HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/18/2010 - FIRST READING OF ORDINANCE NO. 060, 2010, EXTENDIN DATE: May 18, 2010 SUMMARYAGENDA ITEM
STAFF: . Jim O'Neill _
T COLLINS CITY COUNCIL
Amy Sharkey
First Reading of Ordinance No. 060, 2010, Extending the Contracts of the City's Medical Service and Benefits
Consulting Providers for Employee Benefits Programs.
EXECUTIVE SUMMARY
The vendors providing medical coverage and benefits consulting services for City employee have serviced the City
of Fort Collins for many years. This Ordinance will approve an extension of the current agreements with those
vendors, Great-West and Mercer, for an additional year to allow for sufficient time and resources for a competitive
process to be completed in 2011.
BACKGROUND / DISCUSSION
Federal Healthcare Reform passed on March 23, 2010. There will be many changes that affect the City starting in
2011. There are quite a few unknowns as to how insurance companies and plan sponsors(the City)will implement
these changes and what they all mean. Many terms of the bill are not defined and will need clarification. It could take
4 to 5 months to get the clarification needed.
Staff believes it would be in the City's best interest to delay the request for proposal process until the IRS and
Department of Labor publish guidance on the provisions of the bill,who is impacted, define terms,and when all of the
provisions will go into effect. Staff will then know what Healthcare Reform information will need to be included in a
Medical Vendor RFP for 2011 in order to get feedback related to Healthcare Reform processes and compliance.
Mercer Benefits Consultant has been the City's actuary for several years. Mercer knows the City's plans and history.
Staff would like to retain its services as staff works through Healthcare Reform and the impacts on the City. Staff is.
requesting that Council approve an additional year to allow for sufficient time to understand healthcare reform and its
impacts.
FINANCIAL IMPACT
Funds are currently included in the 2010 and 2011 budget to cover the costs of these contracts.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
ORDINANCE NO. 060, 2010
OF THE COUNCIL OF THE CITY OF FORT COLLINS
EXTENDING THE CONTRACTS OF THE CITY'S MEDICAL SERVICE
AND BENEFITS CONSULTING PROVIDERS
FOR EMPLOYEE BENEFITS PROGRAMS
WHEREAS, the Great West Life & Annuity Insurance Company and Mercer Health and
Benefits LLC (collectively, the "Service Providers") were selected by a competitive process to
respectively provide employee medical coverage and benefit consulting services to the City
commencing on January 1, 2006; and
WHEREAS, the City has contracted with the Service Providers for the last five years and
they have satisfactorily performed under those agreements; and
WHEREAS, Section 8-186 of the City Code limits contracts for professional services,
including renewals, to no longer than five years, unless authorized by ordinance; and
WHEREAS, the passage of the federal Heathcare Reform Act (the "Act") in March,
2010, has created substantial uncertainty in determining how the City's medical plans will need
to be amended and administered beginning in late 2010, which uncertainty may be reduced with
the adoption and implementation of guidance from the IRS and the federal Department of Labor;
and
WHEREAS, the current uncertainties associated with the provision of medical coverage
for employees makes it very difficult at this time to draft a request for proposals for benefit
providers for 2011 and beyond; and
WHEREAS, the City desires to extend the term of the agreements with the Service
Providers for one additional year beyond the current five-year limit in order to have service
providers experienced with the City's benefit plans aid the City in making transitions required by
the Act; and
WHEREAS, because of the time and resources required to complete a competitive
process, the Purchasing Agent has determined that a competitive process cannot reasonably be
used and, if used, would result in substantially higher cost to the City and may result in the
impairment of the City's administrative functions, and the Purchasing Agent has submitted the
requisite justification for this determination to the City Manager for approval; and
WHEREAS, the City Manager has reviewed and approved the justification for this
contract extension; and
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS that the Purchasing Agent is hereby authorized to enter into an extension of
one year for the employee benefits contracts with Great West Life & Annuity Insurance
Company and Mercer Health and Benefits LLC for the year 2011.
Introduced, considered favorably on first reading, and ordered published this 18th day of
May, A.D. 2010, and to be presented for final passage on the 1 st day of June, A.D. 2010.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading on the 1 st day of June, A.D. 2010.
Mayor
ATTEST:
City Clerk