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Home My WebLink About2018-08-28; City Council; ; Revisions to Article 15.D, Opt Out Provision of the Carlsbad Firefighters Association Inc. Memorandum of Understanding€) CITY COUNCIL Staff Report Meeting Date: To: From: Staff Contact: August 281 2018 Mayor and City Council Scott Chadwick1 City Manager Julie Clark, Human Resources Director Julie.clark@carlsbadca.gov or 760-602-2440 CA Review ,(}IV Subject: Revisions to Article 15.D, Opt Out Provision1 of the Carlsbad Firefighters1 Association1 Inc. Memorandum of Understanding. Recommended Action Adopt a Resolution approving a side letter with the Carlsbad Firefighters' Association1 Inc. (CFA) that amends Article 15.D, titled "Opt Out Provision'\ of the Memorandum of Understanding (MOU). Executive Summary On June 131 2017, the City Council adopted Resolution No. 2017-105 approving an MOU with the CFA with a term of three years that expires on December 311 2019. In August 20181 the parties agreed to open discussions regarding certain terms and provisions covered by the current MOU. Representatives of the city and the CFA have reached agreement on a side letter revising Article 15.D1 Opt Out Provision1 of the CFA MOU. Pursuant to Gov. Code section 3505.11 the amendment to the MOU is being presented to the City Council as the governing body for its consideration. Discussion The current CFA MOU outlines a specific city contribution amount to health insurance (Benefits Credits) associated with each medical coverage level ("employee only/ "employee plus one dependent/ "employee plus two or more dependents11 and "waive city-sponsored medical insurance11 ). Any unused Benefits Credits are paid to an employee in cash. On January 11 20191 due to a decrease in the cost of two of the medical plans sponsored by the city1 the unused Benefits Credits corresponding to these two medical plans would be higher than the Benefits Credits corresponding to waiving medical insurance. This situation incentiv(zes employees who would otherwise waive city-sponsored medical insurance (because they have obtained insurance elsewhere) to enroll in city-sponsored medical plans unnecessarily1 thereby increasing the total cost of city contributions to health insurance. To address this unique situation staff recommends that the City Council approve a side letter that amends Article 15.D1 Opt Out Provision1 of the CFA MOU. The recommended amendment to the CFA MOU is shown in Attachment A to Exhibit 1. Fiscal Analysis If the recommended change was not made to the CFA MOU1 the total cost of city contributions to health insurance for (FA-represented employees who currently waive city-sponsored medical insurance could increase by an amount in the range of $1041000 to $1491000 per year. The August 28, 2018 Item #1 Page 1 of 6 estimated cost associated with the recommended change described above is $15,400 per year. Funding for this change is included in the adopted Fiscal Year 2018-19 budget. Next Steps Staff will implement the approved changes to the CFA MOU as shown in Attachment A to the · Resolution. Environmental Evaluation (CEQA) The proposed action does not qualify as a "project" under the California Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15378 as it does not result in a direct or reasonably foreseeable indirect physical change in the environment. Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for viewing at least 72 hours prior to the meeting date. Exhibits 1. City Council Resolution. 2. Strikeout/Underline Version of Article 15.D of the CFA MOU. August 28, 2018 Item #1 Page 2 of 6 RESOLUTION NO. 2018-157 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A SIDE LETTER WITH THE CARLSBAD FIREFIGHTERS' ASSOCIATION, INC. (CFA) THAT AMENDS ARTICLE 15.D, TITLED "OPT OUT PROVISION", OF THE MEMORANDUM OF UNDERSTANDING WHEREAS, on June 13, 2017 the City Council adopted Resolution No. 2017-015 approving a Memorandum of Understand (MOU) with the CFA with a term of three years that expires on December 31, 2019; and WHEREAS, on January 1, 2019, due to a decrease in the cost of two ofthe medical plans sponsored by the city, the unused Benefits Credits corresponding to these two medical plans would be higher than the Benefits Credits corresponding to waiving medical insurance; and WHEREAS, this situation incentivizes employees who would otherwise waive city-sponsored medical insurance (because they have obtained insurance elsewhere) to enroll in city-sponsored medical plans unnecessarily, thereby increasing the total cost of city contributions to health insurance; and WHEREAS, representatives of management and the Carlsbad Firefighters' Association, Inc. have met and conferred in good faith pursuant to the Meyers-Millias- Brown Act regarding wages and other terms and conditions of employment; and WHEREAS, said representatives have reached agreement which they desire to submit to the City Council for consideration and approval; and Exhibit 1 August 28, 2018 Item #1 Page 3 of 6 WHEREAS, the City Council has determined it to be in the public interest to accept such an agreement in the form of a side letter marked Attachment A and incorporated by reference herein. NOW, THEREFORE, BE IT RESOLVED by the City Council for the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the side letter as set forth in Attachment A is hereby approved and the City Manager is authorized and directed to execute it. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 28th day of August, 2018, by the following vote, to wit: AYES: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. NOES: None. ABSENT: None. (SEAL) August 28, 2018 Item #1 Page 4 of 6 Attachment A SIDE LETTER AGREEMENT TO THE JANUARY 1, 2017 -DECEMBER 31, 2019 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF CARLSBAD AND THE CARLSBAD FIREFIGHTERS' ASSOCIATION, INC. REGARDING THE CFA MEDICAL INSURANCE OPT OUT PROVISION This side letter memorializes an agreement reached between the City of Carlsbad ("City") and the Carlsbad Firefighters' Association, Inc. ("CFA"), to reflect an agreed upon amendment to the January 1, 2017-December 31, 2019 Memorandum of Understanding ("MOU") entered into between the City and CFA. All other terms and conditions of the existing MOU shall remain in full force and effect. The change is listed below. Effective upon City Council approval, Article 15.D shall be amended to state the following: D. Opt Out Provision CFA represented employees who do not wish to participate in the CalPERS Health Program will have the choice of waiving the city's medical insurance, provided they can show that they are covered under another group insurance plan. Employees who waive city-sponsored medical insurance will be given a reduced city contribution amount (Benefits Credits) to be used toward the purchase of dental insurance, vision insurance, AD&D insurance or as a contribution to a flexible spending account. The city contribution amount will be granted to any employee who elects to waive the CalPERS Health Program and who provides proof of other medical insurance coverage, regardless of the employee's level of coverage (employee only, employee plus one dependent, employee plus two or more dependents). Effective the pay period that includes January 1, 2018, the City monthly benefit credits associated with waiving medical coverage will be set equal to 50% of the benefit credits associated with Employee Only medical coverage level. Effective the pay period that includes January 1, 2019, if this results in a situation where the unused benefit credits associated with any medical plan exceed the benefit credits associated with waiving medical coverage, the benefit credits associated with waiving medical coverage will be set equal to one dollar ($1) above the unused benefit credits associated with that medical plan. Unused Benefits Credits will be paid to the employee in cash and reported as taxable income. It is the understanding of the City and CFA that this side le is of no force or effect whatsoever, unless and until adopted by resolution of th Cit Council of the City of Carlsbad. Carlsbad Firefighters' Association, Inc. Scott Chadwick, City Manager Date August 28, 2018 Item #1 Page 5 of 6 Exhibit 2 Strikeout/Underline Version of Article 15.D of the CFA MOU D. Opt Out Provision CFA represented employees who do not wish to participate in the CalPERS Health Program will have the choice of waiving the city's medical insurance, provided they can show that they are covered under another group insurance plan. Employees who waive city-sponsored medical insurance will be given a reduced city contribution amount (Benefits Credits) of ti.vo hundred sixty seven ($267) per month to be used toward the purchase of dental insurance, vision insurance, AD&D insurance or as a contribution to a flexible spending account. The city contribution amount of two hundred sixty seven ($267) per month will be granted to any employee who elects to waive the CalPERS Health Program and who provides proof of other medical insurance coverage, regardless of the employee's level of coverage (employee only, employee plus one dependent, employee plus two or more dependents). Effective the pay period that includes January 1, 2018, the City monthly benefit credits associated with waiving medical coverage will be set equal to 50% of the benefit credits associated with Employee Only medical coverage level. Effective the pay period that includes January 1, 2019, if this results in a situation where the unused benefit credits associated with any medical plan exceed the benefit credits associated with waiving medical coverage, the benefit credits associated with waiving medical coverage will be set equal to one dollar ($1) above the unused benefit credits associated with that medical plan. Unused Benefits Credits will be paid to the employee in cash and reported as taxable income. August 28, 2018 Item #1 Page 6 of 6