CC SR 20241106 L - HSA 2025 Plan Year
CITY COUNCIL MEETING DATE: 11/06/2024
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to increase the City’s contribution toward eligible
employee health savings accounts (HSA) to align with new IRS HSA contribution limits
effective January 1, 2025.
RECOMMENDED COUNCIL ACTION:
1) Authorize increasing the City’s contribution to eligible employee health savings
accounts (HSA) to $4,300 for individuals and $8,550 for family plans under the
2025 High Deductible PPO+HSA medical plan to align with new IRS 2025 HSA
contribution limits effective January 1, 2025;
2) Approve Resolution No. 2024-__ A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES, CALIFORNIA, INCREASING THE CITY’S HEALTH
SAVINGS ACCOUNT CONTRIBUTION FOR ALL ELIGIBLE EMPLOYEES EFFECTIVE
JANUARY 1, 2025;
3) Approve Resolution No. 2024-__ A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES, CALIFORNIA, APPROVING, ADOPTING, AND
IMPLEMENTING, AND THEREBY AUTHORIZING THE CITY MANAGER TO
SIGN A THIRD AMENDMENT TO THE CITY’S MEMORANDUM OF
UNDERSTANDING WITH THE RANCHO PALOS VERDES EMPLOYEE
ASSOCIATION FOR THE PERIOD JULY 1, 2022 THROUGH JUNE 30, 2025,
INCREASING THE CITY’S CONTRIBUTION TO ELIGIBLE EMPLOYEE HEALTH
SAVINGS ACCOUNTS; and
4) Approve Resolution No. 2024-__ A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES, CALIFORNIA, APPROVING, ADOPTING, AND
IMPLEMENTING, AND THEREBY AUTHORIZING THE CITY MANAGER TO
SIGN A THIRD AMENDMENT TO THE CITY’S MEMORANDUM OF
UNDERSTANDING WITH THE AMERICAN FEDERATION OF STATE, COUNTY
AND MUNICIPAL EMPLOYEES, DISTRICT COUNCIL 36 FOR THE PERIOD
JULY 1, 2023 THROUGH JUNE 30, 2025, INCREASING THE CITY’S
CONTRIBUTION TO ELIGIBLE EMPLOYEE HEALTH SAVINGS ACCOUNTS.
FISCAL IMPACT: Increasing the City’s HSA contribution for all eligible employees will
result in an estimated increase of $7,600 in Fiscal Year (FY) 2024-
25 for the 2025 plan year. This amount is included in the adopted
budget for FY 2024-25; therefore, if approved, no additional
appropriation would be required. VR
Amount Budgeted: $245,000
Additional Appropriation: None
1
Account Number(s): 101-400-XXXX-4206
(General Fund – various HSA contribution accounts) VR
ORIGINATED BY: Vanessa Godinez, Human Resources and Risk Manager VG
REVIEWED BY: Catherine Jun, Deputy City Manager
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Resolution No. 2024-__ increasing the City’s HSA contribution (page A-1)
B. Resolution No. 2024-__ Third Amendment to the City’s MOU with the RPVEA for
the period between July 1, 2022 through June 30, 2025 (page B-1)
C. Resolution No. 2024-__ Third Amendment to the City’s MOU with the AFSCME for
the period between July 1, 2023 through June 30, 2025 (page C-1)
BACKGROUND:
The City offers five medical plan options to employees: three health maintenance
organization (HMO) plans, one traditional preferred provider organization (PPO) plan, and
a high deductible PPO plan with a health savings account (HSA). Currently, the City pays
the entire premium for the employee and 50% of the dependent care premium under any
of the medical plan options. Alternatively, the City also offers the option of declining City-
provided health insurance. Employees who show proof of medical insurance elsewhere
may receive up to 50% of the premium cost of the least expensive medical plan (or
$340.52 per month) in lieu of City medical coverage.
In 2007, in response to a rise in medical insurance premiums, the City Council introduced
an alternative to the traditional PPO plan, with a higher deductible PPO+HSA that would
reduce the City’s healthcare costs over time while also providing additional benefits to
employees. In general, a PPO plan allows the participant to see any doctor or specialist
without a referral in-network (or out-of-network at a higher cost). However, adding an
HSA plan allows participating employees to set aside pre-tax dollars for medical
expenses, reducing their taxable income. Employees can then use these funds for
qualified expenses to make healthcare costs more affordable. HSAs can also be used as
a savings vehicle for future healthcare costs, including in retirement, since they can
accumulate interest over time and can roll over from year to year with no risk of losing
unused funds even if employees decide to separate from the City in the future.
In contrast to the City’s traditional PPO plan, the high deductible PPO+HSA has lower
monthly premiums. The following table illustrates the 2025 cost difference of both plans
under the Family coverage level, which a majority of HSA participants currently enroll in.
Monthly
Premium
Monthly Cost to
the City
Monthly Cost to
the Employee
Blue Shield Silver PPO + HSA
(Family plan)
$2,035.65 $1,409.29 $626.35
2
Blue Shield Gold PPO (no HSA)
(Family plan)
$3,250.67 $2,290.75 $959.92
Cost Difference per Month per
employee
$1,215.02 $881.46 $333.57
When monthly cost differences are aggregated over a year, the traditional PPO costs the
City and employee an additional $10,578 and $4,003, respectively.
Due to the lower cost of the high-deductible PPO+HSA, the City is able to contribute
toward an employee’s HSA as an incentive to increase participation in this medical plan,
which would decrease the cost in premiums incurred by the City and employee over time.
For the 2024 plan year, the City's annual contribution to an employee's HSA plan is
$4,150 for single employee coverage and $8,300 for employee and dependent coverage.
On a pre-tax basis, employees can make additional contributions to their HSA through
payroll deductions up to Internal Revenue Service (IRS) limits based on their age (50+)
and coverage level.
DISCUSSION:
In May 2024, the IRS announced that 2025 HSA contribution limits will increase to $4,300
for single employee coverage and $8,550 for employee and dependent coverage, which
are increases of $150 and $250, respectively, from 2024.
Staff recommends the City Council approve increasing the City’s HSA contribution
amount from $4,150 to $4,300 for single employee coverage and $8,300 to $8,550 for
employee and dependent coverage for the 2025 high deductible PPO with HSA medical
plan, which complies with the limits set by the IRS.
The table below summarizes the 2023 and 2024 medical plan selections made by benefit-
eligible employees, as of January 1, 2024. The High-Deductible PPO+HSA continues to
have the highest enrollment out of all five medical plans offered by the City.
Medical Plans
Total
Participants
2023
Total
Participants
2024*
Blue Shield: High Deductible PPO + HSA 30 23
Blue Shield: PPO without HSA 1 6
Blue Shield: Platinum Access HMO 6 7
Blue Shield: Trio HMO 3 2
Kaiser: HMO 13 13
Declined Medical Coverage 12 12
65 63
*Data is based on January 1, 2024 plan effective date.
In an effort to retain and attract a high-quality workforce and incentivize employees to
participate in the high deductible PPO+HSA plan, staff seeks City Council approval to
increase the City's HSA contribution to the full IRS allowed amount of $4,300 for single
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employee coverage and $8,550 for employee and dependent coverage effective January
1, 2025. This would result in a cost increase of $7,600 in 2025, which is budgeted in the
FY 2024-25 operating budget. Attached for City Council consideration is a resolution
memorializing the increase (Attachment A)
Rancho Palos Verdes Employees Association
The City’s labor representatives offered to meet and confer with R ancho Palos Verdes
Employees Association (RPVEA) regarding increasing the City’s contribution to eligible
employee health savings accounts pursuant to the requirements of the Meyers -Milias-
Brown Act (MMBA). On September 16, 2024, RPVEA’s Board advised that it did not need
to meet and confer and had no objection to the City’s proposal. An MOU Amendment
was then circulated for execution to confirm this tentative agreement, subject to City
Council approval authorizing the City Manager to sign the Amendment to the MOU (Att.
As a result, staff requests the City Council approve, adopt and implement the Third
Amendment to the City’s MOU with the RPVEA for the period July 1, 2022 through June
30, 2025, increasing the City’s contribution to eligible employee health savings
(Attachment B).
American Federation of State, County and Municipal Employees, District Council 36
The City’s labor representatives offered to meet and confer with American Federation of
State, County and Municipal Employees (AFSCME) regarding increasing the City’s
contribution to eligible employee health savings accounts pursuant to the requirements
of the Meyers-Milias-Brown Act (MMBA). AFSCME’s Board had no objection to the City’s
proposal. An MOU Amendment was then circulated for execution to confirm this tentative
agreement, subject to City Council approval authorizing the City Manager to sign the
Amendment to the MOU.
As a result, staff requests the City Council approve, adopt and implement the Amendment
to the City’s MOU with the AFSCME for the period July 1, 2022 through June 30, 2025,
increasing the City’s contribution to eligible employee health savings (Attachment C).
CONCLUSION:
Staff recommends the City Council authorize increasing the City’s contribution to the 2025
Blue Shield high deductible PPO with HSA medical plan in accordance with the IRS 2025
HSA contribution limits effective January 1, 2025.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available for
the City Council’s consideration:
1. Do not authorize the increase to the Blue Shield high deductible PPO with HSA
medical plan.
2. Identify a different amount to contribute toward an employee’s PPO with HSA
medical plan within the parameters established by the IRS.
3. Take other action, as deemed appropriate.
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RESOLUTION NO. 2024-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES, CALIFORNIA,
INCREASING THE CITY’S HEALTH SAVINGS ACCOUNT
CONTRIBUTION FOR ALL ELIGIBLE EMPLOYEES
EFFECTIVE JANUARY 1, 2025
WHEREAS, Section 36506 of the California Government Code requires that a
city council fix the compensation of all appointive officers and employees by resolution
or ordinance; and
WHEREAS, the City of Rancho Palos Verdes (“City”), through City Council
action, provided eligible employees with a high deductible Preferred Provider
Organization (“PPO”) medical plan with a Health Savings Account (“HSA”) feature that
was partly funded by the City starting in 2007; and
WHEREAS, the City Council has increased its HSA contribution amounts over
the years since 2007 and expanded employee eligibility for the high deductible PPO +
HSA medical plan to include qualifying part-time employees pursuant to law; and
WHEREAS, the Internal Revenue Service (“IRS”) administers and enforces U.S.
federal tax laws and announced that eligible HSA contribution limits would be increased
for calendar year 2025 due to the recent inflation surge from $4,150 to $4,300 for self-
only coverage, and from $8,300 to $8,550 for family coverage; and
WHEREAS, the City’s labor relations representatives meet and conferred with
the Rancho Palos Verdes Employees Association (“RPVEA”), as the exclusive
employee organization for those City employees in the bargaining unit defined as non -
management, full-time employees in the classifications listed in Exhibit "A" to the
Memorandum of Understanding between the City and the RPVEA , and reached a
tentative agreement to implement an increase to the City’s HSA contributions to the new
limits allowed by the IRS for eligible employees for 202 5 subject to City Council
approval by resolution and have prepared, under a separate resolution, a Third
Amendment to the RPVEA MOU 2022-25 to reflect that change; and
WHEREAS, the City’s labor relations representatives meet and conferred with
the American Federation of State, County and Municipal Employees, District Council 36
(“AFSCME”), representing certain part-time City classifications, listed in Appendix "A" to
the Memorandum of Understanding between the City and the AFSCME, and reached a
tentative agreement to implement an increase to the City’s HSA contributions to the new
limits allowed by the IRS for eligible employees for 2025 subject to City Council
approval by resolution and have prepared , under a separate resolution, a Third
Amendment to the RPVEA MOU 2023-25 to reflect that change; and
A-1
Resolution No. 2024-
Page 2 of 2
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
Section 1: The City Council finds the above recitals are true and correct and
incorporated herein by this reference.
Section 2: The City Council hereby approves, adopts and implements
increased City contributions to the City’s high deductible PPO medical plan with HSA to
the IRS allowed limits of $4,300 for self-only coverage and $8,550 for family coverage
for eligible employees commencing January 1, 2025 for all City employees subject to
any required meet and confer with the respective employee organizations for
represented employees.
Section 3: The City Council hereby approves, adopts and implements the
Third Amendment to the RPVEA MOU 2022-25 and to the AFSCME MOU 2023-2025
which incorporates the increased City contributions to the City’s high deductible PPO
medical plan with HSA to the IRS allowed limits of $4,300 for self-only coverage and
$8,550 for family coverage for eligible RPVEA represented employees commencing
January 1, 2025.
Section 4: This resolution shall be effective upon adoption though
implementation shall occur at a later date as specified herein . The City Clerk shall
certify the adoption of this Resolution.
PASSED, APPROVED and ADOPTED this 6th day of November 2024.
_____________________________
John Cruikshank, Mayor
Attest:
____________________________
Teresa Takaoka, City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Teresa Takaoka, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2024-__ was duly and regularly passed and adopted by the said
City Council at a regular meeting thereof held on November 6, 2024.
__________________________
Teresa Takaoka, City Clerk
A-2
RESOLUTION NO. 2024-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES, STATE OF CALIFORNIA,
ACCEPTING, APPROVING AND ADOPTING, AND
AUTHORIZING THE CITY MANAGER TO SIGN A THIRD
AMENDMENT TO THE CITY’S MEMORANDUM OF
UNDERSTANDING WITH THE RANCHO PALOS VERDES
EMPLOYEES ASSOCIATION FOR THE PERIOD JULY 1,
2022 THROUGH JUNE 30, 2025, INCREASING THE
CITY’S CONTRIBUTION TO ELIGIBLE EMPLOYEE
HEALTH SAVINGS ACCOUNTS
WHEREAS, Section 36506 of the California Government Code requires that a
city council fix the compensation of all appointive officers and employees by resolution
or ordinance; and
WHEREAS, the City of Rancho Palos Verdes (“City”) continues to recognize the
Rancho Palos Verdes Employees Association (“RPVEA”) as the exclusive employee
organization for those City employees in the bargaining unit defined as non -
management, full-time employees in the classifications listed in Exhibit "A" to the
Memorandum of Understanding between the City and the RPVEA covering the period
July 1, 2022 through June 30, 2025 adopted on June 20, 2023 by City Council
Resolution No. 2023-32 (“RPVEA MOU 2022-25”), a copy of which is attached hereto
as Exhibit "1"; and
WHEREAS, pursuant to the provisions of the Meyers-Milias-Brown Act
(Government Code § 3500 et seq.), the City’s labor representatives and RPVEA have
met and conferred and reached a tentative agreement regarding increasing the City’s
contributions to employee Health Savings Accounts for individual employees and
employee family plans provided under the RPVEA MOU 2022 -25 to further incentivize
employees to remain in or join the City’s high deductible medical plan, in return keeping
premium insurance costs lower for the City; and
WHEREAS, the City Council has determined that it desires to further incentivize
employees to remain in or join the City’s high deductible medical plan by matching the
IRS increases to the contribution amounts for such HSA plans for calendar year 2025;
and
WHEREAS, the City Council and RPVEA desire to amend the current RPVEA
MOU 2022-25 by accepting, adopting and implementing the attached Third Amendment
to the RPVEA MOU 2022-25 to reflect the aforementioned changes.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
B-1
Section 1: The City Council finds the above recitals are true and correct and
incorporated herein by this reference.
Section 2: The City Council approves and adopts the attached Third
Amendment to the RPVEA MOU 2022-2025 provided herewith as Exhibit “1” thereby
increasing the City's Health Savings Account contribution for individual employees and
employee family plans starting calendar year 2025.
Section 3: This resolution shall be effective on November 6, 2024. The City
Clerk shall certify the adoption of this Resolution.
PASSED, APPROVED and ADOPTED this 6th day of November 2024.
_____________________________
John Cruikshank, Mayor
Attest:
____________________________
Teresa Takaoka, City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Teresa Takaoka, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2024-__ was duly and regularly passed and adopted by the said
City Council at a regular meeting thereof held on November 6, 2024.
__________________________
Teresa, Takaoka, City Clerk
B-2
THIRD AMENDMENT TO
MEMORANDUM OF UNDERSTANDING
City of Rancho Palos Verdes
and
Rancho Palos Verdes Employees Association
July 1, 2022 - June 30, 2025
B-3
1
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING
between the City of Rancho Palos Verdes and the
Rancho Palos Verdes Employees Association
for the Period of July 1, 2022 through June 30, 2025
Pursuant to the requirements of the Meyers-Milias-Brown Act (“MMBA,” commencing at
California Government Code § 3500 et seq.), the City of Rancho Palos Verdes (“CITY”) has
recognized the Rancho Palos Verdes Employees Association (“RPVEA”) as the majority or
exclusive representative, as those terms are interchangeably used under the MMBA, for those
CITY employees in the bargaining unit defined as non-management, full-time employees in the
classifications listed on Exhibit “A” to the Memorandum of Understanding between the CITY
and RPVEA for the period July 1, 2022 through June 30, 2025 (“RPVEA MOU 2022-25”), and
adopted by Resolution No. 2023-032 on June 20, 2023.
Thereafter, the parties entered into a First Amendment to the RPVEA MOU 2022-25 (“First
Amendment”), which became effective upon City Council adoption on October 17, 2023, to
address the CITY’s contribution to employee health insurance plans, with all other terms and
conditions of the RPVEA MOU 2022-25 remained in full force and effect.
Thereafter, the parties entered into a Second Amendment to the RPVEA MOU 2022-25
(“Second Amendment”), which became effective upon City Council adoption on March 19,
2024, to address the recommendations from the Classification and Compensation Study, with all
other terms and conditions of the RPVEA MOU 2022-25 remained in full force and effect.
Thereafter, by and between the CITY and RPVEA. This Third Amendment shall only become
effective upon City Council adoption and makes only those changes reflected herein below, all
other terms and conditions of the RPVEA MOU 2022-25 remaining in full force and effect.
RPVEA MOU 2022-25, ARTICLE VII Benefits, Section A, subsection 1, currently provides as
follows:
A. Medical Insurance and Opt-Out
1. Medical Insurance
The City has five (5) medical plans available to employees (3 HMO’s, 1
traditional PPO, and a high deductible PPO).
The high deductible PPO plan comes with a Health Savings Account
(HSA) that is funded by the City. The City’s annual contribution to an
employee’s HSA plan for the 2024 calendar year is $4,150 for single
coverage or $8,300 for employee and dependent coverage. Employees can
make additional contributions, on a pre-tax basis, to their HSA account
through payroll deductions, up to the IRS limits, based on their ages (50+)
and coverage level.
B-4
2
ARTICLE VII Benefits, Section A, subsection 1, shall be superseded and replaced in full with
the following language upon City Council approval of this Third Amendment to the RPVEA
MOU 2022-25:
A. Medical Insurance and Opt-Out
1. Medical Insurance
The City has five (5) medical plans available to employees (3 HMO’s, 1
traditional PPO, and a high deductible PPO).
The high deductible PPO plan comes with a Health Savings Account
(HSA) that is funded by the City. The City’s annual contribution to an
employee’s HSA plan for the 2024 calendar year is $4,150 for single
coverage or $8,300 for employee and dependent coverage. Effective for
the 2025 calendar year and going forward, the City’s annual contribution
to an employee’s HSA plan will increase to $4,300 for single coverage or
to $8,550 for employee and dependent coverage. Employees can make
additional contributions, on a pre-tax basis, to their HSA account through
payroll deductions, up to the IRS limits, based on their ages (50+) and
coverage level.
IT IS SO AGREED:
City of Rancho Palos Verdes Rancho Palos Verdes Employee
Association
Ara M. Mihranian – City Manager
Matt Waters - President
Catherine Jun – Deputy City Manager
Robert Nemeth– Vice President
Vanessa Godinez – Human Resources and
Risk Manager
B-5
RESOLUTION NO. 2024-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES, CALIFORNIA,
APPROVING, ADOPTING, AND IMPLEMENTING, AND
THEREBY AUTHORIZING THE CITY MANAGER TO
SIGN A THIRD AMENDMENT TO THE CITY’S
MEMORANDUM OF UNDERSTANDING WITH THE
AMERICAN FEDERATION OF STATE, COUNTY AND
MUNICIPAL EMPLOYEES, DISTRICT COUNCIL 36 FOR
THE PERIOD JULY 1, 2023 THROUGH JUNE 30, 2025,
INCREASING THE CITY’S CONTRIBUTION TO ELIGIBLE
EMPLOYEE HEALTH SAVINGS ACCOUNTS
WHEREAS, Section 36506 of the California Government Code requires that a
city council fix the compensation of all appointive officers and employees by resolution
or ordinance; and
WHEREAS, the City of Rancho Palos Verdes (“City”) continues to recognize the
American Federation of State, County and Municipal Employees, District Council 36
(“AFSCME”) as the exclusive bargaining unit defined as non -management, part-time
employees in the classifications listed in Appendix "A" to the Memorandum of
Understanding between the City and the AFSCME covering the period July 1, 2023
through June 30, 2025 adopted on September 19, 2023 by City Council Resolution No.
2023-44 (“AFSCME MOU 2023-25”), a copy of which is attached hereto as Exhibit "1";
and
WHEREAS, pursuant to the provisions of the Meyers-Milias-Brown Act
(Government Code § 3500 et seq.), the City’s labor representatives and AFSCME have
met and conferred and reached a tentative agreement regarding increasing the City’s
contributions to employee Health Savings Accounts for individual employees and
employee family plans provided under the AFSCME MOU 2023-25 to further incentivize
employees to remain in or join the City’s high deductible medical plan, in return keeping
premium insurance costs lower for the City; and
WHEREAS, the City Council has determined that it desires to further incentivize
employees to remain in or join the City’s high deductible medical plan by matching the
IRS increases to the contribution amounts for such HSA plans for calendar year 2025;
and
WHEREAS, the City Council and AFSCME desire to amend the current AFSCME
MOU 2023-25 by accepting, adopting and implementing the attached Third Amendment
to the AFSCME MOU 20232-25 to reflect the aforementioned changes.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
C-1
Section 1: The City Council finds the above recitals are true and correct and
incorporated herein by this reference.
Section 2: The City Council approves and adopts the attached Third
Amendment to the AFSCME MOU 2023-2025 provided herewith as Exhibit “1” thereby
increasing the City's Health Savings Account contribution for individual employees and
employee family plans starting calendar year 2025.
Section 3: This resolution shall be effective on November 6, 2024. The City
Clerk shall certify the adoption of this Resolution.
PASSED, APPROVED and ADOPTED this 6th day of November 2024.
_____________________________
John Cruikshank, Mayor
Attest:
____________________________
Teresa Takaoka, City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Teresa Takaoka, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2024-__ was duly and regularly passed and adopted by the said
City Council at a regular meeting thereof held on November 6, 2024.
__________________________
Teresa, Takaoka, City Clerk
C-2
THIRD AMENDMENT TO
MEMORANDUM OF UNDERSTANDING
City of Rancho Palos Verdes
and
American Federation of State, County and Municipal
Employees, District Council 36
July 1, 2023 - June 30, 2025
C-3
1
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING
between the City of Rancho Palos Verdes and the
American Federation of State, County and Municipal Employees, District Council 36
for the Period of July 1, 2023 through June 30, 2025
Pursuant to the requirements of the Meyers-Milias-Brown Act (“MMBA,” commencing at
California Government Code § 3500 et seq.), the City of Rancho Palos Verdes (“CITY”) has
recognized the American Federation of State, County and Municipal Employees, District
Council 36 (“AFSCME”) as the majority or exclusive representative, as those terms are
interchangeably used under the MMBA, for those CITY employees in the bargaining unit
defined as non-management, part-time employees in the classifications listed on Appendix “A”
to the Memorandum of Understanding between the CITY and AFSCME for the period July 1,
2023 through June 30, 2025 (“AFSCME MOU 2023-25”), and adopted by Resolution No. 2023-
044 on September 19, 2023.
Thereafter, the parties entered into a First Amendment to the AFSCME MOU 2023-25 (“First
Amendment”), which became effective upon City Council adoption on October 17, 2023, to
address the CITY’s contribution to employee health insurance plans, with all other terms and
conditions of the AFSCME MOU 2023-25 remained in full force and effect.
Thereafter, the parties entered into a Second Amendment to the AFSCME MOU 2023-25
(“Second Amendment”), which became effective upon City Council adoption on March 19,
2024, to address the recommendations from the Classification and Compensation Study, with all
other terms and conditions of the AFSCME MOU 2023-25 remained in full force and effect.
Thereafter, by and between the CITY and AFSCME. This Third Amendment shall only become
effective upon City Council adoption and makes only those changes reflected herein below, all
other terms and conditions of the AFSCME MOU 2023-25 remaining in full force and effect.
AFSCME MOU 2023-25, ARTICLE VI Benefits, Section A, subsection 2, currently provides as
follows:
A. Health Insurance Plans
1. The City has five (5) medical plans available to eligible employees (3
HMO’s, 1 traditional PPO, and a high deductible PPO).
2. The high deductible PPO plan comes with a Health Savings Account
(HSA) that is funded by the City. The City’s annual contribution to an
eligible employee’s HSA plan for the 2023 calendar year is $3,850 for
single coverage or $7,750 for employee and dependent coverage. Effective
for the 2024 calendar year and going forward, the City’s annual
contribution to an eligible employee’s HAS plan will increase to $4,150
for single coverage or to $8,300 for employee and dependent coverage.
Eligible employees can make additional contributions, on a pre-tax basis,
to their HSA account through payroll deductions, up to the IRS limits,
based on their ages (50+) and coverage level.
C-4
2
ARTICLE VI Benefits, Section A, subsection 2, shall be superseded and replaced in full with the
following language upon City Council approval of this Third Amendment to the RPVEA MOU
2023-25:
A. Health Insurance Plans
1. The City has five (5) medical plans available to eligible employees (3
HMO’s, 1 traditional PPO, and a high deductible PPO).
2. The high deductible PPO plan comes with a Health Savings Account
(HSA) that is funded by the City. The City’s annual contribution to an
eligible employee’s HSA plan for the 2024 calendar year is $4,150 for
single coverage or $8,300 for employee and dependent coverage. Effective
for the 2025 calendar year and going forward, the City’s annual
contribution to an eligible employee’s HAS plan will increase to $4,300
for single coverage or to $8,550 for employee and dependent coverage.
Eligible employees can make additional contributions, on a pre-tax basis,
to their HSA account through payroll deductions, up to the IRS limits,
based on their ages (50+) and coverage level.
IT IS SO AGREED:
City of Rancho Palos Verdes American Federation of State, County and
Municipal Employees, District Council 36
(“AFSCME”)
Ara M. Mihranian – City Manager Corey Cordova – AFSCME DC36 Business
Representative
Catherine Jun – Deputy City Manager Dana Torey – Organizing Committee
Vanessa Godinez – Human Resources and
Risk Manager
Quentin Thelen – Organizing Committee
C-5