Title
Adoption of Resolution Approving a Revision to the Public Safety Retiree Medical Provision in the Executive Management Compensation Plan to Provide Up To Five Years of Service Credit for Time Served as a Chief, Assistant Chief and/or Deputy Chief in Another Agency. (Human Resources 2510)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
In 2011 the City of Alameda (City) modified retiree health benefits for new public safety employees. Prior to 2011 public safety employees were eligible for two-party retiree medical reimbursement after five years of service. After 2011, new employees were required to have ten years of service to be eligible for one-party medical reimbursement.
On May 7, 2019 City Council approved a modification to retiree health benefits for Public Safety Chiefs. This modification allowed up to five years of service credit time, based on actual time served as a Fire/Public Safety Chief at another agency, toward the ten year requirement, to be eligible for retiree medical from the City.
The goal of the change was to allow the City to recruit the most qualified applicants for these positions.
Staff is now recommending a further adjustment to this provision in order to ensure the City is able to recruit the most qualified candidates for these important leadership positions. This adjustment would allow newly hired Fire/Public Safety Chiefs to receive up to five years of service credit for time served as a Deputy and/or Assistant Chief in another agency.
BACKGROUND
The City has four Public Safety Labor groups: the International Association of Firefighters (IAFF), the Alameda Fire Chief Association (AFCA), the Alameda Police Officers Association (APOA) and the Alameda Police Management Association (APMA).
The labor agreements with these Public Safety groups all include a medical benefits provision for retirees. Public Safety employees hired prior to 2011, who have retired, receive reimbursement up to the two-party rate of either Blue Shield or Kaiser depending on enrollment after five years of service and employees hired after 2011, who have retired, receive reimbursement up to the one-party rate of either Blue Shield or Kaiser depending on enrollment after ten years of service.
As part of the agreement for retiree medical care, employees in the labor groups listed above contribute a percent of salary toward the City’s Other Post Employment Benefit (OPEB) Trust. Both the City and Public Safety employees contribute to this trust. The funds in this trust are used toward the cost of the retiree health benefits. Employees hired prior to 2011 who receive a greater benefit contribute 4% and those hired after 2011 contribute 2%.
DISCUSSION
While many Public Safety/Firefighter employees will spend their entire career with one agency, it is not uncommon for someone to change agencies to promote to Chief of Police or Fire Chief. A newly hired Police Chief or Fire Chief may have to forfeit a superior retiree medical benefit at their current agency when they join the City.
In order to recruit and retain the most qualified candidates, it is recommended to provide Public Safety Chiefs hired from outside the organization with up to five years of service credit based on actual time served as a Fire/Police Chief, Assistant or Deputy at another agency. Currently, only those who were Chiefs at another agency, prior to joining the City, are eligible for service credit.
Time served at another agency in one of the approved positions will then count toward the ten years required to be eligible for Public Safety retiree medical benefits. Qualified employees would be eligible for single party medical insurance reimbursement.
The implementation of this provision is subject to an actuarial study as required by Government Code section 7507. This code requires the City to conduct an actuarial and report if the change in post-employment benefits would exceed an annual increase of 3% in premium cost. It is not anticipated that the recommended change in benefits will exceed 3%.
ALTERNATIVES
• Approve a revision to the EXME (Executive Management) Compensation plan to allow up to five years of service credit for actual time served as a Public Safety/Fire Chief, Assistant and/or Deputy at another agency contingent upon having a similar or greater benefit in their previous position.
• Limit the service credit to less than five years for those who were Assistants and/or Deputies at another Police or Fire Agency.
• Approve service credit up to 10 years for those who were Assistant and/or Deputies at another Police or Fire Agency.
• Not approve the recommended change
FINANCIAL IMPACT
The recommended changes would allow a City Fire Chief or Police Chief who had worked as an Assistant Chief and/or Deputy Chief at another agency to become eligible for employee only medical reimbursement with between five and ten years of service with the City instead of the current minimum of ten years of service.
The annual cost for retiree medical for single party insurances is estimated at approximately $10,000 a year depending on the plan selected. Once the retiree becomes eligible for a Medicare supplement the cost is estimated at approximately $4,000 a year depending on the plan selected.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This action is not a project under Public Resources Code section 21065 or California Environmental Quality Act Guidelines section 15378 because it does not have potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
CLIMATE IMPACT
There are not identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a resolution approving a revision to the Public Safety Retiree Medical provision in the Executive Management Compensation Plan to provide up to five years of service credit for time served as a chief, assistant chief and/or deputy chief in another agency conditioned upon having a similar or greater benefit in their former position.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of the Resolution to provide up to 5 years of service credit conditioned upon having a similar or greater benefit in the position they formerly held.
Respectfully submitted,
Nancy Bronstein, Human Resources Director
Financial Impact section reviewed,
Annie To, Finance Director
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager