pages: CityCouncil/2012-10-30.pdf, 3
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CityCouncil | 2012-10-30 | 3 | Councilmember Johnson inquired if there was agreement about the $7 million amount, to which the City Manager responded in the negative; stated agreement was broad and within a range. Councilmember Johnson inquired whether impacts of the Affordable Care Act was analyzed. The City Manager responded understanding how the Affordable Care Act will actually work is difficult; stated the assumption used was that health care costs will continue to rise. Councilmember Johnson inquired whether current employees would face changes, to which the Assistant City Manager responded the PERS recommendations have been superseded by the pension reform legislation; stated changes included additional contributions from current employees; 14 Task Force members voted to ask safety employees to pay more towards the employer share; OPEB solutions included: increasing vesting and eligibility rules for new hires; participating in the Voluntary Employees' Beneficiary Association (VEBA) or the 401(a)(h); capping benefits for retirees, current or future employees; working with employee bargaining groups to negotiate down the liability. Councilmember Tam inquired whether the Beverly Hills OPEB solution required a reserve. The City Manager responded cash is one approach; stated another option is to finance a large buyout with a low interest rate to securely budget; what the premiums are going to be in the future is not known. The Human Resources Director provided an overview of the Beverly Hills program; stated Beverly Hills did financing; the method would help in Alameda for safety, but not for miscellaneous employees; the fixed amount paid to PERS is currently $115 and will increase by approximately 3% every year; safety has an agreement where an additional amount is paid to employees upon retirement, the amount is calculated and a lump sum is given rather than continuing to pay, which is where there are some savings. The Controller stated the Beverly Hills plan was a multifaceted plan; an actuarial evaluation would be done to determine what the pay would be as the value of those benefits; if paying all costs up front is a significant dollar amount, which the City does not have; pension bonds can be issued, but are more expensive than the sewer bonds the Council recently approved; pension bond rates are between 6 and 7%, a lot of cost analysis would have to be done to determine if the option makes sense for the City; one of the big benefits from the Beverly Hills program other than the one-time cash out for employees is the defined contribution plan; with VEBA, once employees leave the City there is no OPEB liability going forward. Councilmember Tam inquired if the City's 1079 and 1082 plans are essentially a Special Meeting Alameda City Council 3 October 30, 2012 | CityCouncil/2012-10-30.pdf |