEA and ANAHEIM further agree that employees shall be given an opportunity each year to elect to contribute (in increments of 1/2 hour) vacation leave hours to be earned prospectively in the upcoming calendar year. Employees shall be required to accrue a minimum of three (3) hours of earned Vacation Leave time per pay period. The remaining balance earned per pay period shall be available for deferral to the individual employee's Retirement Health Savings Account as designated by the employee. Such deferrals shall be converted to cash at the employee's base rate of pay and deposited into the employee's individual RHSA as they are earned. AMEA and ANAHEIH agree that active employees will be eligible to withdraw funds solely for reimbursement of the employee's share of medical insurance premiums for plans provided by the City at age 50 and after five years of service with the City of Anaheim. AMEA and ANAHEIM agree that any employee who separates City service for any reason will be eligible to withdraw funds for reimbursement of eligible medical expenses without regard to the employee's age or years of service. AMEA and ANAHEIM acknowledge that employee premium contributions for employer-provided group health insurance provided by other employers are not an eligible medical expense for the purpose of this plan. ! C:\LR_DATA~M~IEA~MVlEALOU^ RHSAcurrent^final 07/14/03 6. AMEA and ANAHEIM agree that upon the death of an employee, surviving spouse and/or eligible dependents are immediately eligible to maintain the individual member account and to utilize it to fund eligible medical benefits. 7. AMEA and ANAHE]~IVi agree that the Plan Document shall establish the medical benefits that are reimbursable to participating employees and shall establish benefit eligibility. 8. AMEA and ANAHFIIVl agree that either party may request at any time to meet and confer regarding plan provisions, and may propose plan amendments to be effective the first day of the calendar year following agreement, except that ANAHETM shall not be obligated to meet and confer at any time during the term of the current Memorandums of Understanding between the PARTIES dated September 29, 2000 through .lanuary 1, 2004 regarding employer contributions. Any agreements reached shall be incorporated in a written Letter of Understanding, signed by the City Management Representative and the AMEA Representatives and presented to the Anaheim City Council for determination. 9. If any provision of this Letter of Understanding is at any time or in any way expressly prohibited by Private letter Ruling or held to be contrary to any law by any court of proper jurisdiction, the remainder of this Letter of Understanding shall not be effected thereby, and shall remain in full force and effect. 10. Disputes regarding the interpretation or application of the terms of this Letter of Understanding shall be resolved between authorized representatives of ANAHEIM and the AMEA. In the event the parties cannot resolve the dispute, it shall be submitted for review through the grievance procedure. STAFF OFFZCZALS of the cTrY OF ANAHEZM, a Municipal Corporation Dated: '? - / ~' ANAHEXM MUNZCZPAL EMPLOYEES ASSOCIATION, General & Clerical Units 2C:\LR_DATA~.MEA~MEALOU^ RHSAcurrent^final 07/~/03 LETTER OF UNDERSTANDTNG between the ANAHEZM MUNZCPAL EMPLOYEES ASSOCIATTON, General & Clerical Units and the CITY OF ANAHEIM The Anaheim Municipal Employees Association, General and Clerical Units (AMEA) and the City of Anaheim (ANAHEIM) have met and conferred and have reached an agreement concerning a defined contribution Post-Retirement Medical Plan for employees hired on or after January 1, 2002. The PARTIES have reached an understanding, as follows: AMEA and ANAHEIM agree that for employees hired on or after January 1, 2002, an Integral Part Trust ("Plan'~) for reimbursement of qualified medical expenses shall be established. AMEA and ANAHEIM agree that the City of Anaheim Deferred Compensation Committee members shall serve as trustees on behalf of participating employees. AMEA and ANAHEIM further agree that qualified medical expenses are those expenses authorized under the provisions of Internal Revenue Code Section 213, excepting only those specific expenses the parties mutually agree to exclude. 2. AMEA and ANAHEIM agree that the Plan will require a five-year vesting period (cliff vesting) for any ANAHEIM provided contributions. ANAHEIM shall make a one-time lump sum employer contribution of three thousand dollars ($3,000) into an employee's individual Retirement Health Savings Account (RHSA) upon the employee's hire into a classification represented by AMEA. AMEA and ANAHEIM agree that ANAHEIM shall make the three thousand dollar ($3,000) per employee contribution to the Plan no later than the last day of the pay period following City Council approval of this Letter of Understanding for each employee hired between .lanuary 1, 2002, and the effective date of this Agreement. ANAHEIM shall make an additional one-time lump sum employer contribution of two thousand dollars ($2,000) on behalf of each employee hired on or after .lanuary 1, 2002 and before .lanuary 13, 2005, such contribution to be made upon the employee's completion of probation. AMEA and ANAHEIM agree that, effective the first pay period following approval of this Letter of Understanding by the Anaheim City Council, each employee hired on or after .lanuary 1, 2002 shall be required to contribute one percent (1%) of his or her gross biweekly pay to the employee's individual RHSA. AMEA and ANAHEIM agree that each eligible employee shall be required to contribute two percent (2%) of his or her gross biweekly pay to the employee's individual RHSA coincident with the next general wage increase granted employees represented by the AMEA. AMEA and ANAHEIM agree that each eligible employee shall be required to contribute three percent (3%) of his or her gross biweekly pay to the employee's individual RHSA coincident with the subsequent general wage increase granted employees represented by the AMEA. C: \LR_DATA~J~IEA~AMEALOU1 ^ RHSAnew^final 7/i4/2003 10. 11. 12. 13. 14. AMEA and ANAHEIM agree that employees shall be given an opportunity each year to elect to contribute (in increments of 1/2 hour) sick leave hours to be earned prospectively in the upcoming calendar year. Employees shall be required to accrue a minimum of one (1) hour of earned Sick Leave time per pay period. The remaining balance earned per pay period shall be available for deferral to the individual employee's Retirement Health Savings Account as designated by the employee. Such deferrals shall be converted to cash at the employee's base rate of pay and deposited into the employee's individual RHSA as they are earned. AMEA and ANAHEIM agree that employees shall be given an opportunity each year to elect to contribute (in increments of 1/2 hour) vacation leave hours to be earned prospectively in the upcoming calendar year. Employees shall be required to accrue a minimum of three (3) hours of earned Vacation Leave time per pay period. The remaining balance earned per pay period shall be available for deferral to the individual employee's Retirement Health Savings Account as designated by the employee. Such deferrals shall be converted to cash at the employee's base rate of pay and deposited into the employee's individual RHSA as they are earned. All contributions made under the provisions of this Section shall be designated as pm-tax contributions. AMEA and ANAHEIM agree that active employees will be eligible to withdraw funds solely for reimbursement of the employee's share of medical insurance premiums for plans provided by the City at age 50 and after five years of service with the City of Anaheim. AMEA and ANAHEIM agree that any employee who separates City service for any reason will be eligible to withdraw funds for reimbursement of eligible medical expenses without regard to the employee's age or years of service. AMEA and ANAHEIM acknowledge that employee premium contributions for employer-provided group health insurance provided by other employers are not an eligible medical expense for the purpose of this plan. AMEA and ANAHEIM agree that employees hired on or after January 1, 2002, who have completed at least ten (10) years of consecutive ANAHEIM service, and who are awarded a retirement from PERS as their reason for separation from ANAHEIM service shall be allowed access to ANAHEIM sponsored group health plans as one of their coverage options. AMEA and ANAHEIM agree that upon the death of an employee, surviving spouse and/or eligible dependents are immediately eligible to maintain the individual member account and to utilize it to fund eligible medical benefits. AMEA and ANAHEIM agree that the Plan Document shall establish the medical benefits that are reimbursable to participating employees and shall establish benefit eligibility. AMEA and ANAHEIM agree that either party may request at any time to meet and confer regarding plan provisions, and may propose plan amendments to be effective the first day of the calendar year following agreement, except that ANAHEIM shall not be obligated to meet and confer at any time during the term of the current Memorandums of Understanding between the PARTIES dated September 29, 2000 through 3anuary 1, 2004 regarding employer contributions. Any agreements reached shall be incorporated in a written Letter of Understanding, signed by the City Management Representative and the AMEA Representatives and presented to the Anaheim City Council for determination. If any provision of this Letter of Understanding is at any time or in any way expressly prohibited by Private Letter Ruling or held to be contrary to any law by any court of proper jurisdiction, the C: \LR_DATA~,MEA~tAMEALOU l^RHSAnew^final 7/lq./2003 remainder of this Letter of Understanding shall not be effected thereby, and shall remain in full force and effect. 15. Disputes regarding the interpretation or application of the terms of this Letter of Understanding shall be resolved between authorized representatives of ANAHEIM and the AMEA. In the event the parties cannot resolve the dispute, it shall be submitted for review through the grievance procedure. STAFF OFFZCZALS of the cl"rY of ANAHEZM, a Municipal Corporation ANAHEIM MUNICPAL EMPLOYEES ASSOCT~,T~ON, General & Clerical Units By:~ By: C: \LR_DATA~,MEA~,I EALOU 1^ RHSAnew^ final 7/14/2003 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF ANAHEIM ) I, SHERYLL SCHROEDER, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 2003R-161 was introduced and adopted at a regular meeting provided by law, of the Anaheim City Council held on the 5th day of August, 2003, by the following vote of the members thereof: AYES: MAYOR/COUNCIL MEMBERS: Pringle, Tait, Chavez, Hernandez, McCracken NOES: MAYOR/COUNCIL MEMBERS: None ABSTAINED: MAYOR/COUNCIL MEMBERS: None ABSENT: MAYOR/COUNCIL MEMBERS: None A,.- F THE CITY OF ANAHEIM (SEAL)