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RES-2006-114 RESOLUTION NO. 2006- 114 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING A LETTER OF UNDERSTANDING BETWEEN THE ANAHEIM MUNICIPAL EMPLOYEES ASSOCIATION, GENERAL UNIT, AND THE CITY OF ANAHEIM WHEREAS, the City of Anaheim and the Anaheim Municipal Employees Association, General Unit, have met and conferred and reached an understanding to amend Article 51 (Post Retirement Medical Benefits) of the Memorandum of Understanding; and WHEREAS, the Anaheim Municipal Employees Association, General Unit, is in agreement with the recommendation contained in said Letter of Understanding; and WHEREAS, as a result thereof, the Letter of Understanding dated May 22, 2006 between the parties has 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 Letter of Understanding. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Anaheim that the Letter of Understanding dated May 22, 2006 between the Anaheim Municipal Employees Association, General Unit and the City of Anaheim, a copy of which is attached hereto and incorporated by reference herein, is hereby approved. BE IT FURTHER RESOLVED that the effective date of this Resolution shall be June 13, 2006. THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Anaheim this 13th day of June , 2006, by the following roll call vote: AYES: Mayor Pringle, Council Members Sidhu, Hernandez, Galloway, Chavez NOES: None - ABSENT: None ABSTAIN: None ~~ MAYOR OF THE CI OF NAHEIM r CITY C APPROVED AS TO FORM: JACK L. WHITE, CITY ATTORNEY BY F:\OT3652CS.DOC LETTER OF UNDERSTANDING between the ANAHEIM MUNICIPAL EMPLOYEES ASSOCIATION, GENERAL EMPLOYEES and the CITY OF ANAHEIM The Anaheim Municipal Employees Association (AMEA), General Employees, and the Oty of Anaheim (ANAHEIM) after meeting and conferring have agreed to amend certain sections of the Memorandum of Understanding that is in effect from July 1, 2005 through January 8, 2009. Article 51 of the Memorandum of Understanding is hereby amended as follows: ARTICLE 5:1 POST RETIREMENT MEDICAL BENEFrTS 51.1 Retired employees who are receiving a post-retirement medical benefit from ANAHEIM on the date the aty Council approves this Memorandum of Understanding shall continue to receive such benefit in accordance with the provisions of the Memorandum of Understanding between ANAHEIM and AMEA that was in effect at the time of their retirement 51.2 Regular, full-time employees in the dassified service in dassifications listed in Appendix ':4 ~ who are enrolled as subsaiber in an ANAHEIM sponsored health plan at the time of separation from ANAHEIM service shall be eligible to partidpate in any ANAHEIM sponsored health plan (medical and dental) as a retiree subject to the following tenns and conditions: 51.2.1 The employee must be credited with at least ten (10) yeatS of continuous, full time ANAHEIM service on the date of retirement, and 51.2.2 The employee must have been awarded a retirement from the Public Employees' Retirement System ("PERS") as the reason for separation from ANAHEIM service, and 51.2.3 PERS retirement benefits must commence no later than the first day of the month following the date of separation from ANAHEIM service, OR 51.2.4 The employee must have been awarded a disability retirement (Ordinary or Industrial) from PERS as the reason for separation from ANAHEIM service. 51.2.5 ANAHEIM shall provide separate contributions towards the premium costs of the ANAHEIM sponsored medical and/or dental plans elected by the employee according to the following schedule: 51.2.5.1 For Service Retirements, the contributions shall be a percentage of the annual contributions made by ANAHEIM on behalf of active employees, the percentage equal to one and one-half (1.5) times the miscellaneous 296 at 60 PERS retirement schedule to a maximum contribution of 9596 based on the employee's age and consecutive years of Anaheim service at the time of retirement ANAHaM service and the retiree's age shall be calculated to the nearest complete one-quarter year. 51.2.5.2 For Disability Retirements, the contribution shall be a percentage of the annual contributions made by ANAHEIM on behalf of active employees, the percentage equal to 296 for each year of service to a maximum contribution of 9596 based on the employee's consecutive years of Anaheim service shall be calculated to the nearest complete one quarter year. 51.2.5.3 In the event an employee is eligible for both a Service and a Disability Retirement benefit under this ARTICLE, the employee shall receive the Service Retirement benefit. 51.2.5.4 The ANAHEIM contribution shall be based on the Two party or Family rate only for those employees who properly enroll a dependent spouse and/or other family members prior to retirement, and shall continue only as long as the retiree maintains coverage for such dependents in ANAHEIM sponsored health plans. Nothing in this ARTICLE shall prevent a retiree ftom properly enrolling new dependents at the retiree's cost. 51.2.5.5 The filII value of any Medicare credits provided to ANAHaM or Medicare surcharges imposed on ANAHaM by virtue of a retiree's partidpation or non-partidpation in Medicare shall be passed on to the retiree in the fonn of reduced or inaeased premium costs. 51.2.5.6 The survMng spouse or registered domestic partner of the retiree may continue coverage under the same terms and conditions provided that the survMng spouse was properly enrolled at the time of the employee's retirement and that dependent coverage was continuously maintained during the employee's retirement 51.2.6 Employees who retire on or after January 1, 2006 shall be credited with ANAHaM service acaued through December 31, 2005 for the purpose of determining eligibility and benefit levels under the provisions of Section 52.2 above. No employee who has less than ten (10) complete years of credited ANAHaM service as of December 31, 2005 shall be provided benefits under Section 52.2 above. 51.2.7 The following provisions shall apply to employees who retire on or after January 1, 2006 and who are receiving post-retirement medical benefits under the provisions of Section 52.2: 51.2.7.1 Only ANAHEIM service acaved through December 31, 2005 shall be credited to the employee in detennining ANAHEIM's perr:entage contribution towards the premium costs of the plan(s) elected by the retiree. 51.2.7.2 Retirees shall be required to enroll in MediCare parts A and B upon establishing eligibility. Failure to enroll when eligible will result in cancellation of coverage. 51.2.7.3 lJmJa 1KJ fifCl:JmstaMES shall the City fJ6fItFII1t1tc mKeRIs the msts sf any dcpcndcRl:s, execpt a SfJ81:/5C 8(" FCgistcFcd tfI8mestk /fJiJfI!RCY wR8 MaS JN6pa/y CII!6l1ctJ at IN: time sf IN: CffIfJ/SYCC's reliFcmcflt 51.2.8 The following conditions shall apply to all retirees who have post retirement medical benefit coverage under this Section: 51.2.8.1 Once canceled for any reason, coverage shall not be reinstated. 51.2.8.2 Coverage shall be canceled for non-payment of fees after three months in arrears. 51.2.8.3 There shall be Coordination of Benefits where other insurance exists. 51.2.8.4 Retirees may change plans and add dependents only during the annual open enrollment period, except that the surviving spouse or registered domeslic partner of a retiree may not enroll a new spouse or registered domestic partner. 51.3 Regular, full-time employees in the dassified service in dassifications listed in Appendix ':4 ~ hired on or after January 1, 1996 shall partidpate in an Integral Part Trust f'RHS plan' designed to provide reimbursement of qualified medical expenses upon retirement or separation firJm aty service. ''Qualified medical expensesH are those expenses authorized under the provisions of Internal Revenue Code Section 213, excepting only those expenses the parties mutually agree to exdude. 51.3.1 K1Ien an employee is hired into a dassification represented by the AMEA, ANAHEIM shall make an initial employer contribution of three thousand dollars ($3,000) into the employee's Retirement Health Savings f'RHS' account. 51.3.2 On December 24 2008, and annually thereafter, the aty shall make a contribution to the individual account of each employee in dassification represented by the AMEA who has an established RHS account. The contribution shall be equal to one percent (1.096) of the average annual base compensation of all full time employees in the miscellaneous servi~ excepting employees in dassifications represented by the ISEW. The average annual base compensation shall be calculated by annualizing the includable biweekly payroll for the pay period that includes the first of December each year, and dMding by the number of includable employees. 51.3.3 Employees shall be fully vested for all ANAHEIM contributions made on their behalf induding contributions made pursuant to Section 51.6 below, after five (5) full years of continuous ANAHEIM service. 51.3.4 Except as modified by Section 52.4 below, ANAHEIM and AMEA agree that, effective Januaty 13, 2006, each eligible employee shall be required to contribute three percent (3.096) of hiS/her gross biweekly pay to his/her indMdual RHS Account 51.3.5 Employees shall be given an opportunity each year to elect to contribute (in inaements of ~ hour) sick leave hours to be earned prospectively in the upcoming calendar year. Employees shall be required to acaue a minimum of one (1) hour of eamed Sick Leave time per pay period. The remaining balance eamed per pay period shall be available for deferral to the indMdual employee's RHS Account as designated by the employee. Such deferrals shall be converted to cash at the employee's regular hourly rate of pay, and deposited to the employee's indMdual RHS Account as they are earned. Contributions under the provisions of this paragraph shall be designated as pre-tax contributions. 51.3.6 Employees shall be given an opportunity each year to elect to contribute (in inaements of ~ hour) vacation leave hours to be eamed prospectively in the upcoming calendar year. Employees shall be required to acaue a minimum of three (3) hours of eamed Vacation Leave time per pay period. 717e remaining balance eamed per pay period shall be available for deferral to the indMdual employee's RHS Account as designated by the employee. Such deferrals shall be converted to cash at the employee's regular hourly rate of pay, and deposited to the employee's indMdual RHS Account as they are earned. Contributions under the provisions of this paragraph shall be designated as pre-tax contributions. 51.3.7 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. Employee premium contributions for employer-provided group health insurance provided by other employers are not an eligible medical expense. 51.3.8 Employees hired on or after Januaty 1, 1996 who have completed ten (10) years of consecutive ANAHEIM service, and who are awarded a retirement from PERS as the reason for separation fiTJrn ANAHEIM service shall be allowed access to ANAHEIM sponsored group health plans as a retiree. 51.4 Employees hired on or after Januaty 1, 1996 and before Januaty 1, 2002 shall make an employee contribution to their individual RHS Account according to the following schedule: 51.4.1 Effective January 13, 2006, such employees shall contribute one percent (1.0%) of hisjher gross biweekly pay to his/her individual RHS Account 51.4.2 Effective January 12, 2007, such employees shall contribute fiK1 percent (2.0%) of hisjher gross biweekly pay to his/her indMdual RHS Account 51.4.3 Effective February 4 2008, such employees shall contribute three percent (3.0%) of his/her gross biweekly pay to his/her indMdual RHS Account 51.5 Employees hired prior to January 1, 1996 may elect to partidpate in a voluntary Retirement Health Savings plan. An election to partidpate shall be irrellOCiJbIe. All provisions of Section 52.3 of this Artide shall apply to the voluntary plan, except that employees shall be required to contribute one perr:ent (1.0%) of their gross biweekly pay to their individual RHS Account 51.6 In addition to the employer obligations outlined in Section 52.3 above, ANAHEIM shall make a one time employer contribution to the RHS Account of each employee in a dassification in Appendix '~N who was hired on or after January 1, 1996 and prior to January 1, 2002 and who is an active employee on January 13, 2006. The contributions required by this Section shall be deposited to each eligible employee's account no later than January 24 2006. The contribution shall be seventy dollars ($70.()()) for each complete month offull time service calculated from the employee's date of hire to December 31, 2005; except that under no drr:urnstances shall the contribution be less than three thousand dollars ($3,000.00). STAFF OFFICIALS of the CZTY OF ANAHEIM, a Nunicipal Corporation By:~(/v By: By: By: Dated:51-;,z,{~ ANAHEIN NUNZaPAL ENPLOYEES ASSOCIATION, GenenJl Employees By: By: By: By: ?Ju~ ~ By: By: Dated: S-(), y./~