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Home My WebLink About03.D- City Clerk 3A. DOC ID: 2261 C CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION Agreement/Contract Amendment From: Georgeann "Gigi" Hanna M/CC Meeting Date: 01/28/2013 Prepared by: Georgeann "Gigi" Hanna, Dept: City Clerk Ward(s): All Subject: Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to the Retiree Health Insurance Payments for Police Safety and Police Management Employees in Accordance with the City's Pendency Plan, Item No. 8, Adopted by the Mayor and Common Council on November 26, 2012 by Resolution No. 2012-278 Financial Impact: Account Budgeted Amount: <<Insert Amount>> Account No. <<Insert Account No.>> Account Description: <<Insert Account Description>> Balance as o£ <<Insert Date>> Balance after approval of this item: <<Insert Amount>> Please note this balance does not indicate available funding. It does not include non-encumbered reoccurring expenses or expenses incurred, but not yet processed. Motion: Adopt Resolution Synopsis of Previous Council Action: The council voted in Open Session to add this item to the January 24 agenda: The Mayor and Council determine that the need to consider and take action on the unilateral imposition (of terms and conditions of employment for the Police, Fire and Mid Management bargaining units) arose after the posting of the agenda." The basis of this finding was that the January 23, 2013 mediation in the United States Bankruptcy Court concluded with no agreement between the City and the bargaining units involved Following Closed Session on January 24, the meeting was continued until 3:30 p.m. Monday, January 28 in the Council Chamber. Supporting Documents: Updated: 1/25/2013 by Georgeann"Gigi" Hanna C Packet Pg. 15 RESOLUTION NO. 1 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ADOPTING MODIFICATIONS TO THE RETIREE HEALTH 3 INSURANCE PAYMENTS FOR POLICE SAFETY AND POLICE MANAGEMENT EMPLOYEES IN ACCORDANCE WITH THE CITY'S PENDENCY PLAN, ITEM #8, 4 ADOPTED BY THE MAYOR AND COMMON COUNCIL ON NOVEMBER 26, 2012 5 BY RESOLUTION 2012-27. 6 WHEREAS, in meeting its commitments to the citizens of the City of San 7 Bernardino to maintain a safe and secure community while providing access to 8 cultural, recreational and governmental activities and institutions for all citizens, the City has employed a workforce; and 9 WHEREAS, most City employees are entitled to collectively bargain with the 10 City regarding terms and conditions of employment; and 11 WHEREAS, a significant portion of the costs of providing services to the 12 community are the salaries and benefits paid to City employees, with nearly two- 13 thirds of the City's General Fund tied directly to personnel costs; and 14 WHEREAS, despite cost savings measures previously taken by the City, the 15 City's financial situation is dire with no revenue or other funding sources available to 16 balance the City's budget and address prior years' deficits; and WHEREAS, On July 18, 2012, the City Council directed the filing of a petition 17 under Chapter 9 of the United States Bankruptcy Code following the declaration of a 18 fiscal emergency in the City of San Bernardino. These actions were in response to 19 findings that the financial state of the City is such that the health, safety, and well- 20 being of the residents of the City will be jeopardized absent Chapter 9 bankruptcy 21 protection; and 22 WHEREAS, On November 26, 2012, City Council adopted the Pendency Plan, 23 Resolution 2012-27, which included the Fiscal Year 2012/13 and Fiscal Year 2013/14 24 General Fund Budgets which incorporated by reference the Pre-Pendency Plan 25 including the 9-Point Adjustment Plan adopted on September 5, 2012, and the revised Fire Department adjustments adopted on October 1, 2012; and 26 WHEREAS the City ust y present a balanced financial plan, or Pendency 27 Plan, for the General Fund that allows the City to continue to provide effective 28 service, and that failure of the City to take action to implement the Pendency Plan 4__�D constitutes an emergency within the meaning of the Meyers-Milias Brown Act, 1 Government Code section 3504.5; and 2 WHEREAS, reducing the amount of the City's contribution to the retiree 3 medical plans for police safety and police management employees to those 4 contributions that the City pays for all other retirees will result in savings of $ 427,000 5 for Fiscal Year 2012-2013. 6 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 7 8 SECTION 1. The following contribution rates for police safety and police 9 management retirees are adopted for implementation effective February 1, 2013: 10 1. All police safety and police management retirees eligible to receive City 11 contributions to the City's health and medical plans shall receive 12 $112.00/month. 13 2. The City shall reserve all rights to modify retiree medical plans and the 14 amount of contributions paid by the City. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 /// 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 2 BERNARDINO ADOPTING MODIFICATIONS TO THE RETIREE HEALTH INSURANCE PAYMENTS FOR POLICE SAFETY AND POLICE MANAGEMENT 3 EMPLOYEES IN ACCORDANCE WITH THE CITY'S PENDENCY PLAN, ITEM 48, ADOPTED BY THE MAYOR AND COMMON COUNCIL ON NOVEMBER 26, 2012 4 BY RESOLUTION 2012-27. 5 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor 6 and Common Council of the City of San Bernardino at a meeting 7 thereof, held on the_day of , 2013, by the following vote, to wit: 8 9 Council Members: AYES NAYS ABSTAIN ABSENT 10 MARQUEZ 11 JENKINS 12 VALDIVIA 13 SHORETT 14 KELLEY 15 JOHNSON 16 MCCAMMACK _ 17 18 Georgeann Hanna, City Clerk 19 20 The foregoing Resolution is hereby approved this day of , 2013. 21 22 Patrick J. Morris, Mayor City of San Bernardino 23 Approved as to form: 24 JAMES F. PENMAN, City At orney 25 p 26 27 28 CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION Staff Report SUBJECT Resolution of the Mayor and Common Council of the City of San Bernardino adopting modifications to the Retiree Health Insurance Payments for police safety and police management employees, pursuant to California Government Code § 3504.5 and consistent with certain provisions of the City's Pendency Plan, adopted by the Mayor and Common Council on November 26, 2012 by Resolution No. 2012-27. FINANCIAL IMPACT These actions are necessary to implement the provisions of the Pendency Plan. MOTION: Adopt the Resolution. SYNOPSIS OF PREVIOUS COUNCIL ACTION December 17, 2012 -The Mayor and Common Council authorize the implementation of the Public Employees' Pension Reform Act of 2013 (PEPRA) and related Public Employees' Retirement Law (PERL) amendments which shall become applicable and effective January 1, 2013. November 26, 2012 -The Mayor and Common Council adopted the Pendency Plan, Resolution 2012-27, which included the Fiscal Year 2012/13 and Fiscal Year 2013/14 General Fund Budgets which incorporated by reference the Pre-Pendency Plan including the 9-Point Adjustment Plan adopted on September 5, 2012, and the revised Fire Department adjustments adopted on October 1, 2012. BACKGROUND As a result of the City's dire financial condition, the City filed for Chapter 9 Bankruptcy following the July 18, 2012 Declaration of a Fiscal Emergency in the City of San Bernardino. These actions were in response to findings that the financial state of the City was such that the health, safety, and well-being of the residents of the City would be jeopardized absent Chapter 9 bankruptcy protection. Since then, the City has presented its financial plan or Pendency Plan in bankruptcy court and must implement the Plan in order to preserve its Chapter 9 bankruptcy protection. Page 1 Currently, police safety and police management retirees may receive up to $ 450.00/month in accordance with the following formula: • 20 years of service: up to $ 200/month • 25 years of service: up to $ 350/month • 30 years of service: up to $ 450/month There are presently 46 police safety and police management employees receiving the enhanced retiree subsidy as follows: one (1) retiree @ $ 200/month; twenty-seven (27) retirees @ $ 350/month; and, eighteen (18) retirees $450/month. With the exception of Police Safety and Police Management employees, the City's current contribution to Retiree Medical Health Care plans is $112.00 /month. Item # 8 of the City's Pendency Plan directs the reduction of direct payment to existing police safety and police management employees to $112.00/month which is the same amount the City contributes to other retirees. Cost savings to the City as a result of implementing Item #8 of the Pendency Plan for 2012-2013 fiscal year would be $427,000. The City's Pendency Plan constitutes an emergency within the meaning of the Meyers-Milias-Brown Act, Government Code section 3504.5, allowing a public agency, in cases of emergency, to unilaterally implement or adopt modifications to existing agreements. It also serves as a roadmap until the bankruptcy court approves a long- term Plan of Adjustment. The Plan of Adjustment will comprehensively restructure the City's debts and obligations and set the City on the path to solvency. It is imperative that the following actions be approved in order to implement the economic concessions included in the Pendency Plan. Accordingly, it is recommended that the following action be approved: _Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to the Retiree Health Insurance Payments for Police Safety and Police Management Employees in Accordance with the City's Pendency Plan, Item No. 8, Adopted by the Mayor and Common Council on November 26, 2012 by Resolution 2012-27. Page 2