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HomeMy WebLinkAbout4.D.1. Adoption of Updated Contribution Schedules for Post Employment Health Care Savings Plan (HCSP) Accounts Res. No. 7538 Consent Business 4. D. 1. SHAKOPEE TO: Mayor and City Council FROM: Kris Wilson, Assistant City Administrator DATE: 01/06/2015 SUBJECT: Adoption of Updated Contribution Schedules for Post-Employment Health Care Savings Plan (HCSP) Accounts-Res. No. 7538 (E) Action Sought The Council is asked to authorize the appropriate officials to enter into the attached memorandums of understanding with the City's three union groups and to offer Resolution No. 7538, a resolution increasing the employer contribution to employee's Post-Employment Health Care Savings Plans, and move its adoption. Background At its September 16 meeting, the Council authorized an increase in the City's monthly contribution to employee's Post Employment Health Care Savings Plans (HCSP) from $25 to $35 per month. This will be the first increase in the City's contribution level since the accounts were opened ten years ago and it will be funded with a portion of the savings the City will realize from the reduction in our health insurance premiums for 2015. In order to make this increase official, the Minnesota State Retirement System (MSRS), who runs these plans, requires adoption of a resolution and memorandums of understanding with the City's various unions. These documents are attached for Council's approval. Budget Impact The City's estimated savings from reduced health insurance premiums in 2015 is $43,000. This increased contribution to HCSP accounts will utilize approximately $17,000 of that savings. Relationship to Vision As this increase was already presented to and approved by Council at its September 16, 2014 meeting, this action is simply a housekeeping item to comply with the requirements of the plan administrator. Requested Action The Council is asked to authorize the appropriate officials to enter into the attached memorandums of understanding with the City's three union groups and to offer Resolution No. 7538, a resolution increasing the employer contribution to employee's Post-Employment Health Care Savings Plans, and move it adoption. Attachments: MOU with Patrol Union MOU with Sergeants Union MOU with Public Works Union Resolution No. 7538 MEMORANDUM OF UNDERSTANDING BETWEEN CITY OF SHAKOPEE AND LAW ENFORCEMENT LABOR SERVICES, Local No. 292 This Agreement is entered into between Law Enforcement Labor Services, Local No. 292 (Union)and the City of Shakopee (Employer): WHEREAS, Law Enforcement Labor Services Local 292 is the certified exclusive representative for Police Officers with the Shakopee Police Department;and WHEREAS,the parties have negotiated and agreed upon the terms and conditions of employment for bargaining unit employees through December 31, 2016; and WHEREAS,the parties have agreed to amend the City contribution to employee's Post- Employment Health Care Savings Plan, as represented in Appendix C,from $25 to$35 per calendar month; NOW THEREFORE,the attached Appendix C is mutually accepted as the binding contribution schedule for employees' Post-Employment Health Care Savings Plan accounts, effective January 1,2015 and for the duration of the existing contract. FOR THE CITY OF SHAKOPEE LAW ENFORCEMENT LABOR SERVICES, LOCAL#292 Mayor Business Agent Date: Date: City Administrator Union Steward Date: Date: City Clerk Union Steward Date: Date: APPENDIX C POST EMPLOYMENT HEALTH CARE SAVINGS PLAN(HCSP) CONTRIBUTION SCHEDULE FOR LELS MEMBERS Years of Service with Hire- Beginning 2nd Beginning 16th Beginning of City of Shakopee year 1 year- 15 years year-30 years 31st year+ %of per payroll contribution 0% 1% 1% 1% I City Contribution $35 /mo $35$25/mo $35 5/mo $35$2-5/mo Severance contribution None 50%* 100%** 100% ** of unused sick leave (45%of max of 960 hours) Contribution of None None 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 if the employee meets all the following conditions: • Full-time or part-time benefit-eligible employee with the City of Shakopee for 15 continuous years or more. • Employee must reach the age (usually age 55, as governed by Minnesota Statutes, 2004, 353.29 and related chapters)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 of the 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. 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. 2 MEMORANDUM OF UNDERSTANDING BETWEEN CITY OF SHAKOPEE AND LAW ENFORCEMENT LABOR SERVICES, Local No. 279 This Agreement is entered into between Law Enforcement Labor Services, Local No. 279 (Union)and the City of Shakopee(Employer): WHEREAS, Law Enforcement Labor Services Local 279 is the certified exclusive representative for Sergeants with the Shakopee Police Department; and WHEREAS,the parties have negotiated and agreed upon the terms and conditions of employment for bargaining unit employees through December 31, 2016;and WHEREAS,the parties have agreed to amend the City contribution to employee's Post- Employment Health Care Savings Plan,as represented in Appendix C,from $25 to$35 per calendar month; NOW THEREFORE,the attached Appendix C is mutually accepted as the binding contribution schedule for employees' Post-Employment Health Care Savings Plan accounts,effective January 1, 2015 and for the duration of the existing contract. FOR THE CITY OF SHAKOPEE LAW ENFORCEMENT LABOR SERVICES, LOCAL#279 Mayor Business Agent Date: Date: City Administrator Union Steward Date: Date: City Clerk Union Steward Date: Date: APPENDIX C HCSP POST EMPLOYMENT HEALTH CARE SAVINGS PLAN CONTRIBUTION SCHEDULE Years of Service with the City of Shakopee Hire— Beginning Beginning of 11 years 12 —25 years 26 year+ %of per payroll contribution 3% 4% 4% City Contribution $35 /mo $35 /mo $35 /mo $25 /wino $25 /mo $25 /mo Severance Contribution of Unused Sick Leave Balance 100% 100% 100% (45%of max 960 hours) Contribution of Accrued Vacation 50%* 100% 100% (at time of separation) 100%of Step-Up 100%of Step- Accelerated Sick Leave Severance Payout N/A Formula ** Up Formula *Upon eligibility after year 5 ** 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 if the 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 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 of the 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. 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. MEMORANDUM OF UNDERSTANDING BETWEEN CITY OF SHAKOPEE AND MINNESOTA TEAMSTERS PUBLIC AND LAW ENFORCEMENT EMPLOYEES' UNION, LOCAL#320 This Agreement is entered into between the Minnesota Teamsters Public and Law Enforcement Employees' Union, Local No. 320(Union)and the City of Shakopee (Employer): WHEREAS,Teamster Local 320 is the certified exclusive representative for certain employees of the Shakopee Public Works Department;and WHEREAS,the parties have negotiated and agreed upon the terms and conditions of employment for bargaining unit employees through December 31, 2016;and WHEREAS,the parties have agreed to amend the City contribution to employee's Post- Employment Health Care Savings Plan, as represented in Appendix D,from $25 to$35 per calendar month; NOW THEREFORE,the attached Appendix D is mutually accepted as the binding contribution schedule for employees' Post-Employment Health Care Savings Plan accounts, effective January 1, 2015 and for the duration of the existing contract. FOR THE CITY OF SHAKOPEE MINN.TEAMSTERS LOCAL#320 Mayor Business Agent Date: Date: City Administrator Union Steward Date: Date: City Clerk Union Steward Date: Date: APPENDIX D POST EMPLOYMENT HEALTH CARE SAVINGS PLAN (HCSP) CONTRIBUTION SCHEDULE FOR Teamsters, Local 320 MEMBERS Years of Service with Hire Beginning 2nd Beginning 7th Beginning 16th Beginning the City of —1 yr. through 6 yrs. through 15 yrs. through 24 yrs. 25th yr.+ Shakopee of payroll contribution 0% 0.5% 2% 2.5% 3% City $35 $25 $35 per $35 $25 per $35$25 per $35$25 per Contribution per month month month month month End of Year 100% of hours 100%of hours 100%of hours 100%of hours Buy Back of 0% in excess of 40 in excess of 40 in excess of 40 in excess of 40 Comp Time %of Severance NA NA 100% 100% 100% Pay* Accrued Vacation at the Time of 0% 0% 50% 50% 100% Departure Accelerated Sick Leave NA NA NA 100% 100% Payout * Severance Pay as defined in the City of Shakopee Personnel Handbook 1 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 if the employee meets all the following conditions: • Full-time or part-time benefit-eligible employee with the City of Shakopee for 15 continuous years or more. • Employee must reach the age (usually age 55, as governed by Minnesota Statutes, 2004, 353.29 and related chapters) 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 of the 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. 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. 2 RESOLUTION NO. 7538 A RESOLUTION INCREASING THE EMPLOYER CONTRIBUTION TO EMPLOYEE'S POST-EMPLOYMENT HEALTH CARE SAVINGS PLANS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SHAKOPEE, MINNESOTA that, effective January 2015,the City's monthly contribution to employee's Post- Employment Health Care Savings Plans shall increase from $25 to $35 per month for all benefits-eligible employees. BE IT FURTHER RESOLVED that the attached contribution schedules for Non-Union, Non-Exempt and Non-Union,Exempt employees are hereby adopted and made effective January 1, 2015. 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