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Home My WebLink About04/02/1996 i~ A K E R S F I E L D Jacquie Sullivan, Chair Patricia J. DeMond Mark Salvaggio Staff: John W. stinson PERSONNEL COMMITTEE Tuesday, April 2, 1996 4:15 p.m. City Manager's Conference Room 1501 Truxtun Avenue, Suite 201 Bakersfield, CA 1. ROLL CALL 2. APPROVAL OF DECEMBER 18, 1995 MINUTES 3 PRESENTATIONS 4. PUBLIC STATEMENTS 5. DEFERRED BUSINESS 6. NEW BUSINESS . A. HEALTH CARE CONSULTANT 7. ADJOURNMENT JWS:jp FILE COPY B A K E R S F I E L D i : Jacquie Sullivan, Chair Patricia J. DeMond = Mark Salvaggio AGENDA SUMMARY REPORT SPECIAL PERSONNEL COMMITTEE MEETING Monday, December 18, 1995 3:30 p.m. City Manager's Conference Room 1501 Truxtun Avenue Bakersfield, CA 93301 1. ROLL CALL Call to Order 3:30 p.m. Present: Councilmembers Jacquie Sullivan, Chair; Patricia J. DeMond; and Mark Salvaggio 2. APPROVAL OF DECEMBER 4 AND DECEMBER 11, 1995 MINUTES Approved as submitted. 3. PRESENTATIONS None 4. PUBLIC STATEMENTS None 5. DEFERRED BUSINESS A.. RETIREE MEDICAL PLAN ' The Personnel Committee met to discuss and review the issue of Retiree Medical Insurance. Staff presented information to the Committee which showed the inequity AGENDA SUMMARY REPORT PERSONNEL COMMITTEE Monday, December 18, 1995 Page -2- between the fee-for-service and HMO rates due to an error which provides multiple subsidies to the fee-for-service participants. This has resulted in rate inequities and rapidly escalating costs to the City for retiree health insurance. Staff reviewed with the committee the various options available given the legal constraints related to retiree medical plans. Staff also provided a survey of retiree medical benefits for comparable cities which showed our benefit level exponentially greater in comparison. Representatives from the various employee bargaining units and several retirees were in attendance at the Personnel Committee meetings and made comments regarding the information and options presented by staff. After considerable discussion of available options and legal constraints, there appear to be two alternatives. With regard to the double subsidy, the most legally sustainable recommendation is to unblend the retiree and active experience rating. This would occur approximately July 1, 1996 in order to provide time to notify retirees and time for them to make decisions regarding insurance choices. An alternative would be to have all employee groups agree to fix the 42% subsidy at the 1995 level for each coverage level (single, two-party and family) for the fee- for-service participants. The second alternative requires agreement by all employee groups and if legally challenged, would then result in the city taking action to unblend the rates. In addition to addressing this primary issue, staff and the Committee are recommending the following for both alternates: · The restructuring of all the retiree rates to reflect participation in Medicare and the concept that the two-party rates are twice the single rate and a family rate that is three times the single rate. · The implementation of a Medicare Risk option with the City contributing the cost of the Medicare Risk premium and a flat dollar amount up to the Medicare part B monthly premium at the 1996 rate (estimated at approximately $42.50). In no case would this contribution ~exceed-90% of the lowest single rate. · The City would also investigate and develop a strategy for possible participation in HMO plans in other states for city retiree participation. The City would provide counseling and assistance to retirees in helping them understand the options available to them for health care coverage. For retirees that may be impacted by the increases to Fee-for-Service rates due to PERSONNEL COMMITTEE Monday, December 18, 1995 Page -3- unblending, the CitY will assist them by providing information about options available to them such as transferring to the HMO or Medicare Risk plans. Special educational sessions, staffing or consulting efforts would be made to assist employees with special problems. In addition, for those persons not yet hired by the City, the City will meet and confer with each bargaining unit to obtain agreement to language that has been agreed to by the Blue and White Collar employees regarding participation in the Retiree Medical Insurance plan. This would require twenty years' service to qualify for participation and enrollment in Medicare as a condition of participation. Councilmembers Salvaggio and DeMond voted to recommend to the City Council that unless the alternate proposal which fixed the 42% contributions for each level of coverage was agreed to by all the bargaining units, that the City Council should implement staffs' recommendation to unblend the retiree rates. Councilmember Sullivan did not support the motion and indicated a preference to just proceed with the unblending of the rates. Staff has provided each bargaining unit the specific proposal for their consideration. Staff will prepare a Personnel Committee Report reflecting the above information with attachments for each proposal for the January 10, 1996 Council meeting for action by the full Council. 6. NEW BUSINESS A. 1996 MEETING SCHEDULE Approved. 7. ADJOURNMENT The meeting was adjourned at 5:45 p.m. Staff present: City Manager Alan Tandy; Assistant City Manager John W. Stinson; Assistant City Attorney Michael AIIford; and Finance Director Gregory Klimko. Others present: Retirees Margaret Ursin, ,Richard Watkins, Jim Dean, and Galen Chow; Fire Captain Ed Watts; Police Detective Harry Scott; Police Detective Randy Boggs; and Chuck Waide, S.E.I.U. cc: Honorable Mayor and City Council JWS:jp I3 A K E R S F I E L D PERSONNEL COMMITTEE - 1996 MEETING SCHEDULE TUESDAYS @ 4:15 PM COMMITTEE MEETING 1996 January 2 March 5 April 2 May 7 June 4 July 2 August 6 September 3 October 1 November 5 December 3 GODWINS BOOKE & DICKENSON 10 Universal City Plaza, Suite 2250 Universal City, CA 91608-11X)2 (818) 506-4300 F~X (818) 50%3341 (800) 443-9516 March 12, 1996 Mr. John Stinson Assistant City Manager City of Bakersfield 1501 Truxtun Avenue Bakersfield, California 93301 Re: Consulting Activities - 1996/1998 (Two ?'ears) Dear John: Enclosed is an exhibit which lists the Basic Annual Activities and other potential projects, and related fees for the period March 1, 1996 through February 28, 1998. I look forward to meeting with you to contirm the plan of activities and the timeline. Sincerely, Herbert V. Kaighan Senior Vice President HVK:aw Enclosure I :!.'Pt' r.~-.-,~ ....... EXHIBIT "A" .... CITY OF BAKERSFIELD MARCH 1, 1996 THROUGH FEBRUARY 28, 1998 1. Basic Annual Activities · Update Benefits Summary Manual · Benefits planning No charge · Experience Reports (4) $1,500 · Year End Accounting $2,000 · Renewal Negotiations $2,000 $15,000 · Adhoc consulting (including review of HMO plan design) · Meetings (30 hours) $3,500 Total (Annual Fee) $9.00(} $33,000 2. Travel and Lodging (Annual Maximum) ,- $1,ooo 3. Special Projects (to be determined by City of Bakersfield) · Market Health Plans HMO Fee for Service (including TPA) $15,000 Prescription Drug Carve Out $19,000 Dental (FFS and DMOs) $9,500 · Communications of new plans $13,500 · Retiree Medical 'i'BD Evaluation of rates/Medicare Risk Implementation $10,000 Actuarial evaluation $20,000 · Evaluation of OtherAIternatives SISK: In-clepth analysis PERS: In-depth analysis $3,500 $5,000 Funding alternatives analysis (self-funding/minimum premium) $12,000 EXHIBIT "A"