CITY OF HAWAIIAN GARDENS
CITY COUNCIL AGENDA
Victor Farfan, Mayor Pro Tem
Dandy De Paula, Council Member
Luis Roa, Council Member
Ernie Vargas, Council Member Maria Teresa Del
Rio, Mayor
Wednesday, October 4, 2023
Special Meeting, 6:00 PM
Ernesto Marquez, City Manager
Megan Garibaldi, City Attorney
Pablo Rubio, City Clerk
NOTICE IS HEREBY GIVEN: That a Special Meeting of the City Council of the City of Hawaiian Gardens will be held on Wednesday, October 4, 2023, at 6:00 PM at City Hall, in the City Council Chambers, 21815 Pioneer Boulevard, Hawaiian Gardens, California.
ADA Information: The City of Hawaiian Gardens complies with the provisions of the Americans with Disabilities Act (ADA). Anyone needing special assistance please contact the City Clerk’s Department at (562) 4202641 x 240, at least one (1) business day prior to the meeting so that we may accommodate you.
Bilingual Information: Anyone needing a Spanish bilingual interpreter for ORAL COMMUNICATION ONLY, please contact the City Clerk’s Department at (562) 4202641 x 240, at least one (1) business day prior to the meeting so that we may accommodate you.
The meeting can be viewed via various platforms as follows:
City of Hawaiian Gardens local cable/channel:
ATT 99
FRONTIER 16
Spectrum 36
Live Stream via City website at: www.hgcity.org.
CITY OF HAWAIIAN GARDENS
CITY COUNCIL AGENDA
Victor Farfan, Mayor Pro Tem
Dandy De Paula, Council Member
Luis Roa, Council Member
Ernie Vargas, Council Member Maria Teresa Del
Rio, Mayor
Wednesday, October 4, 2023
Special Meeting, 6:00 PM
Ernesto Marquez, City Manager
Megan Garibaldi, City Attorney
Pablo Rubio, City Clerk
SPECIAL MEETING AGENDA
CALL TO ORDER
FLAG SALUTE
ROLL CALL
AGENDA AND GENERAL COMMENTS ARE TO BE SUBMITTED AND
CONDUCTED AS FOLLOWS:
CITY COUNCIL AGENDA
SPECIAL MEETING
OCTOBER 4, 2023 Page 1
FRONTIER 16
Spectrum 36
Live Stream via City website at: www.hgcity.org.
CITY OF HAWAIIAN GARDENS
CITY COUNCIL AGENDA
Victor Farfan, Mayor Pro Tem
Dandy De Paula, Council Member
Luis Roa, Council Member
Ernie Vargas, Council Member Maria Teresa Del
Rio, Mayor
Wednesday, October 4, 2023
Special Meeting, 6:00 PM
Ernesto Marquez, City Manager
Megan Garibaldi, City Attorney
Pablo Rubio, City Clerk
SPECIAL MEETING AGENDA
CALL TO ORDER
FLAG SALUTE
ROLL CALL
AGENDA AND GENERAL COMMENTS ARE TO BE SUBMITTED AND
CONDUCTED AS FOLLOWS:
VIA WRITTEN CORRESPONDENCE / ECOMMENT: Members of the public who wish to comment on matters before the City may submit written correspondence to the City Hall Black Drop Box or the following email address: [email protected], or by ecomment on the City’s website, by no later than Wednesday, October 4, 2023 at 4:00pm. Note: Written correspondence will not be read into the record during the meeting; however, correspondence received by 4:00pm will be forwarded to the City Council, made a part of the official record, and made available for public review during the meeting If submitting a comment pertaining to an agenda item, please reference the agenda item.
INPERSON COMMENT the City Council will provide members of the public with the opportunity to address the City Council on any issues within the subject matter jurisdiction of the Council or to speak on items only on the agenda, except for Public Hearing items. Each speaker shall be limited to three (3) minutes of public comment at each special meeting. The City Council shall not discuss or take action relative to any public comment unless authorized by California Government Code Section 54954.2(b).
Members of the public shall have the right to observe and offer public comment at the public meeting, consistent with the public's rights of access and public comment otherwise provided for by the Brown Act, as applicable (including, but not limited to, the requirement that such right of access and public comment be made available in a manner consistent with the Americans with Disabilities Act).
DISCUSSION ITEM(S)
1. Recommendation to adopt Resolution No. 0342023 Fixing the Employer Contribution at an Equal Amount for Employees and Annuitants under the Public Employees’ Medical and Hospital Care Act (“PEMHCA”).
SUGGESTED ACTION: Approve Recommendation.
ADJOURNMENT
Adjourn to the next Regular City Council meeting to be held on Tuesday, October 10, 2023 at 6:00 PM.
CITY COUNCIL AGENDA
SPECIAL MEETING
OCTOBER 4, 2023 Page 2
DISCUSSION ITEM(S)
1. Recommendation to adopt Resolution No. 0342023 Fixing the Employer Contribution at an Equal Amount for Employees and Annuitants under the Public Employees’ Medical and Hospital Care Act (“PEMHCA”).
SUGGESTED ACTION: Approve Recommendation.
ADJOURNMENT
Adjourn to the next Regular City Council meeting to be held on Tuesday, October 10, 2023 at 6:00 PM.
CITY COUNCIL AGENDA
SPECIAL MEETING
OCTOBER 4, 2023 Page 3
CITY OF HAWAIIAN GARDENS
CITY COUNCIL
STAFF REPORT
Agenda Item #1
DATE: October 4, 2023
TO: Honorable Mayor and Members of the City Council
FROM: Ernesto Marquez, City Manager
BY: Megan Garibaldi, City Attorney
Isabel Safie, Best Best & Krieger LLP
RECOMMENDATION:
Recommendation to adopt Resolution No. 034-2023 Fixing the Employer Contribution at an Equal Amount for Employees and Annuitants under the Public Employees’ Medical and Hospital Care Act (“PEMHCA”).
This will permit the City to conform its obligations pursuant to PEMHCA to its bargaining agreements as further described below.
SUMMARY
The City’s negotiated health benefits do not align with its contribution obligations pursuant to the Public Employees’ Medical and Hospital Care Act (“PEMHCA”), as administered by CalPERS. Currently, the City contracts with CalPERS to provide health insurance benefits to City employees and annuitants, including City retirees that meet the eligibility requirements under PEMHCA. PEMHCA benefits are administered in accordance with Resolution 001-2021, which provides that the City contribution for each employee, fulltime and regular part-time employees eligible per Government Code section 22772, and annuitants hired prior to March 1, 2016 in the Rank-and-File or Management groups, will be the “amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan up to a maximum of PERS Choice Region 3 Family Basic Rate + $200 per month.”[1]
However, Section IV(B) of the Rank-and-File and Management MOUs provide that the part-time employees hired on or after July 1, 2017, that work, or are hired to work, an average of 30 hours or more per week are eligible for a contribution of up to $500 monthly to offset the cost of a CalPERS health plan. In contrast, Section IV(C) of each the MOUs provides that full-time employees, and part-time employees hired prior to July 1, 2017, are eligible for a contribution up to the premium for the PERS Choice – Family plan plus $200 per month to offset the cost of a CalPERS health plan (“Health Allowance”).
Agenda Item #1
October 4, 2023
This means that the City’s current PEMHCA Resolution – Resolution 001-2021 – does not conform to its negotiated benefit which results in the payment of excess contributions on behalf of part-time benefits that are not eligible for the full Health Allowance. Specifically, part-time employees hired on or after July 1, 2017 are eligible as follows:
• If they work an average of 30 or more hours per week, they are eligible for a City contribution up to $500 monthly to offset the cost of a CalPERS health plan; and • If they work less than an average of 30 hours per week, they are not eligible for a City contribution.
Although PEMHCA requires that the City make available an equal contribution to offset the cost of a CalPERS health plan on behalf of any individual that qualifies as an “employee” under Government Code section 22772, the City can limit this obligation to the minimum employer contribution required pursuant to Government Code Section 22892(b) (“MEC”). The MEC for 2023 is $151 per month. This amount will be adjusted each year by the CalPERS Board of Administration. Historically, the monthly increase has been about $3-$4 per month. The MEC is the minimum that the City must contribute to offset the cost of a CalPERS health plan on behalf of all employees and annuitants so long as the City continues to provide health benefits through CalPERS.
Thus, in order to implement a tiered health benefit program for the City’s employees, the City will first need to adopt a new PEMHCA resolution which will supersede Resolution 001-2021. The new resolution should provide that the City’s contribution to offset the cost of a CalPERS health plan on behalf of all employees eligible per Government Code section 22772, and annuitants hired prior to March 1, 2016, in the Rank-and-File or Management groups will be equal to the MEC. However, the City’s share of the cost of enrollment in a CalPERS health plan for full-time and part-time employees, and annuitants hired prior to March 1, 2016, may be higher than the MEC consistent the City’s Rank-and-File and Management MOUs.
In order for the City to be able to implement the foregoing, it will be necessary that the City Council:
1) Adopt a new PEMHCA resolution reflecting the City’s obligation to pay the MEC directly to CalPERS on behalf of employees and annuitants enrolling in a CalPERS health plan. This resolution will be submitted to CalPERS. 2) Adopt Section 125 cafeteria plan, or amend the City’s current Section 125 cafeteria plan, to provide for an allowance equal to the difference between the contribution pursuant to the MOUs and the MEC. This allowance will be used to pay for the specified benefit to CalPERS. Employees will be able to pay for their share of the cost, if any, through pre-tax payroll deductions.
Agenda Item #1
October 4, 2023
3) Adopt a health reimbursement arrangement (“HRA”) to permit the City to reimburse annuitants hired prior to March 1, 2016 for health plan premiums in excess of the MEC in accordance with the MOUs.
CalPERS has provided the City with a proposed new PEMHCA resolution that will permit the City to begin resolving the conflict between Resolution 001-2021 and its MOUs. Although the new PEMHCA resolution will not be effective until January 1, 2024, it is important that this resolution be adopted now to provide sufficient notice to impacted employees and retirees and to bring back further documents for the City Council’s approval. Specifically, the cafeteria plan and HRA plan will be brought to the City Council at a subsequent regular or special meeting, as specified by the City Council.
The PEMHCA resolution adopting MEC will not alter the application of the City’s vesting resolutions – Resolutions 005-2016 and 006-2016 – which provide that annuitants hired on or after March 1, 2016 must meet certain service requirements in order to be eligible for a City-funded contribution. That benefit will continue to be administered by CalPERS for annuitants that meet the minimum service requirement – a minimum of 5 years of service with the City and 5 additional years with any CalPERS contracting agency, including the City – such that the City will not need to include this group of annuitants in the HRA described in item 3) above. Those annuitants hired on or after March 1, 2016 that do not meet the minimum service requirement will not receive a City-funded contribution, including the MEC.
[1] Effective January 1, 2022, CalPERS transitioned from the PERS Choice plan to the PERS Platinum plan.
FISCAL IMPACT
None.
SUGGESTED ACTION
Approve Recommendation.
ATTACHMENTS
A. Resolution No. 034-2023 – Fixing the Employer’s Contribution at an Equal Amount for Employees and Annuitants Under the Public Employees’ Medical and Hospital Care Act.
CalPERS Health Resolution (Change), Revised April 2021
RESOLUTION NO. 034-2023
FIXING THE EMPLOYER CONTRIBUTION
UNDER THE PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT
AT AN EQUAL AMOUNT FOR EMPLOYEES AND ANNUITANTS
WHEREAS, (1) City of Hawaiian Gardens is a contracting agency under Government Code Section 22920 and subject to the Public Employees’ Medical and Hospital Care Act (the “Act”); and
WHEREAS, (2) Government Code Section 22892(a) provides that a contracting agency subject to Act shall fix the amount of the employer contribution by resolution; and WHEREAS, (3) Government Code Section 22892(b) provides that the employer contribution shall be an equal amount for both employees and annuitants, but may not be less than the amount prescribed by Section 22892(b) of the Act; now, therefore be it
RESOLVED, (a) That the employer contribution for each employee or annuitant shall be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan up to a maximum of:
Medical Group Monthly Employer Health Contribution
Self Self+1 Self+ Family
001 Management Group PEMHCA
Minimum
PEMHCA
Minimum
PEMHCA
Minimum
002 Rank and File PEMHCA
Minimum
PEMHCA
Minimum
PEMHCA
Minimum
plus administrative fees and Contingency Reserve Fund assessments; and be it further
RESOLVED, (b) City of Hawaiian Gardens has fully complied with any and all applicable provisions of Government Code Section 7507 in electing the benefits set forth above; and be it further
RESOLVED, (c) That the participation of the employees and annuitants of City of Hawaiian Gardens shall be subject to determination of its status as an “agency or instrumentality of the state or political subdivision of a State” that is eligible to participate in a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code, upon publication of final Regulations pursuant to such Section. If it is determined that City of Hawaiian Gardens would not qualify as an agency or instrumentality of the state or political subdivision of a State under such final Regulations, CalPERS may be obligated, and reserves the right to terminate the health coverage of all participants of the employer; and be it further
RESOLVED, (d) That the executive body appoint and direct, and it does hereby appoint and CalPERS Health Resolution (Change), Revised April 2021
direct, Ernesto Marquez, City Manager to file with the Board a verified copy of this resolution, and to perform on behalf of City of Hawaiian Gardens all functions required of it under the Act; and be it further RESOLVED, (e) That coverage under the Act be effective on January 1, 2024.
Adopted at a special meeting of the City Council at City Hall, this 4th day of October, 2023.
Signed: _________________________________
Maria Teresa Del Rio, Mayor
Attest: _________________________________
Victor Farfan, Mayor Pro Tem