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Home My WebLink AboutResolution No. 2016-17CITY OF KENAI RESOLUTION NO. 2016 -17 Sponsored by: City Attorney A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING THE AMENDMENT OF THE CITY'S PUBLIC EMPLOYEE'S RETIREMENT SYSTEM PARTICIPATION AGREEMENT WITH THE STATE OF ALASKA TO EXCLUDE ALL SEASONAL EMPLOYEES. WHEREAS, on July 1, 1969 the City entered into a Participation Agreement with the State of Alaska to participate in the Public Employee's Retirement System (PERS); and, WHEREAS, this Agreement has previously been amended four times opting out and in the City Manager and City Council Members; and, WHEREAS, audits performed by the State of Alaska Division of Retirement and Benefits in 2009, 2011, and 2015 identified concerns with the City's classification of certain temporary positions, questioning whether under PERS they were seasonal positions; and, WHEREAS, PERS provides that seasonal employees are eligible for participation but temporary employees are not; and, WHEREAS, seasonal employees, as defined by PERS, are permanent employees who work seasonally returning to the same position, year after year without reapplying; and, WHEREAS, City temporary employees, that work in positions with a seasonal duration, are terminated at the completion of the season and may reapply for the same position but are not guaranteed or provided an expectation of reemployment, and the City administration maintains they are temporary rather than seasonal employees for PERS purposes; and, WHEREAS, on February 2, 2016 the City received confirmation from the Division of Retirement and Benefits, that the City's temporary employees working a seasonal duration are in a temporary status and are in fact not eligible for participation in PERS; and, WHEREAS, the City has no intention of seasonal employees being eligible for PERS; and, WHEREAS, the federal Affordable Care Act (ACA) defines and treats seasonal and temporary employees differently than PERS creating potential conflicts with the Division of Retirement between eligibility for PERS benefits and federal healthcare coverage requirements; and, New Text Underlined; ]DELETED TEXT BRACKETED] Resolution No. 2016 -17 Page 2 of 2 WHEREAS, confusion and conflict can be eliminated and employee classification can be consistent between PERS and the ACA with an amendment to the City's PERS Participation Agreement to exclude seasonal employees from participation and retitle positions for temporary employees working seasonal durations as "seasonal" employees; and, WHEREAS, because the City currently has no seasonal employees, as defined by the Division of Retirement and Benefits, the amendment of the City's PERS Participation Agreement will not trigger a termination study. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the City Manager is authorized to execute an amendment with the State of Alaska to exempt all Seasonal Employees from participation in the City's PERS Agreement as follows: Amend Subparagraph 2 on Page 2 of the Participation Agreement to read: 2. The political subdivision agrees that all eligible employees except in the following designated categories will participate in the Retirement System: 1. All Elected Officials 2. All Seasonal Employees Section 2. That this resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 4th day of May, 2016. PAT PORTER, MAYOR A ES San ra odigh, Ci Clerk New Text Underlined; [DELETED TEXT BRACKETEDI lVillaye with a Past, C# with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 www.kenai.city MEMORANDUM TO: Mayor Porter and Council Me s FROM: Scott M. Bloom, City Attorn DATE: April 28, 2016 tV SUBJECT: Resolution No. 2016 -17 The intention of this Resolution is to allow the City to continue to employee what have previously been titled "temporary employees" that work seasonal durations, without having to include the positions in the Public Employees Retirement System (PERS) or to provide health care coverage under the Affordable Care Act (ACA.) Under PERS "temporary employees" are not eligible to participate in PERS, but "seasonal employees" are, and under the ACA, the City may be required to provide healthcare coverage for "temporary employees" but generally not for "seasonal employees" as employed by the City. Changing the designation of these employees from "temporary" to "seasonal" and exempting the positions out of PERS is the most straightforward solution for the City. This solution requires an Amendment to the City's Agreement with the State. On July 1, 1969 the City entered into a Participation Agreement with the State to participate in the PERS; attached hereto. Since that time the Agreement has been amended four times, opting out and in the City Manager and City Council Members. Audits performed by the State of Alaska Division of Retirement and Benefits in 2009, 2011, and 2015 identified concerns with the City's classification of certain temporary positions, questioning whether under PERS they were seasonal positions. Seasonal employees as defined by PERS are permanent employees who work seasonally returning to the same position year after year without reapplying. City temporary employees that work in positions with a seasonal duration are terminated at the completion of the season and may reapply for the same position but are not guaranteed or provided an expectation of reemployment and the City Administration maintains they are temporary rather than seasonal employees for PERS purposes. On February 2, 2016 the City received confirmation from the Division of Retirement and Benefits that the City's temporary employees working a seasonal duration are temporary employees and not eligible for participation in PERS. Because the City currently has no seasonal employees, as defined by the Division of Retirement and Benefits, the amendment of the City's PERS Participation Agreement will not trigger a termination study. The City has worked with PERS to confirm these expectations. Your consideration is appreciated STATE OF ALASKA -+ NT UP ADMNISTRATIO, POUCH 'C JUNEAU, ALASKA Agreement between the State of Alaska (hereafter referred to as the Stele) and the (hereafter referred to as the political subdivision) relating to Participation by the political subdivisions in the Public Employees° Retirement System of Alaska (hereafter referred to as the Retirement System) ; wi.tnesseth: That MOREAS, the 199 of the State provide for a Retirement System in AS 39.35 and further provide for participation by political subdivisions in AS 34.35.550 - 650, and WHEREAS, the political subdivision which provides coverage therefore, in consideration of the manual agreeronts, covenants and provisions herein contrainad, the parties make th« following a?groe.muuts: The political subdivision agrees for its part &a follows: I E�> ?.d7 �C "13 ?. .'3if'`It� "a.Qi':i £e:i.ES«C t'��ji�LS e. .'.W " "A.?;3 "- �8"��"•a'�.�iKCi �:%.7,T in the Rea:iv mt System as of .a� r�� with the psymnt of employer contributions and withholding of employee contributions to c e� with WASes M=Od in the first full pay period begionift f�1 the political subdivision agrees that all eligible employeas crept employeee in the followiM, deoigoastec ca:egnries will participate in the Retirement System: - 2 , (5) The political subdivision &9Zees to comply with the requirements of the statutes and regulations pertaloieg to the Retirement System. It agrees that eligible employees are bound by these statutes and regulations, sad by the terms of this agreement. (6) The political subdivision agrees that this agreement shall not be terminated by it except by written notice accompanied by a resolution adopted by the governing body of the political subdivision submitted to the director at least 90 ddys before the date on which the political subdivision wishes to terminate. Upon termination in this manner, distribution will be in accordance with the relevent statutory provisions, including AS 39.35.620 - 650 and the required actur;rial valuation. The State agrees for its part as follocrgs: ' (1) The political subdivision depgrtmaots, groups, and classifications of employeas designated above are included in the Retirement System and are entitled to all the rights, benefits and privileges afforded "employees" as that term is used in the Retirement System, and cre subject to all conditions, duties, and liabilities imposed upon "employees." (21 The contributions received by the State from the political subdivision will be added to and will become peat of tho Retirement System funds. 3 r� 7r.is .»nz of thi* �d��er xat t:� tkae pc�litis al erxbd:lr�i¢iox ,'nr: u>atcese ,wuth (-t°ize,d or Jim t,4 tea do go staatasto.eq pa ?cr3s ?.moo Writte!" not'C(-0 e)f a t"mi"t'an Pill be given to a gvolit:i€al subdivision at 1641st 90 days prior toy the ters&nation date unless 'termination Ia by 7 statutory provisim. Me vartiei maa °taaeal ly agree trK8 followg€s , (l) Any s:eferj�"Ct, ias this aagreement to any statut ary provivival or to an°r regulations shall iatlude *by kmandrut"t6, sddittions, aor deletions, both express and ivpljod, which may be effeoted„ (2) This ASMewat shall continue in effe*t uat.il at li ?v Y vine ,If' the, fgjY -Wjbk V v to a-urs. tai `'hv polltical sui,dfvisim ue,ilst;erslly- terautuat€ n than agrsawent by gi 'vita 'Written Wtic 10 days prior to the date in which it wishee tee tsrEVtieaate Abp The "rrie:s "turlly Wgr ee to terminate she Qgraemaa Lt (e) 'rhw Stage uftilsteruilY temistatrs the uxreaertara}t; because rox violation a3 >° a Provision of tbis agt'Pa�mnt or because eat' r.tat.utorq Airection Or aut:horYt.W.on, zahece:mtp;",;n vs ittmva qa'wi.c" Wili be giVt`ae : - .j<. (3) All correspondame rid € oticus to the paliticrl subdivision shall be directed to- Mrs. Frances Torkilsen City Clerk City of Kenai P. 0. Box 580 Kenai, Alaska 99611 All correspondence and notices to the State shall be directed tea- Director, Public Employees' Ratire ent System Department of Administration Pouch Co Alaska Office Building Juneau Alaska 9980! D amen arrison, ity onager Approved: c Commissioner of Adsinistrstio Signature Dances Torkilse6 Clark Date Data o v