HomeMy Public PortalAbout2016.146 (07-19-16)RESOLUTION NO. 2016.146
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD
AUTHORIZING THE ELIMINATION OF LIFETIME MEDICAL BENEFITS FOR CITY
EMPLOYEES WHO REMAIN EMPLOYED BY THE CITY AFTER THE CLOSE OF
THE CURRENT CALENDAR YEAR (2016) TO EFFECT A REDUCTION IN THE
CITY'S UNFUNDED LIABILITY FOR THIS BENEFIT IN AN AMOUNT IN EXCESS OF
$6 MILLION DOLLARS, AND DIRECTING STAFF TO PERFORM SUCH TASKS AS
NECESSARY TO ACCOMPLISH THE ELIMINATION OF THE LIFETIME MEDICAL
BENEFITS IN A TIMELY MANNER
WHEREAS, the preparation of the FY 17 Budget compelled a closer examination
of a number of items that have material impacts on City operations and the ability of the
City to bear the financial burden of said items. In particular, the cost to the City of
lifetime medical benefits ( "LMBs ") stood out as a unique component of the General
Fund budget; and
WHEREAS, presently, LMBs have been determined to impose an unfunded
liability of $19.3 million dollars that the City is required to meet over the next 20 years;
and
WHEREAS, the City's consultant, Bartel and Associates ( "Bartel "), has
determined that the City's contribution to meet its unfunded liability, an amount of
$500,000 per year, is far short of the necessary contribution to remain on schedule to
meet City obligations to current and future retirees; and
WHEREAS, to fully fund the LMBs, Bartel recommends annual contributions as
high as $954,000; and
WHEREAS, ending LMBs by the end of the current calendar year would mean,
according to recent calculations by Bartel, a reduction in the unfunded liability of $6.2
million —from $19.3 million to $13.1 million; and
WHEREAS, the material reduction in the amount of unfunded liability means that
the City can meet future obligation to retirees by maintaining contributions at the current
level — or possibly experiencing a slight reduction in the annual contributions to fully
fund the LMBs.
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES
HEREBY FIND, DETERMINE, ORDER AND RESOLVE AS FOLLOWS:
Section 1. The City Council hereby authorizes staff to negotiate the elimination
of lifetime medical benefits for city employees who remain employed by the City after
December 31, 2016 subject to the bargaining elements of current labor negotiations.
Section 2. The City Council authorizes the City Manager to negotiate with the
bargaining units during a meet and confer process to accomplish the elimination of the
lifetime medical benefits by December 31, 2016.
Section 3. This Resolution shall become effective immediately upon its
adoption.
Section 4. The City Clerk shall certify as to the adoption of this City Council
Resolution.
PASSED, APPROVED and ADOPTED this 19th day of July 2016.
ATTEST:
APPROVED AS TO FORM:
David A. Garcia,
City Attorney
PA
Edwin Hernandez,
Finance Director
APPROVED AS TO CONTENT:
J. Arnoldo Beltran, City Manager
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, do hereby certify
that the foregoing Resolution was passed and adopted by the City Council of the City of
Lynwood at a regular meeting held on the 19th day of July, 2016, and passed by the
following vote:
AYES: COUNCIL MEMBERS SANTILLAN-BEAS, CASTRO AND MAYOR
HERNANDEZ
NOES: ALATORRE AND SOLACHE
ABSENT: NONE
ABSTAIN: NONE
Maria Quihonez, City Clerk
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, and the Clerk of
the City Council of said City, do hereby certify that the above foregoing is a full, true and
correct copy of Resolution No. 2016.146 on file in my office and that said Resolution
was adopted on the date and by the vote therein stated. Dated this 19`h day of July,
2016.
Maria QuifioneZ,-City C"�Ilerko