title
Settlement Agreement: Communications Workers of America, et al. v. City of Gainesville, PERC Case Nos. CA-2009-002, CA-2009-003, CA-2009-004, and CA-2009-005 (B)
recommendation
The City Commission (1) authorize the City Attorney to execute the settlement agreement with the Unions; and (2) authorize the City Attorney, City Manager, and General Manager to implement the terms of the settlement agreement.
explanation
BACKGROUND INFORMATION
In response to increasing medical costs and premiums, in 1992, the City changed its payment of retirees' health insurance premiums from 100% of single coverage for the retirees to 80% of single coverage, in line with what it was paying for active employees. These changes were not bargained. The retirees filed a class action lawsuit to stop the City from doing so, arguing that they had been told the City would pay 100% of the premium for their lifetime. After years of litigation, the Court declined to certify a class of retirees, and later held that the Plaintiff retirees had abandoned their claims and dismissed the case.
While the lawsuit was ongoing, the City commissioned an actuarial study to determine the long term cost of the City's contribution of 80% of retirees and current employees' premiums. The study estimated that the City's cost to provide this benefit from 1994 forward was 76 million dollars. As a result of this study, in 1995, the City Commission adopted an ordinance changing how it would contribute to current and future retirees health insurance benefits. The ordinance provided that the City would contribute a percentage of retirees' health insurance costs that was variable based on years of service, age at retirement, and hire date. The result of these changes reduced the City's liability to 18 million dollars. The ordinance further provided that "the percentage or amount of which payment for either retirees or dependent coverage has varied over the years and may continue to do so...
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