TO: HONORABLE MAYOR AND FROM: Toni J. Taber, CMC
CITY COUNCIL City Clerk
SUBJECT: SEE BELOW DATE: February 28, 2023
SUBJECT: VEBA Advisory Committee Appointment
Recommendation
As recommended by the Rules and Open Government Committee on February 22, 2023, approve the following appointment to the Voluntary Employees Beneficiary Association (VEBA) Advisory Committee for a partial term, beginning March 1, 2023 and ending on May 31, 2026:
(a) Edgar “David” Parker, nominated by the Federated unions.
CEQA: Not a Project, File No. PP17-010, City Organizational and Administrative Activities resulting in no changes to the physical environment. (Human Resources) [Rules Committee referral 2/22/2023 - Item B.3]
COUNCIL AGENDA: 2/28/2023
ITEM: 2.24
FILE NO: 23-328
TO:
RULES AND OPEN FROM: Jennifer Schembri
GOVE RNMENT COMMITTEE
S
UBJECT: VEBA ADVISORY COMMITTEE DATE: February 10, 2023
AP POINTMENT
Approved Date
2 /14/2023
RECOMMENDATION
(
a) Approve the appointment of Edgar “David” Parker, nominated by the Federated unions, to the Voluntary Employees Beneficiary Association (VEBA) Advisory Committee for a partial term, beginning March 1, 2023 and ending on May 31, 2026. (b
) Place the item on the February 28, 2023 City Council Agenda for action.
SUMMARY AND OUTCOME
A
pproval of this recommendation will allow the VEBA Advisory Committee to continue to do business and have a quorum at its next meeting on March 20, 2023.
BACKGROUND
P
ursuant to the Alternative Pension Reform Frameworks and Measure F, the City has established the Police and Fire Voluntary Employees Beneficiary Association under Chapter 3.57 of the San Jose Municipal Code and the Federated Employees’ Voluntary Employees Beneficiary Associa- tion under Chapter 3.58 of the San Jose Municipal Code. A VEBA is a tax-exempt trust instru- ment authorized by Internal Revenue Code 501(c)(9) through which eligible healthcare benefits can be reimbursed. The City’s VEBAs are set up to reimburse eligible medical expenses in re- tirement for their respective members.
S
an José Municipal Code Sections 3.57.210 and 3.58.210 provide that the VEBA Plans shall be administered by the VEBA Advisory Committee. The VEBA Advisory Committee is to oversee all aspects of the City’s VEBA Plans. The VEBA Plans currently have 4,596 participants and include active employees, former employees, retirees, and contain approximately $54,004,646 in assets. All newly hired employees represented by a bargaining unit are placed into a VEBA Plan and make contributions based on a percent of base pay. The VEBA Advisory Committee is responsible for administering the VEBA Plans, the trust account, and is responsible for the operation of the Plans in accordance with their terms. The VEBA Advisory Committee is RULES COMMITTEE: 2/22/2023
ITEM: B.3
HONORABLE MAYOR AND CITY COUNCIL
February 10, 2023
Subject: VEBA Advisory Committee Appointment
required to determine all questions arising out of the administration, interpretation, and application of the Plans, including evaluating and selecting investment options.
Resolution No. 78563, dated May 1, 2018, requires that the VEBA Advisory Committee be composed of five (5) members: One (1) active member of the San Jose Firefighters, IAFF Local 230; One (1) active member of the San Jose Police Officers’ Association; Two (2) active members of the Federated Unions; and one (1) active member of unrepresented employees. The union members shall be nominated by the respective unions. The City Manager or City Manager’s designee shall nominate the unrepresented employee member. As a Council- appointed committee, appointments to the VEBA Advisory Committee must first be approved by the Rules Committee before being recommended to the City Council. The appointment of nominated employees to the VEBA Advisory Committee shall be routine business on the City Council agenda. The City Council shall approve the nomination unless the City Council finds cause for rejection.
Each member of the VEBA Advisory Committee shall be an active employee who is a participant in a VEBA Plan and shall serve a four-year term with the exception that the initial terms of the members were set to allow each member’s term to end on subsequent years. In the event a vacancy should occur in the office of any member prior to the expiration of a term, a successor shall be nominated for the unexpired portion of the member’s term pursuant to the process set forth above. There are no term limits for members.
ANALYSIS
Shane Curtain served as the Federated unions employee member on the VEBA Advisory Committee and his four-year term commenced on June 1, 2022. Mr. Curtain’s term was set to end on May 31, 2026, but he resigned from his role on the VEBA Advisory Committee effective January 9, 2023. The Federated unions nominated Edgar “David” Parker to serve the remainder of the four-year term, starting on March 1, 2023 and ending on May 31, 2026. Mr. Parker is an active employee and a VEBA participant.
EVALUATION AND FOLLOW-UP
The VEBA Advisory Committee is responsible for administering the VEBA Plans, the trust account, and is responsible for the operation of the VEBA Plans in accordance with their terms.
The VEBA Advisory Committee is required to determine all questions arising out of the administration, interpretation, and application of the VEBA Plans, including evaluating and selecting investment options.
Whenever terms of the members are due to expire or a seat becomes vacant, a recommendation will be presented to the City Council to appoint nominees to fill those seats on the VEBA Advisory Committee.
HONORABLE MAYOR AND CITY COUNCIL
February 10, 2023
Subject: VEBA Advisory Committee Appointment
COORDINATION
This memorandum has been coordinated with the Office of the City Attorney and the City Clerk’s Office.
PUBLIC OUTREACH
The key stakeholders were invited to nominate a candidate for appointment to the VEBA Advisory Committee.
COMMISSION RECOMMENDATION/INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-010, City Organizational and Administrative Activities resulting in no changes to the physical environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
JENNIFER SCHEMBRI
Director of Employee Relations and Human Resources
For questions please contact Amy Morton, Senior Analyst in Human Resources, at (408) 535- 1245.