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Title:
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Discussion Regarding City Council Members’ Health Benefits.
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City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council discuss City Council Members’ health benefits
and provide direction to staff as deemed appropriate.
BACKGROUND:
In July 1974, the City Council unanimously voted to allow Council Members the
option to participate in the same health insurance program as that provided to
management employees of the City. Since that time, Council Members’ benefits
have been equivalent to those provided to the employees represented by the Culver
City Management Group.
DISCUSSION:
Culver City Medical Benefits
The City contracts with California Public Employees Retirement System (CalPERS)
for medical insurance for its employees and retirees and their eligible dependents.
Effective January 1, 2012, the City implemented a full flex cafeteria plan. Under this
program, active Council Members receive up to $1,364 per month based on family
size to purchase items from a “cafeteria” of benefits that include: medical, dental,
vision, and life insurance. Such coverages are afforded to each Council Member
and their eligible dependents.
Pursuant to the Public Employees Retirement Law, after serving a minimum of 5
years in office, Council Members are considered vested for purposes of receiving
Meeting Date: 3/12/12 Item Number: A-1
CITY COUNCIL AGENDA ITEM: Discussion Regarding City Council Members’
Health Benefits
Contact Person/Dept.: Serena Wright Phone Number: (310) 253-5640
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: []
Public Notification: (E-Mail) Meetings and Agendas – City Council (03/08/12)
Department Approval:
Serena Wright (03/07/12)
City Attorney Approval:
Carol Schwab (03/07/12)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (03/07/12)
City Manager Approval:
John M. Nachbar (03/07/12) City of Culver City, California
Agenda Item Report
CalPERS retirement benefits and are, therefore, eligible to participate in the City’s
retiree medical program upon “retirement” from CalPERS service.
Retiree Medical Benefits
Prior to January 1, 2012 (the Effective Date), Council Members who “retired” from
CalPERS with at least five years of service were eligible for a retiree medical
insurance benefit which equaled up to 95% of the medical premium for themselves
and all eligible dependents. The retiree medical benefit for those Council Members
that “retire” on or after the Effective Date was modified to a defined contribution
benefit of $500.65 per month with a 4% annual growth cap. In addition, such retired
Council Members are eligible for pre-age 65 spousal/dependent coverage up to
$437.00 per month subject to vesting. The City’s retiree contribution has also been
limited to Employee + 1 coverage. After serving two full terms, Council Members are
currently eligible for 60% of the costs of pre-age 65 spousal/dependent coverage.
Newly elected Council Members assuming office after the Effective Date shall only
receive the statutory minimum under the Public Employees’ Medical and Hospital
Care Act (PEMHCA) toward their retiree medical premium (assuming the vesting
and other applicable requirements of State Law are met). The PEMHCA amount for
2012 is $112 per month. Each year the PEMHCA amount is adjusted based on the
Medical Care Component of the Consumer Price Index.
Council Member Cooper requested information regarding Council Member
compensation and health benefits for the specific cities of Beverly Hills, Inglewood,
Manhattan Beach, Santa Monica and West Hollywood. That information is provided
in the following table (in alphabetical order):
City
Monthly
Salary
Health Benefit
Provided
Retiree Medical
Provided
Beverly Hills $785.81
Up to
$2,285/mo $112/mo
Culver City $485.11
Up to
$1,364/mo
After minimum
of 5 years. Up to
approx.
$762/mo for
retiree + spouse
Inglewood
$5,157
$9,275 (Mayor)
Up to
$2,100/mo
After serving 4
terms. 100%
paid for retiree +
spouse City of Culver City, California
Agenda Item Report
Manhattan
Beach $500
Up to
$1,189/mo $112/mo
Santa Monica $1,099
$142/mo
deposited into a
trust
West Hollywood $825
Up to $804/mo $200/mo
Options
California Government Code § 20322, provides that an elective officer is excluded
from membership in CalPERS unless he or she files an election in writing to become
a member. Once optional membership is established, it may only be terminated
upon permanent separation from employment covered by CalPERS and subsequent
withdrawal of contributions.
California Government Code § 20502 allows employers to exclude a specific group
of employees from CalPERS membership though amending the City’s contract with
CalPERS. If the Council wanted to exclude its members from CalPERS, the process
for a contract amendment requires that the City Council introduce an Ordinance and
adopt a Resolution of Intent to amend the contract. The City Council must wait a
minimum of twenty (20) days to adopt the Ordinance. The adopted Ordinance
becomes final thirty (30) days following adoption, and the contract amendment
would become effective soon thereafter. Should the City Council determine to
amend the City’s contract with CalPERS, it would likely not be effective until
approximately June 2012.
FISCAL ANALYSIS:
There is no fiscal impact associated with this report. Should the City Council direct
staff to take additional action related to this subject, the associated fiscal impacts
would be included in future staff reports.
ATTACHMENTS:
None.
City of Culver City, California
Agenda Item Report
MOTION:
That the City Council:
Discuss City Council Members’ health benefits and provide direction to staff
as deemed appropriate.