TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Kim Summers, City Manager
PREPARED BY: Diego Chavez, Administrative Services Director
SUBJECT:
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Resolution Approving a Tentative Agreement between the City of Murrieta and the Murrieta Firefighters Association regarding Participation in the International Association of Fire Fighters Medical Expense Reimbursement Plan
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RECOMMENDATION
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Adopt Resolution No. 24-4774, entitled: A Resolution of the City Council of the City of Murrieta, California, Approving a Tentative Agreement between the City of Murrieta and the Murrieta Firefighters Association, regarding Participation in the IAFF Medical Expense Reimbursement Plan.
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PRIOR ACTION/VOTE
On June 20, 2023, the City Council adopted Resolution No. 23-4691, approving a Tentative Agreement for a Successor Memorandum of Understanding between the City of Murrieta and the Murrieta Firefighters Association, covering the period July 1, 2023, through June 30, 2026 (Vote: 4-0-1).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
Through the process of collective bargaining, the City of Murrieta (City) periodically negotiates with the respective employee organizations for the purpose of establishing compensation, benefits, and other terms and conditions of employment for their represented employees, including Tentative Agreements for successor Memoranda of Understanding (MOU) affecting compensation and benefits. All such agreements must be voted on and passed by a majority of each affected employee organization's membership, known as ratification, and subsequently approved by the City Council before becoming effective. Once approved by the City Council, the terms of tentative agreements for successor MOUs are then memorialized in the successor MOU or through amendments and brought back to the City Council for approval.
The MOU between the City and the Murrieta Firefighters Association (MFA or Association), adopted by City Council Resolution No. 19-4097, covering the period July 1, 2019, through June 30, 2023 (MFA MOU 2019-23), expired June 30, 2023. In 2023, the City and the MFA met and conferred in good faith and came to a ratified Tentative Agreement on a fair and equitable package of compensation and benefits for a successor MFA MOU for the period July 1, 2023 through June 30, 2026 (MFA MOU 2023-26), pursuant to the Meyers-Milias-Brown Act (MMBA) (Government Code sections 3500-3511) and the City's Employer-Employee Relations Resolution No. 93-214. On June 20, 2023, the City Council adopted Resolution No. 23-4691, approving the Tentative Agreement for the Successor MFA MOU 2023-26 (MFA MOU 2023-26 Tentative Agreement).
The MFA MOU 2023-26 Tentative Agreement included deal terms to establish a "retiree medical trust," and the parties agreed to meet and confer on the language for a new provision to the MFA MOU 2023-26 and for the redirection of any funding amount from another employer-sponsored account to the new retiree medical trust. Since then, the parties have worked towards establishing this new benefit and have reached a tentative agreement on the provisions and the successor MFA MOU language for member participation in the International Association of Fire Fighters (IAFF) Medical Expense Reimbursement Plan (Plan), which is the Medical Trust Plan Tentative Agreement dated August 20, 2024.
The Plan is a tax-sheltered benefit designed to help participating members pay for healthcare costs in retirement by providing eligible participants a lifetime stream of monthly benefits for reimbursement of IRS-eligible medical expenses. The City and MFA have agreed to fund the Plan by redirecting the $200 per month employer match that currently funds their 401(a) deferred compensation plan. The participating employees will also be required to make a corresponding and mandatory $200 per month contribution to the Plan. In addition, the City shall cease making contributions to the existing Retirement Health Savings program on behalf of eligible MFA retirees. Instead, the City will make an equivalent contribution to the proposed new Plan. Lastly, there are additional conversion rights of the employees to contribute to the Plan using their accrued vacation and/or sick leave at separation of employment.
Staff has prepared a Resolution (Attachment 1) for the City Council to consider approving the executed Medical Trust Plan Tentative Agreement, dated August 20, 2024, establishing successor MFA MOU language for member participation in the new Plan. Employee participation requirements, contribution amounts, remittance and reporting requirements, and other provisions are detailed in the agreed-upon Tentative Agreement. The employee and employer contributions are scheduled to start on the first pay period following adoption by the City Council. A fully executed copy of the Medical Trust Plan Tentative Agreement dated August 20, 2024, is attached to the Resolution as Exhibit A. The approval and adoption of the agreements to establish the proposed Plan and the amendments to existing programs will be considered by the City Council as a separate agenda item on August 20, 2024.
FISCAL IMPACT
The recommended action has no fiscal impact. The administration, management, and investment fees for the IAFF Medical Expense Reimbursement Plan are paid by the employees who opt to participate in this program. The City and the Association agree that effective the first full pay period after City Council approval, the City shall cease making contributions to the 401(a) Retirement Plan and shall instead make an equivalent mandatory contribution of $200 per month to the new Plan.
ATTACHMENTS
1. Resolution No. 24-4774