SR - RES-11055 - ESTABLISHING RETIREMENT HEALTH SAVINGS PLAN1. SUBJECT
Resolution No. 11055 — A Resolution of the City Council of the City of Orange adopting a
Retirement Health Savings Plan for the Orange Management Association
2. SUMMARY
In October 2017, the City Council adopted Resolution No. 11029, which approved the Letter of
Understanding (LOU) between the City and the Orange Management Association (OMA). The
LOU included a provision that allowed for the establishment of a Retirement Health Savings
(RHS) plan for OMA, wherein all OMA members' eligible accrued sick leave cashout value
upon retirement from City service and entering the Public Employees' Retirement System shall
be contributed to the Plan. This Resolution would establish the RHS plan on behalf of OMA and
satisfy the City's obligation under the LOU.
3. RECOMMENDED ACTION
Approve the Resolution.
4. FISCAL IMPACT
All costs and contributions to the RHS plan are borne by the employees of the Orange
Management Association. The adoption of the plan will not have any fiscal impact to the City.
5. STRATEGIC PLAN GOAL(S)
4e. Provide outstanding public service — attract, retain and develop quality employees.
6. GENERAL PLAN IMPLEMENTATION
Not applicable.
7. DISCUSSION and BACKGROUND
In October 2017, the City Council adopted Resolution No. 11029, which approved the Letter of
Understanding (LOU) between the City and the Orange Management Association (OMA). The
LOU included a provision that allowed for the establishment of a Retirement Health Savings
(RHS) plan for OMA, wherein all OMA members' eligible accrued sick leave cashout value
upon retirement from City service and entering the Public Employees' Retirement System shall
be contributed to the Plan. Prior to this provision, all eligible accrued sick leave upon retirement
was paid to the employee in cash. Therefore, there is no change in the City's financial
obligations under this provision.
The City will use the ICMA VantageCare Retirement Health Savings Plan to administer the
benefit. The City also uses ICMA for the RHS plans provided to Top Management and the Fire
Management Association.
The adoption of Resolution No. 11055 will:
1) Adopt the ICMA VantageCare Retirement Health Savings Plan and all necessary
documents; and
2) Authorize the Mayor to execute all necessary agreements.
8. ATTACHMENTS
Resolution No. 11055
ITEM 2 12/12/17
RESOLUTION NO. 11055
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ORANGE ESTABLISHING A
RETIREMENT HEALTH SAVINGS PROGRAM FOR
THE ORANGE MANAGEMENT ASSOCIATION
WHEREAS, the City of Orange, hereinafter referred to as "City," has employees
rendering valuable services; and
WHEREAS, the establishment of a retiree health savings plan for such
employees serves the interests of the City by enabling it to provide reasonable security
regarding such employees' health needs during retirement, by providing increased
flexibility in its personnel management system and by assisting in the attraction and
retention of competent personnel; and
WHEREAS, the City has determined that the establishment of the retirement
health savings plan (the Plan) serves the above objectives and should be of no cost to the
City;
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of
Orange adopts the Plan in the form of ICMA Retirement Corporation's VantageCare
Retirement Health Savings program which includes the Employer VantageCare
Retirement Health Savings Plan Adoption Agreement which is attached hereto as Exhibit
«A»
BE IT FURTHER RESOLVED, that the assets of the Plan shall be held in trust,
with the City serving as a trustee, for the exclusive benefit of the Orange Management
Association Plan Participants and their beneficiaries, and the assets of the plan shall not
be diverted to any other purpose prior to the satisfaction of all liabilities of the Plan. The
City has authorized the Mayor to execute the Declaration of Trust of the City of Orange
Integral Part Trust in the form of the model trust made available by the ICMA Retirement
Corporation. The City shall have no tax liability to Plan Participants if any future
determination is made that the Plan or any Plan Participant is not exempt from federal or
state taxes.
BE IT FURTHER RESOLVED, that the Human Resources and Personnel
Relations Director shall be the coordinator and contact for the Plan and shall receive
necessary reports, notices, etc.
BE IT FURTHER RESOLVED, that the Mayor is authorized to execute all
documents necessary to implement the Plan.
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