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Res 14-007RESOLUTION NO. 14 -007 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, APPROVING THE IMPLEMENTATION OF A RETIREMENT HEALTH SAVINGS PLAN FOR NON - SAFETY AND MANAGEMENT /CONFIDENTIAL EMPLOYEES WHEREAS, the current Memorandum of Understanding (MOU) between the City and the Non - Safety Employees is in effect through June 30, 2015; and WHEREAS, the current Salary and Benefit Plan for the Management/Confidential group is in effect through June 30, 2015; and WHEREAS, representatives of the California Teamsters Local 911 and the City of Poway completed a thorough evaluation of a Retirement Health Savings Plan (RHSP); and WHEREAS, the City wishes to encourage and support the prudent use of employee sick leave; and WHEREAS, the City Council of the City of Poway wishes to adopt said Retirement Health Savings Plan NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: 1. That the City of Poway shall enter into an agreement with ICMA Retirement Corporation to provide a Retirement Health Savings Plan for the employees of the Non - Safety bargaining unit and the Management/Confidential group 2. That the plan shall be structured according to the provisions set forth in the Side Letter Agreement between the City of Poway and California Teamsters Local 911, attached hereto as Exhibit A, and the Addendum to the Salary and Benefit Plan for the Management/Confidential group, attached hereto as Exhibit B PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway at a regular meeting this 18th day of March 2014. e Don Higginson, Mayor ATTEST: Sheila R. Cobian, CMC, City Clerk Resolution No. 14 -007 Page 2 STATE OF CALIFORNIA ) ) SS COUNTY OF SAN DIEGO ) I, Sheila R. Cobian, City Clerk, of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 14 -007 was duly adopted by the City Council at a meeting of said City Council held on the 18th day of March 2014, and that it was so adopted by the following vote: AYES: CUNNINGHAM, VAUS, MULLIN, GROSCH, HIGGINSON NOES: NONE ABSENT: NONE DISQUALIFIED: NONE � Sheila R. Cobian, CIVIC, City Clerk City of Poway Attachments: Exhibit A Exhibit B Resolution No. 14 -007 Page 3 SIDE LETTER AGREEMENT BETWEEN CITY OF POWAY AND CALIFORNIA TEAMSTERS, LOCAL 911 JULY 1, 2013 THROUGH JUNE 30, 2015 Whereas, the City of Poway ( "City ") is the employer of the City of Poway employees; and Whereas, the California Teamsters, Local 911 represents certain City employees (Non- Safety Employees); and Whereas, the current Memorandum of Understanding (MOU) between the City and the Non - Safety Employees is in effect through June 30, 2015; and Whereas, during MOU negotiations both parties agreed to establish a joint committee to evaluate the implementation of a Retirement Health Savings Plan (RHSP); and Whereas, the joint committee was formed and a thorough evaluation of a RHSP has been completed. Now, therefore, the City and Non - Safety Employees hereby agree to the following, which replaces the MOU language contained in Article 6, Section 2.F Annual Conversion of Sick Leave and Article 6, Section 2.G Payout of Sick Leave, concerning regular full -time employees, and Article 6, Section 2.F concerning regular part-time employees: PART I. FULL -TIME EMPLOYEES Article 6. Leaves Section 2 —Sick Leave F. Annual Conversion of Sick Leave In the last full pay period of the fiscal year, Non - Safety Employees must convert sick leave to cash under the following conditions: 1. After conversion, employee must have a minimum balance of 168 hours of sick leave. 2. The employee has used 32 hours or less of sick leave in the immediately preceding 12 months. Sick leave use includes use of family sick leave. 3. An employee shall convert 50% of the annual sick leave accrual, less sick leave used in the immediately preceding 12 months, up to a maximum of 40 hours. Example: employee used 16 hours in preceding 12 months 96 hours of annual accrual x 50% = 48 hours 48 hours - 16 used = 32 hours converted to cash Exhibit A Resolution No. 14 -007 Page 4 G. Retirement Health Savings Plan A Retirement Health Savings Plan (RHSP) will be implemented for regular full -time Non - Safety Employees as follows: 1. Regular full -time employees that satisfy the provisions contained in Article 6, Section 2.F. must contribute 50% of their annual sick leave conversion to a Retirement Health Savings Account as a cash deposit. (e.g., an employee that is eligible to convert 40 hours of sick leave would receive the equivalent of 20 hours in cash and the equivalent of 20 hours would be contributed to their Retirement Health Savings Account as a cash deposit). 2. Any fees related to the RHSP will be paid by employees. 3. The first annual RHSP contribution shall be the last full pay period of Fiscal Year 2013 -14 (i.e., pay period ending June 22, 2014). 4. In the event of a Non - Safety Employee's death, if the Non - Safety Employee is a participant in the RHSP and does not have a surviving spouse or surviving IRS qualified dependent/s, the Non - Safety Employee's Retirement Health Savings account balance shall remain in the trust (i.e., RHSP) to be allocated among all RHSP Non - Safety Employee participants. The allocation will be on a pro -rata share, based upon RHSP Non - Safety Employee participant account balances. H. Payout of Sick Leave After ten (10) years of employment with the City and upon termination or retirement, a regular full -time employee will receive compensation for unused sick leave as follows: 1. Upon retirement, an employee will receive 50% of all sick leave hours accrued. Calculations will be at the employee's rate of pay at the time of retirement, subject to maximum annual retirement sick leave payout restrictions then in effect. 2. Upon retirement, an employee shall convert 100% of the sick leave payout to a Retirement Health Savings Account as a cash deposit. 3. The maximum annual retirement sick leave payout (payout), currently $5,000, shall increase with the annual across - the -board salary increases under Article 5, as follows: a) The maximum payout shall be $5,100, effective February 1, 2014, or as soon as practicable, subject to the implementation of a RHSP (e.g., The maximum payout of $5,000 x 1.02 = $5,100). b) The maximum payout shall be $5,202, effective the beginning of the pay period which includes July 1, 2014, or as soon as practicable, subject to the implementation of a RHSP (e.g., The maximum payout of $5,100 x 1.02 = $5,202). c) The maximum payout thereafter shall increase by the same percentage as future MOU salary increases, effective the same date as that salary increase. Resolution No. 14 -007 Page 5 4. Upon leaving City employment for reasons other than retirement, employee will receive 50% of all sick leave hours accrued. Calculations will be at the employee's rate of pay at the time of termination and that payout will not exceed $2,000. 5. Upon the death of an employee, compensation for unused sick leave shall be at the same rate as the retirement benefit. Payment shall be made to the employee's designated beneficiary. PART II. PART-TIME EMPLOYEES Article 6. Leaves Section 2 — Sick Leave F. Retirement Health Savings Plan A Retirement Health Savings Plan (RHSP) will be implemented for regular part-time Non - Safety Employees as follows: 1. Any fees related to the RHSP will be paid by employees. 2. In the event of a Non - Safety Employee's death, if the Non - Safety Employee is a participant in the RHSP and does not have a surviving spouse or surviving IRS qualified dependent/s, the Non - Safety Employee's Retirement Health Savings account balance shall remain in the trust (i.e., RHSP) to be allocated among all RHSP Non - Safety Employee participants. The allocation will be on a pro -rata share, based upon RHSP Non - Safety Employee participant account balances. G. Payout of Sick Leave After ten (10) years of employment with the City and upon termination or retirement, a regular part-time employee will receive compensation for unused sick leave as follows- 1. Upon retirement, a regular part -time employee shall convert 100% of the sick leave payout to a Retirement Health Savings Account as a cash deposit. 2. The maximum annual retirement sick leave payout (payout) for regular part-time employees, currently $2,000 ($3,500 for regular three - quarter -time employees), shall increase with the annual across - the -board salary increases under Article 5, as follows: a) The maximum payout for regular part -time employees shall be $2,040 ($3,570 for regular three - quarter -time employees), effective February 1, 2014, or as soon as practicable, subject to the implementation of a RHSP (e.g., The maximum payout of $2,000 x 1.02 = $2,040 for regular part-time employees; $3,500 x 1.02 = $3,570 for regular three - quarter -time employees). b) The maximum payout for regular part -time employees shall be $2,081 ($3,641 for regular three - quarter- time employees), effective the beginning of the Resolution No. 14 -007 Page 6 pay period which includes July 1, 2014, or as soon as practicable, subject to the implementation of a RHSP (e.g., The maximum payout of $2,040 x 1.02 = $2,081 for regular part -time employees; $3,570 x 1.02 = $3,641 for regular three-quarter-time employees). c) The maximum payout thereafter shall increase by the same percentage as future MOU salary increases, effective the same date as that salary increase. d) Upon leaving City employment for reasons other than retirement, regular part- time employees will receive 25% of all sick leave hours accrued (37.5% for regular three - quarter -time employees). Calculations will be at the regular part- time employee's rate of pay at the time of termination and that payout will not exceed $1,000 ($1,500 for regular three - quarter -time employees). 3. Upon the death of an employee, compensation for unused sick leave shall be at the same rate as the retirement benefit. Payment shall be made to the employee's designated beneficiary. This agreement does not diminish or affect City's rights as described in the MOU. r ChesterMoMalsini Date Z_ 2-0 ...- 2c-)f ' ,le N o r r Date Thornas Kester Date Tina White Date Torres s I• r Resolution No. 14 -007 Page 7 City of Poway ADDENDUM Management/Confidential Group Salary and Benefit Plan 1. This addendum will be effective July 1, 2013 — June 30, 2015. 2. As soon as practicable following City Council approval on March 18, 2014, a Retirement Health Savings Plan (RHSP) will be implemented for Management/Confidential Employees as follows: Article 2. Leaves Section 3. Sick Leave E. Annual Conversion of Sick Leave In the last full pay period of the fiscal year, Management/Confidential Employees must convert sick leave to cash under the following conditions: 1. After conversion, employee must have a minimum balance of 168 hours of sick leave. 2. The employee has used 32 hours or less of sick leave in the immediately preceding 12 months. 3. Employees can convert 50% of their annual sick leave accrual, less sick leave used in the immediately preceding 12 months, up to a maximum of 40 hours. Sick leave use includes use of family sick leave. Example: employee used 16 hours in preceding 12 months 96 hours of annual accrual x 50% = 48 hours 48 hours — 16 used = 32 hours converted to cash F. Retirement Health Savings Plan 1. Employees in Group 1 that satisfy the provisions contained in Article 2, Section 3.E. must contribute 100% of their annual sick leave conversion to a Retirement Health Savings Account as a cash deposit. 2. Employees in Group 2 -4 that satisfy the provisions contained in Article 2, Section 3.E. must contribute 50% of their annual sick leave conversion to a Retirement Health Savings Account as a cash deposit (e.g., an employee that is eligible to convert 40 hours of sick leave would receive the equivalent of 20 hours in cash and the equivalent of 20 hours would be contributed to their Retirement Health Savings Account as a cash deposit). 3. Any fees related to the RHSP will be paid by employees Exhibit B Resolution No. 14 -007 Page 8 4. The first annual RHSP contribution shall be the last full pay period of Fiscal Year 2013 -14 (i.e., pay period ending June 22, 2014). 5. In the event of a Management/Confidential employee's death, if the Management/Confidential Employee is a participant in the RHSP and does not have a surviving spouse or surviving IRS qualified dependent/s, the Management/Confidential employee's Retirement Health Savings account balance shall remain in the trust (i.e., RHSP) to be allocated among all RHSP Management/Confidential employee participants. The allocation will be on a pro - rata share, based upon RHSP Management/Confidential employee participant account balances. G. Payout of Sick Leave After five (5) years of employment with the City and upon termination or retirement, a Management/Confidential employee will receive compensation for unused sick leave as follows: Upon retirement, an employee will receive 50% of all sick leave hours accrued. Calculations will be at the employee's rate of pay at the time of retirement, subject to maximum annual retirement sick leave payout restrictions then in effect. 2. Upon retirement, an employee shall convert 100% of the sick leave payout to a Retirement Health Savings Account as a cash deposit. 3. The maximum annual retirement sick leave payout (payout), currently $5,000, shall increase with the annual across - the -board salary increases under Article 1, as follows: a) The maximum payout shall be $5,100, effective March 18, 2014, or as soon as practicable thereafter, subject to the implementation of a RHSP (e.g., The maximum payout of $5,000 x 1.02 = $5,100). b) The maximum payout shall be $5,202, effective the beginning of the pay period which includes July 1, 2014, or as soon as practicable thereafter, subject to the implementation of a RHSP (e.g., The maximum payout of $5,100 x 1.02 =$5,202). c) The maximum payout thereafter shall increase by the same percentage as future MOU salary increases, effective the same date as that salary increase. 4. Upon leaving City employment for reasons other than retirement, an employee will receive 50% of all sick leave hours accrued. Calculations will be at the employee's rate of pay at the time of termination and that payout will not exceed $2,000. 5. Upon the death of an employee, compensation for unused sick leave shall be at the same rate as the retirement benefit. Payment shall be made to the employee's designated beneficiary. All other provisions of the existing Salary and Benefit Plan for the Management/Confidential Group will remain in effect.