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HomeMy WebLinkAbout14 1125 Council minutesThe Plainview City Council met on November 25, 2014 at 7:00 p.m. in the City Council Chambers of the Plainview City Hall at 901 Broadway. The agenda for this meeting was posted in City Hall at 4:15 p.m. on November 21, 2014. Mayor Wendell Dunlap presided. Councilmembers present were: Charles Stames-District 1, Larry Williams - District 2, Norma Juarez -District 3, Teressa King -District 4, Susan Blackerby-District 5, Lionel Garcia -District 6 and Eric Hastey-District 7. Staff members present were: Jeffrey Snyder -City Manager, Leslie Spear -City Attorney, Ken Coughlin -Police Chief, Rusty Powers -Fire Chief, lsauro Gutierrez -Information Technology Specialist, Andrew Freeman -Assistant City Manager, Sarianne Beversdorf- Director of Finance, Shane Harrell -Personnel Specialist and Belinda Hinojosa-City Secretary. News Media Present: Homer Marquez -Plainview Herald and Caleb Hatch - Plainview Radio Guests Present: Mike Fox, Beverly McCaskill, Lanell Julian, Jim Posey and Rodney Watson Mayor Pro Tem Teressa King delivered the invocation and led in the pledge of allegiance. Councilmember Starnes moved to approve the consent calendar. The motion was duly seconded by Mayor Pro Tem King and carried by unanimous vote. Items approved on the consent calendar included the approval of the minutes of November 6 and November 11, 2014; approval of Resolution R14-327, a Resolution of the City Council of the City of Plainview, Texas, Approving The Request Of The Plainview Chamber of Commerce to Host Their Annual Christmas Parade; Authorizing the Filing of the Agreement for the Temporary Closure of State Right -Of -Way With the Texas Department of Transportation for This Event; Declaring that the Event Serves a Public Purpose; and Agreeing to Comply with Regulations. Rodney Watson, Chairman of Walk of Fame Committee presented recommendation of appointing Keith Longbotham to the Walk of Fame. They received a nomination to honor Keith Longbotham. Keith (graduated with him) is a great Christian young man. A great example and a positive influence for Plainview. On his website, he mentions his hometown. He is a great ambassador for us. The Committee recommends approval to add Keith Longbotham to the Walk of Fame. Mayor Dunlap asked for public comment. There was no public comment. Councilmember Charles Starnes moved to approve the nomination of Keith Longbotham to the Walk of Fame. The motion was duly seconded by Councilmember Blackerby and carried by unanimous vote. Mr. Jeffrey Snyder, City Manager presented for consideration to Award Bid for Group Health Insurance Program and authorize City Manager to sign all necessary documents. Health Insurance has been a discussion over last worksessions. Staff had TML representative come out and talk to Council. From that process, we told Council we were going to move forward with RFP process for renewal. City Council Minutes November 25, 2014 Page 1 of 5 389 390 He introduced Adam Hensen with IPS Advisors. They are a 35 year consulting firm. They work with 32 municipalities in the State of Texas. Right now the City is self- insured and using an individual stop loss of $50,000. There are individual lasers. The renewal with TML represented a 17% increase with two lasers for an additional $325,000 risk for City. They secured multiple bids. BlueCross offered the most competitive with a 7.1% increase, which includes premiums, and run out in claims for terminating self-insured account. Expected Cost Comparison Expected Claims TML PSF' Current $1.511,002 TML PSF' Renewal 51,710,970 UMR PSF' 51,633,224 BCB5 P5F' 51,508,164 BCBS Fully Insured nla TML Fully Insured n!a UHC Fully Insured rile Stop Loss Premiums 5264.406 5347.553 5352.509 5361.411 rtla Ilia nla Administrative Fees 570,848 570,848 571,604 588,063 nla nla nla Additional Laser Liability 5265.000 5325,000 5325,000 5310.000 nla nla rile Healthcare Refrom Fees 525.740 518.216 518.216 518.216 Included Included Included Fully Insured Premium Cost nla nla nla nla 52,128 543 52,355,882 52.526.432 Terminal Liability nla nla nla nla 5160,690 5160.690 5160,690 Total Expected Coat 52,136,997 nla 51472,587 5335 590 52,400.552 5263,556 12.3% 52,295,804 52,289,233 52,516,571 $2,687,122 $ Charge From C urrsnt 5145.857 515 35 5379,575 5550,125 % Change From Current nla 15.7% 7.0% 7.1% 17.8% 25.7%___ Maximum Cost Comparison Maximum Claims TML PSF' Current 51,888,753 TML PSF' Renewal 52.138,712 UMR PSF' 52.041.530 BCBS PSF' 51,885,205 BCBS Fully Insured nla TML Fully Insured &a UHC Fully Insured rile Stop Loss Premiums 5264,406 $347,553 5352,509 5361,411 nla nla n/a Administrative Fees 570,848 570,848 571,604 588,063 nla nla rile AddlUonal Laser Liability 5265.000 5325.000 5325,000 5310,000 r la &a nla Healthcare Refrom Fees $25,740 518.216 518.216 518.216 Included Included Included Fully Insured Premium Cost nla nla nla nla 52.128.543 52.355.882 52.526.432 Terminal Liability n/a nla n/a nla 5160,690 5160,690 5160,690 Total Maximum Cost $2r514,747 52,900,329 52,808,858 12982,895 52,299,233 12,516,571 12,657,122 $ Change From Currant nla _5385502 1294,111 5148,148 -5225.514 51,824 1172,374 %Change From Current nla 15.1% 11.7% 59% - -9.0% 0.1% 6.9% , iPremlum Tins Included: n/a .�, nra rile 1.75% or S37k 1 1.75% M Salk 1 1.75% or $44k Self-insured is typically for larger employee pools. Typically see in 300 employees and above. It is recommended for the City of Plainview to enter into a Fully Insured funding model with BlueCross BlueShield for the 2015 plan year. When compared to TML's current expected cost of partial self-insuring, the BlueCross BlueShield quote including terminal liability represents a 7.1% or $152,236 increase above the plans current expected cost obligation. Due to the City's current contract and funding arrangement, the City will be responsible for incurred but not paid claims and administrative fees after contract termination. Based on current claims spend and lag reports, it is estimated that $149,680 will be paid out in claims after termination. Fees paid to TML to process these claims are estimated at $11,010. The City of Plainview offers employees a single option health plan with cost sharing levels that are significantly lower than benchmarks. IPS Advisors explored multiple plan design alternatives increasing deductible and copay levels of the current plan however, the savings offered by BCBS at this time was not enough to warrant consideration. City Council Minutes November 25, 2014 Page 2 of 5 However, the High Deductible Health Plan option including a Health Savings Account has provided considerable premium savings from the renewal plan and is recommended for implementation as a low cost plan option for employees and dependents. It is recommended that Plainview use part of this savings ($1,000 Employee and $1,500 for Employee + Dependents) to fund a tax preferred Health Savings Account for employees who may utilize the account on deductible and other qualified expenses. By offering this plan option, Plainview will not only begin to offer employees choice in benefit Levels, but will also assist Plainview in mitigating health care cost liability by encouraging consumerism among the City's employees. Prior to our analysis, the City's rating structure had reflected 100% subsidy of the employee only rate and 0% subsidy to dependent rates. The City's current budget for all employees and dependents is $1,617,079 while the expected cost are $2,136,997. This results in an expected additional liability of $519,918 to the City. Over time, this strategy has led to an inaccurate representation of subsidy levels. The results of our analysis shows that the City is actually funding 45.9% of spousal, 30.1% of child, 46.3% of children, and 47.9% of family rate tiers based on the expected 2014 plan year cost of $2,136,997. In conjunction with offering two plan options, it is recommended for the City to re- consider its current subsidies to employee and dependent coverage. For 2015, it is recommended to implement a $25 monthly premium cost for the Buy Up PPO Plan and a $0 monthly premium cost for the Core HSA PPO Plan. It is also recommended to consider increasing dependent subsidies to 58% to all plans to align with benchmarks. The City allows pre -65 retirees to remain on the City's plan and does not subsidize retiree coverage, meaning retirees must pay the entire Employee premium. This is in line with municipal benchmarks. It is recommended for the City to consider integration of health and wellness incentives into its benefits strategy. It is recommended to consider rewarding employees for receiving an annual physical and choosing not to use tobacco. For ease of administration, it is recommended for the City to apply an additional $25 monthly cost to employee premiums in 2016 if an individual does not receive their annual physical in the 2015 plan year. An additional $25 is recommended to be applied if the employee chooses to use tobacco in 2016. Mayor Dunlap asked for public comment. Eugene Nabors of 1281 County Road D, a former firefighter, stated that currently one- third of his pay goes to health insurance. He does not see how retirees can afford to pay $781 for health insurance. He put 22 years of his life with City hoping to have benefit of health insurance when he retired. It is getting to the point where he cannot afford it. He would like to see if Council would help retirees. Beverly McCaskill of 705 Broadway. Spoke on behalf of her husband, a 23 year retiree. $781 is a lot of money. They pay $643 right now and are struggling. An increase would City Council Minutes November 25, 2014 Page 3 of 5 391 392 be really hard for these retired firefighters. Councilmember Williams moved to award bid for group health insurance program to BlueCross BlueShield under the fully insured funding model. The motion was duly seconded by Councilmember Enc Hastey. Mayor Pro Tem King asked about the additional $25.00 for wellness program. What is typically seen? She was advised it can go up to 30% for wellness and 50% for smoking. This charge is added each month. Mayor Pro Tem King asked if we ran any kind of numbers to consider retirees to include any kind of retiree supplement. She was advised it was not factored into chart. Mr. Hensen stated it would be $2400 times 9 retirees Mr. Farmer stated they have an in-house retiree specialist who can assist the retirees in finding coverage through the exchanges. In many cases they can be cheaper for retirees. Mr. Snyder stated the current rate for retirees is $643.50 and we can leave rate the same. We can evaluate over the next year and see how this impacts the City. At that time we could revisit this. Mayor Pro Tem King moved to retain present retiree rate of $643.50. Councilmember Williams stated we have been in a sinking ship, before we automatically do this need to see if the marketplace is going to give them something they need. Lanell Julian with LJ Insurance stated there is nothing out there. Approximately one month ago they ran a proposal and the premium was more than what the premium is through the City. It was around $800 with a comparable deductible. Councilmember Starnes stated the subsidy would add $24,949.20. Mayor Dunlap asked for a city employee that has a family, how much more would they increase. Mr. Hensen stated it would actually decrease around $140. Mr. Snyder stated we can keep the same rates for retirees at $643.50 and we can reevaluate next year. This would have a minimal impact. Councilmember Blackerby asked what is the main reason for decrease. She was advised we are moving plan to a benchmark plan. As it was set up in past, there was no basis. Mayor Pro Tem King moved to amend original motion to include we retain the current retirement rate for the next 12 months. The motion was duly seconded by Councilmember Blackerby. Mayor Dunlap asked for a vote on the motion to award bid for group health insurance program to BlueCross BlueShield for the fully insured funding model. Mayor Dunlap, Councilmembers Starnes, Williams, Juarez, King, Blackerby and Hastey voted "for" the motion. Councilmembers Garcia voted "against" the motion. City Council Minutes November 25, 2014 Page 4 of 5 393 Mayor Dunlap asked for a vote on the amended motion to enter into fully funded model with BlueCross BlueShield for the 2015 plan year and retain the current retirement rate. Councilmember Starnes asked how employees will be educated on new plan. IPS will put together a communication booklet and be here on site to do employee meetings. Counciimember Garcia asked what our turnover rate was. He also asked what a new employee made. Shane Harrell, Personnel Specialist stated we hire on average about 3 to 5 a month, 50 to 60 a year. A new employee typically averages $12 to $15 an hour. Salary is position specific. Mr. Garcia stated that HSA accounts will help employees at higher pay scale. He expressed concern over subsidizing the $1,000 or $1,500. He was advised that we are trying to move to benchmark industry standards. We may make adjustments in future. Mayor Pro Tem King stated seeing us get closer to benchmark would help us retain employees. It is important to have a competitive offering for our employees. Councilmember Garcia also asked how we are paying local agents — LJ Insurance - for their service. Mr. Snyder stated we pay on per life per month basis. Mr. Garcia stated he did not agree on that. He felt all employees should call the 1-800 number. That is just an additional cost that we are incurring. Mr. Snyder stated he recommends we keep the same and monitor the situation over the next year. Mr. Garcia asked Ms. Julian number of employees who contact them. She said she did not know that number. Mayor Dunlap asked for a vote on the amendment. The motion carried by a vote of 8 "for" the motion. There being no further business, Mayor Dunlap adjourned the meeting at 8:13 p.m. // Belinda Hinojosa City Secretary City Council Minutes November 25, 2014 Page 5 of 5