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14-First reading, deliberate and possibly act on an Ordinance authorizing the offering of health benefit insurance coverage to city retireesCITY COUNCIL AGENDA ITEM BRIEFING SHEET Submittal Date: O1/19/10 Originating Department: Presented By: Agenda Item No.: Council Date: O1/25/10 Finance Gene Anderson 14. RECOMMENDED MOTION: Move to approve an ordinance offering health benefits coverage to City retirees. POLICY ISSUE(S): Fiscal Management This ordinance is an update of Ordinance 2005-014. The changes involved reflect that (1) the City is no longer a self-funded group but a fully-funded group member of TML-IEBP, (2) the City's contribution toward retiree health benefits will be set each year as part of the City's budget (currently the City's contribution amount is up to $425 per month per employee), and (3) that premiums for retiree coverage will be a percentage of active employee premiums as set by TML-IEBP. The City only contributes toward medical insurance for retirees. All other types of coverage are entirely paid for by retirees. All other provisions of the ordinance are brought forward from the 2005 ordinance. BOARD/COMMISSION RECOMMENDATION: EXHIBITS: Ordinance ACTION: BUDGET INFO: ❑ Financial Report ❑ Minute Order Expense $N/A ❑ Department Report ❑ Resolution Budgeted Amt. $N/A ❑ Presentation Z Ordinance ❑ P bli H i y'I'D Actual $N/A u c ear ng ❑ Other Acct. Name N/A Acct. Number N/A FiSCAL NoTES: REVIEWED AND APPROVED BY: Z Administration Z City Clerk ❑ Community Development ❑ EMS/IT Z Finance ❑ Fire ❑ Municipal Court Z Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Urilities City of Paris Revised 2/04/08 ~n~~133 DRAFT attorney\ordwork\current\Health Benefits - Retirees Ord 2010 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, AMMENDING SECTION 2-46, HEALTH BENEFITS COVERAGE TO CITY RETIREES, OF ARTICLE II, DIVISION 2, RETIREMENT, OF THE CODE OF ORDINAIVCES OF THE CITY OF PARIS; TO UPDATE THE HEALTH BENEFITS COVERAGE OFFERED TO CITY RETIREES; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A SAVINGS CLAUSE, AN OPE1V MEETINGS CLAUSE; MAKING OTHER FIIVDIIVGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Paris desires to continue to provide health benefits coverage to its retirees; and, WHEREAS, the City of Paris is currently offering fully-funded benefits coverage administered through the TML Intergovernmental Employee Benefits Pool (TML IEBP) pursuant to Chapter 172 of the Texas Local Government Code, which would allow the extension of benefits to retirees of the City and Section 2-46 of the Code of Ordinances of the City of Paris needs to be amended to reflect updates in the health benefits coverage offered to City retirees; and, WHEREAS, TML IEBP is a health risk pool established pursuant to Texas Local Government Code Chapter 172, Texas Government Code Chapter 791, and the Texas Trust Code to provide health benefits coverage for employees and retirees and dependents of employees and retirees, of Texas political subdivisions under an Interlocal agreement; and, WHEREAS, TML IEBP offers a fully insured Retiree Continuum of Care medical plan to retirees (and their dependents) of TML IEBP's fully-funded members, as well as a Medicare supplement policy for retirees who are Medicare eligible; and, WHEREAS, TML IEBP also offers fully-insured life, dental, and vision coverage to retirees (and their dependents) of TML IEBP's fully-funded members; and, WHEREAS, Chapter 175 of the Texas Local Government Code empowers the City to offer alternative health plans to City retirees in addition to the basic plan, and to charge a premium for such coverage that reflects the cost to the City for providing retiree coverage; and WHEREAS, the City desires to provide health benefits coverage to its retirees through its fully-funded plan, TML IEBP's Retirees Continuum of Care, and a Medicare supplement, and that the cost for such coverage be paid for by the individual retiree and the City with the City's cost limited to an amount approved in the City's adopted budget, with the remainder of the cost for retiree coverage to be paid by current and future retirees; and, 0(?0134 WHEREAS, providing retiree coverage is in the best interest of the City, its retirees, and the public generally and Section 2-46 of the Code of Ordinances should be amended to reflect updates in the fully-funded benefits coverage administered through TML IEBP. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That findings set out in the preamble to this ordinance are hereby in all things approved. Section 2. That Section 2-46, Health benefits coverage to City retirees, of the Code of Ordinances of the City of Paris, Texas, be, and the same is hereby amended to read as follows: "Sec. 2-46. Health benefits coverage to City retirees. (a) That the City of Paris hereby elects to provide health benefits coverage to its retirees through its fully-funded TML IEBP Retiree Continuum of Care plan and Medicare supplement policies. (1) An employee of the City of Paris eligible for retirement from the Firemen's' Pension Fund is a"retiree" and the employee's "retirement" shall begin on the first day of the month following the date the employee separates from employment with the Ciry, so long as the employee has met the following conditions: a. The employee has reached the age of fifty-five (55) years; and b. The employee has completed twenty (20) years of creditable service with the City of Paris or any other municipality for which service with said municipality provides credit towards retirement from the Firemen's' Pension Fund; and, c. The employee has begun receiving retirement payments from the Firemen's' Pension Fund. (2) For an employee of the City of Paris not qualified for retirement from the Firemen's' Pension Fund, but qualified for retirement from the Texas Municipal Retirement System (TMRS), said employee is a "retiree" and the employee's "retirement" shall begin on the first day of the month following the date the employee separates from employment with the City, so long as the employee has met the following conditions after one (1) year from the effective date of membership in TMRS: a. The employee has begun receiving payments from TMRS; and, . ~nn135 b. The employee has reached the age of sixty (60) years and has completed at least five (5) full years of creditable service with the City of Paris or other municipalities participating in the same retirement system with the City of Paris; or c. The employee has become eligible for service retirement under any other applicable provision of Title 110b, Section 61.001 et seq., of the Revised Civil Statues. (c) That for Retirees who are not Medicare eligible and their dependents, the City will offer at least two choices of inedical coverage: (1) The same medical plans offered to active employees at a percentage of the employee rate established by TML IEBP, with varying other rates for dependent coverage, or (2) The Retiree Continuum of Coverage Plan at the rate established by TMLIEBP. (d) That for retirees who are Medicare eligible, the City will offer a fully insured Medicare Supplement policy through TML IEBP at a rate to be established by TML IEBP. (e) That the City will contribute a monthly amount toward the cost of retiree medical coverage in an amount to be determined and set by the City Council as part of the annual budget process; provided, however, that employees who retire on or after October 1, 2004, and begin receiving retirement payments from either the Firemen's' Pension Fund or the Texas Municipal Retirement System must meet a Rule of 80 in order for the City to share in any of the cost of health insurance. For these purposes, the Rule of 80 means that the number of years of service plus the employee's age must equal 80 before the City will share in the cost of the retiree's insurance premiums. Provided further, that employees who are hired on or after October 1, 2004, and later begin to receive retirement payments from the Firemen's Pension Fund or the Texas Municipal Retirement System, shall be responsible for the full cost of their health insurance premium upon retirement, without any contribution by the City. (o That the City's contribution for retirees is for medical coverage only, and does not include dental, vision, or long term disability coverage. (g) That other fully funded life coverages will be as offered annually by the TML IEBP and elected by the City at the cost set by TML IEBP." Section 3. That this ordinance will apply to individuals who have retired or are retiring after its effective date. For individuals retiring after the effective date of this ordinance to qualify, they must enroll for this coverage within thirty (30) days of their retirement. w ~0 i a_36 Section 4. That the City Clerk is hereby ordered to enter a copy of this Ordinance in the City minutes. Section 5. That it is hereby officially found and determined that the meeting at which this Ordinance was considered was open to the public as required and that public notice of the time, place, and purpose of said meeting was given as required by the Open Meetings Act, Chapter 551 of the Texas Government code. Section 6. That all provisions of the ordinances of the City of Paris, Texas in conflict with the provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of the City of Paris not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 7. That the repeal of any ordinance or part of ordinances affected by the enactment of this ordinance shall not be construed as abandoning any action now pending under or by virtue of such ordinance or as discontinuing, abating, modifying, or altering any penalty accruing or to accrue, or as affecting any rights of the municipality under any section or provisions of any ordinance at the time of passage of this ordinance. Section 8. That it is the intention of the City Council of the City of Paris that this ordinance, and every provision hereof, shall be considered severable, and the invalidity or partial invalidity of any section, clause, or provisions of this ordinance shall not affect the validity of any other portion of this ordinance. Section 9. That by a supermajority vote of ayes and nays, the Ciry Council voted to suspend the rule requiring two readings before adoption of this ordinance. Section 10. That this ordinance shall become effective from and after its passage of the first reading and publication as required by law. PASSED AND ADOPTED on first and final reading this 25th day of January, 2010. Jesse James Freelen, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Kent McIlyar, City Attorney ~0 C, I '17 Section 15. Introduced and read on first reading on January 25, 2010, at a regular meeting of the City Council of the City of Paris and read and passed on second reading on February 8, 2010, at a regular meeting of the City Council of the City of Paris; the same being two (2) separate regular meetings of the City Council of the City of Paris. Section 16. That this ordinance shall become effective from and after its passage of the second reading and publication as required by law. PASSED AND ADOPTED on second and final reading this 8th day of February, 2010.