HomeMy WebLinkAbout12.D.7. Amendment to Sergeant's Contract Post Retirement Health Plan
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To: Mayor and Council
From: Mark McNeill, City Administrator
Subject: Amendment to Sergeant's Contract-Post Retirement Health
Plan
Date: January 3, 2006
COMMENT:
Introduction:
The Council is asked to approve a change in the employee
contribution rate towards a Post Retirement Health Care ( PRHC)
savings plan.
Background:
This involves a contract change for the 8 member Police
Sergeant's union. They agreed amongst themselves to certain wage
deferrals as their contributions to a Post Employment Health Plan
set to begin 1/1/06. (Each employee group may decide for
themselves as to how much to contribute). The amounts that they
originally agreed to were:
0-9 Years of Employment 3% deferral annually
10-13 4%
14-plus 2%
As it was a contract issue, those provisions needed to be
approved by Council, and were agreed to at your first meeting of
December.
Since then, staff attempted to set this up with the Plan's
administrator, the State of Minnesota. We have very recently
been informed that those percentages did not meet their
guidelines, in terms of the number of employees in each
designated area, plus problems with the continuity of
contribution rates
In gp~atina with the un~9n ~t~w~~dr thel have agreed to change
the deferrals to:
0-9 Years of Employment 3~ deferral annually
10-plus years 4%
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Budget Impact:
There is no additional budget impact on the City; if anything,
the higher rate of contributions will slightly reduce the City's
Medicare contributions for the participants.
Visioning Relationship:
This is a housekeeping item with no direct relationship to the
City's overall Visioning Plan.
Recommendation:
Because we need to start deferrals for this program with the
first pay period of the new year, this cannot wait until the
second meeting of January. I recommend approval.
Action Required:
If the City Council concurs, it should, by motion, approve the
amendment to Article XXVI of the Agreement with the Police
Supervisors union, regarding employee contributions to their
PRHP.
1U~~
Mark McNeill
City Administrator
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ADDENDUM
POLICE SERGEANTS LABOR AGREEMENT
ARTICLE XXVI
POST RETIREMENT HEALTH CARE SAVINGS PLAN (HCSP)
CONTRIBUTION SCHEDULE FOR POLICE SERGEANT GROUP
Years of Service with Hire - Beginning 10th Beginning 14th Beginning of
City of Shakopee 9 years year -13 years vear-25 years 26th year +
% of per payroll contribution 3% 4% 4% 4%
City Contribution $25/mo $25/mo $25/mo $25/mo
Severance contribution of 100%* 100% 100%** 100%**
unused sick leave balance
45% ofmax of960 hours
Contribution of 50% 50% 50% 100%
Accrued Vacation
Accelerated Sick Leave N/A N/A 100% of 100% of
Severance Payout Step-up Step-up
Formula *** Formula***
*Upon eligibility after year 5
**For employees who are ineligible for Accelerated Sick Leave Payout
*** Upon eligibility after year 15
Accelerated Sick Leave Severance Payout
The City of Shakopee appreciates employees, who through long-term service and dedication,
contribute to making the city a successful and positive service provider. In recognition thereof,
the City acknowledges such long-term service by providing an accelerated sick leave payout
formula listed below ifthe employee meets all the following conditions:
. Full-time or part-time benefit-eligible employee employed by the City of Shakopee
Police Department for 15 continuous years or more.
. Employee must reach the age and service requirements to be qualified for retirement
under PERA.
. Employee is separating employment in good standing.
. The percentage of the severance pay-out shall be based on a maximum of 960 hours of
accumulated sick leave calculated on the basis ofthe employee's current annual base pay.
. The accelerated severance payment will be deposited in the employee's HCSP account
not later than the first regularly scheduled payday following the employee's final day of
employment.
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Completion of Continuous Service
With the City of Shakopee Step-up Payout formula
15 years 55%
16 years 57%
.17 years 59%
18 years 61%
19 years 63%
20 years 65%
21 years 67%
22 years 69%
23 years 71%
24 years 73%
25 years 75%
Anniversary date of full-time employment or part-time benefit-eligible date is used to compute
years. of service with Shakopee.
This addendum shall be effective as ofthe first (1st) day ofJanuary, 2006 and shall remain in full
effect until the thirty-frrst (31st) day of December, 2006.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this
day of ,2006.
FOR THE CITY OF SHAKOPEE FOR LELS
Mayor Union Steward
City Administrator Local Representative
City Clerk