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Agenda Item No:
Meeting Date: May 4, 2009
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Management Services c
Prepared by: Leslie Loomis, Human Resources City Manager Approval: �S
Director
SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AMENDING THE
RESOLUTION NO. 11498 AND AUTHORIZING AMENDMENT OF THE DECLARATION OF TRUST
FOR THE ICMA-RC VANTAGECARE RETIREMENT HEALTH SAVINGS (RHS) PLAN TO ALLOW
NEW CONTRIBUTIONS TO SUCH PLAN.
RECOMMENDATION: Adopt Resolution.
BACKGROUND: Effective April 8, 2004, the City approved a Declaration of Trust with ICMA-RC to offer a
tax qualified retiree health savings plan to eligible employees. The City adopted a program entitled
VantageCare Retirement Health Savings Plan (RHS) which enabled the City and eligible employees to
contribute funds into a Trust for retiree health purposes.
This plan provides employees with the ability to fund retiree health expenses including health insurance
premiums, medical out-of-pocket expenses, Medicare insurance premiums, dental expenses and
premiums, and long-term care insurance premiums on a pre-tax basis. All rules related to this plan are
governed by the Plan document. The City periodically needs to makes Plan changes in order to have the
Plan remain compliant with existing IRS regulations and/or to reflect current City issues. A Plan
amendment is needed at this time to address City programs related to the Trust.
ANALYSIS: Staff recommends amending the ICMA-RC Vantage Care Retirement Health Savings Plan
to provide for two changes related to employee and employer contributions into the RHS Plan.
First, the City would like to make available to bargaining units the opportunity to elect the option of putting
Voluntary Retirement Separation Program incentive funds into the RHS account. Under this option, direct
employer contributions of one week base salary multiplied by the years of San Rafael service, up to a
maximum of $30,000, would be deposited into the RHS Plan. This payment would be made if the
participants in the Voluntary Retirement Separation Program, within their respective bargaining unit,
requested that the City contribute these funds into the RHS Plan. Each bargaining unit, if they had
employees selected to participate in the Voluntary Retirement Separation Program, would have to make
this election in order to meet IRS regulations.
Second, per the terms of the Firefighter Association contract July 1, 2008 to June 30, 2011, firefighters
hired after January 1, 2010 are to receive a direct employer contribution of 2% of the top step of firefighter
salary each pay period into a Retiree Health Savings Plan. In addition, these said employees are
required to contribute an equal amount (2% of top step of firefighter salary) into the RHS plan each pay
FOR CITY CLERK ONLY
File No.:
Council Meeting:
Disposition:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
period. This Plan amendment will enable the City to fulfill its contractual obligation to allow for these
funds to be contributed into a qualified RHS Plan.
FISCAL IMPACT: There is no fiscal impact of amending this Plan.
OPTIONS:
1. Adopt the Resolution amending Resolution No. 11498 and authorizing an amendment of the
Declaration of Trust for the RHS Plan to allow new contributions to the Plan.
2. Modify or deny the Resolution.
ACTION REQUIRED: Adopt Resolution as presented.
RESOLUTION
A RESOLUTION OF THE CITY COUNCIL AMENDING
RESOLUTION NO. 11498 AND AUTHORIZING AMENDMENT OF
THE DECLARATION OF TRUST FOR THE ICMA-RC
VANTAGECARE RETIREMENT HEALTH SAVINGS (RHS) PLAN
TO ALLOW NEW CONTRIBUTIONS TO SUCH PLAN.
WHEREAS, the City of San Rafael (the "Employer") previously adopted the City of
San Rafael ICMA-RC VantageCare Retirement Health Savings (RHS) Plan effective April
8, 2004, pursuant to City Council Resolution No. 11498, adopted February 17, 2004; and
WHEREAS, an amendment of the existing Retirement Health Savings Plan is
needed to allow new contributions into the such plan; and
WHEREAS, the Employer deems it to be in the best interest of the Employer and
the Plan to amend the Plan to provide for additional participation.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
The City Council by this Resolution amends City Council Resolution No. 11498,
and authorizes the City Manager to execute the necessary documents to amend the
Declaration of Trust for the City of San Rafael ICMA-RC VantageCare Retirement Health
Savings (RHS) Plan to provide for Voluntary Retirement Separation Program payments to
be deposited into the Plan, at the election of the bargaining units, and to further provide
for the City to contribute 2% of the top step of the firefighter salary for firefighters hired
after January 1, 2010 and for equal contributions to be made by said firefighters into the
RHS plan every pay period.
I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular meeting
of the Council of said City the 4t' day of May, 2009 by the following vote, to wit:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
Esther C. Beirne, City Clerk