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HomeMy WebLinkAbout08/27/2001 BAKERSFIELD Harold Hanson, Chair Alan Tandy, City Manager Irma Carson Staff: Alan Christensen Mark Salvaggio AGENDA SUMMARY REPORT SPECIAL MEETING PERSONNEL COMMI'I'rEE Monday, August 27, 2001, 4:00 p.m. City Manager's Conference Room - City Hall 1501 Truxtun Avenue, Bakersfield, CA 1. ROLL CALL The meeting was called to order at 4:03 p.m. Present: Councilmembers Harold Hanson, Chair; Irma Carson; and Mark Salvaggio 2. ADOPT FEBRUARY 9, 2001 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. NEW BUSINESS 1) Report and Committee recommendation on Medical Insurance Renewal Information - Hayden Human Resources Manager Carroll Hayden introduced Tim Beck and Michael Schionning from Buck Consultants, the City's health care consultants. Michael Schionning gave an overview of the 2002 Health Plan Renewal Report. Overall the 2002 premiums for the City's medical, dental, vision and mental health coverages are projected to increase 8.5% or $806,843 over 2001 premiums, which will bring the 2002 annual premiums to $10,342,297. Overall medical premiums are increasing 10.4%, dental premiums are decreasing -5.3%, while the mental health, EAP, vision'premiums and FSA program fees are not changing. This increase compares favorably, to the increases Buck Consultants are seeing for other clients in the central valley of California. The Blue Cross' overall medical PPO/Rx renewal adjustment is 6.8%, active's premiums are increasing 4.8% and retiree's are increasing 11.6%. ADOPTED.AS S1TI~/'TED ~ 18, 2002. PERSONNEL COMMITTEE AGENDA SUMMARY REPORT Monday, August 27, 2001 Page -2- Blue Cross' overall HMO renewal adjustment is 14.3% and Senior Secure Medicare Risk premiums have increased 34.4%. Kaiser's HMO premiums are increasing by 9.5% for the actives and the under-65 retirees. Kaiser's Medicare Risk premiums are increasing by 13.24%. PacifiCare Secure Horizons HMO premiums are increasing by 286.6%, almost triple. Blue Cross dental plan is decreasing by -9.4%. The Dedicated Dental premiums are renewing at current rates. Pacific Union Dental premium rates are increasing by 2.8%. Medical Eye Services (MES) Vision and Eyewear Only plans will be renewing at the current rates. It was noted all of the medicare risk premiums are increasing fairly substantially. This is happening in the overall marketplace. Prescription drug increases have continued to be a significant factor in the cost increase for the medical plans. Projected 2001 prescription drug claims are expected to increase by more than 18% this year for both the active and retired employees. Annual prescription drug trends have been averaging between 18% - 25% for the last few years. Carroll Hayden stated staff's recommendation is to renew the health insurance contracts. Chuck Waide commented Buck Consultants have done a very good job for the City this year on the renewal rates. The Insurance Committee met and recommended unanimously to renew the health insurance contracts as presented in the Health Plan Renewal Report by Buck Consultant. Committee member Salvaggio made a motion that the Committee recommend to the Council that we renew the health insurance contracts. Dale Hawley commented this has been a good year, but in the long picture the retirees have concerns that the retiree and active rates are not blended. They have a very small retiree group and if you have one major claim, it significantly affects their premiums. He stated he is not objecting to the recommendation to renew the contracts. Carroll Hayden responded that at the request of the Insurance Committee, Buck Consultants have done a comparison on blended rates. Michael Schionning responded if you actually were to blend the rates this year, the result for the actives would be 32.5% higher than the overall 4.8% being proposed today. Retiree rates would decrease 53.7%. Buck Consultants did not recommend blending the rates.' PERSONNEL COMMITTEE AGENDA SUMMARY REPORT Monday, August 27, 2001 Page -3- Chuck Waide stated he requested the comparison information from Buck Consultants and 'they have reviewed it and blending the rates would be too high a cost for the Blue and White Collar employees to pay. He has a couple of proposals to address this issue, which will be discussed during bargaining. It was discussed that the City subsidizes the retires that are in Blue Cross Fee-for- Service. The City pays 42% of the premiums and they also are provided a years-of- service subsidy. For actives the City pays 80% and the employees pay 20%. New employees hired after April 1996 for Miscellaneous and 1997 for Police Officers will no longer receive the 42% subsidy when they retire. Dale Hawley suggested the retirees give back the 42% subsidy to offset the active's increase and have the rates blended. It was discussed that legally you cannot just arbitrarily decide to give back the subsidy. Chuck Waide stated the Insurance Committee, with input from the shop stewards, discussed this issue and voted to table it as blending the rates is not feasible. Committee Chair Hanson expressed that to blend rates and raise premiums on young families with children just entering the work force would create a hardship. The Committee voted unanimously to approve staff's and the Insurance Committee's recommendations to renew the health insurance contracts as presented in the Health Plan Renewal Report by Buck Consultants. Staff will forward the amendments to renew the Health Insurance Contracts to the City Council for approval. 2) Discussion to consider allowing the Retiree Representative voting status on the Insurance Committee - Hayden The City Attorney's Office provided an opinion that under the current arrangement, the retirees cannot be members of the Insurance Committee. Each of the MOU's for the various bargaining units of the City employees and the salary resolution for general supervisory, police supervisory and managements units contains identical language on the composition of the Insurance Committee. That language provides "The Committee shall consist of representatives from each Unit and the City." The retirees are not a unit. Additionally, any change to the composition o[ the Insurance Committee would be a "meet and confer" item, necessitating bargaining with each unit. Committee member Carson spoke about the retirees and asked why they could not be considered a bargaining unit on the health insurance issue. Bart Thiltgen responded, a bargaining unit as described in State Law is a group of regular employees. The retirees are no longer employees. PERSONNEL COMMITTEE AGENDA SUMMARY REPORT Monday, August 27, 2001 Page -4- Committee member Carson asked, if we wanted the retiree group to have a voting member on the Insurance Committee, could we do it. Alan Tandy responded, he believed City staff has no objection, but Chuck Waide representing the bargaining units has indicated he has issues. Chuck Waide stated he takes issue in that this is a long-standing agreement they have had for a number of years on how we are going to handle the benefit levels. An agreement was reached with the City a number of years ago and placed in the MOUs. He stated it is inappropriate for a Council Committee to even be discussing it at this point without first coming back to the unions for negotiations. Committee member Carson expressed that it does not seem fair that the retirees would not be included and asked why the unions would be opposed to just one retiree being on the Insurance Committee? Chuck Waide responded, it was agreed we would have a retiree representative sit in as an advisor to the committee on retiree issues. The retiree advisor does not have voting rights, nor have they ever had voting rights under the agreement between the City and the Unions. For benefit purposes, the unions are very interested in what the retirees get, as all employees are going to be there. Part of the union's role is to negotiate retiree benefits. Margaret Ursin spoke about the formation of the Insurance Committee and their role. She also stated until last year, they did not know their retiree advisory person sitting on the Committee had no vote. Carroll Hayden stated she met with Mr. Hawley and Mr. Deem when they were appointed to the Insurance Committee and explained their advisory roles. Jim Deem spoke about serving on the Insurance Committee, his status on the Committee and not being able to vote. Committee member Salvaggio express that unfortunately we have had a misunderstanding, which should have been clarified years ago. We now have the information that clarifies the issue. Richard Watkins spoke about his experience serving on the union and the Insurance Committee and made a suggestion if information comes out of the Committee, the retirees recommendation be noted. Chuck Waide said it would change the way the Insurance Committee functions and would call for a roll call vote. It was noted there are no written summaries for these meetings, only a vote. Due to legal issues, the Personnel Committee took no action and the issue was returned to the Insurance Committee. PERSONNEL COMMITTEE AGENDA SUMMARY REPORT Monday, August 27, 2001 Page -5- 5. ADJOURNMENT The meeting adjourned at 5:02 p.m. Attendance staff: City Manager Alan Tandy; City Attorney Bart Thiltgen; Assistant City Manager Alan Christensen; Finance Director Gregory Klimko; Human Resources Manager Carroll Hayden; and Assistant City Attorney Bob Sherfy Others present: Michael Schionning and Tim Beck from Buck Consultants; Chuck Waide and Denny Haynes, Central California Association of Public Employees (CCAPE); and Retirees: Dale Hawley, Richard Watkins, Jim Deem and Margaret Ursin. cc: Honorable Mayor and City Councilmembers P:\draftp01aug27summarY.WPd