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Home My WebLink AboutAgenda Packet 120908 r �e78 CITY OF A TA SCA DERO CITY COUNCIL AGENDA Tuesday, December 9, 2008 City Hall Council Chambers 6907 EI Camino Real, Atascadero, California Redevelopment Agency 6.00 P M City Council Regular Session Immediately following the conclusion of the Redevelopment Agency meeting REDEVELOPMENT AGENCY 6 00 P M REGULAR SESSION Immediately following the conclusion of the Redevelopment Agency meeting PLEDGE OF ALLEGIANCE Council Member Clay ROLL CALL. Mayor Brennler Mayor Pro Tem Beraud Council Member Clay Council Member Luna 1%W Council Mayor O'Malley 1 APPROVAL OF AGENDA. Roll Call A. CONSENT CALENDAR (All items on the consent calendar are considered to be routine and non-controversial by City staff and will be approved by one motion if no member of the Council or public wishes to comment or ask questions If comment or discussion is desired by anyone, the item will be removed from the consent calendar and will be considered in the listed sequence with an opportunity for any member of the public to address the Council concerning the item before action is taken DRAFT MINUTES Council meeting draft minutes are listed on the Consent Calendar for approval of the minutes Should anyone wish to request an amendment to draft minutes, the item will be removed from the Consent Calendar and their suggestion will be considered by the City Council If anyone desires to express their opinion concerning issues included in draft minutes, they should share their opinion during the Community Forum portion of the meeting ) 1 City Council Draft Minutes — October 28, 2008 ■ Recommendation. Council approve the City Council Meeting Minutes of October 28, 2008 [City Clerk] 2. Reciting the Fact of the General Municipal Election Held on November 4, Iw o 2008 ■ Fiscal Impact: None ■ Recommendation Council adopt the Draft Resolution, reciting the fact of the General Municipal Election held on November 4, 2008, declaring the result and such other matters as provided by law [City Clerk] OATHS OF OFFICE. 1 Administration of Oaths of Office — Newly-elected Council Members Jerry Clay, Roberta Fonzi and Bob Kelley will be sworn in by City Clerk Marcia Torgerson. CITY COUNCIL REORGANIZATION 1 Council Appointment of Mayor — The City Clerk will accept nominations from the Council Members. 2. Council Appointment of Mayor Pro Tem — The new Mayor will accept nominations from the Council Members. 2 PRESENTATION 1 Presentation to Outgoing Council Members Mike Brennler and George Luna RECESS The new Mayor will call a recess for the City Council reception, followed by reconvening of the Redevelopment Agency RECONVENE The new Mayor will reconvene the City Council at the conclusion of the Redevelopment Agency meeting PRESENTATION 1 Bob Wilkins - Veterans Memorial A. CONSENT CALENDAR (continued) 3. City Council 2009 Meeting Schedule ■ Fiscal Impact: None ■ Recommendation. Council approve City Council meeting schedule for 2009 [City Manager] 4. Temporary Road Closure and Tow-Away Zone— Atascadero Main Street Winter Wonderland ■ Fiscal Impact: None • Recommendation. Council approve the attached draft Resolution authorizing tow away zones for Winter Wonderland [Public Works] 5 Adoption of a Section 125 Flexible Benefits Plan for Employees ■ Fiscal Impact: Plan costs will vary based on the number of participants and will be paid for by the employees who participate Plan costs are estimated to be $4,400 per year with the cost per employee being approximately $100 annually There may be savings to the city on Medicare and other payroll taxes ■ Recommendation. Council adopt the attached Draft Resolution adopting a flexible benefits plan for employees [City Manager] COMMUNITY FORUM (This portion of the meeting is reserved for persons wanting to address the Council on any matter not on this agenda and over which the Council has jurisdiction Speakers are limited to three minutes. Please state your name for the record before making your presentation The Council may take action to direct the staff 3 to place a matter of business on a future agenda. A maximum of 30 minutes will be allowed for Community Forum, unless changed by the Council ) ;, ow B. HEARINGS None. C MANAGEMENT REPORTS 1 Regional Water Quality Control Board (RWQCB) - Storm Water Management Plan Update ■ Fiscal Impact: The long term fiscal impact is unknown at this time but could be significant. Staff has secured Wallace Group for $21,500 to assist in the preparation of a compliant SWMP ■ Recommendation. Council approve the proposed timeline for submittal of a Storm Water Management Plan (SWMP) to the Central Coast Regional Water Quality Control Board (RWQCB) [Public Works] COUNCIL ANNOUNCEMENTS AND REPORTS (On their own initiative, Council Members may make a brief announcement or a brief report on their own activities Council Members may ask a question for clarification, make a referral to staff or take action to have staff place a matter of business on a future agenda. The Council may take action on items listed on the Agenda.) * ' 1 Announcement of Commission Appointments D COMMITTEE REPORTS (The newly elected Mayor will be assigning committee members to the following committees) Air Pollution Control District (APCD) Atascadero State Hospital Advisory Board (appointed by the Governor) Atascadero Youth Task Force City/ Schools Committee (2) County Mayors Round Table Economic Vitality Corporation, Board of Directors (EVC) Finance Committee (2) Integrated Waste Management Authority (IWMA) League of California Cities — Council Liaison League of California Cities — CITIPAC Board Member (appointed by League of CA Cities) Local Agency Formation Commissions (LAFCO) (appointed by City Selection Committee) S L.O Council of Governments (SLOCOG) S L.O Regional Transit Authority (SLORTA) 4 E. INDIVIDUAL DETERMINATION AND/ OR ACTION 1 City Council 2 City Clerk 3 City Treasurer 4 City Attorney 5 City Manager F ADJOURNMENT Please note: Should anyone challenge any proposed development entitlement listed on this Agenda in court, that person may be limited to raising those issues addressed at the public hearing described in this notice or in written correspondence delivered to the City Council at or prior to this public hearing. Correspondence submitted at this public hearing will be distributed to the Council and available for review in the City Clerk's office. I, Victoria Randall, Deputy City Clerk of the City of Atascadero, declare under the penalty of perjury that the foregoing agenda for the December 9, 2008 Regular Session of the Atascadero City Council was posted on December 2, 2008 at the Atascadero City Hall, 6907 EI Camino Real, Atascadero, CA 93422 and was available for public review in the Customer Service Center at that location Signed this 2nd day of December, 2008 at Atascadero, California. 1 4W Victoria Randall, Deputy City Clerk City of Atascadero fir+` 5 City of Atascadero WELCOME TO THE ATASCA DERO CITY COUNCIL MEETING IWO The City Council meets in regular session on the second and fourth Tuesday of each month at 6:00 p.m unless there is a Community Redevelopment Agency meeting commencing at 6.00 p.m in which event the Council meeting will commence immediately following the conclusion of the Community Redevelopment Agency meeting. Council meetings will be held at the City Hall Council Chambers, 6907 EI Camino Real, Atascadero Matters are considered by the Council in the order of the printed Agenda. Copies of the staff reports or other documentation relating to each item of business referred to on the Agenda are on file in the office of the City Clerk and are available for public inspection during City Hall business hours at the Front Counter of City Hall, 6907 EI Camino Real, Atascadero, and on our website, www.atascadero.org An agenda packet is also available for public review at the Atascadero Library, 6850 Morro Road. Contracts, Resolutions and Ordinances will be allocated a number once they are approved by the City Council. The minutes of this meeting will reflect these numbers All documents submitted by the public during Council meetings that are either read into the record or referred to in their statement will be noted in the minutes and available for review in the City Clerk's office Council meetings are video taped and audio recorded, and may be reviewed by the public. Copies of meeting recordings are available for a fee. Contact the City Clerk for more information (470-3400) In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a City meeting or other services offered by this City, please contact the City Manager's Office or the City Clerk's Office, both at (805) 470-3400 Notification at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service TO SPEAK ON AGENDA ITEMS(from Title 2, Chapter 1 of the Atascadero Municipal Code) Members of the audience may speak on any item on the agenda. The Mayor will identify the subject, staff will give their report, and the Council will ask questions of staff The Mayor will announce when the public comment period is open and will request anyone interested to address the Council regarding the matter being considered to step up to the lectern If you wish to speak for, against or comment in any way- 1 ay1 You must approach the lectern and be recognized by the Mayor 2. Give your name and address (not required) 3. Make your statement 4 All comments should be made to the Mayor and Council 5 No person shall be permitted to make slanderous, profane or negative personal remarks concerning any other individual, absent or present 6. All comments limited to 3 minutes 7 No one may speak for a second time until everyone wishing to speak has had an opportunity to do so, and no one may speak more than twice on any item If you wish to use a computer presentation to support your comments, you must notify the City Clerk's office at least 24 hours prior to the meeting Digital presentations brought to the meeting on a USB drive or CD is preferred. Access to hook up your laptop to the City's projector can also be provided. You are required to submit to the City Clerk a printed copy of your presentation for the record. Please check in with the City Clerk before the meeting begins to announce your presence and turn in the printed copy The Mayor will announce when the public comment period is closed, and thereafter, no further public comments will be heard by the Council TO SPEAK ON SUBJECTS NOT LISTED ON THE AGENDA Under Agenda item, "COMMUNITY FORUM", the Mayor will call for anyone from the audience having business with the Council to • Please approach the lectern and be recognized • Give your name and address (not required) • State the nature of your business This is the time items not on the Agenda may be brought to the Council's attention. A maximum of 30 minutes will be allowed for Community Forum (unless changed by the Council) 6 ITEM NUMBER A-1 DATE. 12/09/08 a qFl ,f: p CITY OF ATASCADERO `'9'� r r 1 979 CITY COUNCIL DRAFT MINUTES Tuesday, October 28, 2008 CITY COUNCIL REGULAR SESSION- Mayor Brennler called the meeting to order at 6 12 p m and led the Pledge of Allegiance ROLL CALL. Present: Council Members Clay, Luna, O'Malley, Mayor Pro Tem Beraud and Mayor Brennler Absent: None Others Present: City Clerk / Assistant to the City Manager Marcia McClure Torgerson, and Deputy City Clerk Susanne Anshen Staff Present: Assistant City Manager Jim Lewis, City Attorney Brian Pierik, Community Development Director Warren Frace, Administrative Services Director Rachelle Rickard, and Police Chief Jim Mulhall APPROVAL OF AGENDA. MOTION By Council Member Luna and seconded by Mayor Pro Tem Beraud to approve the agenda. Motion passed 5.0 on a roll-call vote. CC Draft Minutes 10/28/08 Page 1 of 13 7 CONSENT CALENDAR 1 City Council Draft Minutes — September 9, 2008 ■ Recommendation. Council approve the City Council Special Meeting Minutes of September 9, 2008 [City Clerk] 2. City Council Draft Minutes — September 23, 2008 ■ Recommendation. Council approve the City Council Meeting Minutes of September 23, 2008 [City Clerk] 3. Qualified Firms List - Engineering Services ■ Fiscal Impact: The costs of Engineering Services are billed directly to the capital project accounts ■ Recommendation. Council authorize the City Manager to enter into ongoing contracts for contract engineering services with firms on the "General Engineering Services Qualified Firms List." [Public Works] 4 Consideration of Request from the Atascadero Main Street (AMS) - Permission to Install Brackets and Banners in the Downtown ■ Fiscal Impact: None ■ Recommendations. Council 1 Approve the request from Atascadero Main Street (AMS) to grant them permission to install brackets and banners on the streetlight poles in the Downtown in the locations designated on the attached map, and, 2. Direct staff to have the Community Redevelopment Agency of Atascadero pay the required fee for the Administrative Use Permit. [City Manager] 5. Temporary Road Closure— Atascadero Main Street - Winter Wonderland • Fiscal Impact: $220 00 for the installation of Road Closed signs by Public Works Staff ■ Recommendation. Council approve a request by Atascadero Main Street for road closures for Winter Wonderland on December 12, 2008 [Public Works] Item No. A-4 was pulled from the Consent Calendar by Council Member O'Malley for discussion. MOTION By Council Member Luna seconded by Council Member Clay to approve Items A-1 through A-3, and Item A-5 of the Consent Calendar Motion passes 5.0 on a roll-call vote. CC Draft Minutes 10/28/08 Page 2 of 13 8 Item #A-4 Council Member O'Malley suggested we amend the recommendation to include all streets not covered under the Chamber of Commerce contract within the Main Street district at Main Street's discretion, so, if in the future, they have additional funding, they will be able to expand the banner program Steve Martin, Executive Director of the Atascadero Main Street, indicated his agreement with Council Member O'Malley's amendment providing them the ability to complete the additional streets within the district when they have additional funding without having to return to the City Council for approval City Clerk / Assistant City Manager Marcia McClure Torgerson answered questions of the City Council and assured the City Council that Main Street is solely funding this project. PUBLIC COMMENT None MOTION By Council Member O'Malley and seconded by Mayor Pro Tem Beraud to (1) Approve the request from Atascadero Main Street (AMS) to grant them permission to install brackets and banners on the streetlight poles to include all streets not covered under 1%W the Chamber of Commerce contract within the Main Street district at Main Street's discretion, and (2) Direct staff to have the Community Redevelopment Agency of Atascadero pay the required fee for the Administrative Use Permit. Motion passes 5:0 on a roll-call vote. COMMUNITY FORUM Joan O'Keefe spoke on the depositions in the Gaughn v City of Atascadero matter, and her continued difficulty in obtaining all the information she has been requesting Ms O'Keefe expressed her concern with the way this matter was handled by the City Steve Martin spoke on the joint efforts of the Redevelopment Agency and Main Street as well as Main Street's long term goals Jim Shannon asked why the City purchased the property on Highway 41 and Cemetery Road, what has the campaign finance reform cost the City; and has the City budgeted for the trail program CC Draft Minutes 10/28/08 Page 3 of 13 9 George Schroff spoke of looking forward to the election, the defeat of Measure D-08, the forthcoming EIR report on Walmart, and recognized Mayor Brennler and Council Member George Luna for their service to the City Frank Henderson spoke on the current City policy on storm water drainage, the excessive requirements to a person who only wants to add 10 feet to a bedroom on an existing home, and why there are no exceptions to the policy when the same requirements are not applied to WalMart or Rite Aid Joanne Main, Atascadero Chamber of Commerce, spoke about an anonymous letter sent to businesses displaying No on Measure D-08 signs and threatening never to shop with these stores again, and denounced the letters as an abomination The Chamber is sponsoring a healing breakfast after the election on Thursday, November 6, 2008, at 7 30 a.m , at Hoovers for only $10 featuring positive interactions for the future David Broadwater stated his concerns with the Chamber of Commerce reports received by the City and submitted his report on the matter He wants the City to require the Chamber to fulfill their obligations listed in their agreement with the City, including disclosing their expenditures (Exhibit A) Jolene Horn, read from an email from Michael Buckman, an environmental scientist in Sacramento, stating that a workshop is set for Wednesday, November 12, 2008, at 5 30 p m on the Basin Plan and how it will impact properties with septic systems (Exhibit B) Tino Santos spoke on the possible confusion between Proposition 8 and Measure D-08, and his belief Measure D-08 is unnecessary for Atascadero as the Fire Department and Police Department need to be funded by the money WalMart will bring into Atascadero Lee Perkins addressed a complaint from the Chamber on anonymous letters sent to businesses and expressed the Yes on D-08 Committee condemns anonymous letters Lee Perkins also stated her concern over the removal of Yes on D-08 signs, which is illegal and morally wrong On Colony Square, Lee Perkins asked if the permit has been picked up yet, and if City management is attempting to get a nice restaurant next to the new hotel at the south end of town Tom Comar, spokesperson for Yes on Measure D-08, stated the Tribune's support against Measure D-08 is not surprising, but as the Tribune admitted, Measure D-08 does not prevent a WalMart from opening, as the Measure allows a regular store or a SAM's Club store, and welcomes stores under 150,000 square feet. Steve LaSalle thanked Mike Brennler and George Luna for their public service Nora Trinacosta thanked Mike Brennler and George Luna for their service, spoke on the confusion on Measure D-08, stated the Associated Press has completed a study of many grocery chains testing smaller stores, and explained Measure D-08 does not CC Draft Minutes 10/28/08 Page 4 of 13 10 prevent WalMart in Atascadero and does not mean a grocery store cannot locate on the north side of town Mayor Brennler closed the Public Comment Period. Mayor Brennler acknowledged Joan O'Keefe's difficulty in obtaining documents from the City, and stated that he intends to release his report on his investigation into the City's handling of employee Marty Tracey, by end of week. Mayor Brennler discussed the purpose of purchasing the property at Highway 41 and Cemetery Road, which he indicated has been addressed, but asked Mr Shannon to give him a call to discuss it if he would like As for Mr Shannon's concern on the cost of the campaign finance reform, he suggested Mr Shannon call the City Clerk/Assistant to the City Manager, Marcia McClure Torgerson for more details on that cost. Mayor Brennler addressed Mr Henderson's issue of a lack of flexibility on our policies for the storm water management issue Community Development Director Warren Frace indicated he would meet with Mr Henderson to see if there is something that can be worked out on this individual project. Council Member George Luna stated Mr Henderson's accusation that the council is not impacted is completely false, and they are often subject to greater scrutiny and when the Council passes a law, they are also subject to that law �Mrr' Council Member O'Malley stated he feels Joan O'Keefe's questions have been asked and answered and the personnel issue had been resolved and the community needs to move on He addressed Mr Shannon's question on the piece of land (Highway 41 and Cemetery Road) which is just a piece of open space, and he, too, wants to know what has been spent on campaign finance, and the cost for the trail maintenance Mayor Brennler addressed Lee Perkins' questions on Colony Square, and Community Development Director Warren Frace stated the permit has not been picked up and staff is working with the architect on revisions Mayor Brennler asked about her questions on a restaurant next to the Holiday Inn Express, and Assistant City Manager Jim Lewis stated they are activity working with the developer for a restaurant at that location Mayor Pro Tem Beraud commented that Ms Horn stated the workshop is a rally against the Water Board, however it is meant to offer education and asked staff to clarify Assistant City Manager Jim Lewis stated the purpose of meeting is to share the City's proposal and provide the public with a chance to comment. Community Development Director Warren Frace stated the MOU between the Board and the City will specifically tailor some of the Basin Plan requirements that will be applied locally Council Member Clay stated in regard to the workshop on the Basin Plan, there is nothing wrong with public input. In regard to missing political signs, everyone is missing some, and it is just the political season Council Member Clay stated there seems to be CC Draft Minutes 10/28/08 Page 5 of 13 11 conflicting information on both sides of Measure D-08, and he supports the concept of a Super WalMart at Del Rio Road Council Member O'Malley stated his proposal for WalMart was to study three alternative projects so that the impact on our community could be studied B PUBLIC HEARINGS None C MANAGEMENT REPORTS 1 Central Coast Regional Water Quality Control Board Stormwater Management Plan (SWMP) Update ■ Fiscal Impact: None ■ Recommendation. Council receive and file this report [Public Works] Community Development Director Warren Frace gave the staff report and answered questions of the City Council Members and presented a timeline for revising the plan City Attorney Brian Pierik quoted from his report to the Council on p 81 indicating there is legal exposure for not having a storm water management plan in place PUBLIC COMMENT John Hollenbeck stated he lives next to Graves Creek and spoke about the requirements of the Regional Water Quality Control Board's buffer zone which may infringe on his ability to develop his property He expressed his concern with the RWQCB's need to impose these four additional requirements on Atascadero Mr Hollenback urged the adoption of options (A) and (B) Frank Henderson stated there has been no discussion on what square footage exemption would be established by the Council, and he is asking Council to establish the number, such as 499 square feet, because no school fees are due on that limit. Pam Heatherington, candidate for City Council, thanked staff for getting the letter off to RWQCB, and for the Council to remember the RWQCB is asking for participation We need to go along a path of education bringing the RWQCB to the table for dialogue Suzie Anderson stated she contacted Lompoc regarding their appeal They said their Council and staff were unanimous in opposing these requirements, and she urged the community to be included before taking a vote Jolene Horn made reference to creek setbacks, now called buffer zones, and questioned if there will be public education workshops insofar as we have no problem CC Draft Minutes 10/28/08 Page 6of13 12 with storm water in Atascadero Jolene Horn stated she does not want over-regulation ''' and does not want to give up property rights John Shadack spoke on setbacks and asked the Council to fight this like other cities are attempting Jim Shannon asked the Council to fight the RWQCB and protect our property rights Mr Shannon also stated a member of the Planning Commission also served on ECOSLO, and questions that conflict. Mayor Brennler closed the Public Comment Period. Council Member Luna stated the RWQCB members are appointed by the Governor, and you would need to contact the Governor and ask the two vacancies be filled and suggest people for the positions. Mayor Pro Tem Beraud referenced a personal attack that she does not support education, and stated Suzie Anderson's attempt to recall her did not work so it should be over As for the creek setbacks, she stated there are problems with our surface water, and because the RWQCB is now suggesting creek setbacks, staff and Council were on the right track when they proposed the first Setback Ordinance Mayor Pro Tem Beraud stated that, unfortunately, some property owners do not always take care of their properties, and their impacts on our environment affect the rest of us Council Member Clay favors joining other communities to fight these requirements, and we need to not penalize everyone along the creek for the few that are not being responsible Council Member Clay agrees with staff's recommendation and the plan for public input. Mayor Brennler asked staff about identifying exemptions, and Community Development Director Warren Frace indicated staff would be looking into exemptions for the NPDES requirements, however, Mr Henderson is referring to workshops on storm drainage runoff, and there is probably going to be an update on those standards There was consensus of the City Council to receive and file the report. Mayor Brennler recessed the hearing at 8.57 p.m. Mayor Brennler called the meeting back to order at 9.14 p.m. CC Draft Minutes 10/28/08 Page 7 of 13 13 2. Campaign Ordinance (Continued from 10/14/08 Council Meeting) ■ Fiscal Impact: The fiscal impact of the adoption of this Ordinance will be the staff time involved in the implementation of the Ordinance and the Candidate Statement fees the City will have to cover The staff time will include processing of Declaration of Candidacy Statements, calculation of expenditure limit each election season, public noticing requirements, press releases, postings on the website and processing of additional Late Contribution Reports The Candidate Statement fees will be approximately $250 00 per candidate ■ Action. If Council desires to adopt this campaign ordinance Council introduce for first reading by title only the Draft Ordinance amending the Atascadero Municipal Code by adding Chapter 19 to Title 2, adopting an ordinance to be known as "Atascadero Campaign Ordinance [City Attorney] City Attorney Brian Pierik gave the staff report. City Attorney Brian Pierik and City Clerk / Assistant to the City Manager Marcia McClure Torgerson answered questions of the City Council Members PUBLIC COMMENTS Len Colamarino stated he is a candidate for City Council and asked about the possibility of an elected Mayor in the future, but the ordinance does not make reference to an elected Mayor, only City Council Members Brian Sturtevant stated the State of California has limits and regulations that are already in place and he does not see the necessity for this ordinance Pam Heatherington congratulated the Council for having the voluntary campaign contribution limits, and would rather see the contribution limit at $100 Jim Shannon feels this should be passed because it does not make a difference as he goes by what the candidates say David Broadwater stated he has read the staff report and ordinance and supports the matter Lee Perkins stated the ordinance is reasonable and urged the Council's adoption Karyn Sturtevant stated she does not think campaign finance reform levels the playing field because it depends what your constituents do for a living, and if your supporters are available to work on your campaign during the day this would be an in-kind contribution, but if your supporters are business people, they may only be able to contribute a check. CC Draft Minutes 10/28/08 Page 8 of 13 14 Nora Trinicosta applauded this effort, but feels it does not go far enough stating transparencies in campaigns and government are not an unnecessary extravagance as some voters do require information on candidates' backgrounds and financial obligations to make their decisions Tino Santos stated this is ridiculous as he does not give money but volunteers for candidates he likes, and he feels it is voluntary and would be socialistic to restrict what someone can spend on their campaign Tom Comar stated he believes the ordinance is a great compromise from where we started, and volunteer or in-kind contributions are not political contributions under the law Mayor Brennler closed the Public Comment Period. Council Member Clay stated he is philosophically against this and because business people are unable to contribute their time, they provide their support with monetary contributions, and it requires a certain amount of money to get your message across Mayor Pro Tem Beraud stated she has heard comments that this is a rushed ordinance, however, after serving on the Campaign Reform Committee it was identified that the Council needed to build public trust and this ordinance is a step in that direction Council Member Luna stated there are misconceptions that candidates cannot accept cash and this particular ordinance does not cap contributions or campaign spending unless you ascribe to the voluntary spending limit of $12,000 Council Member Luna indicated that he would rather see potential candidates collect 300 signatures, rather than the ordinance's requirement of only 20 Council Member Clay asked if you do not sign the voluntary contribution limit, you would pay your own $250 qualification fee, and City Attorney Brian Pierik confirmed that you would Council Member Clay further stated he feels the number of 300 signatures is too many Mayor Pro Tem Beraud said the 300 signatures should be something discussed in the future, and we should not have more than what the State requires at this point because it will deter people from running for office Council Member O'Malley stated although we have made progress on campaign reform, he is against the Council not working through to a consensus rather than pushing this through with a majority On the question of an elected Mayor, the issue was discussed before and the Council was against the idea. Mayor Brennler asked City Attorney Brian Pierik if an elected Mayor would be covered by this ordinance City Attorney Brian Pierik stated the Mayor is an elected member of the City Council and this ordinance would cover that position CC Draft Minutes 10/28/08 Page 9 of 13 15 Council Member Luna withdrew his suggestion about 300 signatures Mayor Pro Tem Beraud stated that as we further our efforts on campaign reform, some of Council Member O'Malley's concerns will be addressed on PAC issues and campaign expenditures MOTION By Mayor Pro Tem Beraud and seconded by Council Member Luna to introduce for first reading by title only the draft Ordinance amending the Atascadero Municipal Code by adding Chapter 19 to Title 2, to be known as "Atascadero Campaign Ordinance." Motion passes 3.2 on a roll-call vote. (Council Members Clay and O'Malley opposed.) 3. Human Services Grants ■ Description Approval of the distribution of $20,000 in grant funds to assist local service providers that have a profound impact on the community ■ Fiscal Impact: The program is budgeted at $20,000 ■ Recommendation. Council approve Human Services Grants to the Agencies and in the amounts recommended by the Finance Committee in Attachment A. [City Manager] Administrative Services Director Rachelle Rickard gave the staff report and answered questions of the City Council PUBLIC COMMENT Susan Warren, staff member with North County Connection, thanked the Council for including North County Connection for a grant to assist with producing their calendar There services are free, anonymous and confidential and they serve over 800 people a month She thanked the Council for considering their program Pearl Munak, with Transitional Food and Shelter, Inc , stated they are an all-volunteer agency in their tenth year They assist the largest contingent of people in the County, providing disabled homeless with apartments because it is cheaper than hotels This grant would assist in their ability to continue providing services Linda McGreggor, 211 SLO Hotline, stated they receive 12,000 calls a year, but after 211 was implemented their calls went up 57% She also said that over the last two months, their calls are up 100 percent. Ms McGreggor stated that they depend upon local funds and take the burden off the 911 process, and hopefully Council will consider them for CDBG funding CC Draft Minutes 10/28/08 Page 10 of 13 16 Mayor Brennler closed the Public Comment Period. `'wrrr° MOTION By Mayor Pro Tem Beraud seconded by Council Member O'Malley approve Human Resources Grants to the Agencies and in the amounts recommended by the Finance Committee in Attachment A. Motion passes 5 0 on a roll-call vote. Mayor Brennler recessed the hearing at 9.20 p.m. Mayor Brennler called the meeting back to order at 9 32 p.m 4. Proposed Urgency Ordinance and A Regular Ordinance Pertaining to Summary Nuisance Abatement Procedures ■ Fiscal Impact: The ordinance would allow the City to recover its costs in the event summary abatement is necessary to address an imminent threat to public safety The exact fiscal impact cannot be determined in advance of a particular summary abatement action ■ Recommendations. Council 1) Adopt the Draft Urgency Ordinance amending Section 9-8 107 of Title 9, Chapter 8 of the Atascadero Municipal code pertaining to summary nuisance abatement procedures VOW AND 2) Introduce for first reading by title only, the Draft Ordinance amending Section 9-8 107 of title 9, Chapter 8 of the Atascadero Municipal Code pertaining to summary nuisance abatement procedures [City Attorney) City Attorney Brian Pierik gave the staff report and answered questions of the City Council Members PUBLIC COMMENT None Council Member O'Malley suggested the City make contact through other means which could be added to the recommendation City Attorney Brian Pierik indicated this could be added to the ordinance or the Council could just give direction to staff; however, it is fairly common to notice by mail and it is the City's incentive not to spend money when they do not have to, and the City's attempts would be documented Assistant City Manager Jim Lewis said because this is a small community, every effort is made to notify residents and indicated the Fire Department uses reasonable notification in emergency circumstances CC Draft Minutes 10/28/08 Page 11 of 13 17 City Attorney Brian Pierik suggested he could add where it states in Section J, "to give notice by U S Mail" and add "and, if reasonable under the circumstances, serve personal notice upon the property owner of the public nuisance " Discussion was held about absentee owners, whether on vacation or absentee landlord or vacancies PUBLIC COMMENT None MOTION By Council Member Clay and seconded by Council Member O'Malley to (1) Adopt the Draft Urgency Ordinance amending Section 9- 8.107 of Title 9, Chapter 8 of the Atascadero Municipal Code pertaining to summary nuisance abatement procedures, and (2) Introduce for first reading by title only, the Draft Ordinance amending Section 9-8.107 of Title 9, Chapter 8 of the Atascadero Municipal Code pertaining to summary nuisance abatement procedures; and (3) To add to both ordinances, where it states in Section J, "to give written notice by U.S. Mail" and add "and, if reasonable under the circumstances, serve personal notice upon the property owner of the public nuisance." (Urgency Ordinance No 535) Motion passes 5-0 on a roll-call vote. 5. Affordable Housing Funds Policy— PLN 2007-1266 (City of Atascadero) ■ Fiscal Impact: None ■ Recommendation. Council adopt the Draft Resolution, approving the City of Atascadero Affordable Housing Funds Policy with attached Affordable Housing Participation Checklist. [Community Development] Community Development Director Warren Frace gave the staff report and answered questions of the City Council Assistant City Manager Jim Lewis provided information on pending litigation on redevelopment funds to the state Administrative Services Director Rachelle Rickard answered questions of the Council PUBLIC COMMENT None MOTION By Council Member O'Malley and seconded by Council Member Clay to adopt the Draft Resolution, approving the City of Atascadero Affordable Housing Funds Policy with attached Affordable Housing Participation Checklist. Motion passes 5.0 on a roll-call vote. (Resolution 2008-062) Iwo CC Draft Minutes 10/28/08 Page 12 of 13 18 MOTION By Council Member Clay seconded by Council Member Luna to adjourn the meeting City Clerk / Assistant City Manager Marcia McClure Torgerson asked if the Council could appoint two members of the Council to interview an applicant for the Youth Rep for the Parks and Recreation Commission Mayor Brennler called for a vote for the motion on the floor MOTION By Council Member Clay seconded by Council Member Luna to adjourn the meeting. Motion passes 3:2 on a roll-call vote. (Beraud and Brennler opposed.) ADJOURNMENT The meeting was adjourned at 10 15 p m to the next regularly scheduled meeting of the City Council MINUTES PREPARED BY Susanne Curtis Anshen, Deputy City Clerk The following exhibits are available for review in the City Clerk's office. Exhibit A - Report from David Broadwater on all the financial reports filed with the City by the Atascadero Chamber of Commerce. Exhibit B—Copy of an email from Michael Buckman, an environmental scientist in Sacramento, stating the Basin Plan Amendment will not be heard in November 2008. CC Draft Minutes 10/28/08 Page 13 of 13 19 ITEM NUMBER A-2 DATE. 12/09/08 50 s e A��i Atascadero City Council Marcia McClure Torgerson, City Clerk Reciting the Fact of the General Municipal Election Held on November 4, 2008 RECOMMENDATION Council adopt the Draft Resolution, reciting the fact of the General Municipal Election held on November 4, 2008, declaring the result and such other matters as provided by law DISCUSSION The General Municipal Election was held on November 4, 2008 California Elections Code §10262 states that the City Council shall meet to declare the results of the election upon certification of results by the County Election Department. The California Elections Code §10262 & 10264 also states that the Council shall adopt a resolution reciting the fact of the election, including a statement of the results Total voter registration for the City of Atascadero was 16,815, which is 594 more than the total voter registration for the year 2006 Traditionally, national election years result in a higher voter registration count. Atascadero voters were asked to vote for three Council Members, and Ballot Measure D-08 The final official results are attached to this report. FISCAL IMPACT None ATTACHMENTS Final Official Results Draft Resolution, with County Clerk Certificate of Results 21 ■ City of At Office of the City Clerk FINAL OFFICIAL ELECTION RESULTS (as of November 25, 2008) NAME VOTES % of VOTES ATASCADERO CITY COUNCIL City Council - Four Year Term — 3 seats Roberta Fonzi 8221 2619% Jerry L. Clay, Sr 7317 23.29% Bob Kelley 5689 18 11% Len Colamanno 3939 1254% Pamela Heatherington 3763 1198% Bret Heinemann 2290 729% Write-in Votes 189 060% BALLOT MEASURE D-08 Shall the ordinance prohibiting commercial establishments in excess of 150,000 square feet of gross floor area and retail discount stores in excess of 90,000 square feet with at least 5% of gross floor area dedicated to non- taxable goods such as groceries be adopted? No 9281 6788% Yes 4392 3212% THIS IS THE UNOFFICIAL TOTAL COUNT ALL ABSENTEE BALLOTS HAVE NOT BEEN COUNTED SAN LUIS OBISPO COUNTY CLERK-RECORDER WILL CERTIFY THE RESULTS IN THE NEXT FEW WEEKS AND THE NEW OFFICIALS WILL BE SWORN IN AT THE CITY COUNCIL MEETING ON DECEMBER 9, 2008. 22 DRAFT RESOLUTION A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ATASCADERO, CALIFORNIA RECITING THE FACT OF THE GENERAL MUNICIPAL ELECTION HELD ON NOVEMBER 4, 2008, DECLARING THE RESULT AND SUCH OTHER MATTERS AS PROVIDED BY LAW WHEREAS, a General Municipal Election was held and conducted in the City of Atascadero, California, on Tuesday,November 4, 2008, as required by law, and WHEREAS, notice of the election was given in time, form and manner as provided by law; that voting precincts were properly established, that election officers were appointed and that in all respects the election was held and conducted and the votes were cast, received and canvassed and the returns made and declared in time, form and manner as required by the provisions of the Elections Code of the State of California for the holding of elections in general law cities, and WHEREAS, pursuant to Resolution No 2008-050 adopted June 24, 2008, the County Election Department canvassed the returns of the election and has certified the results to this City Council, the results are received, attached and made a part hereof as "Exhibit A." NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ATASCADERO, CALIFORNIA,DOES RESOLVE,DECLARE, DETERMINE AND ORDER AS FOLLOWS SECTION I That the whole number of ballots cast in the precincts except vote by mail voter ballots and provisional ballots was 6624. That the whole number of vote by mail voter ballots cast in the City was 7582, making a total of 14,206 ballots cast in the City SECTION 2. That the names of persons voted for at the election for Member of the City Council are as follows Roberta Fonzi, Jerry L. Clay, Sr, Bob Kelley, Len Colamanno, Pamela Heatherington, and Bret Heinemann. SECTION 3 That the number of votes given at each precinct and the number of votes given in the City to each of the persons above named for the respective offices for which the persons were candidates and for and against the measure were as listed in Exhibit"A" attached. SECTION 4 The City Council does declare and determine that: Roberta Fonzi was elected as Member of the City Council for the full term of four years, Jerry L. Clay, Sr, was elected as Member of the City Council for the full term of four years, and Bob Kelley was elected as Member of the City Council for the full term of four years. 23 City of Atascadero Draft Resolution Page 2 SECTION 5 The City Clerk shall enter on the records of the City Council of the City, a statement of the result of the election, showing- (1)The whole number of ballots cast in the City; "wo (2) The names of the persons voted for; (3) For what office each person was voted for; (4) The number of votes given at each precinct to each person, (5) The total number of votes given to each person. SECTION 6 That the City Clerk shall immediately make and deliver to each of the persons so elected a Certificate of Election signed by the City Clerk and authenticated, that the City Clerk shall also administer to each person elected the Oath of Office prescribed in the Constitution of the State of California and shall have them subscribe to it and file it in the office of the City Clerk. Each and all of the persons so elected shall then be inducted into the respective office to which they have been elected. SECTION 7 That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. On Motion by Council Member and seconded by Council Member the foregoing Resolution was adopted on the following roll-call vote AYES NOES tiwr ABSENT ADOPTED December 9, 2008 CITY OF ATASCADERO- ATTEST Mike Brennler, Mayor Marcia McClure Torgerson, C.M.0 , City Clerk APPROVED AS TO FORM. Bnan A.Pierik,City Attorney 1400 24 CERTIFICATE OF THE COUNTY CLERK RESULTS OF CANVASS OF ALL VOTES CAST NOVEMBER 4, 2008 CONSOLIDATED GENERAL ELECTION CITY OF ATASCADERO I, JULIE L. RODEWALD, County Clerk-Recorder of the County of San Luis Obispo, do hereby certify that pursuant to law I did canvass the returns of the votes cast at the above referenced election in the City of Atascadero on November 4, 2008, and that a photocopy of the Statement of Votes Cast to which this certificate is attached, shows the number of votes cast in said city for each candidate for the office of Member of the City Council and that the totals shown for each candidate for the office of Member of the City Council in said city and in each of the respective precincts therein, are full, true and correct. WITNESS, my hand and Official Seal this 25th day of November, 2008 JULIE L. 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RODEWALD, County Clerk-Recorder of the County of San Luis Obispo, do hereby certify that pursuant to law I did canvass the returns of the votes cast at the above referenced election in the City of Atascadero on November 4, 2008, and that the Statement of Votes Cast, to which this certificate is attached, shows the number of votes cast in said city for and against said measure, and that the totals shown for and against said measure in said city, and in each of the respective precincts therein, are full, true and correct. MEASURE D-08 Shall the ordinance prohibiting commercial establishments in excess of 150,000 square feet of gross floor area and retail discount stores in excess of 90,000 square feet with at least 5% of gross floor area dedicated to non-taxable goods such groceries be adopted? WITNESS, my hand and Official Seal, this 25th day of November, 2�0G§13; x: JULIE . 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C7 rUr�^ W U H> Vl N710 b r M"T[- 0.V V1 NOS V O1M V'O+M G, ^ 00 lD C' 01 V M M M\D 11)00 V '7 Vl O V'1.-• In r- Vl h I W C V 01 M R 00 Y V O M V 00 c}C, —o o M MIn M Mb M M10MM z So 10 r, M SO r-M lD r N Q w' 1, > wwo 0 a O w F —tom oo M Vl o0 000 Oth�O �a1 V NCO 7N lO [t N to V'N 50 C N N o0 0 N o0 0 N co 0 N o0 0 N o0 M V1 00 d' r O, 10 \O Vl N 'o V1 zU � F 0 w U L O w O U ^ M M ^M _ 00 00 00 00 00 00 00 00 00 00 00 00 00 00 � ^ SD SDb bbOb 1010 SD SD bSD SD OO ? .-. �. .- ... �i r U U q � .a F.. z Q o a V Id o Id rd oZ *apebCq,p r a C oCo,p bCOy O O�A� M� W Oqp W.p o�z _ o o � o l9 or - 0:��= " ? 5 — � :3 59 W i .0 15 C 0 0 0 0 0 0 0 0 0 0 0 0 o 0 o Q o 0 0—o 0 o F x o 0 c >F:a > Fcna > Fva>Fv w>H oa >r C7Na >r oa >F ¢tea >H oa > �n vi �n vi F U 37 O N � N �N �^ rj N_ N N N Q E G" "_ F 0 0 0 0 0 0 0 o e o 0 0 0 0 o a o 0 o e o 0 0 0 00 M M Op M M 00 M M 00 M M 00 MM OO M M 00 M M w M M 00 00 �D 00 00 �D 00 00 1p 00 W �D 00 00 �D W OO �D 00 00 iD CO W �D 00 00 r vias Ch r- -C,r noir —a,r -rnr oo cN ^ N ^^N ^N ^^N N ^^N ^ N ^^N t V1 O� t F z w o 0 0 0 0 0 0 0 0 0 0 0 o e o 0 0 0 0 o a o 0 0 t O N V O N t O N V O N V O N t O N t O N 1 0 10 Q M M M M M M M M M M M M M M M M M M M M M M M M M ~� F N t 00 N t 00 N 1 C0 N t 00 N 1 00 N t 00 N V o 0 N t 00 N O� oo O O� oo O m 00 O Ol ao O m 07 O m oo O M o4 O m 00 O m N M �+N M ^N M ^N M ^N M ^N M _N M U .a t N N t N N t N N t N N t N N t N N t N N'IT N N t Q z v� w Cl O O O O O O O O O O O O O O O O O O O O O O U U u W uv^ �wc0 a z > N cc3 W � z � U � O � > o O Ho> O,N 1010 M �O 10 M �p�D M 10 10 M �O IO OW W r CO C �n N N �n N N�n N N�/1 N N�/1 N N�n N N � ZQW o oa r^ H> V1 M t ODM t D,M t D\M 1 TM t ODM V T M tTM t O�M M P 10 M M�p M M 1p M�D M 1p M M\p M M 10 10 r M \O r M M�O r M 10 M r rl y O O W F tN = 710 C) tN0 V NCO V NCD tN�D tNC) tNCO O O 10000 N 000 NooO N 000 N 000 N 000 10 10 0 En 1 N b r-N 'D r-N 'D r-N ID r-N �D rn N \D r-N �o r-N 'D r N � t 15 \0 r- 'D r- .Drt art 'Drt \0 r- �Drt port DO H Q c oU � o U �° v �� v v v U 00 ��00 �� .0 -WW ww� -WW a A O F F" U N W z� z� F o 0 rA o 14 w Q N w a ao ¢ af/� b00.D OCDD waa OCp� CD a C� C� w DCD� [° > ° aD>E° ¢tea>F oa° C, >ED WHnD>F° oa°>FD C6� F U U F 38 ITEM NUMBER A-3 DATE. 12/09/08 A 191& 19 ATA`�r�w�►/ . Atascadero City Council Staff Report - City Manager's Office City Council 2009 Meeting Schedule RECOMMENDATION Council approve City Council meeting schedule for 2009 DISCUSSION. The City Council, pursuant to Chapter 2, Section 1 01 of the Atascadero Municipal Code, meets the second and fourth Tuesday of each month On occasion, the Council will hold special study sessions and/or joint meetings with one or both of the Commissions on a fifth Tuesday Generally, in the summer months, the Council meets once a month and avoids conflicts with major holidays Staff has prepared the attached schedule for the year 2009 to help in the coordination of these meetings with personal schedules FISCAL IMPACT None ATTACHMENT City Council 2009 Meeting Schedule 39 ITEM NUMBER A-3 DATE. 12/09/08 Claty of At Office of the City Clerk Atascadero City Council 2009 Meeting Schedule MEETING DATE TYPE OF MEETING January 13 Regular January 27 Re ular February 10 Regular February 24 Regula March 10 Regular March 24 Re ular April 14 Regular April 28 Re ular May 12 Regular May 26 Re ular June 9 Regular June 23 Regular July 14 Regular August 11 Regular September 8 Regular September 22 Regular October 13 Regular October 27 Re ular November 10 Regular November 24 Regular December 8 Regular Meetings are held at 6:00 p.m. or at the conclusion of the Redevelopment Agency meeting, whichever comes last. 6907 El Camino Real, Atascadero, CA 93422 470-3400 40 ITEM NUMBER A-4 DATE. 12/09/08 Isis I e �A cm Atascadero City Council Staff Report - Public Works Department Temporary Road Closure and Tow-Away Zone Atascadero Main Street Winter Wonderland RECOMMENDATION Council approve the attached draft Resolution authorizing tow away zones for Winter Wonderland DISCUSSION At their meeting of October 28, 2008, Council approved the road closures required for the annual Winter Wonderland celebration The Atascadero Police Department has requested the authority to tow vehicles which may remain in the activity area. The attached Resolution is required pursuant to the California Vehicle Code FISCAL IMPACT None ATTACHMENTS A. Road Closure Map B Draft Resolution 41 ITEM NUMBER A-4 DATE. 12/09/08 ATTACHMENT A kz ♦ J ♦ Road Closure Request December 12, 2008 Winter Wonderland Atascadero Main Street Entrada Avenue Palma — Traffic Way to West Mall West Mall to East Mall 1200pm tol03Opm East Mall — ECR to Lewis Avenue West Mall — ECR to Lewis Avenue 330pm to103Opm 42 DRAFT RESOLUTION vrrw A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ATASCADER09 CALIFORNIA CLOSING CERTAIN STREETS AND ESTABLISHING TEMPORARY TOW-AWAY ZONES FOR WINTER WONDERLAND 2008 BE IT RESOLVED by the City Council of the City of Atascadero that the following streets will be closed at the times indicated and that tow-away zones will be established during the hours of closure for the annual Winter Wonderland celebration. December 12, 2008 from 12:00 p.m. to 10:30 p.m. Entrada Avenue from El Camino Real to Lewis Avenue Palma Avenue from Traffic Way to West Mall Palma Avenue from West Mall to East Mall December 12, 2008 from 3.30 p.m. to 10:30 p.m. East Mall from El Camino Real to Lewis Avenue West Mall from El Camino Real to Lewis Avenue On Motion by Council Member and seconded by Council Member the foregoing Resolution was adopted on the following roll-call vote. AYES NOES ABSENT ADOPTED December 9, 2008 CITY OF ATASCADERO ATTEST , Mayor Marcia McClure Torgerson, C.M.0 , City Clerk APPROVED AS TO FORM. Brian A. Pierik,City Attorney 43 ITEM NUMBER: A-5 DATE. 12-09-08 r n n n n, 1913 Atascadero City Council Staff Report — City Manager's Office Adoption of a Section 125 Flexible Benefits Plan for Employees RECOMMENDATION Council adopt the attached Draft Resolution adopting a flexible benefits plan for employees DISCUSSION Background In September, as part of the City's periodic review of contract services, the City released an RFP for brokerage services for the City's health benefits plan One of the major reasons for the review was to reduce health care costs, broker commissions, and review the programs currently being offered to employees to ensure employee programs were competitive and cost effective One plan the new broker is recommending and that the employees have requested is a Section 125 Flexible Benefits Plan Such plans are common in public and private agencies Internal Revenue Code Section 125 is an IRS approved way for employers and their employees to change and personalize their benefits while controlling plan costs In other words, employees can use pre-tax dollars to pay for certain benefits such as medical related expenses, prescription drugs and dependent care, thus reducing their taxable income and tax liability Without new money being involved, in essence, an employer is able to update benefits, improve employee morale and, in most cases, reduce worker's compensation and other payroll tax contributions Employees establish their contribution level to the plan at the beginning of each year The amount of contribution is decided by the employee but cannot exceed $3,500 per calendar year The contributions may cover related medical expenses, dependent care and the costs of administering the plan The plan is administered by a third party and has a minimal impact on staff 45 Staff is requesting the Council adopt the Draft Resolution to enact Dependent Care Flexible Spending Account and a Health Flexible Spending Account effective January 1, 2009 FISCAL IMPACT Plan costs will vary based on the number of participants and will be paid for by the employees who participate. Plan costs are estimated to be $4,400 per year with the cost per employee being approximately $100 annually There may be savings to the city on Medicare and other payroll taxes ALTERNATIVES Do not adopt the flexible benefits plan ATTACHMENTS Draft Resolution 46 DRAFT RESOLUTION A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ATASCADERO ADOPTING FLEXIBLE SPENDING ACCOUNTS FOR EMPLOYEES WHO RECEIVE BENEFITS The City of Atascadero (Employer) hereby resolves SECTION 1., That the form of Cafeteria Plan including a Depended Care Flexible Spending Account and Health Flexible Spending Account effective January 1, 2009, presented to this meeting is hereby approved and adopted and that the duly authorized agents of the Employer are hereby authorized and directed to execute and deliver to the Administrator of the Plan one or more counterparts of the Plan. SECTION 2., That the Administrator shall be instructed to take such actions that are deemed necessary and proper in order to implement the Plan, and to set up adequate accounting and administrative procedures to provide benefits under the Plan. SECTION 3 , That the duly authorized agents of the Employer shall act as soon as possible to notify the employees of the Employer of the adoption of the Cafeteria Plan by delivering to each employee a copy of the summary description of the Plan in the form of the Summary Plan Description presented to this meeting, which form is hereby approved. SECTION 4 , That the undersigned further certifies that attached hereto as Exhibits A and B, respectively, are true copies of the City of Atascadero Flexible Benefits Plan and the Summary Plan Description approved and adopted in the foregoing resolutions. On motion by Council Member and seconded by Council Member the foregoing Resolution is hereby adopted in its entirety by the following roll call vote AYES NOES ABSENT ADOPTED CITY OF ATASCADERO By- Mayor 47 ATTEST Marcia McClure Torgerson, C.M.0 , City Clerk APPROVED AS TO FORM. Brian Pierik, City Attorney 48 Exhibit A err CITY OF ATASCADERO FLEXIBLE BENEFITS PLAN AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED FOR CITY OF ATASCADERO Copyright 2008 SunGard All Rights Reserved 49 CITY OF ATASCADERO FLEXIBLE BENEFITS PLANT 50 TABLE OF CONTENTS ARTICLE I DEFINITIONS ARTICLE II PARTICIPATION 21 ELIGIBILITY 3 22 EFFECTIVE DATE OF PARTICIPATION 3 23 APPLICATION TO PARTICIPATE 3 24 TERMINATION OF PARTICIPATION 4 25 TERMINATION OF EMPLOYMENT 4 2.6 DEATH 4 ARTICLE III CONTRIBUTIONS TO THE PLAN 3 1 SALARY REDIRECTION 5 32 APPLICATION OF CONTRIBUTIONS 5 33 PERIODIC CONTRIBUTIONS 5 ARTICLE IV BENEFITS 41 BENEFIT OPTIONS 6 4.2 HEALTH FLEXIBLE SPENDING ACCOUNT BENEFIT 6 43 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT BENEFIT 6 44 HEALTH INSURANCE BENEFIT 6 45 DENTAL INSURANCE BENEFIT 7 46 GROUP-TERM LIFE INSURANCE BENEFIT 7 47 VISION INSURANCE BENEFIT 7 48 PRESCRIPTION DRUG COVERAGE BENEFIT 7 49 NONDISCRIMINATION REQUIREMENTS 8 ARTICLE V PARTICIPANT ELECTIONS 51 INITIAL ELECTIONS 9 5.2 SUBSEQUENT ANNUAL ELECTIONS 9 53 FAILURE TO ELECT 9 *4w 54 CHANGE IN STATUS 9 51 ARTICLE VI HEALTH FLEXIBLE SPENDING ACCOUNT 6 1 ESTABLISHMENT OF PLAN 13 6.2 DEFINITIONS 13 63 FORFEITURES 14 64 LIMITATION ON ALLOCATIONS 14 65 NONDISCRIMINATION REQUIREMENTS 14 66 COORDINATION WITH CAFETERIA PLAN 14 67 HEALTH FLEXIBLE SPENDING ACCOUNT CLAIMS 15 68 DEBIT AND CREDIT CARDS 16 ARTICLE VII DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT 71 ESTABLISHMENT OF ACCOUNT 17 7.2 DEFINITIONS 17 73 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS 19 74 INCREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS 19 75 DECREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS 19 76 ALLOWABLE DEPENDENT CARE REIMBURSEMENT 19 77 ANNUAL STATEMENT OF BENEFITS 19 78 FORFEITURES 19 79 LIMITATION ON PAYMENTS 19 7 10 NONDISCRIMINATION REQUIREMENTS 19 711 COORDINATION WITH CAFETERIA PLAN 20 7 12 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT CLAIMS 20 ARTICLE VIII BENEFITS AND RIGHTS 8 1 CLAIM FOR BENEFITS 21 8.2 APPLICATION OF BENEFIT PLAN SURPLUS 23 ARTICLE IX ADMINISTRATION 9 1 PLAN ADMINISTRATION 23 9.2 EXAMINATION OF RECORDS 24 93 PAYMENT OF EXPENSES 24 94 INSURANCE CONTROL CLAUSE 24 „ + 95 INDEMNIFICATION OF ADMINISTRATOR 24 52 ARTICLE X AMENDMENT OR TERMINATION OF PLAN �wrs 101 AMENDMENT 24 10.2 TERMINATION 25 ARTICLE XI MISCELLANEOUS 11 1 PLAN INTERPRETATION 25 11.2 GENDER AND NUMBER 25 11.3 WRITTEN DOCUMENT 25 114 EXCLUSIVE BENEFIT 25 11.5 PARTICIPANT'S RIGHTS 25 116 ACTION BY THE EMPLOYER 26 117 EMPLOYER'S PROTECTIVE CLAUSES 26 11.8 NO GUARANTEE OF TAX CONSEQUENCES 26 119 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS 26 1110 FUNDING 26 11 11 GOVERNING LAW 27 1112 SEVERABILITY 27 vakw 1113 CAPTIONS 27 1114 CONTINUATION OF COVERAGE (COBRA) 27 1115 FAMILY AND MEDICAL LEAVE ACT (FMLA). 27 1116 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT(HIPAA) 27 1117 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) 27 1118 COMPLIANCE WITH HIPAA PRIVACY STANDARDS 27 1119 COMPLIANCE WITH HIPAA ELECTRONIC SECURITY STANDARDS 29 'mow 53 CITY OF ATASCADERO FLEXIBLE BENEFITS PLAN INTRODUCTION Novo, The Employer has adopted this Plan effective January 1, 2009, to recognize the contribution made to the Employer by its Employees. Its purpose is to reward them by providing benefits for those Employees who shall qualify hereunder and their Dependents and beneficiaries The concept of this Plan is to allow Employees to choose among different types of benefits based on their own particular goals, desires and needs The Plan shall be known as City of Atascadero Flexible Benefits Plan (the"Plan") The intention of the Employer is that the Plan qualify as a "Cafeteria Plan"within the meaning of Section 125 of the Internal Revenue Code of 1986, as amended, and that the benefits which an Employee elects to receive under the Plan be excludable from the Employee's income under Section 125(a) and other applicable sections of the Internal Revenue Code of 1986, as amended ARTICLE I DEFINITIONS 1 1 "Administrator" means the individual(s) or corporation appointed by the Employer to carry out the administration of the Plan The Employer shall be empowered to appoint and remove the Administrator from time to time as it deems necessary for the proper administration of the Plan In the event the Administrator has not been appointed, or resigns from a prior appointment, the Employer shall be deemed to be the Administrator 1.2 "Affiliated Employer" means the Employer and any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b))which includes the Employer; any trade or business (whether or not incorporated)which is under common control (as defined in Code Section 414(c))with the Employer; any organization (whether or not incorporated)which is a member of an affiliated service group (as defined in Code Section 414(m))which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Treasury regulations under Code Section 414(0) 1 3 'Benefit" or"Benefit Options" means any of the optional benefit choices available to a Participant as outlined in Section 4 1 14 "Cafeteria Plan Benefit Dollars" means the amount available to Participants to purchase Benefit Options as provided under Section 4 1 Each dollar contributed to this Plan shall be converted into one Cafeteria Plan Benefit Dollar 1.5 "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time 1 6 "Compensation" means the amounts received by the Participant from the Employer during a Plan Year 1 7 "Dependent" means any individual who qualifies as a dependent under an Insurance Contract for purposes of that Contract or under Code Section 152 (as modified by Code Section 105(b)) 1 8 "Effective Date" means January 1, 2009 1 54 1 9 "Election Period" means the period immediately preceding the beginning of each Plan Year established by the Administrator, such period to be applied on a uniform and nondiscriminatory basis for all Employees and Participants However, an Employee's initial Election Period shall be determined pursuant to Section 5 1 1 10 "Eligible Employee" means any Employee who has satisfied the provisions of Section 2 1 An individual shall not be an "Eligible Employee" if such individual is not reported on the payroll records of the Employer as a common law employee In particular, it is expressly intended that individuals not treated as common law employees by the Employer on its payroll records are not "Eligible Employees" and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. 1 11 "Employee" means any person who is employed by the Employer The term Employee shall include leased employees within the meaning of Code Section 414(n)(2). 1 12 "Employer" means City of Atascadero and any successor which shall maintain this Plan, and any predecessor which has maintained this Plan In addition, where appropriate, the term Employer shall include any Participating, Affiliated or Adopting Employer 1 13 "Grace Period" means, with respect to any Plan Year, the time period ending on the fifteenth day of the third calendar month after the end of such Plan Year, during which Medical Expenses and Employment-Related Dependent Care Expenses incurred by a Participant will be deemed to have been incurred during such Plan Year 1 14 "Insurance Contract" means any contract issued by an Insurer underwriting a Benefit. 1 15 "Insurance Premium Payment Plan" means the plan of benefits contained in Section 4 1 of this Plan, which provides for the payment of Premium Expenses 1 16 "Insurer" means any insurance company that underwrites a Benefit under this Plan 1 17 "Key Employee" means an Employee described in Code Section 416(1)(1)and the Treasury regulations thereunder 1 18 "Participant" means any Eligible Employee who elects to become a Participant pursuant to Section 2.3 and has not for any reason become ineligible to participate further in the Plan 1 19 "Plan" means this instrument, including all amendments thereto 1.20 "Plan Year" means the 12-month period beginning January 1 and ending December 31 The Plan Year shall be the coverage period for the Benefits provided for under this Plan. In the event a Participant commences participation during a Plan Year, then the initial coverage period shall be that portion of the Plan Year commencing on such Participant's date of entry and ending on the last day of such Plan Year 1.21 "Premium Expenses" or"Premiums" mean the Participant's cost for the Benefits described in Section 4 1 2 55 1 22 "Premium Expense Reimbursement Account" means the account established for a Participant pursuant to this Plan to which part of his Cafeteria Plan Benefit Dollars may be allocated and from which Premiums of the Participant shall be paid or reimbursed If more than '+ one type of insured Benefit is elected, sub-accounts shall be established for each type of insured Benefit. 1.23 "Salary Redirection" means the contributions made by the Employer on behalf of Participants pursuant to Section 3 1 These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the Participants' elections made under Article V 1.24 "Salary Redirection Agreement" means an agreement between the Participant and the Employer under which the Participant agrees to reduce his Compensation or to forego all or part of the increases in such Compensation and to have such amounts contributed by the Employer to the Plan on the Participant's behalf The Salary Redirection Agreement shall apply only to Compensation that has not been actually or constructively received by the Participant as of the date of the agreement (after taking this Plan and Code Section 125 into account)and, subsequently does not become currently available to the Participant. 1.25 "Spouse" means "spouse"as defined in an Insurance Contract for purposes of that Contract or the legally married husband or wife of a Participant, unless legally separated by court decree ARTICLE II PARTICIPATION 2.1 ELIGIBILITY Any Eligible Employee shall be eligible to participate hereunder as of the date he satisfies the eligibility conditions for the Employer's group medical plan, the provisions of which are specifically incorporated herein by reference 2.2 EFFECTIVE DATE OF PARTICIPATION An Eligible Employee shall become a Participant effective as of the first day of the month coinciding with or next following the date on which he met the eligibility requirements of Section 2.1 2.3 APPLICATION TO PARTICIPATE An Employee who is eligible to participate in this Plan shall, during the applicable Election Period, complete an application to participate and election of benefits form which the Administrator shall furnish to the Employee The election made on such form shall be irrevocable until the end of the applicable Plan Year unless the Participant is entitled to change his Benefit elections pursuant to Section 5 4 hereof An Eligible Employee shall also be required to execute a Salary Redirection Agreement during the Election Period for the Plan Year during which he wishes to participate in this Plan Any such Salary Redirection Agreement shall be effective for the first pay period beginning on or after the Employee's effective date of participation pursuant to Section 2.2 Notwithstanding the foregoing, an Employee who is eligible to participate in this Iwo Plan and who is covered by the Employer's insured Benefits under this Plan shall automatically 3 56 become a Participant to the extent of the Premiums for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan 2.4 TERMINATION OF PARTICIPATION A Participant shall no longer participate in this Plan upon the occurrence of any of the following events (a) Termination of employment. The Participant's termination of employment, subject to the provisions of Section 2 5, (b) Death. The Participant's death, subject to the provisions of Section 2 6, or (c) Termination of the plan.The termination of this Plan, subject to the provisions of Section 10.2 2.5 TERMINATION OF EMPLOYMENT If a Participant's employment with the Employer is terminated for any reason other than death, his participation in the Benefit Options provided under Section 4 1 shall be governed in accordance with the following (a) Insurance Benefit.With regard to Benefits which are insured, the Participant's participation in the Plan shall cease, subject to the Participant's right to continue coverage under any Insurance Contract for which premiums have already been paid (b) Dependent Care FSA.With regard to the Dependent Care Flexible Spending Account, the Participant's participation in the Plan shall cease and no further Salary Redirection contributions shall be made However, such Participant may submit claims for employment related Dependent Care Expense reimbursements for claims incurred through the remainder of the Plan Year in which such termination occurs and submitted within 90 days after the end of the Plan Year, based on the level of the Participant's Dependent Care Flexible Spending Account as of the date of termination (c) COBRA applicability With regard to the Health Flexible Spending Account, the Participant may submit claims for expenses that were incurred during the portion of the Plan Year before the end of the period for which payments to the Health Flexible Spending Account have already been made Thereafter, the health benefits under this Plan including the Health Flexible Spending Account shall be applied and administered consistent with such further rights a Participant and his Dependents may be entitled to pursuant to Code Section 4980B and Section 11 14 of the Plan 2.6 DEATH If a Participant dies, his participation in the Plan shall cease However, such Participant's spouse or Dependents may submit claims for expenses or benefits for the remainder of the Plan Year or until the Cafeteria Plan Benefit Dollars allocated to each specific benefit are exhausted. In no event may reimbursements be paid to someone who is not a spouse or Dependent. If the Plan is subject to the provisions of Code Section 4980B, then those provisions and related regulations shall apply for purposes of the Health Flexible Spending Account. 4 57 ARTICLE III CONTRIBUTIONS TO THE PLAN 31 SALARY REDIRECTION Benefits under the Plan shall be financed by Salary Redirections sufficient to support Benefits that a Participant has elected hereunder and to pay the Participant's Premium Expenses The salary administration program of the Employer shall be revised to allow each Participant to agree to reduce his pay during a Plan Year by an amount determined necessary to purchase the elected Benefit Options. The amount of such Salary Redirection shall be specified in the Salary Redirection Agreement and shall be applicable for a Plan Year Notwithstanding the above, for new Participants, the Salary Redirection Agreement shall only be applicable from the first day of the pay period following the Employee's entry date up to and including the last day of the Plan Year These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the Participants'elections made under Article V Any Salary Redirection shall be determined prior to the beginning of a Plan Year (subject to initial elections pursuant to Section 5 1)and prior to the end of the Election Period and shall be irrevocable for such Plan Year However, a Participant may revoke a Benefit election or a Salary Redirection Agreement after the Plan Year has commenced and make a new election with respect to the remainder of the Plan Year, if both the revocation and the new election are on account of and consistent with a change in status and such other permitted events as determined under Article V of the Plan and consistent with the rules and regulations of the Department of the Treasury Salary Redirection amounts shall be contributed on a pro rata basis for each pay period during the Plan Year All individual Salary Redirection ,, Agreements are deemed to be part of this Plan and incorporated by reference hereunder 3.2 APPLICATION OF CONTRIBUTIONS As soon as reasonably practical after each payroll period, the Employer shall apply the Salary Redirection to provide the Benefits elected by the affected Participants. Any contribution made or withheld for the Health Flexible Spending Account or Dependent Care Flexible Spending Account shall be credited to such fund or account. Amounts designated for the Participant's Premium Expense Reimbursement Account shall likewise be credited to such account for the purpose of paying Premium Expenses. 3.3 PERIODIC CONTRIBUTIONS Notwithstanding the requirement provided above and in other Articles of this Plan that Salary Redirections be contributed to the Plan by the Employer on behalf of an Employee on a level and pro rata basis for each payroll period, the Employer and Administrator may implement a procedure in which Salary Redirections are contributed throughout the Plan Year on a periodic basis that is not pro rata for each payroll period However, with regard to the Health Flexible Spending Account, the payment schedule for the required contributions may not be based on the rate or amount of reimbursements during the Plan Year 5 58 ARTICLE IV BENEFITS 41 BENEFIT OPTIONS Each Participant may elect any one or more of the following optional Benefits. (1) Health Flexible Spending Account (2) Dependent Care Flexible Spending Account In addition, each Participant shall have a sufficient portion of his Salary Redirections applied to the following Benefits unless the Participant elects not to receive such Benefits. (3) Health Insurance Benefit (4) Dental Insurance Benefit (5) Group-Term Life Insurance Benefit (6) Vision Insurance Benefit (7) Prescription Drug Coverage Benefit 4.2 HEALTH FLEXIBLE SPENDING ACCOUNT BENEFIT Each Participant may elect to participate in the Health Flexible Spending Account option, in which case Article VI shall apply 4.3 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT BENEFIT Each Participant may elect to participate in the Dependent Care Flexible Spending Account option, in which case Article VII shall apply 44 HEALTH INSURANCE BENEFIT (a) Coverage for Participant and Dependents. Each Participant may elect to be covered under a health Insurance Contract for the Participant, his or her Spouse, and his or her Dependents. (b) Employer selects contracts. The Employer may select suitable health Insurance Contracts for use in providing this health insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit. (c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such health Insurance Contract shall be determined therefrom, and such Insurance Contract shall be incorporated herein by reference 6 59 4.5 DENTAL INSURANCE BENEFIT (a) Coverage for Participant and/or Dependents. Each Participant may elect to be covered under the Employer's dental Insurance Contract. In addition, the Participant may elect either individual or family coverage under such Insurance Contract. (b) Employer selects contracts. The Employer may select suitable dental Insurance Contracts for use in providing this dental insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit. (c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such dental Insurance Contract shall be determined therefrom, and such dental Insurance Contract shall be incorporated herein by reference 4.6 GROUP-TERM LIFE INSURANCE BENEFIT (a) Coverage for Participant only Each Participant may elect to be covered under the Employer's group-term life Insurance Contract. (b) Employer selects contracts. The Employer may select suitable group-term life Insurance Contracts for use in providing this group-term life insurance benefit, which policies will provide benefits for all Participants electing this Benefit on a uniform basis. (c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such group-term life Insurance Contract shall be determined therefrom, and such group-term life Insurance Contract shall be incorporated herein by reference 47 VISION INSURANCE BENEFIT (a) Coverage for Participant and/or Dependents. Each Participant may elect to be covered under the Employer's vision Insurance Contract. In addition, the Participant may elect either individual or family coverage (b) Employer selects contracts. The Employer may select suitable vision Insurance Contracts for use in providing this vision insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit. (c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such vision Insurance Contract shall be determined therefrom, and such vision Insurance Contract shall be incorporated herein by reference 48 PRESCRIPTION DRUG COVERAGE BENEFIT (a) Coverage for Participant and/or Dependents. Each Participant may elect to be covered under the Employer's Prescription Drug Coverage Contract. 7 60 (b) Employer selects contracts. The Employer may select suitable prescription drug coverage for use in providing this benefit, including, but not limited to, if applicable, by-mail services and prescription drug cards, which will provide uniform benefits for all Participants electing this Benefit. (c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such prescription drug coverage contract shall be determined therefrom, and such Contract shall be incorporated herein by reference 49 NONDISCRIMINATION REQUIREMENTS (a) Intent to be nondiscriminatory It is the intent of this Plan to provide benefits to a classification of employees which the Secretary of the Treasury finds not to be discriminatory in favor of the group in whose favor discrimination may not occur under Code Section 125 (b) 25% concentration test. It is the intent of this Plan not to provide qualified benefits as defined under Code Section 125 to Key Employees in amounts that exceed 25% of the aggregate of such Benefits provided for all Eligible Employees under the Plan For purposes of the preceding sentence, qualified benefits shall not include benefits which (without regard to this paragraph) are includible in gross income (c) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination or possible taxation to Key Employees or a group of employees in whose favor discrimination may not occur in violation of Code Section 125, it may, but shall not be required to, reduce contributions or non-taxable Benefits in order to assure compliance with this Section Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner If the Administrator decides to reduce contributions or non-taxable Benefits, it shall be done in the following manner First, the non-taxable Benefits of the affected Participant (either an employee who is highly compensated or a Key Employee, whichever is applicable)who has the highest amount of non-taxable Benefits for the Plan Year shall have his non-taxable Benefits reduced until the discrimination tests set forth in this Section are satisfied or until the amount of his non-taxable Benefits equals the non-taxable Benefits of the affected Participant who has the second highest amount of non-taxable Benefits This process shall continue until the nondiscrimination tests set forth in this Section are satisfied With respect to any affected Participant who has had Benefits reduced pursuant to this Section, the reduction shall be made proportionately among Health Flexible Spending Account Benefits and Dependent Care Flexible Spending Account Benefits, and once all these Benefits are expended, proportionately among insured Benefits. Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited and deposited into the benefit plan surplus. 8 61 ARTICLE V PARTICIPANT ELECTIONS 5.1 INITIAL ELECTIONS An Employee who meets the eligibility requirements of Section 2 1 on the first day of, or during, a Plan Year may elect to participate in this Plan for all or the remainder of such Plan Year, provided he elects to do so on or before his effective date of participation pursuant to Section 2.2 Notwithstanding the foregoing, an Employee who is eligible to participate in this Plan and who is covered by the Employer's insured benefits under this Plan shall automatically become a Participant to the extent of the Premiums for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan 5.2 SUBSEQUENT ANNUAL ELECTIONS During the Election Period prior to each subsequent Plan Year, each Participant shall be given the opportunity to elect, on an election of benefits form to be provided by the Administrator, which spending account Benefit options he wishes to select. Any such election shall be effective for any Benefit expenses incurred during the Plan Year which follows the end of the Election Period With regard to subsequent annual elections, the following options shall apply, (a) A Participant or Employee who failed to initially elect to participate may elect different or new Benefits under the Plan during the Election Period, (b) A Participant may terminate his participation in the Plan by notifying the Administrator in writing during the Election Period that he does not want to participate in the Plan for the next Plan Year; (c) An Employee who elects not to participate for the Plan Year following the Election Period will have to wait until the next Election Period before again electing to participate in the Plan except as provided for in Section 5 4 5.3 FAILURE TO ELECT With regard to Benefits available under the Plan for which no Premium Expenses apply, any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by the end of the applicable Election Period shall be deemed to have elected not to participate in the Plan for the upcoming Plan Year No further Salary Redirections shall therefore be authorized or made for the subsequent Plan Year for such Benefits With regard to Benefits available under the Plan for which Premium Expenses apply, any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by the end of the applicable Election Period shall be deemed to have made the same Benefit elections as are then in effect for the current Plan Year The Participant shall also be deemed to have elected Salary Redirection in an amount necessary to purchase such Benefit options 5.4 CHANGE IN STATUS (a) Change in status defined. Any Participant may change a Benefit election after the Plan Year(to which such election relates) has commenced and make new elections with respect to the remainder of such Plan Year if, under the facts and circumstances, the changes are necessitated by and are consistent with 9 62 a change in status which is acceptable under rules and regulations adopted by the Department of the Treasury, the provisions of which are incorporated by reference Notwithstanding anything herein to the contrary, if the rules and regulations conflict, then such rules and regulations shall control. In general, a change in election is not consistent if the change in status is the Participant's divorce, annulment or legal separation from a Spouse, the death of a Spouse or Dependent, or a Dependent ceasing to satisfy the eligibility requirements for coverage, and the Participant's election under the Plan is to cancel accident or health insurance coverage for any individual other than the one involved in such event. In addition, if the Participant, Spouse or Dependent gains or loses eligibility for coverage, then a Participant's election under the Plan to cease or decrease coverage for that individual under the Plan corresponds with that change in status only if coverage for that individual becomes applicable or is increased under the family member plan Regardless of the consistency requirement, if the individual, the individual's Spouse, or Dependent becomes eligible for continuation coverage under the Employer's group health plan as provided in Code Section 4980B or any similar state law, then the individual may eiect to increase payments under this Plan in order to pay for the continuation coverage However, this does not apply for COBRA eligibility due to divorce, annulment or legal separation Any new election shall be effective at such time as the Administrator shall prescribe, but not earlier than the first pay period beginning after the election form is completed and returned to the Administrator For the purposes of this subsection, a change in status shall only include the following events or other events permitted by Treasury regulations. (1) Legal Marital Status events that change a Participant's legal marital status, including marriage, divorce, death of a Spouse, legal separation or annulment; (2) Number of Dependents Events that change a Participant's number of Dependents, including birth, adoption, placement for adoption, or death of a Dependent; (3) Employment Status.Any of the following events that change the employment status of the Participant, Spouse,or Dependent: termination or commencement of employment, a strike or lockout, commencement or return from an unpaid leave of absence, or a change in worksite In addition, if the eligibility conditions of this Plan or other employee benefit plan of the Employer of the Participant, Spouse, or Dependent depend on the employment status of that individual and there is a change in that individual's employment status with the consequence that the individual becomes(or ceases to be)eligible under the plan,then that change constitutes a change in employment under this subsection, (4) Dependent satisfies or ceases to satisfy the eligibility requirements: An event that causes the Participant's Dependent to satisfy or cease to satisfy the requirements for coverage due to attainment of age, student status, or any similar circumstance, and 10 63 (5) Residency- A change in the place of residence of the Participant, Spouse or Dependent, that would lead to a change in status (such as a loss of HMO coverage). For the Dependent Care Flexible Spending Account, a Dependent becoming or ceasing to be a "Qualifying Dependent" as defined under Code Section 21(b) shall also qualify as a change in status (b) Special enrollment rights. Notwithstanding subsection (a), the Participants may change an election for accident or health coverage during a Plan Year and make a new election that corresponds with the special enrollment rights provided in Code Section 9801(f) Such change shall take place on a prospective basis, unless otherwise required by Code Section 9801(f)to be retroactive (c) Qualified Medical Support Order Notwithstanding subsection (a), in the event of a judgment, decree, or order(including approval of a property settlement) ("order") resulting from a divorce, legal separation, annulment, or change in legal custody which requires accident or health coverage for a Participant's child (including a foster child who is a Dependent of the Participant) (1) The Plan may change an election to provide coverage for the child if the order requires coverage under the Participant's plan, or (2) The Participant shall be permitted to change an election to cancel coverage for the child if the order requires the former Spouse to provide coverage for such child, under that individual's plan and such coverage is actually provided (d) Medicare or Medicaid. Notwithstanding subsection (a), a Participant may change elections to cancel accident or health coverage for the Participant or the Participant's Spouse or Dependent if the Participant or the Participant's Spouse or Dependent is enrolled in the accident or health coverage of the Employer and becomes entitled to coverage (Le , enrolled)under Part A or Part B of the Title XVIII of the Social Security Act(Medicare)or Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under Section 1928 of the Social Security Act (the program for distribution of pediatric vaccines). If the Participant or the Participant's Spouse or Dependent who has been entitled to Medicaid or Medicare coverage loses eligibility,that individual may prospectively elect coverage under the Plan if a benefit package option under the Plan provides similar coverage (e) Cost increase or decrease. If the cost of a Benefit provided under the Plan increases or decreases during a Plan Year, then the Plan shall automatically increase or decrease, as the case may be, the Salary Redirections of all affected Participants for such Benefit. Alternatively, if the cost of a benefit package option increases significantly, the Administrator shall permit the affected Participants to either make corresponding changes in their payments or revoke their elections and, in lieu thereof, receive on a prospective basis coverage under another benefit package option with similar coverage, or drop coverage prospectively if there is no benefit package option with similar coverage A cost increase or decrease refers to an increase or decrease in the , amount of elective contributions under the Plan, whether resulting from an action taken by the Participants or an action taken by the Employer 11 64 (f) Loss of coverage If the coverage under a Benefit is significantly rpw, curtailed or ceases during a Plan Year, affected Participants may revoke their elections of such Benefit and, in lieu thereof, elect to receive on a prospective basis coverage under another plan with similar coverage, or drop coverage prospectively if no similar coverage is offered (g) Addition of a new benefit. If, during the period of coverage, a new benefit package option or other coverage option is added, an existing benefit package option is significantly improved, or an existing benefit package option or other coverage option is eliminated, then the affected Participants may elect the newly-added option, or elect another option if an option has been eliminated prospectively and make corresponding election changes with respect to other benefit package options providing similar coverage In addition, those Eligible Employees who are not participating in the Plan may opt to become Participants and elect the new or newly improved benefit package option (h) Loss of coverage under certain other plans. A Participant may make a prospective election change to add group health coverage for the Participant, the Participant's Spouse or Dependent if such individual loses group health coverage sponsored by a governmental or educational institution, including a state children's health insurance program under the Social Security Act, the Indian Health Service or a health program offered by an Indian tribal government, a state health benefits risk pool, or a foreign government group health plan (i) Change of coverage due to change under certain other plans. A Participant may make a prospective election change that is on account of and corresponds with a change made under the plan of a Spouse's,former Spouse's or Dependent's employer if (1)the cafeteria plan or other benefits plan of the Spouse's, former Spouse's or Dependent's employer permits its participants to make a change, or(2)the cafeteria plan permits participants to make an election for a period of coverage that is different from the period of coverage under the cafeteria plan of a Spouse's, former Spouse's or Dependent's employer Q) Change in dependent care provider A Participant may make a prospective election change that is on account of and corresponds with a change by the Participant in the dependent care provider The availability of dependent care services from a new childcare provider is similar to a new benefit package option becoming available A cost change is allowable in the Dependent Care Flexible Spending Account only if the cost change is imposed by a dependent care provider who is not related to the Participant, as defined in Code Section 152(a)(1) through (8) (k) Health FSA cannot change due to insurance change. A Participant shall not be permitted to change an election to the Health Flexible Spending Account as a result of a cost or coverage change under any health insurance benefits. 12 65 ARTICLE VI HEALTH FLEXIBLE SPENDING ACCOUNT 6.1 ESTABLISHMENT OF PLAN This Health Flexible Spending Account is intended to qualify as a medical reimbursement plan under Code Section 105 and shall be interpreted in a manner consistent with such Code Section and the Treasury regulations thereunder Participants who elect to participate in this Health Flexible Spending Account may submit claims for the reimbursement of Medical Expenses All amounts reimbursed shall be periodically paid from amounts allocated to the Health Flexible Spending Account. Periodic payments reimbursing Participants from the Health Flexible Spending Account shall in no event occur less frequently than monthly 6.2 DEFINITIONS For the purposes of this Article and the Cafeteria Plan, the terms below have the following meaning (a) "Health Flexible Spending Account" means the account established for Participants pursuant to this Plan to which part of their Cafeteria Plan Benefit Dollars may be allocated and from which all allowable Medical Expenses incurred by a Participant, his or her Spouse and his or her Dependents may be reimbursed (b) "Highly Compensated Participant" means, for the purposes of this Article and determining discrimination under Code Section 105(h), a participant who is. (1) one of the 5 highest paid officers, (2) a shareholder who owns (or is considered to own applying the rules of Code Section 318) more than 10 percent in value of the stock of the Employer; or (3) among the highest paid 25 percent of all Employees (other than exclusions permitted by Code Section 105(h)(3)(B)for those individuals who are not Participants) (c) "Medical Expenses" means any expense for medical care within the meaning of the term "medical care" as defined in Code Section 213(d) and as allowed under Code Section 105 and the rulings and Treasury regulations thereunder, and not otherwise used by the Participant as a deduction in determining his tax liability under the Code "Medical Expenses" can be incurred by the Participant, his or her Spouse and his or her Dependents A Participant may not be reimbursed for the cost of other health coverage such as premiums paid under plans maintained by the employer of the Participant's Spouse or individual policies maintained by the Participant or his Spouse or Dependent. A Participant may not be reimbursed for"qualified long-term care services" as defined in Code Section 7702B(c) 13 66 (d) The definitions of Article I are hereby incorporated by reference to the extent necessary to interpret and apply the provisions of this Health Flexible err Spending Account. 6.3 FORFEITURES The amount in the Health Flexible Spending Account as of the end of any Plan Year (and after the processing of all claims for such Plan Year pursuant to Section 6 7 hereof) shall be forfeited and credited to the benefit plan surplus In such event, the Participant shall have no further claim to such amount for any reason, subject to Section 8 2 64 LIMITATION ON ALLOCATIONS Notwithstanding any provision contained in this Health Flexible Spending Account to the contrary, no more than $3,500 may be allocated to the Health Flexible Spending Account by a Participant in or on account of any Plan Year 6.5 NONDISCRIMINATION REQUIREMENTS (a) Intent to be nondiscriminatory It is the intent of this Health Flexible Spending Account not to discriminate in violation of the Code and the Treasury regulations thereunder (b) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination under this Health Flexible Spending Account, it may, but shall not be required to, reject any elections or reduce contributions or Benefits in order to assure compliance with this Section Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner If the Administrator decides to reject any elections or reduce contributions or Benefits, it shall be done in the following manner First, the Benefits designated for the Health Flexible Spending Account by the member of the group in whose favor discrimination may not occur pursuant to Code Section 105 that elected to contribute the highest amount to the fund for the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section or the Code are satisfied, or until the amount designated for the fund equals the amount designated for the fund by the next member of the group in whose favor discrimination may not occur pursuant to Code Section 105 who has elected the second highest contribution to the Health Flexible Spending Account for the Plan Year This process shall continue until the nondiscrimination tests set forth in this Section or the Code are satisfied Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited and credited to the benefit plan surplus 6.6 COORDINATION WITH CAFETERIA PLAN All Participants under the Cafeteria Plan are eligible to receive Benefits under this Health Flexible Spending Account. The enrollment under the Cafeteria Plan shall constitute enrollment under this Health Flexible Spending Account. In addition, other matters concerning contributions elections and the like shall be governed by the general provisions of the Cafeteria Plan 14 67 6.7 HEALTH FLEXIBLE SPENDING ACCOUNT CLAIMS (a) Expenses must be incurred during Plan Year All Medical Expenses incurred by a Participant, his or her Spouse and his or her Dependents shall be reimbursed during the Plan Year subject to Section 2 5, even though the submission of such a claim occurs after his participation hereunder ceases, but provided that the Medical Expenses were incurred during the applicable Plan Year Medical Expenses are treated as having been incurred when the Participant is provided with the medical care that gives rise to the medical expenses, not when the Participant is formally billed or charged for, or pays for the medical care (b) Reimbursement available throughout Plan Year The Administrator shall direct the reimbursement to each eligible Participant for all allowable Medical Expenses, up to a maximum of the amount designated by the Participant for the Health Flexible Spending Account for the Plan Year Reimbursements shall be made available to the Participant throughout the year without regard to the level of Cafeteria Plan Benefit Dollars which have been allocated to the fund at any given point in time Furthermore, a Participant shall be entitled to reimbursements only for amounts in excess of any payments or other reimbursements under any health care plan covering the Participant and/or his Spouse or Dependents. (c) Payments. Reimbursement payments under this Plan shall be made directly to the Participant. However, in the Administrator's discretion, payments may be made directly to the service provider The application for payment or reimbursement shall be made to the Administrator on an acceptable form within a reasonable time of incurring the debt or paying for the service The application shall include a written statement from an independent third party stating that the Medical Expense has been incurred and the amount of such expense Furthermore, the Participant shall provide a written statement that the Medical Expense has not been reimbursed or is not reimbursable under any other health plan coverage and, if reimbursed from the Health Flexible Spending Account, such amount will not be claimed as a tax deduction The Administrator shall retain a file of all such applications (d) Grace Period. Notwithstanding anything in this Section to the contrary, Medical Expenses incurred during the Grace Period, up to the remaining account balance, shall also be deemed to have been incurred during the Plan Year to which the Grace Period relates (e) Claims for reimbursement. Claims for the reimbursement of Medical Expenses incurred in any Plan Year shall be paid as soon after a claim has been filed as is administratively practicable, provided however, that if a Participant fails to submit a claim within 90 days after the end of the Plan Year, those Medical Expense claims shall not be considered for reimbursement by the Administrator 1001 15 68 6.8 DEBIT AND CREDIT CARDS Participants may, subject to a procedure established by the Administrator and applied in a uniform nondiscriminatory manner, use debit and/or credit (stored value) cards ("cards") provided by the Administrator and the Plan for payment of Medical Expenses, subject to the following terms (a) Card only for medical expenses. Each Participant issued a card shall certify that such card shall only be used for Medical Expenses The Participant shall also certify that any Medical Expense paid with the card has not already been reimbursed by any other plan covering health benefits and that the Participant will not seek reimbursement from any other plan covering health benefits. (b) Card issuance. Such card shall be issued upon the Participant's Effective Date of Participation and reissued for each Plan Year the Participant remains a Participant in the Health Flexible Spending Account. Such card shall be automatically cancelled upon the Participant's death or termination of employment, or if such Participant has a change in status that results in the Participant's withdrawal from the Health Flexible Spending Account. (c) Maximum dollar amount available. The dollar amount of coverage available on the card shall be the amount elected by the Participant for the Plan Year The maximum dollar amount of coverage available shall be the maximum amount for the Plan Year as set forth in Section 6 4 (d) Only available for use with certain service providers. The cards shall only be accepted by such merchants and service providers as have been approved by the Administrator (e) Card use. The cards shall only be used for Medical Expense purchases at these providers, including, but not limited to, the following (1) Co-payments for doctor and other medical care, (2) Purchase of drugs, (3) Purchase of medical items such as eyeglasses, syringes, crutches, etc. (f) Substantiation Such purchases by the cards shall be subject to substantiation by the Administrator, usually by submission of a receipt from a service provider describing the service, the date and the amount.The Administrator shall also follow the requirements set forth in Revenue Ruling 2003-43 and Notice 2006-69 All charges shall be conditional pending confirmation and substantiation (g) Correction methods. If such purchase is later determined by the Administrator to not qualify as a Medical Expense, the Administrator, in its discretion, shall use one of the following correction methods to make the Plan whole Until the amount is repaid, the Administrator shall take further action to ensure that further violations of the terms of the card do not occur, up to and including denial of access to the card (1) Repayment of the improper amount by the Participant; 16 69 (2) Withholding the improper payment from the Participant's wages or other compensation to the extent consistent with applicable federal or state law; (3) Claims substitution or offset of future claims until the amount is repaid and (4) if subsections (1)through (3)fail to recover the amount, consistent with the Employer's business practices, the Employer may treat the amount as any other business indebtedness ARTICLE VII DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT 71 ESTABLISHMENT OF ACCOUNT This Dependent Care Flexible Spending Account is intended to qualify as a program under Code Section 129 and shall be interpreted in a manner consistent with such Code Section Participants who elect to participate in this program may submit claims for the reimbursement of Employment-Related Dependent Care Expenses All amounts reimbursed shall be paid from amounts allocated to the Participant's Dependent Care Flexible Spending Account. 7.2 DEFINITIONS For the purposes of this Article and the Cafeteria Plan the terms below shall have NNO the following meaning (a) "Dependent Care Flexible Spending Account" means the account established for a Participant pursuant to this Article to which part of his Cafeteria Plan Benefit Dollars may be allocated and from which Employment-Related Dependent Care Expenses of the Participant may be reimbursed for the care of the Qualifying Dependents of Participants (b) "Earned Income" means earned income as defined under Code Section 32(c)(2), but excluding such amounts paid or incurred by the Employer for dependent care assistance to the Participant. 1460 17 70 (c) "Employment-Related Dependent Care Expenses" means the amounts paid for expenses of a Participant for those services which if paid by the Participant would be considered employment related expenses under Code Section 21(b)(2). Generally, they shall include expenses for household services and for the care of a Qualifying Dependent, to the extent that such expenses are incurred to enable the Participant to be gainfully employed for any period for which there are one or more Qualifying Dependents with respect to such Participant. Employment-Related Dependent Care Expenses are treated as having been incurred when the Participant's Qualifying Dependents are provided with the dependent care that gives rise to the Employment-Related Dependent Care Expenses, not when the Participant is formally billed or charged for, or pays for the dependent care The determination of whether an amount qualifies as an Employment-Related Dependent Care Expense shall be made subject to the following rules. (1) If such amounts are paid for expenses incurred outside the Participant's household, they shall constitute Employment-Related Dependent Care Expenses only if incurred for a Qualifying Dependent as defined in Section 7.2(d)(1) (or deemed to be, as described in Section 7.2(d)(1) pursuant to Section 7.2(d)(3)), or for a Qualifying Dependent as defined in Section 7.2(d)(2) (or deemed to be, as described in Section 7.2(d)(2) pursuant to Section 7.2(d)(3))who regularly spends at least 8 hours per day in the Participant's household, (2) If the expense is incurred outside the Participant's home at a facility that provides care for a fee, payment, or grant for more than 6 individuals who do not regularly reside at the facility, the facility must comply with all applicable state and local laws and regulations, including licensing requirements, if any; and (3) Employment-Related Dependent Care Expenses of a Participant shall not include amounts paid or incurred to a child of such Participant who is under the age of 19 or to an individual who is a Dependent of such Participant or such Participant's Spouse (d) "Qualifying Dependent" means, for Dependent Care Flexible Spending Account purposes, (1) a Participant's Dependent (as defined in Code Section 152(a)(1)) who has not attained age 13, (2) a Dependent or the Spouse of a Participant who is physically or mentally incapable of caring for himself or herself and has the same principal place of abode as the Participant for more than one-half of such taxable year; or (3) a child that is deemed to be a Qualifying Dependent described in paragraph (1)or (2) above, whichever is appropriate, pursuant to Code Section 21(e)(5) (e) The definitions of Article I are hereby incorporated by reference to the extent necessary to interpret and apply the provisions of this Dependent Care Flexible Spending Account. 18 71 73 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS The Administrator shall establish a Dependent Care Flexible Spending Account 1"001 for each Participant who elects to apply Cafeteria Plan Benefit Dollars to Dependent Care Flexible Spending Account benefits 74 INCREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS A Participant's Dependent Care Flexible Spending Account shall be increased each pay period by the portion of Cafeteria Plan Benefit Dollars that he has elected to apply toward his Dependent Care Flexible Spending Account pursuant to elections made under Article V hereof 7.5 DECREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS A Participant's Dependent Care Flexible Spending Account shall be reduced by the amount of any Employment-Related Dependent Care Expense reimbursements paid or incurred on behalf of a Participant pursuant to Section 7 12 hereof 7 6 ALLOWABLE DEPENDENT CARE REIMBURSEMENT Subject to limitations contained in Section 7.9 of this Program, and to the extent of the amount contained in the Participant's Dependent Care Flexible Spending Account, a Participant who incurs Employment-Related Dependent Care Expenses shall be entitled to receive from the Employer full reimbursement for the entire amount of such expenses incurred during the Plan Year or portion thereof during which he is a Participant. 77 ANNUAL STATEMENT OF BENEFITS On or before January 31 st of each calendar year, the Employer shall furnish to each Employee who was a Participant and received benefits under Section 7 6 during the prior calendar year, a statement of all such benefits paid to or on behalf of such Participant during the prior calendar year 7 8 FORFEITURES The amount in a Participant's Dependent Care Flexible Spending Account as of the end of any Plan Year (and after the processing of all claims for such Plan Year pursuant to Section 7 12 hereof)shall be forfeited and credited to the benefit plan surplus In such event, the Participant shall have no further claim to such amount for any reason 7 9 LIMITATION ON PAYMENTS Notwithstanding any provision contained in this Article to the contrary, amounts paid from a Participant's Dependent Care Flexible Spending Account in or on account of any taxable year of the Participant shall not exceed the lesser of the Earned Income limitation described in Code Section 129(b)or$5 000 ($2,500 if a separate tax return is filed by a Participant who is married as determined under the rules of paragraphs (3) and (4) of Code Section 21(e)). 710 NONDISCRIMINATION REQUIREMENTS (a) Intent to be nondiscriminatory It is the intent of this Dependent Care Flexible Spending Account that contributions or benefits not discriminate in 19 72 favor of the group of employees in whose favor discrimination may not occur under Code Section 129(d) '�rw✓ (b) 25% test for shareholders. It is the intent of this Dependent Care Flexible Spending Account that not more than 25 percent of the amounts paid by the Employer for dependent care assistance during the Plan Year will be provided for the class of individuals who are shareholders or owners (or their Spouses or Dependents), each of whom (on any day of the Plan Year) owns more than 5 percent of the stock or of the capital or profits interest in the Employer (c) Adjustment to avoid test failure If the Administrator deems it necessary to avoid discrimination or possible taxation to a group of employees in whose favor discrimination may not occur in violation of Code Section 129 it may, but shall not be required to, reject any elections or reduce contributions or non-taxable benefits in order to assure compliance with this Section Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner If the Administrator decides to reject any elections or reduce contributions or Benefits, it shall be done in the following manner First, the Benefits designated for the Dependent Care Flexible Spending Account by the affected Participant that elected to contribute the highest amount to such account for the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section are satisfied, or until the amount designated for the account equals the amount designated for the account of the affected Participant who has elected the second highest contribution to the Dependent Care Flexible Spending Account for the Plan Year This process shall continue until the nondiscrimination tests set forth in this Section are satisfied Contributions which VMW are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited 711 COORDINATION WITH CAFETERIA PLAN All Participants under the Cafeteria Plan are eligible to receive Benefits under this Dependent Care Flexible Spending Account. The enrollment and termination of participation under the Cafeteria Plan shall constitute enrollment and termination of participation under this Dependent Care Flexible Spending Account. In addition, other matters concerning contributions, elections and the like shall be governed by the general provisions of the Cafeteria Plan 7 12 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT CLAIMS The Administrator shall direct the payment of all such Dependent Care claims to the Participant upon the presentation to the Administrator of documentation of such expenses in a form satisfactory to the Administrator However, in the Administrator's discretion, payments may be made directly to the service provider In its discretion in administering the Plan, the Administrator may utilize forms and require documentation of costs as may be necessary to verify the claims submitted At a minimum, the form shall include a statement from an independent third party as proof that the expense has been incurred and the amount of such expense In addition, the Administrator may require that each Participant who desires to receive reimbursement under this Program for Employment-Related Dependent Care Expenses submit a statement which may contain some or all of the following information (a) The Dependent or Dependents for whom the services were performed, 20 73 (b) The nature of the services performed for the Participant, the cost of which he wishes reimbursement; 1000, (c) The relationship, if any, of the person performing the services to the Participant; (d) If the services are being performed by a child of the Participant, the age of the child, (e) A statement as to where the services were performed, (f) If any of the services were performed outside the home, a statement as to whether the Dependent for whom such services were performed spends at least 8 hours a day in the Participant's household, (g) If the services were being performed in a day care center, a statement: (1) that the day care center complies with all applicable laws and regulations of the state of residence, (2) that the day care center provides care for more than 6 individuals (other than individuals residing at the center), and (3) of the amount of fee paid to the provider (h) If the Participant is married, a statement containing the following (1) the Spouse's salary or wages if he or she is employed, or (2) if the Participant's Spouse is not employed, that (i) he or she is incapacitated, or (ii) he or she is a full-time student attending an educational institution and the months during the year which he or she attended such institution (i) Grace Period. Notwithstanding anything in this Section to the contrary, Employment-Related Dependent Care Expenses incurred during the Grace Period, up to the remaining account balance, shall also be deemed to have been incurred during the Plan Year to which the Grace Period relates. 0) Claims for reimbursement. If a Participant fails to submit a claim within 90 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator ARTICLE VIII BENEFITS AND RIGHTS 8.1 CLAIM FOR BENEFITS (a) Insurance claims. Any claim for Benefits underwritten by Insurance Contract(s) shall be made to the Insurer If the Insurer denies any 21 74 claim, the Participant or beneficiary shall follow the Insurer's claims review procedure (b) Dependent Care Flexible Spending Account or Health Flexible Spending Account claims. Any claim for Dependent Care Flexible Spending Account or Health Flexible Spending Account Benefits shall be made to the Administrator For the Health Flexible Spending Account, if a Participant fails to submit a claim within 90 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator For the Dependent Care Flexible Spending Account, if a Participant fails to submit a claim within 90 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator If the Administrator denies a claim, the Administrator may provide notice to the Participant or beneficiary, in writing, within 90 days after the claim is filed unless special circumstances require an extension of time for processing the claim The notice of a denial of a claim shall be written in a manner calculated to be understood by the claimant and shall set forth (1) specific references to the pertinent Plan provisions on which the denial is based, (2) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation as to why such information is necessary; and (3) an explanation of the Plan's claim procedure (c) Appeal. Within 60 days after receipt of the above material,the claimant shall have a reasonable opportunity to appeal the claim denial to the Administrator for a full and fair review The claimant or his duly authorized representative may- (1) request a review upon written notice to the Administrator; (2) review pertinent documents, and (3) submit issues and comments in writing (d) Review of appeal. A decision on the review by the Administrator will be made not later than 60 days after receipt of a request for review, unless special circumstances require an extension of time for processing (such as the need to hold a hearing), in which event a decision should be rendered as soon as possible, but in no event later than 120 days after such receipt. The decision of the Administrator shall be written and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, with specific references to the pertinent Plan provisions on which the decision is based (e) Forfeitures. Any balance remaining in the Participant's Dependent Care Flexible Spending Account or Health Flexible Spending Account as of the end of the time for claims reimbursement for each Plan Year and Grace Period (if applicable)shall be forfeited and deposited in the benefit plan surplus of the Employer pursuant to Section 6 3 or Section 7.8, whichever is applicable, unless the Participant had made a claim for such Plan Year, in writing, which has been denied or is pending, in which event the amount of the claim shall be held 22 75 in his account until the claim appeal procedures set forth above have been satisfied or the claim is paid If any such claim is denied on appeal the amount held beyond the end of the Plan Year shall be forfeited and credited to the benefit %001 plan surplus. 8.2 APPLICATION OF BENEFIT PLAN SURPLUS Any forfeited amounts credited to the benefit plan surplus by virtue of the failure of a Participant to incur a qualified expense or seek reimbursement in a timely manner may, but need not be, separately accounted for after the close of the Plan Year(or after such further time specified herein for the filing of claims) in which such forfeitures arose In no event shall such amounts be carried over to reimburse a Participant for expenses incurred during a subsequent Plan Year for the same or any other Benefit available under the Plan, nor shall amounts forfeited by a particular Participant be made available to such Participant in any other form or manner, except as permitted by Treasury regulations Amounts in the benefit plan surplus shall be used to defray any administrative costs and experience losses or used to provide additional benefits under the Plan ARTICLE IX ADMINISTRATION 91 PLAN ADMINISTRATION The operation of the Plan shall be under the supervision of the Administrator It shall be a principal duty of the Administrator to see that the Plan is carried out in accordance with its terms, and for the exclusive benefit of Employees entitled to participate in the Plan The Administrator shall have full power to administer the Plan in all of its details, subject, however, to the pertinent provisions of the Code The Administrator's powers shall include, but shall not be limited to the following authority, in addition to all other powers provided by this Plan (a) To make and enforce such rules and regulations as the Administrator deems necessary or proper for the efficient administration of the Plan, (b) To interpret the Plan, the Administrator's interpretations thereof in good faith to be final and conclusive on all persons claiming benefits by operation of the Plan, (c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan and to receive benefits provided by operation of the Plan, (d) To reject elections or to limit contributions or Benefits for certain highly compensated participants if it deems such to be desirable in order to avoid discrimination under the Plan in violation of applicable provisions of the Code, (e) To provide Employees with a reasonable notification of their benefits available by operation of the Plan, (f) To approve reimbursement requests and to authorize the payment of benefits, (g) To appoint such agents, counsel, accountants, consultants, and actuaries as may be required to assist in administering the Plan 23 76 Any procedure, discretionary act, interpretation or construction taken by the ,. Administrator shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to comply with the terms of Code Section 125 and the Treasury regulations thereunder 9.2 EXAMINATION OF RECORDS The Administrator shall make available to each Participant, Eligible Employee and any other Employee of the Employer such records as pertain to their interest under the Plan for examination at reasonable times during normal business hours. 9.3 PAYMENT OF EXPENSES Any reasonable administrative expenses shall be paid by the Employer unless the Employer determines that administrative costs shall be borne by the Participants under the Plan or by any Trust Fund which may be established hereunder The Administrator may impose reasonable conditions for payments, provided that such conditions shall not discriminate in favor of highly compensated employees 94 INSURANCE CONTROL CLAUSE In the event of a conflict between the terms of this Plan and the terms of an Insurance Contract of an independent third party Insurer whose product is then being used in conjunction with this Plan, the terms of the Insurance Contract shall control as to those Participants receiving coverage under such Insurance Contract. For this purpose, the Insurance Contract shall control in defining the persons eligible for insurance, the dates of their eligibility, the conditions which must be satisfied to become insured, if any, the benefits Participants are entitled to and the circumstances under which insurance terminates 9.5 INDEMNIFICATION OF ADMINISTRATOR The Employer agrees to indemnify and to defend to the fullest extent permitted by law any Employee serving as the Administrator or as a member of a committee designated as Administrator(including any Employee or former Employee who previously served as Administrator or as a member of such committee)against all liabilities, damages, costs and expenses (including attorney's fees and amounts paid in settlement of any claims approved by the Employer)occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith. ARTICLE X AMENDMENT OR TERMINATION OF PLAN 101 AMENDMENT The Employer, at any time or from time to time, may amend any or all of the provisions of the Plan without the consent of any Employee or Participant. No amendment shall have the effect of modifying any benefit election of any Participant in effect at the time of such amendment, unless such amendment is made to comply with Federal, state or local laws, statutes or regulations. ,, 24 77 10.2 TERMINATION The Employer is establishing this Plan with the intent that it will be maintained for an indefinite period of time Notwithstanding the foregoing, the Employer reserves the right to terminate this Plan, in whole or in part, at any time In the event the Plan is terminated, no further contributions shall be made Benefits under any Insurance Contract shall be paid in accordance with the terms of the Insurance Contract. No further additions shall be made to the Health Flexible Spending Account or Dependent Care Flexible Spending Account, but all payments from such fund shall continue to be made according to the elections in effect until 90 days after the termination date of the Plan Any amounts remaining in any such fund or account as of the end of such period shall be forfeited and deposited in the benefit plan surplus after the expiration of the filing period ARTICLE XI MISCELLANEOUS 11 1 PLAN INTERPRETATION All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner This Plan shall be read in its entirety and not severed except as provided in Section 11 12 11.2 GENDER AND NUMBER Wherever any words are used herein in the masculine feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases wry where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply 11.3 WRITTEN DOCUMENT This Plan, in conjunction with any separate written document which may be required by law, is intended to satisfy the written Plan requirement of Code Section 125 and any Treasury regulations thereunder relating to cafeteria plans. 114 EXCLUSIVE BENEFIT This Plan shall be maintained for the exclusive benefit of the Employees who participate in the Plan. 11.5 PARTICIPANT'S RIGHTS This Plan shall not be deemed to constitute an employment contract between the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan 25 78 11.6 ACTION BY THE EMPLOYER NOW Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority 117 EMPLOYER'S PROTECTIVE CLAUSES (a) Insurance purchase. Upon the failure of either the Participant or the Employer to obtain the insurance contemplated by this Plan (whether as a result of negligence, gross neglect or otherwise), the Participant's Benefits shall be limited to the insurance premium(s), if any, that remained unpaid for the period in question and the actual insurance proceeds, if any, received by the Employer or the Participant as a result of the Participant's claim (b) Validity of insurance contract. The Employer shall not be responsible for the validity of any Insurance Contract issued hereunder or for the failure on the part of the Insurer to make payments provided for under any Insurance Contract. Once insurance is applied for or obtained, the Employer shall not be liable for any loss which may result from the failure to pay Premiums to the extent Premium notices are not received by the Employer 11.8 NO GUARANTEE OF TAX CONSEQUENCES Neither the Administrator nor the Employer makes any commitment or guarantee that any amounts paid to or for the benefit of a Participant under the Plan will be excludable from the Participant's gross income for federal or state income tax purposes, or that any other 'Or federal or state tax treatment will apply to or be available to any Participant. It shall be the obligation of each Participant to determine whether each payment under the Plan is excludable from the Participant's gross income for federal and state income tax purposes, and to notify the Employer if the Participant has reason to believe that any such payment is not so excludable Notwithstanding the foregoing, the rights of Participants under this Plan shall be legally enforceable 11.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS If any Participant receives one or more payments or reimbursements under the Plan that are not for a permitted Benefit, such Participant shall indemnify and reimburse the Employer for any liability it may incur for failure to withhold federal or state income tax or Social Security tax from such payments or reimbursements However, such indemnification and reimbursement shall not exceed the amount of additional federal and state income tax (plus any penalties)that the Participant would have owed if the payments or reimbursements had been made to the Participant as regular cash compensation, plus the Participant's share of any Social Security tax that would have been paid on such compensation, less any such additional income and Social Security tax actually paid by the Participant. 1110 FUNDING Unless otherwise required by law, contributions to the Plan need not be placed in trust or dedicated to a specific Benefit, but may instead be considered general assets of the Employer Furthermore, and unless otherwise required by law, nothing herein shall be construed to require the Employer or the Administrator to maintain any fund or segregate any amount for the benefit of any Participant, and no Participant or other person shall have any claim against, right to, or security or other interest in, any fund, account or asset of the Employer from which any payment under the Plan may be made 26 79 11 11 GOVERNING LAW This Plan is governed by the Code and the Treasury regulations issued thereunder (as they might be amended from time to time) In no event shall the Employer guarantee the favorable tax treatment sought by this Plan To the extent not preempted by Federal law, the provisions of this Plan shall be construed, enforced and administered according to the laws of the State of California 1112 SEVERABILITY If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included herein 1113 CAPTIONS The captions contained herein are inserted only as a matter of convenience and for reference, and in no way define, limit, enlarge or describe the scope or intent of the Plan, nor in any way shall affect the Plan or the construction of any provision thereof 11 14 CONTINUATION OF COVERAGE (COBRA) Notwithstanding anything in the Plan to the contrary, in the event any benefit under this Plan subject to the continuation coverage requirement of Code Section 49808 becomes unavailable, each Participant will be entitled to continuation coverage as prescribed in Code Section 498013, and related regulations. If during the Plan Year, the Employer employs fewer than twenty (20) employees on a typical business day, this Section shall not apply 11 15 FAMILY AND MEDICAL LEAVE ACT (FMLA) Notwithstanding anything in the Plan to the contrary, in the event any benefit under this Plan becomes subject to the requirements of the Family and Medical Leave Act and regulations thereunder, this Plan shall be operated in accordance with Regulation 1 125-3 11 16 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA) Notwithstanding anything in this Plan to the contrary, this Plan shall be operated in accordance with HIPAA and regulations thereunder 11 17 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with the Uniform Services Employment And Reemployment Rights Act (USERRA)and the regulations thereunder 1118 COMPLIANCE WITH HIPAA PRIVACY STANDARDS (a) Application. If the Health Flexible Spending Account under this Cafeteria Plan is subject to the Standards for Privacy of Individually Identifiable Health Information (45 CFR Part 164, the "Privacy Standards"), then this Section shall apply 27 80 (b) Disclosure of PHI. The Plan shall not disclose Protected Health Information to any member of the Employer's workforce unless each of the conditions set out in this Section are met. "Protected Health Information" shall have the same definition as set forth in the Privacy Standards but generally shall mean individually identifiable information about the past, present or future physical or mental health or condition of an individual, including information about treatment or payment for treatment. (c) PHI disclosed for administrative purposes. Protected Health Information disclosed to members of the Employer's workforce shall be used or disclosed by them only for purposes of Plan administrative functions. The Plan's administrative functions shall include all Plan payment functions and health care operations The terms "payment" and "health care operations" shall have the same definitions as set out in the Privacy Standards, but the term "payment" generally shall mean activities taken to determine or fulfill Plan responsibilities with respect to eligibility, coverage, provision of benefits, or reimbursement for health care (d) PHI disclosed to certain workforce members. The Plan shall disclose Protected Health Information only to members of the Employer's workforce who are authorized to receive such Protected Health Information, and only to the extent and in the minimum amount necessary for that person to perform his or her duties with respect to the Plan "Members of the Employer's workforce" shall refer to all employees and other persons under the control of the Employer The Employer shall keep an updated list of those authorized to receive Protected Health Information (1) An authorized member of the Employer's workforce who receives Protected Health Information shall use or disclose the Protected Health Information only to the extent necessary to perform his or her duties with respect to the Plan (2) In the event that any member of the Employer's workforce uses or discloses Protected Health Information other than as permitted by this Section and the Privacy Standards,the incident shall be reported to the Plan's privacy officer The privacy officer shall take appropriate action, including (i) investigation of the incident to determine whether the breach occurred inadvertently, through negligence or deliberately; whether there is a pattern of breaches, and the degree of harm caused by the breach, (ii) appropriate sanctions against the persons causing the breach which, depending upon the nature of the breach, may include oral or written reprimand, additional training, or termination of employment; (iii) mitigation of any harm caused by the breach, to the extent practicable, and (iv) documentation of the incident and all actions taken to resolve the issue and mitigate any damages VOW 28 81 (e) Certification The Employer must provide certification to the Plan that it agrees to (1) Not use or further disclose the information other than as permitted or required by the Plan documents or as required by law; (2) Ensure that any agent or subcontractor, to whom it provides Protected Health Information received from the Plan, agrees to the same restrictions and conditions that apply to the Employer with respect to such information, (3) Not use or disclose Protected Health Information for employment- related actions and decisions or in connection with any other benefit or employee benefit plan of the Employer; (4) Report to the Plan any use or disclosure of the Protected Health Information of which it becomes aware that is inconsistent with the uses or disclosures permitted by this Section, or required by law; (5) Make available Protected Health Information to individual Plan members in accordance with Section 164.524 of the Privacy Standards, (6) Make available Protected Health Information for amendment by individual Plan members and incorporate any amendments to Protected Health Information in accordance with Section 164 526 of the Privacy Standards, (7) Make available the Protected Health Information required to provide an accounting of disclosures to individual Plan members in accordance with Section 164.528 of the Privacy Standards, (8) Make its internal practices, books and records relating to the use and disclosure of Protected Health Information received from the Plan available to the Department of Health and Human Services for purposes of determining compliance by the Plan with the Privacy Standards, (9) If feasible, return or destroy all Protected Health Information received from the Plan that the Employer still maintains in any form, and retain no copies of such information when no longer needed for the purpose for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible, and (10) Ensure the adequate separation between the Plan and members of the Employer's workforce, as required by Section 164 504(f)(2)(iii) of the Privacy Standards and set out in (d)above 11 19 COMPLIANCE WITH HIPAA ELECTRONIC SECURITY STANDARDS Under the Security Standards for the Protection of Electronic Protected Health Information (45 CFR Part 164.300 et. seq , the "Security Standards")- (a) Implementation The Employer agrees to implement reasonable and appropriate administrative, physical and technical safeguards to protect the 29 82 confidentiality, integrity and availability of Electronic Protected Health Information that the Employer creates, maintains or transmits on behalf of the Plan *mow "Electronic Protected Health Information"shall have the same definition as set out in the Security Standards, but generally shall mean Protected Health Information that is transmitted by or maintained in electronic media. (b) Agents or subcontractors shall meet security standards. The Employer shall ensure that any agent or subcontractor to whom it provides Electronic Protected Health Information shall agree, in writing, to implement reasonable and appropriate security measures to protect the Electronic Protected Health Information (c) Employer shall ensure security standards. The Employer shall ensure that reasonable and appropriate security measures are implemented to comply with the conditions and requirements set forth in Section 11 18 30 83 IN WITNESS WHEREOF, this Plan document is hereby executed this day of , City of Atascadero By EMPLOYER 31 84 Exhibit B CITY OF ATASCADERO FLEXIBLE BENEFITS PLAN SUMMARY PLAN DESCRIPTION ,. 85 TABLE OF CONTENTS I ELIGIBILITY 1 When can I become a participant in the Plan? 1 2 What are the eligibility requirements for our Plan? 1 3 When is my entry date? 2 4 What must I do to enroll in the Plan? 2 11 OPERATION 1 How does this Plan operate? 2 III CONTRIBUTIONS 1 How much of my pay may the Employer redirect? 2 2 What happens to contributions made to the Plan? 2 3 When must I decide which accounts I want to use? 3 4 When is the election period for our Plan? 3 5 May I change my elections during the Plan Year? 3 6 May I make new elections in future Plan Years? 4 IV BENEFITS 1 What benefits are available? 4 V BENEFIT PAYMENTS 1 When will I receive payments from my accounts? 6 2 What happens if I don't spend all Plan contributions during the Plan Year? 6 3 Family and Medical Leave Act (FMLA) 7 4 Uniformed Services Employment and Reemployment Rights Act. 7 5 What happens if I terminate employment? 7 6 Will my Social Security benefits be affected? 8 VI HIGHLY COMPENSATED AND KEY EMPLOYEES 1 Do limitations apply to highly compensated employees? 8 86 VII PLAN ACCOUNTING 1 Periodic Statements 8 VIII GENERAL INFORMATION ABOUT OUR PLAN 1 General Plan Information 9 2. Employer Information 9 3 Plan Administrator Information 9 4 Service of Legal Process 9 5 Type of Administration 9 6 Claims Submission 10 IX ADDITIONAL PLAN INFORMATION 1 Claims Process 10 X CONTINUATION COVERAGE RIGHTS UNDER COBRA 1 What is COBRA continuation coverage? 11 2 Who can become a Qualified Beneficiary? 11 3 What is a Qualifying Event? 12 4 What factors should be considered when determining to elect COBRA continuation coverage? 12 5 What is the procedure for obtaining COBRA continuation coverage? 13 6 What is the election period and how long must it last? 13 7 Is a covered Employee or Qualified Beneficiary responsible for informing the Plan Administrator of the occurrence of a Qualifying Event? 13 8 Is a waiver before the end of the election period effective to end a Qualified Beneficiary's election rights? 15 9 Is COBRA coverage available if a Qualified Beneficiary has other group health plan coverage or Medicare? 15 10 When may a Qualified Beneficiary's COBRA continuation coverage be terminated? 15 11 What are the maximum coverage periods for COBRA continuation coverage? 16 12 Under what circumstances can the maximum coverage period be expanded? 16 13 How does a Qualified Beneficiary become entitled to a disability extension? 17 *,,, 14 Does the Plan require payment for COBRA continuation coverage? 17 87 15 Must the Plan allow payment for COBRA continuation coverage to be made in monthly installments? 17 16 What is Timely Payment for COBRA continuation coverage? 17 17 Must a Qualified Beneficiary be given the right to enroll in a conversion health plan at the end of the maximum coverage period for COBRA continuation coverage? 18 18 How is my participation in the Health Flexible Spending Account affected? 18 XI SUMMARY 88 CITY OF ATASCADERO FLEXIBLE BENEFITS PLAN INTRODUCTION We are pleased to announce that we have established a "Flexible Benefit Plan"for you and other eligible employees. Under this Plan, you will be able to choose among certain benefits that we make available The benefits that you may choose are outlined in this Summary Plan Description We will also tell you about other important information concerning the Plan, such as the rules you must satisfy before you can join and the laws that protect your rights One of the most important features of our Plan is that the benefits being offered are generally ones that you are already paying for, but normally with money that has first been subject to income and Social Security taxes. Under our Plan these same expenses will be paid for with a portion of your pay before Federal income or Social Security taxes are withheld This means that you will pay less tax and have more money to spend and save Read this Summary Plan Description carefully so that you understand the provisions of our Plan and the benefits you will receive This SPD describes the Plan's benefits and obligations as contained in the legal Plan document, which governs the operation of the Plan The Plan document is written in much more technical and precise language If the non-technical language in this SPD and the technical, legal language of the Plan document conflict,the Plan document always governs Also, if there is a conflict between an insurance contract and either the Plan document or this Summary Plan Description, the insurance contract will control If you wish to receive a copy of the legal Plan document, please contact the Administrator This SPD describes the current provisions of the Plan which are designed to comply with applicable legal requirements. The Plan is subject to federal laws, such as the Internal Revenue 46W Code and other federal and state laws which may affect your rights. The provisions of the Plan are subject to revision due to a change in laws or due to pronouncements by the Internal Revenue Service (IRS) or other federal agencies. We may also amend or terminate this Plan If the provisions of the Plan that are described in this SPD change, we will notify you We have attempted to answer most of the questions you may have regarding your benefits in the Plan. If this SPD does not answer all of your questions, please contact the Administrator (or other plan representative) The name and address of the Administrator can be found in the Article of this SPD entitled "General Information About the Plan " I ELIGIBILITY 1 When can I become a participant in the Plan? Before you become a Plan member (referred to in this Summary Plan Description as a "Participant"), there are certain rules which you must satisfy First, you must meet the eligibility requirements and be an active employee After that, the next step is to actually join the Plan on the "entry date"that we have established for all employees The "entry date" is defined in Question 3 below You will also be required to complete certain application forms before you can enroll in the Health Flexible Spending Account or Dependent Care Flexible Spending Account. 2. What are the eligibility requirements for our Plan? You will be eligible to join the Plan once you have satisfied the conditions for coverage NOWunder our group medical plan 1 11/08 89 3 When is my entry date? Once you have met the eligibility requirements, your entry date will be the first day of the month coinciding with or following the date you met the eligibility requirements. 4 What must I do to enroll in the Plan? Before you can join the Plan, you must complete an application to participate in the Plan. The application includes your personal choices for each of the benefits which are being offered under the Plan You must also authorize us to set some of your earnings aside in order to pay for the benefits you have elected However, if you are already covered under any of the insured benefits, you will automatically participate in this Plan to the extent of your premiums unless you elect not to participate in this Plan 11 OPERATION 1 How does this Plan operate? Before the start of each Plan Year, you will be able to elect to have some of your upcoming pay contributed to the Plan. These amounts will be used to pay for the benefits you have chosen The portion of your pay that is paid to the Plan is not subject to Federal income or Social Security taxes In other words,this allows you to use tax-free dollars to pay for certain kinds of benefits and expenses which you normally pay for with out-of-pocket,taxable dollars However if you receive a reimbursement for an expense under the Plan, you cannot claim a moo Federal income tax credit or deduction on your return (See the Article entitled "General Information About Our Plan"for the definition of"Plan Year") III CONTRIBUTIONS 1 How much of my pay may the Employer redirect? Each year, we will automatically contribute on your behalf enough of your compensation to pay for the insurance coverage provided unless you elect not to receive any or all of such coverage You may also elect to have us contribute on your behalf enough of your compensation to pay for any other benefits that you elect under the Plan These amounts will be deducted from your pay over the course of the year 2. What happens to contributions made to the Plan? Before each Plan Year begins, you will select the benefits you want and how much of the contributions should go toward each benefit. It is very important that you make these choices carefully based on what you expect to spend on each covered benefit or expense during the Plan Year Later, they will be used to pay for the expenses as they arise during the Plan Year rwr 2 11/08 90 3. When must I decide which accounts I want to use? You are required by Federal law to decide before the Plan Year begins, during the election period (defined below) You must decide two things First, which benefits you want and, second, how much should go toward each benefit. If you are already covered by any of the insured benefits offered by this Plan, you will automatically become a Participant to the extent of the premiums for such insurance unless you elect, during the election period (defined below), not to participate in the Plan 4 When is the election period for our Plan? You will make your initial election on or before your entry date (You should review Section I on Eligibility to better understand the eligibility requirements and entry date )Then, for each following Plan Year, the election period is established by the Administrator and applied uniformly to all Participants. It will normally be a period of time prior to the beginning of each Plan Year The Administrator will inform you each year about the election period (See the Article entitled "General Information About Our Plan"for the definition of Plan Year ) 5. May I change my elections during the Plan Year? Generally, you cannot change the elections you have made after the beginning of the Plan Year However, there are certain limited situations when you can change your elections You are permitted to change elections if you have a change in status and you make an election change that is consistent with the change in status. Currently, Federal law considers the following events to be a change in status -- Marriage, divorce, death of a spouse, legal separation or annulment; -- Change in the number of dependents, including birth, adoption, placement for adoption, or death of a dependent; --Any of the following events for you, your spouse or dependent: termination or commencement of employment, a strike or lockout, commencement or return from an unpaid leave of absence, a change in worksite, or any other change in employment status that affects eligibility for benefits, --One of your dependents satisfies or ceases to satisfy the requirements for coverage due to change in age,student status, or any similar circumstance, and --A change in the place of residence of you, your spouse or dependent that would lead to a change in status, such as moving out of a coverage area for insurance In addition, if you are participating in the Dependent Care Flexible Spending Account, then there is a change in status if your dependent no longer meets the qualifications to be eligible for dependent care There are detailed rules on when a change in election is deemed to be consistent with a change in status. In addition, there are laws that give you rights to change health coverage for you, your spouse, or your dependents. If you change coverage due to rights you have under the law, then you can make a corresponding change in your elections under the Plan If any of these conditions apply to you, you should contact the Administrator 3 11/08 91 If the cost of a benefit provided under the Plan increases or decreases during a Plan Year then we will automatically increase or decrease, as the case may be, your salary redirection election If the cost increases significantly, you will be permitted to either make corresponding changes in your payments or revoke your election and obtain coverage under another benefit package option with similar coverage, or revoke your election entirely If the coverage under a Benefit is significantly curtailed or ceases during a Plan Year, then you may revoke your elections and elect to receive on a prospective basis coverage under another plan with similar coverage In addition, if we add a new coverage option or eliminate an existing option, you may elect the newly-added option (or elect another option if an option has been eliminated)and make corresponding election changes to other options providing similar coverage If you are not a Participant, you may elect to join the Plan. There are also certain situations when you may be able to change your elections on account of a change under the plan of your spouse's, former spouse's or dependent's employer These rules on change due to cost or coverage do not apply to the Health Flexible Spending Account, and you may not change your election to the Health Flexible Spending Account if you make a change due to cost or coverage for insurance You may not change your election under the Dependent Care Flexible Spending Account if the cost change is imposed by a dependent care provider who is your relative 6. May I make new elections in future Plan Years? Yes, you may For each new Plan Year, you may change the elections that you previously made You may also choose not to participate in the Plan for the upcoming Plan Year If you do not make new elections during the election period before a new Plan Year begins, we will assume you want your elections for insured benefits only to remain the same w and you will not be considered a Participant for the non-insured benefit options under the Plan for the upcoming Plan Year IV BENEFITS 1 What benefits are available? Under our Plan, you can choose to receive your entire compensation or use a portion to pay for the following benefits or expenses during the year- Health Flexible Spending Account: The Health Flexible Spending Account enables you to pay for expenses allowed under Sections 105 and 213(d) of the Internal Revenue Code which are not covered by our insured medical plan and save taxes at the same time The Health Flexible Spending Account allows you to be reimbursed by the Employer for out-of-pocket medical, dental and/or vision expenses incurred by you and your dependents Drug costs, including "over-the-counter" drugs may be reimbursed You may not, however, be reimbursed for the cost of other health care coverage maintained outside of the Plan, or for long-term care expenses A list of covered expenses is available from the Administrator w„ 4 11/08 92 The most that you can contribute to your Health Flexible Spending Account each Plan Year is $3,500 In order to be reimbursed for a health care expense, you must submit to the Administrator an itemized bill from the service provider We will also provide you with a debit or credit card to use to pay for medical expenses, such as co-pays deductibles, medical equipment and drug costs The Administrator will provide you with further details. Amounts reimbursed from the Plan may not be claimed as a deduction on your personal income tax return Reimbursement from the fund shall be paid at least once a month Newborns'and Mothers' Health Protection Act: Group health plans generally may not, under Federal law, restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than 96 hours following a cesarean section However, Federal law generally does not prohibit the mother's or newborn's attending provider, after consulting with the mother, from discharging the mother or her newborn earlier than 48 hours (or 96 hours as applicable) In any case, plans and issuers may not, under Federal law, require that a provider obtain authorization from the plan or the issuer for prescribing a length of stay not in excess of 48 hours (or 96 hours). Dependent Care Flexible Spending Account: The Dependent Care Flexible Spending Account enables you to pay for out-of-pocket, work-related dependent day-care cost with pre-tax dollars If you are married, you can use the account if you and your spouse both work or, in some situations, if your spouse goes to school full-time Single employees can also use the account. An eligible dependent is someone for whom you can claim expenses on Federal Income Tax Form 2441 "Credit for Child and Dependent Care Expenses " Children must be under age 13 Other dependents must be physically or mentally unable to care for themselves. Dependent Care arrangements which qualify include (a) A Dependent (Day) Care Center, provided that if care is provided by the facility for more than six individuals,the facility complies with applicable state and local laws* (b) An Educational Institution for pre-school children For older children, only expenses for non-school care are eligible, and (c) An "Individual" who provides care inside or outside your home The "Individual" may not be a child of yours under age 19 or anyone you claim as a dependent for Federal tax purposes. You should make sure that the dependent care expenses you are currently paying for qualify under our Plan The law places limits on the amount of money that can be paid to you in a calendar year from your Dependent Care Flexible Spending Account. Generally, your reimbursements may not exceed the lesser of- (a)$5,000 (if you are married filing a joint return or you are head of a household) or$2,500 (if you are married filing separate returns), (b)your taxable compensation, (c) your spouse's actual or deemed earned income (a spouse who is a full time student or incapable of caring for himself/herself has a monthly earned income of$250 for one dependent or$500 for two or more dependents) Also, in order to have the reimbursements made to you from this account be excludable from your income, you must provide a statement from the service provider including the name, address, and in most cases, the taxpayer identification number of the service provider on your tax form for the year, as well as the amount of such expense as proof that the expense has been incurred In addition, Federal tax laws permit a tax credit for certain dependent care expenses you may be paying for 1,. even if you are not a Participant in this Plan You may save more money if you take advantage 5 11/08 93 of this tax credit rather than using the Dependent Care Flexible Spending Account under our Plan Ask your tax adviser which is better for you Premium Expense Account: A Premium Expense Account allows you to use tax-free dollars to pay for certain premium expenses under various insurance programs that we offer you These premium expenses include -- Health care premiums under our insured group medical plan --Group term life insurance premiums. -- Dental insurance premiums. --Vision insurance premiums -- Prescription drug coverage Under our Plan, we will establish sub-accounts for you for each different type of insurance coverage that is available Also, certain limits on the amount of coverage may apply The Administrator may terminate or modify Plan benefits at any time, subject to the provisions of any insurance contracts providing benefits described above We will not be liable to you if an insurance company fails to provide any of the benefits described above. Also, your insurance will end when you leave employment, are no longer eligible under the terms of any insurance policies, or when insurance terminates Any benefits to be provided by insurance will be provided only after(1)you have provided the Administrator the necessary information to apply for insurance, and (2)the insurance is in effect for you V BENEFIT PAYMENTS 1 When will I receive payments from my accounts? During the course of the Plan Year, you may submit requests for reimbursement of expenses you have incurred Expenses are considered "incurred" when the service is performed, not necessarily when it is paid for The Administrator will provide you with acceptable forms for submitting these requests for reimbursement. If the request qualifies as a benefit or expense that the Plan has agreed to pay, you will receive a reimbursement payment soon thereafter Remember, these reimbursements which are made from the Plan are generally not subject to federal income tax or withholding Nor are they subject to Social Security taxes Requests for payment of insured benefits should be made directly to the insurer You will only be reimbursed from the Dependent Care Flexible Spending Account to the extent that there are sufficient funds in the Account to cover your request. 2. What happens if I don't spend all Plan contributions during the Plan Year? If you have not spent all the amounts in your Health Flexible Spending Account or Dependent Care Flexible Spending Account by the end of the Plan Year, you may continue to incur claims for expenses during the "Grace Period " The "Grace Period" extends 2 1/2 months 6 11/08 94 after the end of the Plan Year, during which time you can continue to incur claims and use up all amounts remaining in your Health Flexible Spending Account or Dependent Care Flexible Spending Account. Any monies left at the end of the Plan Year and the Grace Period will be forfeited Obviously, qualifying expenses that you incur late in the Plan Year or during the Grace Period for which you seek reimbursement after the end of such Plan Year and Grace Period will be paid first before any amount is forfeited For the Health Flexible Spending Account, you must submit claims no later than 90 days after the end of the Plan Year For the Dependent Care Flexible Spending Account, you must submit claims no later than 90 days after the end of the Plan Year Because it is possible that you might forfeit amounts in the Plan if you do not fully use the contributions that have been made, it is important that you decide how much to place in each account carefully and conservatively Remember, you must decide which benefits you want to contribute to and how much to place in each account before the Plan Year begins You want to be as certain as you can that the amount you decide to place in each account will be used up entirely 3. Family and Medical Leave Act(FMLA) If you take leave under the Family and Medical Leave Act, you may revoke or change your existing elections for health insurance, group-term life insurance and the Health Flexible Spending Account. If your coverage in these benefits terminates, due to your revocation of the benefit while on leave or due to your non-payment of contributions, you will be permitted to reinstate coverage for the remaining part of the Plan Year upon your return For the Health Flexible Spending Account, you may continue your coverage or you may revoke your coverage and resume it when you return. You can resume your coverage at its original level and make payments for the time that you are on leave For example, if you elect$1,200 for the year and are out on leave for 3 ,. months, then return and elect to resume your coverage at that level, your remaining payments will be increased to cover the difference-from$100 per month to $150 per month Alternatively your maximum amount will be reduced proportionately for the time that you were gone For example, if you elect$1,200 for the year and are out on leave for 3 months, your amount will be reduced to $900 The expenses you incur during the time you are not in the Health Flexible Spending Account are not reimbursable. If you continue your coverage during your unpaid leave, you may pre-pay for the coverage, you may pay for your coverage on an after-tax basis while you are on leave, or you and your Employer may arrange a schedule for you to "catch up"your payments when you return 4 Uniformed Services Employment and Reemployment Rights Act (USERRA) If you are going into or returning from military service, you may have special rights to health care coverage under your Health Flexible Spending Account under the Uniformed Services Employment and Reemployment Rights Act of 1994 These rights can include extended health care coverage If you maybe affected by this law, ask your Administrator for further details. 5. What happens if I terminate employment? If you terminate employment during the Plan Year, your right to benefits will be determined in the following manner- (a) You will remain covered by insurance, but only for the period for which premiums have been paid prior to your termination of employment. 7 11/08 95 (b) You will still be able to request reimbursement for qualifying dependent care expenses for the remainder of the Plan Year from the balance remaining in your dependent care account at the time of termination of employment. However no further salary redirection contributions will be made on your behalf after you terminate You must submit claims within 90 days after the end of the Plan Year in which termination occurs (c) For health benefit coverage and Health Flexible Spending Account coverage on termination of employment, please see the Article entitled "Continuation Coverage Rights Under COBRA." Upon your termination of employment, your participation in the Health Flexible Spending Account will cease, and no further salary redirection contributions will be contributed on your behalf However, you will be able to submit claims for health care expenses that were incurred before the end of the period for which payments to the Health Flexible Spending Account have already been made Your further participation will be governed by "Continuation Coverage Rights Under COBRA." 6. Will my Social Security benefits be affected? Your Social Security benefits may be slightly reduced because when you receive tax-free benefits under our Plan, it reduces the amount of contributions that you make to the Federal Social Security system as well as our contribution to Social Security on your behalf VI HIGHLY COMPENSATED AND KEY EMPLOYEES 1 Do limitations apply to highly compensated employees? Under the Internal Revenue Code, highly compensated employees and key employees generally are Participants who are officers, shareholders or highly paid You will be notified by the Administrator each Plan Year whether you are a highly compensated employee or a key employee If you are within these categories,the amount of contributions and benefits for you may be limited so that the Plan as a whole does not unfairly favor those who are highly paid,their spouses or their dependents Federal tax laws state that a plan will be considered to unfairly favor the key employees if they as a group receive more than 25% of all of the nontaxable benefits provided for under our Plan. Plan experience will dictate whether contribution limitations on highly compensated employees or key employees will apply You will be notified of these limitations if you are affected VII PLAN ACCOUNTING 1 Periodic Statements The Administrator will provide you with a statement of your account periodically during the Plan Year that shows your account balance It is important to read these statements carefully so you understand the balance remaining to pay for a benefit. Remember, you want to spend all the money you have designated for a particular benefit by the end of the Plan Year 8 11/08 96 VIII GENERAL INFORMATION ABOUT OUR PLAN This Section contains certain general information which you may need to know about the Plan 1 General Plan Information City of Atascadero Flexible Benefits Plan is the name of the Plan Your Employer has assigned Plan Number 501 to your Plan The provisions of the Plan become effective on January 1, 2009, which is called the Effective Date of the Plan Your Plan's records are maintained on a twelve-month period of time This is known as the Plan Year The Plan Year begins on January 1 and ends on December 31 2. Employer Information Your Employer's name, address, and identification number are City of Atascadero 6907 EI Camino Real Atascadero, California 93422 95-3389063 3 Plan Administrator Information The name, address and business telephone number of your Plan's Administrator are City of Atascadero 6907 EI Camino Real Atascadero, California 93422 (805)470-3400 The Administrator keeps the records for the Plan and is responsible for the administration of the Plan The Administrator will also answer any questions you may have about our Plan You may contact the Administrator for any further information about the Plan 4 Service of Legal Process The name and address of the Plan's agent for service of legal process are City of Atascadero 6907 EI Camino Real Atascadero, California 93422 5 Type of Administration The type of Administration is Employer Administration 9 11/08 97 6 Claims Submission Claims for expenses should be submitted to Flex-Plan Services, Inc PO Box 53250 Bellevue,WA 98015 IX ADDITIONAL PLAN INFORMATION 1 Claims Process You should submit all reimbursement claims during the Plan Year For the Health Flexible Spending Account, you must submit claims no later than 90 days after the end of the Plan Year For the Dependent Care Flexible Spending Account, you must submit claims no later than 90 days after the end of the Plan Year Any claims submitted after that time will not be considered Claims that are insured will be handled in accordance with procedures contained in the insurance policies. All other general requests should be directed to the Administrator of our Plan If a dependent care or medical expense claim under the Plan is denied in whole or in part, you or your beneficiary will receive written notification The notification will include the reasons for the denial, with reference to the specific provisions of the Plan on which the denial was based, a description of any additional information needed to process the claim and an explanation of the claims review procedure. Within 60 days after denial, you or your beneficiary may submit a written request for reconsideration of the denial to the Administrator Any such request should be accompanied by documents or records in support of your appeal You or your beneficiary may review pertinent documents and submit issues and comments in writing The Administrator will review the claim and provide, within 60 days, a written response to the appeal (This period may be extended an additional 60 days under certain circumstances ) In this response, the Administrator will explain the reason for the decision, with specific reference to the provisions of the Plan on which the decision is based The Administrator has the exclusive right to interpret the appropriate plan provisions. Decisions of the Administrator are conclusive and binding X CONTINUATION COVERAGE RIGHTS UNDER COBRA Under federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), certain employees and their families covered under health benefits under this Plan will be entitled to the opportunity to elect a temporary extension of health coverage (called "COBRA continuation coverage") where coverage under the Plan would otherwise end. This notice is intended to inform Plan Participants and beneficiaries, in summary fashion, of their rights and obligations under the continuation coverage provisions of COBRA, as amended and reflected in final and proposed regulations published by the Department of the Treasury This notice is intended to reflect the law and does not grant or take away any rights under the law The Plan Administrator or its designee is responsible for administering COBRA continuation coverage Complete instructions on COBRA, as well as election forms and other information, will be provided by the Plan Administrator or its designee to Plan Participants who become Qualified Beneficiaries under COBRA. While the Plan itself is not a group health plan, it 10 11/08 98 does provide health benefits Whenever"Plan" is used in this section, it means any of the health benefits under this Plan including the Health Flexible Spending Account. 1 What is COBRA continuation coverage? COBRA continuation coverage is the temporary extension of group health plan coverage that must be offered to certain Plan Participants and their eligible family members (called "Qualified Beneficiaries") at group rates The right to COBRA continuation coverage is triggered by the occurrence of a life event that results in the loss of coverage under the terms of the Plan (the "Qualifying Event") The coverage must be identical to the coverage that the Qualified Beneficiary had immediately before the Qualifying Event, or if the coverage has been changed, the coverage must be identical to the coverage provided to similarly situated active employees who have not experienced a Qualifying Event (in other words, similarly situated non-COBRA beneficiaries) 2. Who can become a Qualified Beneficiary? In general, a Qualified Beneficiary can be (a) Any individual who, on the day before a Qualifying Event, is covered under a Plan by virtue of being on that day either a covered Employee, the Spouse of a covered Employee, or a Dependent child of a covered Employee If, however, an individual who otherwise qualifies as a Qualified Beneficiary is denied or not offered coverage under the Plan under circumstances in which the denial or failure to offer constitutes a violation of applicable law, then the individual will be considered to have had the coverage and will be considered a Qualified Beneficiary if that individual experiences a Qualifying Event. (b) Any child who is born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage, and any individual who is covered by the Plan as an alternate recipient under a qualified medical support order If, however, an individual who otherwise qualifies as a Qualified Beneficiary is denied or not offered coverage under the Plan under circumstances in which the denial or failure to offer constitutes a violation of applicable law, then the individual will be considered to have had the coverage and will be considered a Qualified Beneficiary if that individual experiences a Qualifying Event. The term "covered Employee" includes any individual who is provided coverage under the Plan due to his or her performance of services for the employer sponsoring the Plan However,this provision does not establish eligibility of these individuals Eligibility for Plan coverage shall be determined in accordance with Plan Eligibility provisions. An individual is not a Qualified Beneficiary if the individual's status as a covered Employee is attributable to a period in which the individual was a nonresident alien who received from the individual's Employer no earned income that constituted income from sources within the United States If, on account of the preceding reason, an individual is not a Qualified Beneficiary, then a Spouse or Dependent child of the individual will also not be considered a Qualified Beneficiary by virtue of the relationship to the individual. A domestic partner is not a Qualified Beneficiary Each Qualified Beneficiary(including a child who is born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage) must be offered the opportunity to make an independent election to receive COBRA continuation coverage 11 11/08 99 3 What is a Qualifying Event? A Qualifying Event is any of the following if the Plan provided that the Plan participant would lose coverage (i e , cease to be covered under the same terms and conditions as in effect immediately before the Qualifying Event) in the absence of COBRA continuation coverage (a) The death of a covered Employee (b) The termination (other than by reason of the Employee's gross misconduct), or reduction of hours, of a covered Employee's employment. (c) The divorce or legal separation of a covered Employee from the Employee's Spouse If the Employee reduces or eliminates the Employee's Spouse's Plan coverage in anticipation of a divorce or legal separation, and a divorce or legal separation later occurs, then the divorce or legal separation may be considered a Qualifying Event even though the Spouse's coverage was reduced or eliminated before the divorce or legal separation (d) A covered Employee's enrollment in any part of the Medicare program (e) A Dependent child's ceasing to satisfy the Plan's requirements for a Dependent child (for example, attainment of the maximum age for dependency under the Plan) If the Qualifying Event causes the covered Employee, or the covered Spouse or a Dependent child of the covered Employee, to cease to be covered under the Plan under the same terms and conditions as in effect immediately before the Qualifying Event, the persons losing such coverage become Qualified Beneficiaries under COBRA if all the other conditions of COBRA are also met. For example, any increase in contribution that must be paid by a covered Employee, or the Spouse, or a Dependent child of the covered Employee,for coverage under the Plan that results from the occurrence of one of the events listed above is a loss of coverage The taking of leave under the Family and Medical Leave Act of 1993 ("FMLA") does not constitute a Qualifying Event. A Qualifying Event will occur, however, if an Employee does not return to employment at the end of the FMLA leave and all other COBRA continuation coverage conditions are present. If a Qualifying Event occurs, it occurs on the last day of FMLA leave and the applicable maximum coverage period is measured from this date (unless coverage is lost at a later date and the Plan provides for the extension of the required periods, in which case the maximum coverage date is measured from the date when the coverage is lost.) Note that the covered Employee and family members will be entitled to COBRA continuation coverage even if they failed to pay the employee portion of premiums for coverage under the Plan during the FMLA leave 4 What factors should be considered when determining to elect COBRA continuation coverage? You should take into account that a failure to continue your group health coverage will affect your rights under federal law First, you can lose the right to avoid having pre-existing condition exclusions applied by other group health plans if there is more than a 63-day gap in health coverage and election of COBRA continuation coverage may help you avoid such a gap Second, if you do not elect COBRA continuation coverage and pay the appropriate premiums for the maximum time available to you, you will lose the right to convert to an individual health insurance policy, which does not impose such pre-existing condition exclusions. Finally, you should take into account that you have special enrollment rights under federal law (HIPAA) You 12 11/08 100 have the right to request special enrollment in another group health plan for which you are otherwise eligible (such as a plan sponsored by your Spouse's employer)within 30 days after Plan coverage ends due to a Qualifying Event listed above You will also have the same special right at the end of COBRA continuation coverage if you get COBRA continuation coverage for the maximum time available to you 5 What is the procedure for obtaining COBRA continuation coverage? The Plan has conditioned the availability of COBRA continuation coverage upon the timely election of such coverage An election is timely if it is made during the election period 6. What is the election period and how long must it last? The election period is the time period within which the Qualified Beneficiary must elect COBRA continuation coverage under the Plan The election period must begin not later than the date the Qualified Beneficiary would lose coverage on account of the Qualifying Event and ends 60 days after the later of the date the Qualified Beneficiary would lose coverage on account of the Qualifying Event or the date notice is provided to the Qualified Beneficiary of her or his right to elect COBRA continuation coverage If coverage is not elected within the 60 day period, all rights to elect COBRA continuation coverage are forfeited Note If a covered Employee who has been terminated or experienced a reduction of hours qualifies for a trade readjustment allowance or alternative trade adjustment assistance under a federal law called the Trade Act of 2002, and the employee and his or her covered dependents have not elected COBRA coverage within the normal election period, a second opportunity to elect COBRA coverage will be made available for themselves and certain family members, but only within a limited period of 60 days or less and only during the six months °rte,• immediately after their group health plan coverage ended Any person who qualifies or thinks that he or she and/or his or her family members may qualify for assistance under this special provision should contact the Plan Administrator or its designee for further information The Trade Act of 2002 also created a new tax credit for certain TAA-eligible individuals and for certain retired employees who are receiving pension payments from the Pension Benefit Guaranty Corporation (PBGC) (eligible individuals) Under the new tax provisions, eligible individuals can either take a tax credit or get advance payment of 65% of premiums paid for qualified health insurance, including continuation coverage If you have questions about these new tax provisions, you may call the Health Coverage Tax Credit Consumer Contact Center toll- free at 1-866-628-4282 TTD/TTY callers may call toll-free at 1-866-626-4282. More information about the Trade Act is also available at www doleta gov/tradeact. 7 Is a covered Employee or Qualified Beneficiary responsible for informing the Plan Administrator of the occurrence of a Qualifying Event? The Plan will offer COBRA continuation coverage to Qualified Beneficiaries only after the Plan Administrator or its designee has been timely notified that a Qualifying Event has occurred The Employer(if the Employer is not the Plan Administrator)will notify the Plan Administrator or its designee of the Qualifying Event within 30 days following the date coverage ends when the Qualifying Event is (a) the end of employment or reduction of hours of employment, (b) death of the employee, *#Me 13 11/08 101 (c) commencement of a proceeding in bankruptcy with respect to the Employer, or (d) enrollment of the employee in any part of Medicare IMPORTANT For the other Qualifying Events (divorce or legal separation of the employee and spouse or a dependent child's losing eligibility for coverage as a dependent child), you or someone on your behalf must notify the Plan Administrator or its designee in writing within 60 days after the Qualifying Event occurs, using the procedures specified below If these procedures are not followed or if the notice is not provided in writing to the Plan Administrator or its designee during the 60-day notice period, any spouse or dependent child who loses coverage will not be offered the option to elect continuation coverage You must send this notice to the Plan Administrator or its designee. NOTICE PROCEDURES Any notice that you provide must be in wrifinp Oral notice, including notice by telephone, is not acceptable You must mail, fax or hand-deliver your notice to the person, department or firm listed below, at the following address City of Atascadero 6907 EI Camino Real Atascadero, California 93422 If mailed, your notice must be postmarked no later than the last day of the required notice period Any notice you provide must state • the name of the plan or plans under which you lost or are losing coverage, • the name and address of the employee covered under the plan, • the name(s) and address(es) of the Qualified Beneficiary(ies), and • the Qualifying Event and the date it happened. If the Qualifying Event is a divorce or legal separation, your notice must include a copy of the divorce decree or the legal separation agreement. Be aware that there are other notice requirements in other contexts, for example, in order to qualify for a disability extension Once the Plan Administrator or its designee receives timely notice that a Qualifying Event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries Each Qualified Beneficiary will have an independent right to elect COBRA continuation coverage Covered employees may elect COBRA continuation coverage for their spouses, and parents may elect COBRA continuation coverage on behalf of their children For each Qualified Beneficiary who elects COBRA continuation coverage, COBRA continuation coverage will begin on the date that plan coverage would otherwise have been lost. If you or your spouse or dependent children do not elect continuation coverage within the 60-day election period described above, the right to elect continuation coverage will be lost. 14 11/08 102 8. Is a waiver before the end of the election period effective to end a Qualified Beneficiary's election rights? If, during the election period, a Qualified Beneficiary waives COBRA continuation coverage, the waiver can be revoked at any time before the end of the election period Revocation of the waiver is an election of COBRA continuation coverage However, if a waiver is later revoked, coverage need not be provided retroactively (that is, from the date of the loss of coverage until the waiver is revoked). Waivers and revocations of waivers are considered made on the date they are sent to the Plan Administrator or its designee, as applicable 9 Is COBRA coverage available if a Qualified Beneficiary has other group health plan coverage or Medicare? Qualified Beneficiaries who are entitled to elect COBRA continuation coverage may do so even if they are covered under another group health plan or are entitled to Medicare benefits on or before the date on which COBRA is elected However, a Qualified Beneficiary's COBRA coverage will terminate automatically if, after electing COBRA, he or she becomes entitled to Medicare or becomes covered under other group health plan coverage (but only after any applicable preexisting condition exclusions of that other plan have been exhausted or satisfied) 10 When may a Qualified Beneficiary's COBRA continuation coverage be terminated? During the election period, a Qualified Beneficiary may waive COBRA continuation coverage Except for an interruption of coverage in connection with a waiver, COBRA continuation coverage that has been elected for a Qualified Beneficiary must extend for at least the period beginning on the date of the Qualifying Event and ending not before the earliest of the following dates. (a) The last day of the applicable maximum coverage period (b) The first day for which Timely Payment is not made to the Plan with respect to the Qualified Beneficiary (c) The date upon which the Employer ceases to provide any group health plan (including a successor plan)to any employee (d) The date, after the date of the election, that the Qualified Beneficiary first becomes covered under any other Plan that does not contain any exclusion or limitation with respect to any pre-existing condition, other than such an exclusion or limitation that does not apply to, or is satisfied by, the Qualified Beneficiary (e) The date, after the date of the election, that the Qualified Beneficiary first enrolls in the Medicare program (either part A or part B, whichever occurs earlier) (f) In the case of a Qualified Beneficiary entitled to a disability extension, the later of- (1) (i)29 months after the date of the Qualifying Event, or (ii)the first day of the month that is more than 30 days after the date of a final determination under Title II or XVI of the Social Security Act that the disabled Qualified Beneficiary whose disability resulted in the Qualified Beneficiary's entitlement to the disability extension is no longer disabled, whichever is earlier; or Vftw 15 11/08 103 (2) the end of the maximum coverage period that applies to the Qualified Beneficiary without regard to the disability extension The Plan can terminate for cause the coverage of a Qualified Beneficiary on the same basis that the Plan terminates for cause the coverage of similarly situated non-COBRA beneficiaries for example for the submission of a fraudulent claim In the case of an individual who is not a Qualified Beneficiary and who is receiving coverage under the Plan solely because of the individual's relationship to a Qualified Beneficiary, if the Plan's obligation to make COBRA continuation coverage available to the Qualified Beneficiary ceases, the Plan is not obligated to make coverage available to the individual who is not a Qualified Beneficiary 11 What are the maximum coverage periods for COBRA continuation coverage? The maximum coverage periods are based on the type of the Qualifying Event and the status of the Qualified Beneficiary, as shown below (a) In the case of a Qualifying Event that is a termination of employment or reduction of hours of employment, the maximum coverage period ends 18 months after the Qualifying Event if there is not a disability extension and 29 months after the Qualifying Event if there is a disability extension (b) In the case of a covered Employee's enrollment in the Medicare program before experiencing a Qualifying Event that is a termination of employment or reduction of hours of employment, the maximum coverage period for Qualified Beneficiaries other than the covered Employee ends on the later of *00 (1) 36 months after the date the covered Employee becomes enrolled in the Medicare program, or (2) 18 months (or 29 months, if there is a disability extension) after the date of the covered Employee's termination of employment or reduction of hours of employment. (c) In the case of a Qualified Beneficiary who is a child born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage, the maximum coverage period is the maximum coverage period applicable to the Qualifying Event giving rise to the period of COBRA continuation coverage during which the child was born or placed for adoption (d) In the case of any other Qualifying Event than that described above, the maximum coverage period ends 36 months after the Qualifying Event. 12. Under what circumstances can the maximum coverage period be expanded? If a Qualifying Event that gives rise to an 18-month or 29-month maximum coverage period is followed, within that 18-or 29-month period, by a second Qualifying Event that gives rise to a 36-months maximum coverage period, the original period is expanded to 36 months, but only for individuals who are Qualified Beneficiaries at the time of and with respect to both Qualifying Events. In no circumstance can the COBRA maximum coverage period be expanded to more than 36 months after the date of the first Qualifying Event. The Plan Administrator must be notified of the second qualifying event within 60 days of the second qualifying event. This erre 16 11/08 104 notice must be sent to the Plan Administrator or its designee in accordance with the procedures above 13 How does a Qualified Beneficiary become entitled to a disability extension? A disability extension will be granted if an individual (whether or not the covered Employee)who is a Qualified Beneficiary in connection with the Qualifying Event that is a termination or reduction of hours of a covered Employee's employment, is determined under Title 11 or XVI of the Social Security Act to have been disabled at any time during the first 60 days of COBRA continuation coverage To qualify for the disability extension, the Qualified Beneficiary must also provide the Plan Administrator with notice of the disability determination on a date that is both within 60 days after the date of the determination and before the end of the original 18-month maximum coverage This notice must be sent to the Plan Administrator or its designee in accordance with the procedures above 14 Does the Plan require payment for COBRA continuation coverage? For any period of COBRA continuation coverage under the Plan, Qualified Beneficiaries who elect COBRA continuation coverage may be required to pay up to 102% of the applicable premium and up to 150% of the applicable premium for any expanded period of COBRA continuation coverage covering a disabled Qualified Beneficiary due to a disability extension Your Plan Administrator will inform you of the cost. The Plan will terminate a Qualified Beneficiary's COBRA continuation coverage as of the first day of any period for which timely payment is not made 15. Must the Plan allow payment for COBRA continuation coverage to be made in monthly installments? Yes The Plan is also permitted to allow for payment at other intervals. 16. What is Timely Payment for COBRA continuation coverage? Timely Payment means a payment made no later than 30 days after the first day of the coverage period Payment that is made to the Plan by a later date is also considered Timely Payment if either under the terms of the Plan, covered Employees or Qualified Beneficiaries are allowed until that later date to pay for their coverage for the period or under the terms of an arrangement between the Employer and the entity that provides Plan benefits on the Employer's behalf, the Employer is allowed until that later date to pay for coverage of similarly situated non-COBRA beneficiaries for the period Notwithstanding the above paragraph, the Plan does not require payment for any period of COBRA continuation coverage for a Qualified Beneficiary earlier than 45 days after the date on which the election of COBRA continuation coverage is made for that Qualified Beneficiary Payment is considered made on the date on which it is postmarked to the Plan If Timely Payment is made to the Plan in an amount that is not significantly less than the amount the Plan requires to be paid for a period of coverage, then the amount paid will be deemed to satisfy the Plan's requirement for the amount to be paid, unless the Plan notifies the Qualified Beneficiary of the amount of the deficiency and grants a reasonable period of time for payment of the deficiency to be made A"reasonable period of time" is 30 days after the notice is provided A shortfall in a Timely Payment is not significant if it is no greater than the lesser of $50 or 10% of the required amount. 17 11/08 105 17 Must a Qualified Beneficiary be given the right to enroll in a conversion health plan at the end of the maximum coverage period for COBRA continuation coverage? If a Qualified Beneficiary's COBRA continuation coverage under a group health plan ends as a result of the expiration of the applicable maximum coverage period, the Plan will, during the 180-day period that ends on that expiration date, provide the Qualified Beneficiary with the option of enrolling under a conversion health plan if such an option is otherwise generally available to similarly situated non-COBRA beneficiaries under the Plan If such a conversion option is not otherwise generally available, it need not be made available to Qualified Beneficiaries 18 How is my participation in the Health Flexible Spending Account affected? You can elect to continue your participation in the Health Flexible Spending Account for the remainder of the Plan Year, subject to the following conditions You may only continue to participate in the Health Flexible Spending Account if you have elected to contribute more money than you have taken out in claims For example, if you elected to contribute an annual amount of$500 and, at the time you terminate employment, you have contributed $300 but only claimed $150, you may elect to continue coverage under the Health Flexible Spending Account. If you elect to continue coverage, then you would be able to continue to receive your health reimbursements up to the $500 However, you must continue to pay for the coverage,just as the money has been taken out of your paycheck, but on an after-tax basis. The Plan can also charge you an extra amount (as explained above for other health benefits)to provide this benefit. IF YOU HAVE QUESTIONS If you have questions about your COBRA continuation coverage, you should contact the Plan Administrator or its designee For more information about your rights under ERISA, including COBRA, the Health Insurance Portability and Accountability Act(HIPAA), and other laws affecting group health plans, contact the nearest Regional or District Office of the U S Department of Labor's Employee Benefits Security Administration (EBSA). Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA's website at www dol gov/ebsa KEEP YOUR PLAN ADMINISTRATOR INFORMED OF ADDRESS CHANGES In order to protect your family's rights, you should keep the Plan Administrator informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Plan Administrator or its designee XI SUMMARY The money you earn is important to you and your family You need it to pay your bills, enjoy recreational activities and save for the future Our flexible benefits plan will help you keep more of the money you earn by lowering the amount of taxes you pay The Plan is the result of our continuing efforts to find ways to help you get the most for your earnings. If you have any questions, please contact the Administrator 18 11/08 106 ITEM NUMBER. C-1 DATE. 12/09/08 Atascadero City Council Staff Report - Public Works Department Regional Water Quality Control Board (RWQCB) Storm Water Management Plan Update RECOMMENDATION Council approve the proposed timeline for submittal of a Storm Water Management Plan (SWMP) to the Central Coast Regional Water Quality Control Board (RWQCB) REPORT-IN-BRIEF The Central Coast Regional Water Quality Control Board (RWQCB) has sent recent correspondence to the City of Atascadero requiring the submittal of a Storm Water Management Plan (SWMP) by January 5, 2009 (Attachment A) This correspondence from the RWQCB was in response to a request by City staff for additional time for the preparation and public review of a SWMP (Attachment B) The RWQCB is requiring the City to prepare a SWMP in order to comply with the National Pollutant Discharge Elimination System (NPDES) Phase II storm water regulations. The SWMP will guide the City's management of storm water run-off, require the allocation of additional City resources, and may change certain development requirements The General Order from the State Water Board requiring the development and implementation of a SWMP is mandatory for all county and local agencies A summary description of NPDES Phase II and the current SWMP requirements is included in Attachment C City staff has prepared a timeline, included below, for the preparation, public review and City Council approval of our SWMP, prior submittal to the RWQCB DISCUSSION City staff has been working to prepare a SWMP since 2003 The City Council directed staff to submit a draft SWMP in 2003, but like most other Central Coast cities, the SWMP was not approved by the RWQCB because the approval process was 107 postponed In February 2008, the RWQCB issued a letter regarding SWMP approval, which included four new regulations that would need to be incorporated into the City's SWMP The February 2008 RWQCB letter established a June 2008 submittal deadline for the City of Atascadero City staff has been working with the RWQCB, and staff from other agencies, to better understand and respond to these four additional requirements The following summary represents staff's actions to date • Staff requested a deadline extension to provide time to receive comments from the Board, study the impacts of the new requirements, and have a public process to allow Atascadero's citizens an opportunity to provide comment. • A letter was received from RWQCB staff on August 12, 2008 that denied the City's request for additional time • Staff submitted a follow-up letter requesting reconsideration of the RWQCB's time extension denial • City staff met with RWQCB staff on October 9, 2008 to discuss the City's position and public review process needs Water Board staff agreed to consider a timeline extension • City staff sent a formal request to the RWQCB on October 17, 2008, with a proposed SWMP development timeline (Attachment B) • The Water Board Executive Officer provided a new timeline to the City for SWMP approval on November 17, 2008 (Attachment A) Water Board staff have agreed to postpone the posting of the Atascadero SWMP until January 29, 2009 to allow for modifications after the 1/27/09 City Council Meeting Staff has prepared a draft time-line that will allow for public and Council review based on the new Water Board posting deadline of January 29, 2009 Proposed Public Process time-line to meet RWQCB deadline 1,1105 4. Review SWMP preparation timeline with City Council December 9, 2008 Draft SWMP posted on Website for review December 10, 2008 First Public Review Meeting December 17, 2008 Prepare Final Draft SWMP/work with RWQCB to December 18, -January 5, 2009 determine areas of agreement with plan language Submit Draft SWMP to Water Board January 5, 2009 Receive Water Board comments and incorporate into January 16, 2009 Plan Revised Draft SWMP posted on Website for Public January 21, 2009 Review and Comment City Council consider Final Draft SWMP for submittal of January 27, 2009 potential comments to Water Board Submit Plan to Water Board January 29, 2009 60 Day Water Board Public Review Begins On or after January 29, 2009 as determined by CCRWQCB Board Hearing if requested by the Public or the City May, 8, 2009 108 err+ FISCAL IMPACT The long term fiscal impact is unknown at this time but could be significant. Staff has secured Wallace Group for $21,500 to assist in the preparation of a compliant SWMP ATTACHMENTS A — Response from Roger Briggs on Proposed Timeline B — Letter to Roger Briggs Outlining Public Review Process C — Status report on other agencies D- A Summary Description of NPDES Phase II and the Current SWMP Requirements 109 Attachment A California Regional Water Quality Control Board Linda S.Adams Central Coast Region Arnold Schwarcenegger Agencv Secretary Internet Address: http://www waterboards.ca.gov/centralcoast Governor 895 Aerovista Place,Suite 101,San Luis Obispo,California 93401 7906 Phone(805)549-3147 FAX(805)543-0397 November 17, 2008 Geoff English City of Atascadero 6907 EI Camino Real Atascadero, CA 93422 Dear Mr English REVISED STORMWATER GENERAL PERMIT ENROLLMENT SCHEDULE, CITY OF ATASCADERO, SAN LUIS OBISPO COUNTY, WDID# 3 40MSO4027 We received your October 17, 2008 request for an extension to submit the revised City of Atascadero Storm Water Management Plan (SWMP) We understand the City has hired a consultant to revise the SWMP to better meet the Central Coast Water Board's expectations. We understand you intend to submit the revised SWMP for Water Board and public review in the first week of January 2009 If a hearing becomes necessary, the Water Board will consider adoption of Atascadero's SWMP and enrollment under the General Permit at its regular meeting in San Luis Obispo on May 8, 2009 The attached schedule provides the series of milestones and tasks that both the City and Water Board staff must follow in order for the SWMP to be ready for Water Board consideration on May 8, 2009 Based on the schedule, we request you submit the revised SWMP as soon as possible, but no later than January 5, 2009 We request the revised SWMP by this date in order to determine compliance with the statewide General Permit for Storm Water Discharges from Small Municipal Separate Storm Sewer Systems (General Permit) After you submit the revised SWMP, we will review the document and reply with a Table of Required Revisions by January 26, 2009 At that time, we will post the draft SWMP and our Table of Revisions on our website for 60-days for public review and comment. If no party requests a Water Board hearing during this 60-day public comment period, the Executive Officer may approve the SWMP and enroll the City under the General Permit. Alternatively, if a member of the public or the City requests a Water Board hearing during the 60-day public comment period, Water Board staff will provide recommendations to the Water Board on the City's SWMP (with the required revisions) at the May 8, 2009 meeting We provided preliminary comments on the City's December 17, 2004 draft SWMP to David Athey in September 2008 Staff provided those comments to assist the City with California Environmental Protection Agency N0104 Recvcled Paper 110 City of Atascadero - 2- November 17, 2008 improving its SWMP to meet the Clean Water Act's Maximum Extent Practicable (MEP) standard Staff would appreciate the opportunity to review those comments with your staff and consultants We will contact you in the near future to set up such a meeting We are granting this extension in a spirit of cooperation with the City of Atascadero, but we cannot permit any further delays If we do not receive the revised SWMP by January 5, 2009, we may find the City in violation of the General Permit requirement to submit information necessary to determine compliance The consequences of such a violation may be significant. General Permit Standard Provision No 15 states, "Any person who violates any permit condition of this General Permit is subject to civil penalty not to exceed $27,500 per calendar day of such violation, as well as any other appropriate sanction provided by Part 309 of [Clean Water Act] " Thank you for your attention to this letter We look forward to working with you to improve the City's SWMP and enrolling the City under the General Permit as soon as possible If you have any questions regarding this letter, please contact David Innis at (805) 549-3150 or Matt Thompson at (805) 549-3159 Sincerely, Roger W Briggs Executive Officer Attachment: City of Atascadero Revised Storm Water Management Plan Enrollment Schedule S:\Shared\Stormwater\Stormwater Facilities\San Luis Obispo Co\Municipal\Atascadero\Enrollment 2008\Response to Atascadero Request for SWMP Submittal Extension,Nov 2008.doc California Environmental Protection Agency Recvcled Paper 111 City of Atascadero Revised Storm Water Management Plan Enrollment Schedule Tasks Length of I Process Begin End Phase I. Staff Assessment of Water Quality Challenges 2008 Water Board staff assesses water quality internally 5-Jun 3-Jul Water Board staff meets with MS4s and stakeholders to solicit information on water quality conditions 8-J ul 8-Jul Water Board staff conveys current knowledge of water quality challenges to MS4 1 5 weeks 8-Jul 16-Jul Phase II MS4 Finalization of Draft SWMPs and Water Board Staff and Public SWMP Review Water Board Review 2004 SWMP and provide comments to MS4 16-Jul 24-Sep Phase III MS4 SWMP Redraft MS4s re-draft SWMPs based on Water Board staff and public comments 14 weeks 24-Sep 5-Jan Phase IV Water Board Staff Final Review and Posting of SWMP 2008-2009 ' Water Board staff reviews SW MPs 4 weeks 5-Jan 26-Jan Water Board staff posts SWMPs and table of required revisions for public review, 60 days 60 days 26-Jan-09 27 Mar-09 Phase V Water Board Action 2009 Water Board staff responds to public comment Water Board staff prepares Staff Report with recommendation and resolution for SWMP approval 3 weeks 28-Mar 18-Apr Water Board staff responds to additional public comment after posting Board Agenda Water Board staff prepares presentation for hearing Water Board staff internal review/adjustments up to Board Meeting on May 8, 2008 in San Luis Obispo 3 weeks 18-Apr 8-Ma California Environmental Protection Agency ``t5 Remled Paper 112 Attachment B x'1915 1979 CITY OF ATASCADERO 6907 El CAMINO REAL, ATASCADERO, CA 93422 Telephone(805)461-5000 *Fax (805)461-7612 October 17,2008 Roger Briggs Executive Officer Central Coast Regional Water Quality Control Board 895 Aerovista Place San Luis Obispo, CA 93401 RE Request for Storm Water Management Plan Adoption Time Line Extension Dear Mr Briggs, I appreciated the opportunity to meet with your staff, Matt Thompson and David Innis on October 9, 2008, to discuss our concerns related to the City of Atascadero's Draft Storm Water Management Plan (SWMP) We are specifically concerned with the time frames for adoption and how it impacts our community's desire for public participation. The City of Atascadero is requesting an opportunity to conduct a SWMP public participation process, prior to submittal to the Water Board. We want to work with you and your staff and we believe we have an opportunity to produce a comprehensive SWMP if more time is granted. We believe we need the extra time in order to provide information and provide an opportunity for our citizens to participate in the SWMP process. Therefore, in the interest of moving the plan forward we are proposing the following SWMP adoption schedule: • Submit requested SWMP response timeline to RWQCB October 17 2008 • Hire consultant to revise SWMP October 24,2008 • Revise SWMP with evaluation of interim measures December 1,2008 • Conduct Public Review process January 2009 • Prepare final draft SWMP February 2009 • City Council approve SWMP February 24,2009 • Submit final draft SWMP to RWQCB March 3, 2009 Nrw 113 Mr Roger Briggs October 17 2008 As you can see, this schedule delays final draft submittal until March 3, 2009 We believe this proposed process will provide the City with the necessary time to develop a well-vetted plan that is mutually agreeable to the Water Board. We look forward to getting your positive response and working with your staff to produce the best possible SWMP In the meantime we are proceeding with the selection of a consultant to start our SWMP re-write Should you have any questions you can reach me at(805)470-3180 Sincerely, Geoff English Interim Public Works Director City of Atascadero Cc W McKinney, City Manager J Lewis, Assistant City Manager W Frace, Community Development Director D Athey, Deputy Public Works Director B Pierik, City Attorney wird 114 ATTACHMENT C Updated Table- What Are Other Cities Doing? Atascadero is not the only agency facing the imposition of the four new requirements Twenty-four agencies in the RWQCB jurisdiction are facing the same requirements The following chart outlines several other agencies and their actions taken to date � -"111,00"01, Submitted December 2004 Draft for initial Water Board review Staff will be responding to the Water Board Atascadero March 2009 based on City Council direction. The Water Board has provided staff with comments.The City has hired Wallace Group to rewrite the plan based on Water Board comments. Submitted Draft in August 2008. The CSD's plan Templeton CSD March 2009 addresses facilities they own. The County of San Luis Obispo's plan covers the rest of the town. Water Board staff is currently reviewing the plan The Water Board has notified the City that they will be Paso Robles' Approved 2004 addressing the four additional requirements during their next Storm Water Plan update in 2009. The Water Board has notified the County that they will be addressing the four additional requirements during their County of San Luis Obispo* Approved 2008 next Storm Water Plan update in 2012. The State Water V,, Board has just denied an appeal by an environmental group and stated that the plan meets maximum extent practical criteria, The City resubmitted its Storm Water Plan in September 12, 2008, for initial Water Board Review The City has addressed the four additional requirements by either City of San Luis Obispo April 2009 telling the Water Board they already have standards that address the Water Board's concems (LID and riparian setback standards), or offering to do study's and report back to the Board in three years to present options H dromodification Plan The City has requested a hearing at the State Water City of Santa Maria September 2008 Resources Control Board. The hearing has been postponed so that the Water Board and City can work out their differences. Lompoc and the Building Industry Association appealed the Storm Water Plan approval to a Full Water Board City Lompoc October 2008 Hearing. The City of Lompoc's plan was approved with minor changes. Lompoc has appealed the Decision to the State Water Resources Control Board for a hearing. The City has re-submitted to the Regional Board on September 5, 2008. The City revised their Storm Water City of Morro Bay April 2009 Plan to be similar to the County of San Luis Obispo Storm Water Plan. The City's Storm Water Plan is now going through the 60 day public review process. "The City of Paso Robles and San Luis Obispo County already have approved Storm Water Plans. Agencies with approved Storm Water Plans will be required to address the four additional measures when their Storm Water Plans are up for their five year review 115 ATTACHMENT D `40W What is NPDES, what does it do, and how is it enforced? The NPDES program was established under the Federal Clean Water Act in 1977 to protect and restore surface waters of the United States Surface waters include wetlands, lakes, creeks, and rivers The enforcement of NPDES is delegated by the Federal government to the states The California State Water Resources Control Board (State Board) is responsible for State implementation of NPDES The State Board, a regulatory state agency, and the nine RWQCBs coordinate implementation throughout California. The RWQCB that oversees Atascadero is Region 3 - Central Coast Regional Water Quality Control Board Our RWQCB covers a six-county area, including San Luis Obispo County, Santa Barbara County, Monterey County, San Benito County, Santa Clara County and Santa Cruz County The RWQCB is composed of nine officials that are appointed by the Governor and serve four-year terms The RWQCB appoints an Executive Officer who is responsible for day to day operations and enforcement of regulations How do Storm Water Management Plans (SWMP) relate to NPDES and what do the plans cover? A SWMP is required for every City and County in the State as part of NPDES Phase II NPDES was implemented in two phases depending on the size of agencies Phase I required agencies with populations over 100,000 to comply NPDES Phase II required r cities smaller than 100,000 in population to comply SWMPs define strategies and provide guidelines for the protection of water quality and the reduction of pollutant discharge Prior to the Region 3 RWQCB's additional regulations, a SMWP was required to address six minimum requirements 1 Public Education 2 Public Participation 3 Illicit Discharge Detection and Elimination 4 Construction Site Storm Water Runoff Control 5 Post Construction Storm Water Management 6 Pollution Prevention/Good Housekeeping for Municipal Operations What Process has the City followed to prepare a SWMP? In February, 2002, the City Council directed staff to begin development of a SWMP as required by NPDES Phase II The City retained URS Inc , to assist staff in drafting the plan In March 2003, the City Council directed staff to submit the SWMP to the RWQCB The RWQCB reviewed the plan and requested a number of revisions The City was working earnestly to get the SWMP plan approved By December 2004, the City and RWQCB had completed three re-submittal cycles of the SMWP and responded to comments from the RWQCB 116 Vft,► Shortly after December 2004, RWQCB staff indicated that the City of Atascadero's Storm Water Plan adoption would be delayed because of problems with staffing and heavy opposition to other cities' plans from environmental groups Coincidentally, the City of Paso Robles' SWMP, which had been submitted in the same timeframe as Atascadero's, was approved The City's draft SWMP remained under review with the RWQCB for several years Staff did not receive any further comments from the RWQCB until November 2007 In November 2007, the RWQCB notified Atascadero and other agencies that a new timeline and process for adopting the outstanding SWMPs would be imposed The new process and timeline was presented and approved at the RWQCB meeting on December 7, 2007 At this meeting many agencies were concerned about the lack of detail provided in the Board's staff report regarding the four additional SWMP requirements imposed by the local RWQCB On February 15, 2008, RWQCB staff notified the City of Atascadero and other cities of the new requirements and timeline for Storm Water Plan adoption (refer to Attachment 1) The letter included four new requirements that are likely to have a major impact on Atascadero's future development and "housekeeping" practices What are the new requirements being imposed by the RWQCB? Listed below is a summary of the four new RWQCB requirements that were released in the February 15, 2008 letter (refer to attachment 1 and 2) 1 Maximize infiltration of clean storm water, minimize runoff volume and rate The RWQCB believes that excess storm water is a problem for streams and creeks According to the RWQCB, excess water may cause erosion of stream banks and down cutting of stream beds Therefore, the RWQCB is requiring agencies to modify development practices to retain the same amount of water onsite post-development as occurred prior to development. The City currently requires the rate of stormwater run-off to be maintained at pre-development levels but does not restrict the quantity of run-off The proposed changes would restrict the quantity of run-off to pre-development levels This represents a change in the thinking and design of how stormwater has been handled for decades In order to comply with this requirement projects will likely have to incorporate onsite retention systems and utilize other means such as porous paving materials which will allow stormwater to permeate back into the site 2 Protection of riparian areas wetlands and their buffer zones. The RWQCB is requiring agencies to determine and implement appropriate setbacks to riparian areas, creeks, and wetlands It is not clear exactly which waterways would be affected by this requirement. It appears that the minimum setbacks could be greater than those currently adopted by the City's General Plan 117 3 Minimize pollutant loading The RWQCB is requiring agencies to incorporate Best Management Practices Nato (BMP) into SWMPs that will minimize the discharge of pollutants affecting creeks and streams For example, the City will need to incorporate specific BMP that will address lour dissoi ,,cd oxygen and pathogens into Atascadero Creek. This requirement will likely require modifications to the City's existing storm water drainage system that may result in expensive modifications, maintenance and retrofits 4 Provide long-term watershed protection Agencies are required to develop plans to control watershed impacts, also known as hydro-modification The RWQCB desires that watersheds contain no more than 3-10% impervious surfaces (paving) This means that the City will have to develop plans and requirements that limit new and redevelopment impacts on storm water runoff volume in creeks and watersheds through site design and limitations on lot coverage These requirements are complicated and the boundaries of the watershed are not clearly delineated Due to the unique nature of Atascadero's topography which includes several valleys, creeks, and riparian areas, the City could potentially contain multiple watersheds Since many parts of Atascadero already exceed the 5% threshold, this rule is likely to change development practices and redevelopment. It is not clear how this rule will affect compact infill development like the City encourages Downtown Additionally, the cost of complying with these new requirements is not known 118