The City Council requested as part of their Fiscal Year Calendar 1998/99 a study issue to consider information to assess current benefits provided to City Council.

A survey of fourteen (14) cities was conducted during the month of May 1999. (Attachment A) These cities are the same used for establishing comparison of wages and benefits for the Sunnyvale Employees Association (SEA), Public Safety Officers Association (PSOA) and Management classifications. These cities have been selected through the collective bargaining process and/or because of their impact on the Bay Area market.

Information was also sought from various benefits providers regarding process and procedures to follow in the event the City Council wishes to extend certain benefits to its members.

It was found that the majority of the Cities, except for the City of Santa Clara, offer some form of benefits to their Council members. The City of Santa Clara limits its benefit to participation in the retirement system for part-time employees at the participant’s cost. It was also found that benefits vary considerably from one agency to another.

A discussion of the individual benefit findings for the fourteen cities surveyed follows:

RETIREMENT: The most common benefit provided to Council members is retirement. All surveyed cities provide a retirement contribution or allow participation of its Council members in their retirement system; the most popular of which is through the California Public Employee Retirement System (CalPERS). Six (43%) cities pay in full for the participation of the Council member. Eight (57%) cities allow their Council members to participate, but Council members have to pay for their own contribution. Contributions range from 5.31% of salary to 7.5% in PARS (Public Agency Retirement System).

MEDICAL INSURANCE: Fully paid medical insurance (single/family) is provided by seven agencies (50%), without restrictions. Three (21.4%) more agencies also provide medical insurance, but the agencies restrict the payment to the level of the Kaiser rate (currently $428.56 per month for family coverage). One city (7.1%) restricts its contribution to $385.00 to buy medical insurance. Two (14.3%) agencies offer medical insurance under a cafeteria or give Council members a discretionary lump sum to purchase it if they wish.

CASH-IN-LIEU FOR MEDICAL INSURANCE – Three cities (21.4%) offer cash-in-lieu of benefits ranging from $31.86 single coverage or $80.46 family coverage to $385.00. One (7.1%) city allows member to elect $525.00 of the taxable income in-lieu for a combination of benefits under a cafeteria plan.

CAFETERIA PLANS – Two cities (14.3%) offer two different amounts $450.00 and $525.00 per month under cafeteria plans to "purchase" a combination of benefits. Only one city allows the Council member to take taxable income for $525.00 if the Council member decides not to purchase benefits.

The benefits that the Council member can purchase include; medical, dental and life insurance; one agency allows long–term disability and deferred compensation participation.

DENTAL INSURANCE – Eleven (78.6%) cities provide fully paid dental insurance (single/family coverage). Two cities (14.3%) provide dental insurance, as needed, under their cafeteria plans. One city of these eleven allows cash-in-lieu for dental ($13.19) per month; another one mandates dental insurance participation, if benefits are selected.

VISION INSURANCE – Only seven cities (50%) provide fully paid vision insurance. The other seven (50%) do not offer vision insurance.

LIFE INSURANCE – Ten cities (71.4%) provide fully paid basic life insurance for the following amounts:

Two additional cities (14.3%) allow purchase of life insurance ($20,000 basic and mandatory basic $100,000) under their cafeteria plans. Purchase of additional variable amounts optional life insurance is allowed at the Council member cost.

Four cities (28.6%) pay for the full premium towards long-term disability insurance (LTD) based on the Council members City salary. One additional City (7.1%) allows purchase of LTD through its cafeteria plan.

One city (7.1%) contributes 3.4% of the Council member’s salary towards a deferred compensation plan. Another city (7.1%) allows contribution to a deferred compensation plan if the Council member decides not to take other benefits. An additional agency (7.1%) allows participation, but there is no City contribution.

MISCELLANOUS

Two cities (14.3%) provide car allowances in the following manner:

In another city (7.1%) the Mayor is allowed to have a City car for City business.

One City (7.1%) provides cellular phone allowance $95.00 per month.

If Council decides to extend additional benefits the potential cost per benefit follows:

Cash-in-Lieu of medical insurance provided:

DENTAL INSURANCE

Monthly premiums cost range from $54.00 (family coverage/United Concordia Plan) to $100.00 (family coverage/MetLife*) per Council member.

Maximum cost $ 54.00 x 7 = $378.00 per month = $4,536 annual
$100.00 x 7 = $700.00 per month = $8,400 annually

*MetLife will experience 30% increase in cost September 1999.

VISION INSURANCE – Maximum monthly cost estimated at $18.00 per month (family coverage)

$18.00 x 7 = $126.00 per month = $1,512 annually

LIFE INSURANCE – The current contract provides. $0.22 per $1,000 of annual coverage. If additional coverage or a different coverage is needed current contract will need to be amended to provide it. The cost would depend on the desired coverage amount.

LONG TERM DISABILITY

Benefits are based on salary (66% of salary after 90 calendar days of disability). The current contract provides coverage only for full-time employees. Contract would need extensive amendments. One-year waiting period is required to become initially eligible.

The public is notified of this action through placement on the City Council Agenda.

The surveyed cities all have a different range of benefits provided to their Mayor and City Council members. If Council decides to extend to themselves additional benefits, all applicable city benefits contracts would need to be amended to include the category of Council members, and their part-time status, since current contracts are restricted to specific employee categories and different periods of service will also have to be modified. Eligibility is currently established by pay periods of full time or prorated for part-time service for regular employees.

All surveyed agencies follow the terms as stipulated by their providers’ contracts including waiting periods.

This information by their request is presented to Council members and staff is available to answer questions or provide additional information as needed.

No staff recommendation is being made at this time.

Prepared by:

Myriam Castaneda
Human Resources Supervisor

Reviewed by:

David L. Nieto
Director of Human Resources

Approved by:

Robert S. LaSala
City Manager

A. Survey of Fourteen Cities – May 1999