Tom Kisela
Interim City Manager
Mary Binning
Senior Assistant City Attorney
Pamela Coleman
City Clerk
DAN SLATER
Mayor
ARIANNA BARRIOS
Mayor pro tem, District 1
JON DUMITRU
Councilmember, District 2
KATHY TAVOULARIS
Councilmember, District 3
DENIS BILODEAU
Councilmember, District 4
ANA GUTIERREZ
Councilmember, District 5
JOHN GYLLENHAMMER
Councilmember, District 6
AGENDA
City Council
January 23, 2023
Notice and Call
of a Special Meeting
5:00 PM Closed Session
6:00 PM Regular Session
City Council Chamber
300 E. Chapman Avenue
Orange, CA 92866
The City of Orange City Council welcomes you to this Special Meeting. Special Meetings are held for a specific purpose and when action is needed prior to the next Regular Meeting. The Mayor or a majority of the City Council may call a special meeting of the City Council with a minimum 24 hours notice.
Agenda Information
The agenda contains a brief general description of each item to be considered. The City Council may take legislative action deemed appropriate with respect to the item and is not limited to the recommended action indicated in staff reports or the agenda. The agenda and supporting documentation for a special meeting is available no later than 24 hours prior to the Council meeting on the City's website at www .cityoforange.org, at the City Clerk's Office located at 300 E. Chapman Avenue, and at the Main Public Library located at 407 E. Chapman Avenue.
Public Participation
Public Comment shall be limited to only those items described on this Special Meeting Notice /Agenda (Government Code Section 54954.3(a)).
Public Comments are limited to three (3) minutes per speaker unless a different time limit is announced. It is requested that you state your name for the record, then proceed to address the City Council. All speakers shall observe civility, decorum, and good behavior.
ADA Requirements: In compliance with the Americans with Disabilities Act, if you need accommodations to participate in this meeting, please contact the City Clerk's office at (714) 744-5500. When possible, notification at least 48 hours in advance of meeting will enable the City to make arrangements to assure accessibility to this meeting.
REMINDER: Please silence all electronic devices while City Council is in session.
1 City Council Agenda January 23, 2023
NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the California Government Code, that a Special Meeting of the Orange City Council is hereby called for the following purpose:
5:00 PM CLOSED SESSION
1. CALL TO ORDER
1.1 ROLL CALL
2. PUBLIC COMMENTS ON CLOSED SESSION ITEMS
At this time, members of the public may address the Council on Closed Session items only. Public Comments are limited to three (3) minutes per speaker.
3. RECESS TO CLOSED SESSION
a. PUBLIC EMPLOYEE APPOINTMENT
Pursuant to Government Code Section 54957(b)1.
Titles: City Manager, City Attorney
4. CLOSED SESSION REPORT
5. ADJOURNMENT
The City Council will adjourn to the 6:00 p.m. Regular Session in the Council Chamber. 6:00 PM REGULAR SESSION
1. OPENING/CALL TO ORDER
1.1 PLEDGE OF ALLEGIANCE
Mayor pro tem Arianna Barrios
1.2 ROLL CALL
2. ADMINISTRATIVE REPORTS
2.1. Preliminary update on health and welfare benefit options for elected City Councilmembers.
Provide direction to staff on various health and welfare benefit options and direct staff to incorporate the selections into a future Orange Municipal Code (OMC) Ordinance amendment.
Recommended Action:
Staff Report
Medical, Dental, and Vision Rates for 2023
Council Benefit Costing Projections
Attachments:
2 City Council Agenda January 23, 2023
3. ADJOURNMENT
The next Regular City Council meeting will be held on Tuesday, February 14, 2023, at 6:00 p.m., in the Council Chamber, with Closed Session beginning at 5:00 p.m., if necessary.
I, Pamela Coleman, CMC, City Clerk for the City of Orange, do hereby declare, under penalty of perjury, that a full and correct copy of this agenda was posted pursuant to Government Code Section 54950 et. seq., at the following locations: Orange Civic Center kiosk and Orange City Clerk's Office at 300 E. Chapman Avenue, Orange Main Public Library at 407 E. Chapman Avenue, Police facility at 1107 N. Batavia Street, and uploaded to the City's website www.cityoforange.org.
Date posted: January 19, 2023
3 Agenda Item
City Council
Item #: 2.1. 1/23/2023 File #: 23-0026
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, Interim City Manager
FROM: Monica Espinoza, Human Resources Director
1. SUBJECT
Preliminary update on health and welfare benefit options for elected City Councilmembers.
2. SUMMARY
A presentation of available health and welfare benefits and associated costs to be considered by City Councilmembers.
3. RECOMMENDED ACTION
Provide direction to staff on various health and welfare benefit options and direct staff to incorporate the selections into a future Orange Municipal Code (OMC) Ordinance amendment.
4. FISCAL IMPACT
The total expenditure for this proposal is estimated at $99,100 per year and will be funded through General Fund (100).
Final fiscal impact to be determined and presented at a future meeting date based on direction provided to staff and the number of Councilmembers who elect to accept benefit(s). The costing projections for both employer and employee are provided as an attachment.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
a: Expend fiscal resources responsibly.
Goal 4: Provide outstanding public service
e: Attract, retain and develop quality employees dedicated to public service.
6. DISCUSSION AND BACKGROUND
At the January 10, 2023 City Council meeting, City staff was directed to research and provide health and welfare options to City Councilmembers. The following array of options are presented for review and consideration:
Health Benefits
Health benefits commensurate with the largest employee general group equates to $1,095 per month. This amount sufficiently covers a Health Maintenance Organization (HMO) or a basic Preferred Provider Organization (PPO) medical plan, along with dental and vision plan options for City of Orange Printed on 1/19/2023Page 1 of 3
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4 Item #: 2.1. 1/23/2023 File #: 23-0026
Preferred Provider Organization (PPO) medical plan, along with dental and vision plan options for single-party coverage. The attachment to this report summarizes the 11 available medical groups associated with the California Public Employees’ Retirement System (CalPERS), two dental, two vision plans and the applicable costing. It is important to note, per Government Code 36516, any remaining funds once medical premiums are deducted from the $1,095 amount cannot be taken as cash. It is permissible to place these remaining funds into an Internal Revenue Code (IRC) 457(b) deferred compensation governmental plan.
Waiving of Medical Coverage
If health benefits are made available to the City Council, a Councilmember may elect to waive medical coverage altogether, provided that proof of acceptable and alternate coverage is declared with the Human Resources Department. Should proof be satisfactory, the monthly waiver option amount available to the Councilmember is $400, and not the entire $1,095. However, this amount cannot be taken as cash and must be placed into an Internal Revenue Code (IRC) 457(b) deferred compensation governmental plan.
Alternatively, a Councilmember may elect to waive medical coverage, but choose to elect dental and/or vision benefits. Should this be the case, the elected benefits will be deducted from the waiver amount of $400. As previously indicated, it is permissible to place these remaining funds into a deferred compensation governmental plan.
Life Insurance
Another welfare benefit option for consideration is Group Life Insurance and Accidental Death and Dismemberment (AD&D) insurance coverage. Life insurance options with the City’sexisting provider are available at the benefit level of $40,000, $50,000 or $75,000. The City Council as a whole would select one life insurance option which would be applicable to all Councilmembers. Life insurance premiums would be paid for by the City and would not come from the $1,095 (or $400, if medical is waived) benefit allotment.
Currently, annual life insurance premiums per Councilmember would be as follows:
Benefit Level Annual Cost
$40,000 $98.40
$50,000 $123.00
$75,000 $184.56
Pension/Retirement Plan
City Councilmembers are deemed employees, and like the rest of the workforce, are not covered by Social Security. As such, City Councilmembers must be enrolled into a Federal Insurance Contributions Act (FICA) Replacement Plan or other qualifying plan.
Current part-time City employees who do not have CalPERS membership participate in a defined contribution retirement plan in lieu of Social Security. For these employees, the City has a long- standing existing contract with Empower, a retirement plan provider where both the employer and the employee contribute 3.75% of the employee’s eligible earnings. That would amount to a $22.50 deduction from the $600 monthly compensation and a $22.50 contribution on behalf of the employer.
This existing plan meets Federal requirements. Staff is researching whether a contribution of remaining benefit option amounts to the 457(b) deferred compensation plan would satisfy the Federal City of Orange Printed on 1/19/2023Page 2 of 3
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5 Item #: 2.1. 1/23/2023 File #: 23-0026
remaining benefit option amounts to the 457(b) deferred compensation plan would satisfy the Federal requirement.
CalPERS membership also satisfies Federal requirements as a defined benefit plan, exempting participants from mandatory Social Security coverage. If Councilmembers were to obtain CalPERS membership, they would be required to pay their portion of the employee contribution based on their membership status (i.e., Classic members or New members), currently 8% or 6.75% respectively.
That would amount to a $48.00 monthly deduction for Classic, or $40.50 monthly deduction for New members. The current employer portion is 11.53%, which amounts to $69.17 per month per Councilmember. Please note, these amounts are subject to change each fiscal year.
Based on City Council direction, it will also be necessary to amend the OMC and CalPERS contract.
Following these amendments, it is staff’srecommendation to incorporate the agreed terms into a future Resolution.
7. ATTACHMENTS
· Medical, Dental, and Vision Rates for 2023
· Council Benefit Costing Projections
City of Orange Printed on 1/19/2023Page 3 of 3
powered by Legistar™
6 Agenda Item
City Council
Item #: 2.1. 1/23/2023 File #: 23-0026
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, Interim City Manager
FROM: Monica Espinoza, Human Resources Director
1. SUBJECT
Preliminary update on health and welfare benefit options for elected City Councilmembers.
2. SUMMARY
A presentation of available health and welfare benefits and associated costs to be considered by City Councilmembers.
3. RECOMMENDED ACTION
Provide direction to staff on various health and welfare benefit options and direct staff to incorporate the selections into a future Orange Municipal Code (OMC) Ordinance amendment.
4. FISCAL IMPACT
The total expenditure for this proposal is estimated at $99,100 per year and will be funded through General Fund (100).
Final fiscal impact to be determined and presented at a future meeting date based on direction provided to staff and the number of Councilmembers who elect to accept benefit(s). The costing projections for both employer and employee are provided as an attachment.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
a: Expend fiscal resources responsibly.
Goal 4: Provide outstanding public service
e: Attract, retain and develop quality employees dedicated to public service.
6. DISCUSSION AND BACKGROUND
At the January 10, 2023 City Council meeting, City staff was directed to research and provide health and welfare options to City Councilmembers. The following array of options are presented for review and consideration:
Health Benefits
Health benefits commensurate with the largest employee general group equates to $1,095 per month. This amount sufficiently covers a Health Maintenance Organization (HMO) or a basic Preferred Provider Organization (PPO) medical plan, along with dental and vision plan options for City of Orange Printed on 1/19/2023Page 1 of 3
powered by Legistar™
7 Item #: 2.1. 1/23/2023 File #: 23-0026
Preferred Provider Organization (PPO) medical plan, along with dental and vision plan options for single-party coverage. The attachment to this report summarizes the 11 available medical groups associated with the California Public Employees’ Retirement System (CalPERS), two dental, two vision plans and the applicable costing. It is important to note, per Government Code 36516, any remaining funds once medical premiums are deducted from the $1,095 amount cannot be taken as cash. It is permissible to place these remaining funds into an Internal Revenue Code (IRC) 457(b) deferred compensation governmental plan.
Waiving of Medical Coverage
If health benefits are made available to the City Council, a Councilmember may elect to waive medical coverage altogether, provided that proof of acceptable and alternate coverage is declared with the Human Resources Department. Should proof be satisfactory, the monthly waiver option amount available to the Councilmember is $400, and not the entire $1,095. However, this amount cannot be taken as cash and must be placed into an Internal Revenue Code (IRC) 457(b) deferred compensation governmental plan.
Alternatively, a Councilmember may elect to waive medical coverage, but choose to elect dental and/or vision benefits. Should this be the case, the elected benefits will be deducted from the waiver amount of $400. As previously indicated, it is permissible to place these remaining funds into a deferred compensation governmental plan.
Life Insurance
Another welfare benefit option for consideration is Group Life Insurance and Accidental Death and Dismemberment (AD&D) insurance coverage. Life insurance options with the City’sexisting provider are available at the benefit level of $40,000, $50,000 or $75,000. The City Council as a whole would select one life insurance option which would be applicable to all Councilmembers. Life insurance premiums would be paid for by the City and would not come from the $1,095 (or $400, if medical is waived) benefit allotment.
Currently, annual life insurance premiums per Councilmember would be as follows:
Benefit Level Annual Cost
$40,000 $98.40
$50,000 $123.00
$75,000 $184.56
Pension/Retirement Plan
City Councilmembers are deemed employees, and like the rest of the workforce, are not covered by Social Security. As such, City Councilmembers must be enrolled into a Federal Insurance Contributions Act (FICA) Replacement Plan or other qualifying plan.
Current part-time City employees who do not have CalPERS membership participate in a defined contribution retirement plan in lieu of Social Security. For these employees, the City has a long- standing existing contract with Empower, a retirement plan provider where both the employer and the employee contribute 3.75% of the employee’s eligible earnings. That would amount to a $22.50 deduction from the $600 monthly compensation and a $22.50 contribution on behalf of the employer.
This existing plan meets Federal requirements. Staff is researching whether a contribution of remaining benefit option amounts to the 457(b) deferred compensation plan would satisfy the Federal City of Orange Printed on 1/19/2023Page 2 of 3
powered by Legistar™
8 Item #: 2.1. 1/23/2023 File #: 23-0026
remaining benefit option amounts to the 457(b) deferred compensation plan would satisfy the Federal requirement.
CalPERS membership also satisfies Federal requirements as a defined benefit plan, exempting participants from mandatory Social Security coverage. If Councilmembers were to obtain CalPERS membership, they would be required to pay their portion of the employee contribution based on their membership status (i.e., Classic members or New members), currently 8% or 6.75% respectively.
That would amount to a $48.00 monthly deduction for Classic, or $40.50 monthly deduction for New members. The current employer portion is 11.53%, which amounts to $69.17 per month per Councilmember. Please note, these amounts are subject to change each fiscal year.
Based on City Council direction, it will also be necessary to amend the OMC and CalPERS contract.
Following these amendments, it is staff’srecommendation to incorporate the agreed terms into a future Resolution.
7. ATTACHMENTS
· Medical, Dental, and Vision Rates for 2023
· Council Benefit Costing Projections
City of Orange Printed on 1/19/2023Page 3 of 3
powered by Legistar™
9 City of Orange
2023 Monthly Premium Rates – Region 2
Orange County and San Diego County
Medical HMO Plans
2023 Monthly
Premium Rates for
Single Coverage
Anthem Select $ 765.38
Anthem Traditional $ 935.12
Blue Shield Access+ $ 842.62
Blue Shield Trio $ 760.72
Health Net Salud y Mas $ 698.92
Health Net Smart Care $ 834.66
Kaiser $ 756.22
UnitedHealthcare Alliance $ 793.64
UnitedHealthcare Harmony $ 781.58
Medical PPO Plans
2023 Monthly
Premium Rates for
Single Coverage
PERS Platinum $ 1,014.80
PERS Gold $ 695.94
Dental Plans
2023 Monthly
Premium Rates for
Single Coverage
Delta Care – HMO $ 21.30
Delta Dental - PPO $ 54.50
Vision Plans
2023 Monthly
Premium Rates for
Single Coverage
EyeMed $ 5.60
VSP $ 9.70
10 Council Benefit Costing Projections
Annual City of Orange Councilmember's
Cost Per Person Annual Cost Annual Cost
Health Benefits 13,140$ 91,980$
Life Insurance & AD&D 75,000 184.56 1,292 50,000 123.00 861
40,000 98.40 689
Empower 3.75% 270 1,890
Employer Contribution 3.75% 270 1,890 CAL PERS - PEPRA 6.75% 486 3,402
Employer Contribution 11.53% 830 5,811 CAL PERS-Classic 8.00% 576 4,032
Employer Contribution 11.53% 830 5,811 Three highest options 99,083.04
11