HomeMy WebLinkAbout04/30/2012
B A K E R S F I E L D
Staff: City Council members:
Steven Teglia, Asst. to the City Manager Ken Weir, Chair
David Couch
Harold Hanson
SPECIAL MEETING NOTICE
PERSONNEL COMMITTEE
of the City Council - City of Bakersfield
Monday, April 30, 2012
12:00 p.m.
City Hall North – Conference Room A
1600 Truxtun Avenue, First Floor
Bakersfield, California 93301
A G E N D A
1. ROLL CALL
2. ADOPT SEPTEMBER 30, 2011 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. NEW BUSINESS
A. Update regarding Request for Information (RFI) Process - Tenter
B. Update regarding Response Actions to Panama Buena Vista Medical
Expense Reimbursement Plan (MERP) - Tenter
C. Discussion and Recommendation regarding Segal Contract Extension - Teglia
5. COMMITTEE COMMENTS
6. ADJOURNMENT
OFFICE OF THE CITY MANAGER
MEMORANDUM
April 26, 2012
TO: Personnel Committee Members
Vice Mayor David Couch
Councilmember Ken Weir
Councilmember Harold Hanson
FROM: Alan Tandy, City Manager
SUBJECT: Extension of Health Benefits Consulting Contract with The Segal
Company (Segal).
______________________________________________________________________________ Recommendation: Staff and the City’s Insurance Committee are requesting the
Personnel Committee approve extending a contract with Segal for four
additional years and forward such recommendation to the City Council.
Background: In June of 2008 the City entered into a three year (including an
optional fourth year) contract with Segal for a broad range of health benefits
consulting work. These duties include, but are not limited to, the following
activities:
Health benefit consulting and cost management;
Health benefit renewal management;
Vendor marketing and management;
Compliance management;
Segal is currently in the fourth option year of the existing contract which will
expire at the end of June 2012.
Since 2008 Segal has worked to establish an exceptional track record of
providing sound strategic guidance and overall management of the City’s
healthcare benefit programs. Through the establishment of an excellent
working relationship with the City’s Insurance Committee, Personnel Committee
and staff, Segal has been able to effectively carry out their scope of work to the
betterment of the City and its employees.
Segal Contract Extension
April 26, 2012
Page 2
Segal’s efforts in negotiating renewal rates over the life of their contract has
resulted in the City maintaining favorable annual premiums for its employees, as
well as for the City. Segal’s benefits consulting/management efforts have
allowed the City to develop annual benefits packages that have maintained a
high level of coverage options for employees and retirees, while at the same
time allowing the City to significantly reduce its current and future costs.
An example of this was this past year when Segal was able to successfully
provide the City with a recommended health care package for 2012 which
provided for rate reductions or no rate increases for a majority of City
employees and retirees; expanded benefit options; and included the potential
to reduce the City’s Retiree Medical unfunded liability by 20%.
On March 14, 2012 staff discussed the issue of continuing a relationship with
Segal with the City’s Insurance Committee. This resulted in a unanimous
recommendation by the Insurance Committee to continue a contract with
Segal. Below is a chart comparing the costs of the first four year contract with
the agreed upon contract rates for the next four years, should the Council
approve the contract.
Current Contract Proposed Contract
Year 1 = $80,000 Year 1 = $92,000
Year 2 = $83,250 Year 2 = $93,500
Year 3 = $87,000 Year 3 = $95,000
Year 4 = $90,750 Year 4 = $96,500