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CITY OF COLTON ITEM #10 <br />AGENDA REPORT <br />FOR CITY COUNCIL MEETING OF <br />SEPTEMBER 4, 2007 <br />TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS <br />FROM: DILU DE ALWIS, FINANCE DIRECTOR M <br />SUBJECT: APPROVE PAYMENT FOR UNEMPLOYMENT INSURANCE TO STATE OF <br />CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT NOT TO <br />EXCEED $75,000 <br />DATE: AUGUST 27, 2007 <br />BACKGROUND <br />The City of Colton is mandated to pay the State of California Employment Development Department (EDD) the city's <br />share of unemployment insurance (UI) premium for unemployment benefits. <br />DISCUSSION/ ANALYSIS <br />Unemployment Insurance is a nationwide program created to provide partial wage replacement to unemployed workers <br />while they conduct an active search for new work. Unemployment Insurance is a federal -state program, based on federal <br />law, but executed through state law. Employers finance the UI program by tax contributions. In California, the EDD <br />administers the UI program according to guidelines established by the UI Code and the California Code of Regulations, <br />Title 22. <br />All employees whether full-time or part-time are entitled to unemployment benefits through EDD when they separate from <br />the city resulting from termination or due to staff reductions. Payment of benefits for employees that are terminated are <br />paid out only after the City has had input to EDD regarding the cause for termination and a determination from EDD <br />regarding eligibility of such benefits. <br />The amount requested is a best guess estimate as staff is unable to determine what claims will be filed against the City for <br />this benefit. The average claims paid over the past four years has been $68,645 per year. <br />ALTERNATIVE <br />Since this is required under California Code of Regulations Title 22 there are no alternatives. <br />FINANCIAL IMPACT <br />Funds for this premium is budgeted in the Risk Management budget account 605-6040-8601-2262 <br />ENVIRONMENTAL IMPACT <br />N/A <br />RECOMMENDATION <br />Staff recommends Council Approval to authorize the issuance of a purchase order in an amount not to exceed $75,000 to <br />the State of California employment Development Department. <br />REVIEW TEAM ONLY <br />Attorney: - M 0'Z*- Finance Director: <br />Manager: OTHER: <br />