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HomeMy WebLinkAboutPersonnel Board - Minutes - 07/15/2003PERSONNEL BOARD MINUTES July 15, 2003 12:00 P.M. 215 North Mason Conference Room 2-D Council Liaison: Ray Martinez, Mayor Staff Liaison: Rick DeLaCastro, Human Resources Director Board Chair: Peter Shostak Board Members Present: James Lyall, Valerie Remington, Gail Shellberg, Peter Shostak Board Members Absent: James Alderden (Excused) City Staff Present: Rick DeLaCastro, Human Resources Director Vincent Pascale, Benefits Administrator Joan Busch, Admin Support Supervisor (Recorder) Others Present: Ron Uthmann, Division Chief, Poudre Fire Authority I. Call to Order Chair Peter Shostak called the meeting to order at 12:01 p.m. II. Introductions Peter Shostak introduced Vincent Pascale and stated that Vincent would be presenting an update on employee benefits. Members introduced themselves. III. Approval of Minutes Joan Busch distributed an amended copy of the May 20, 2003 meeting minutes and explained that after the minutes were distributed to the members, and prior to today's meeting, Peter Shostak had some grammatical changes. The copy distributed included those changes. Valerie Remington moved to approve the May 20, 2003 meeting minutes as corrected. James Lyall seconded. Motion passed. In Favor: James Lyall, Valerie Remington, Peter Shostak Opposed: Gail Shellberg--stating the minutes were fine as originally written. IV. Benefits Update Vincent Pascale presented information regarding City employee benefits changes. This same information was presented at the City Manager's Issues and Answers session on July 7, 2003. Vincent stated that medical claims costs have increased 23.3% in 2001 and 21% in 2002 and he expects we will continue to see similar increased costs in years to come. Projected Personnel Board Minutes July 15, 2003 Page 2 of 3 medical costs for 2003 are expected to be 22.6% over costs in 2002; in 2004 projected costs of 14% over 2003 and in 2005 the projected cost is expected to be 15% over 2004. Peter Shostak asked if there were any catastrophic claims. Vincent answered that there were approximately five claims that were over $120,000 and thirty claims that were over $25,000. Vincent explained that if the City does not make any changes to the current premiums, the Benefits Fund is projected to exhaust reserves and realize a deficit of $700,000 in 2004 and a $3.7 million deficit in 2005. The Benefits Fund requires additional revenues and there are only two sources: the City and its employees. A recommendation to increase the City's contribution and employee's contribution has been presented to City Council. Over the next two years, the City's contribution will increase to $8,000 per year per employee. The proposed recommendation also provides that in 2004 employee contributions will increase to a minimum of 10% of the actual premium and in 2005 to a minimum of 15% of the actual premium. Rick DeLaCastro, Human Resources Director commented that the change in employee contributions would keep Fort Collins more in line with the market. Vincent also explained that the limits to employees' Out -of -Pocket maximum expense will increase as well as their co -pays. Some benefits costs are shifting from the City to the employee. From all of the proposed changes, the projected savings to the City is expected to be $400,000. Valerie Remington asked if $400,000 in savings will be enough. Vincent replied that this will help reduce claim costs which in turn will reduce premium costs. The City is also drawing down its reserves to 10% of claims costs based on a recommendation from the City's Actuary. Rick DeLaCastro, commented that drawing down reserves also delays changes in cost shifting to employees. Peter Shostak commented that the City is relying on reserves rather than making changes and asked Vincent if he thought the City was making significant changes. Vincent answered that he felt the City was making considerable changes and that going from a 6% contribution in premiums to 15% was a pretty significant change for employees. Valerie Remington commented that it appeared that all plans are similar in cost. Vincent agreed that the plans are similar, but there is a 4% variance between the least expensive plan and the most expensive plan. Peter Shostak asked if it would be beneficial to offer only one plan. Vincent said that as the City is self -insured and there is just one benefits fund, it wouldn't make that much of a difference. All of the plans are experiencing increased costs. Vincent commented that staff is working to educate employees on reducing costs. He stated that Mo Balzer, Personnel Board Minutes July 15, 2003 Page 3 of 3 Wellness Coordinator for the City, does a wonderful job of encouraging and providing information to employees on wellness and staying well. Peter Shostak thanked Vincent for his excellent presentation. V. Other Business A. Review of Correspondence Rick DeLaCastro, Human Resources Director distributed a copy of a memo to the Mayor and City Council regarding a summary of the Council Study Session on June 10, 2003. The Council had asked for some additional information and Rick advised that the Human Resources staff is following up on Council's request. B. Status of Employee Grievances/Appeals Rick advised that there is a potential for four appeals due to disciplinary actions including terminations and suspensions. The earliest any of these could come before the Board is August or September. VI. Adjourn There being no further business, James Lyall moved to adjourn the meeting. Valerie Remington seconded. Motion passed unanimously (4-0). Meetipg adjourned at 1 p.m. Approved: j Peter Sty st <, Chair