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HomeMy WebLinkAbout08516 ORDINANCE NO. 8516 AN ORDINANCE AMENDING CHAPTERS 3 AND 6 OF TITLE VI OF THE PUEBLO MUNICIPAL CODE RELATING TO EMPLOYMENT BENEFITS FOR SAME GENDER DOMESTIC PARTNERS WHEREAS, some households in the City of Pueblo are made up of persons who are not related by marriage or blood relationships but who nevertheless share their lives and resources and support one another in their daily living; and WHEREAS, many couples who live together often have partnerships, responsibilities and bonds similar to those of married couples and who nurture and care for one another in sickness and in health; and WHEREAS, members of the same gender domestic partnership community are often discriminated against in ways including denial of services, housing, employment and spousal benefits; and WHEREAS, fairness in the workplace has been recognized as a fundamental right protected under federal law and the City of Pueblo’s non-discrimination policy underscores its commitment to tolerance, inclusiveness, equality and justice; and WHEREAS, the City of Pueblo offers employment-based benefits to spouses of employees, yet same gender couples are at a significant disadvantage because they can not legally marry in Colorado and are unable to claim benefits for same gender domestic partners; and WHEREAS, the exclusion of same gender domestic partners as dependents under an employer sponsored health insurance plan makes unmarried couples and their children more likely to be uninsured; and WHEREAS, more and more employers recognize this inequity and offer employment benefits to same gender domestic partners; and WHEREAS, employers who offer same gender domestic partnership benefits are at a competitive advantage over those employers who do not offer such benefits as they are able to offer a more comprehensive benefits package, as part of the overall compensation, to recruit and retain skilled employees; and WHEREAS, the City must remain a competitive employer in the market, recruiting and retaining the best employees for City government positions by offering a comprehensive compensation and benefits package; and WHEREAS, it is therefore important for the City to offer same gender domestic partner benefits to its employees in order to give the City a competitive edge in attracting and retaining qualified individuals for employment with the City; and WHEREAS, consistent with section 6-1-7 of Chapter 6, Title VI of the Pueblo Municipal Code, as amended, the City is committed to providing equal employment benefits in the service of the City regardless of sexual orientation; and WHEREAS, the matters herein relate to local and municipal matters which are by Article XX of the Colorado Constitution reserved to home rule cities. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (brackets indicate matter being deleted, underscoring indicates new matter being added) SECTION 1. Section 6-3-1 of Chapter 3, Title VI of the Pueblo Municipal Code, as amended, is hereby amended to add new subsections 6-3-1 (20.1) and 6-3-1 (33.1) to read as follows: Sec. 6-3-1. Definitions. For the interpretation of this Title and the civil service rules adopted by the City Council, the following words and terms shall be construed as follows: . . . (20.1) means an employee and spouse or spousal Family equivalent and one (1) or more eligible children. . . . (33.1) and s mean Same gender domestic partnerpousal equivalent an adult of the same gender with whom an employee is in an exclusive committed relationship, who is not related to the employee and who shares basic living expenses with the intent for the relationship to last indefinitely. A same gender domestic partner or spousal equivalent cannot be related by blood to a degree which would prevent marriage in Colorado and cannot be married to another person. An employee claiming a same gender domestic partner or spousal equivalent dependent shall file with the Human Resources Department an affidavit of spousal equivalency on a form approved by the City Attorney. . . . . SECTION 2. The first sentence of subsections (a) and (b) of Section 6-6-5 of Chapter 6, Title VI of the Pueblo Municipal Code, as amended, are hereby amended to read as follows: Sec. 6-6-5. Paid sick leave benefits. (a) Paid sick leave to the extent the same is accrued and unused shall be granted to permanent, full-time employees and probationary employees in case of actual illness or disability occurring without negligence of the employee, or for a maximum of three (3) work days in each consecutive twelve (12) months for an , spousal equivalent illness of the employee's spouse or child subject to verification thereof. . . . (b) Paid sick leave to the extent the same is accrued and unused shall be granted to police officers in the case of actual illness, injury or disability of the police officer, occurring without negligence of the police officer; or for a maximum of three (3) work days in each consecutive twelve (12) months for a life- , threatening illness or illness requiring hospitalization of the employee's spouse spousal equivalent or child, subject to verification thereof. . . . . SECTION 3. Subsection (b) of Section 6-6-8 of Chapter 6, Title VI of the Pueblo Municipal Code, as amended, is hereby amended to read as follows: Sec. 6-6-8. Funeral leave. . . . (b) Benefits; Immediate Family. In the event of the death of a member of an employee's immediate family, the employee shall be granted immediate funeral leave from the date of death, plus five (5) consecutive work days thereafter for Group A employees and seven (7) consecutive days for Group B employees. spousal Immediate family is defined as parent, brother, sister, spouse, equivalent, child, grandchild, grandparent, mother-in-law, father-in-law or other relative residing in the same household with the employee. . . . . SECTION 4. Subsection (b) of Section 6-6-13 of Chapter 6, Title VI of the Pueblo Municipal Code, as amended, is hereby amended to read as follows: Sec. 6-6-13. Maternity/paternity leave. . . . (b) Paternity leave shall not exceed three (3) weeks and shall commence at the time of the birth of the child, unless otherwise agreed by the employee and Leave shall be similarly granted when an the appropriate supervisor. employee’s spousal equivalent gives birth to a child. . . . . SECTION 5. The City Council finds and determines that this Ordinance furthers the City of Pueblo’s commitment to providing equal employment benefits in the service of the City regardless of sexual orientation, in conformity with section 6-1-7 of Chapter 6, Title VI of the Pueblo Municipal Code, as amended. SECTION 6. Consistent with the intent of this Ordinance and subject to applicable law, the City Council directs and authorizes the City Manager to take actions necessary to implement and ensure that benefits made available to an employee and a spouse are extended to an employee and a spousal equivalent. SECTION 7. This Ordinance shall become effective upon final passage and approval. INTRODUCED: September 24, 2012 BY: Leroy Garcia COUNCIL PERSON PASSED AND APPROVED: October 9, 2012 Background Paper for Proposed ORDINANCE DATE:September 24, 2012 AGENDA ITEM # R-1 DEPARTMENT: City Council Council Member Sandy Daff Council Member Steve Nawrocki TITLE: AN ORDINANCE AMENDING CHAPTERS 3 AND 6 OF TITLE VI OF THE PUEBLO MUNICIPAL CODE RELATING TO EMPLOYMENT BENEFITS FOR SAME GENDER DOMESTIC PARTNERS ISSUE: Should City Council amend the Pueblo Municipal Code to provide employment benefits for same gender domestic partners? RECOMMENDATION: Council Members Sandy Daff and Steve Nawrocki recommend approval. BACKGROUND: The enclosed Ordinance amends Title VI of the City’s Municipal Code by providing for equal employment benefits to employees. Specifically, the Ordinance indicates that existing benefits available to an employee with a spouse be provided to an employee with a same gender domestic partner, or spousal equivalent. By way of example, the benefits include sick leave, funeral leave, maternity or paternity leave, family and medical leave, and health insurance benefits. Currently, sections of the Code related to employment benefits do not recognize same gender domestic partners, or spousal equivalents. However, Section 6-1-7 of the Code specifies that “[n]o…employee shall be discriminated against or denied equal employment opportunity in the service of the City on the basis of…sexual orientation....” This Ordinance is consistent with, and in furtherance of, that policy statement. Various local governments, institutions of higher education, private companies and the State of Colorado have adopted similar law or policy addressing this issue and offering employment benefits to same gender domestic partners. Many of those employers are considered to be at a competitive advantage over those employers who do not offer such benefits as they are able to offer a more comprehensive benefits package. As a result, and to remain a competitive employer in the market, it is important for the City to offer same gender domestic partner benefits to its employees. Sections 1, 2, 3 and 4 of the Ordinance relate to matter being added to the Code related to various employment benefits. However, many employment benefits available to City employees are not codified and are contained in a collective bargaining agreement (e.g., health insurance benefits). In order to ensure that equal benefits of this type are available to same gender couples, Section 6 of the Ordinance directs and authorizes the City Manager to ensure that benefits made available to an employee and a spouse are extended to an employee and a spousal equivalent through the collective bargaining process. Please refer to the attached fact sheet for additional information. FINANCIAL IMPACT: The precise financial impact is unknown. There will be no negative rate impact on the City’s health insurance plans if coverage for same gender domestic partner is added. The City’s broker has researched the potential total cost impact to the City and feels that it would be minimal, but largely dependent upon demographics. Research demonstrates that the majority of employers experience a total health benefits cost increase of less than one percent, with an average of one percent of employees electing coverage. One percent of the City of Pueblo’s current health enrollment equates to 7.11 employees. Rounding that number up to eight employees and using the most predictive cost model reflects a total annual health benefits cost of $54,058.56. FACT SHEET FOR SAME GENDER DOMESTIC PARTNER BENEFITS AN ORDINANCE AMENDING CHAPTERS 3 AND 6 OF TITLE VI OF THE PUEBLO MUNICIPAL CODE RELATING TO EMPLOYMENT BENEFITS FOR SAME GENDER DOMESTIC PARTNERS WHY? The proposed Ordinance amending Title VI of the City’s Municipal Code by providing for equal employment benefits (e.g., sick leave, funeral leave, maternity or paternity leave, family and medical leave, and health insurance benefits) to employees with same gender domestic partners is not a new idea. Indeed, Section 6-1-7 of the Pueblo Municipal Code specifies that “[n]o…employee shall be discriminated against or denied equal employment opportunity in the service of the City on the basis of…sexual orientation….” This Ordinance is consistent with, and in furtherance of, that policy statement – a policy statement of many employers. While addressing the changing needs of society and in an effort to treat all persons fairly and equally, many local governments and private companies have already adopted similar law or policy addressing this issue and offering employment benefits to same gender domestic partners. Examples of entities offering same gender domestic partner benefits include:  State of Colorado Bank of America  City and County of Denver Wells Fargo  City of Boulder Ford  Chevron Coors  Barnes and Noble WHAT IS A SAME GENDER DOMESTIC PARTNER OR SPOUSAL EQUIVALENT? The Ordinance specifically defines same gender domestic partner and spousal equivalent, requiring an employee alleging such to submit an affidavit to the City which states: 1. Employee and partner are adults and the same gender; 2. They are in an exclusive committed relationship sharing basic living expenses with intent for the relationship to last indefinitely; 3. They are not related by blood to a degree which would prevent marriage in Colorado; and 4. The employee or the partner are not married to another person. The above elements are similar to those elements needed to establish “common law” marriage; however, same-gender domestic partners can not legally marry in Colorado. IMPLEMENTATION As a practical matter, the scope of many employment benefits for City employees is currently determined by virtue of collective bargaining agreement. The Ordinance directs and authorizes the City Manager to take actions necessary to implement and ensure that benefits made available to an employee and a spouse are extended to an employee and a spousal equivalent through the collective bargaining process. Specifically in the context of health insurance benefits, the City and collective bargaining units have formed a collaborative consultation committee for the purposes of discussing bid specifications and plan structures. The City solicits bids based upon that process. The “Benefits Committee” unanimously supports implementation. COST Overall Rates – Through discussions with insurance benefits providers, it has been determined that there will be no negative rate impact on the City’s health insurance plans if coverage for same gender domestic partner is added. The 9% renewal rate provided by United Healthcare for 2013 included extending coverage to same gender domestic partners. There was a zero percent impact on the renewal given the potential extension of coverage to this new population. This is supported by a 2000 Hewitt Associates survey that confirmed coverage for domestic partners is no more expensive than coverage for spouses or other dependents. Overall Impact on Benefits Cost to City – The City’s broker, HUB, was asked about the impact on the overall cost to the City in providing to additional insureds; their answer is that the cost impact to the plan will be minimal. Coverage for same gender domestic partners increases the number of insured individuals enrolled in the health insurance plan, but that coverage is no more expensive, utilization of the plan benefits is not greater than for other individuals and enrollment may be relatively low depending on actual demographics. A 2005 Hewitt Associates study found that the majority of employers — 64 percent — experience a total financial impact of less than 1 percent of total benefits cost, 88 percent experience financial impacts of 2 percent or less and only 5 percent experience financial impacts of 3 percent or greater of total benefits cost. Health Coverage Tax to Employee – Because same gender domestic partners are not usually “dependents” or “spouses” as defined in Tax Code, employees are taxed on the “fair market value” of domestic partner health coverage. For a fully-insured plan, that means the premiums relating to that domestic partner; for a self-funded plan, that means the premium equivalency for that coverage (basically the COBRA rate minus 2% as calculated based on expected claims). The Coverage must be reported on Form W-2. Because of the Tax Code’s definition of “spouse” and “dependent,” domestic partners rarely qualify and therefore cannot usually be covered under Cafeteria Plan, HSA or HRA. For example, Internal Revenue Service Ruling 2006-36 indicates that the possibility of HRA reimbursement for expenses for a non-dependent can affect the whole HRA and make all reimbursements taxable.