Loading...
HomeMy WebLinkAbout2002-03-13 Government Operations Committee Minutes � GOVERNMENT OPERATIONS COMMITTEE MINUTES March 13, 2002 Councilors Present: Joe Baldacci, Nichi Farnham, Dan Tremble, Frank Farrington, Gerry Palmer StafF Present: Ed Barrett, Bob Farrar, Frank Comeau, Harry Courtois, Norm Heitmann, Ben Birch Other Present: Various Members of Health Insurance Advisory Committee 1. Employees Seeking Election to Political Office Bob stated that this item had been before the committee for a couple of meetings and was discussed in depth at the last meeting. Based on the recommendation of the committee and interested city employees, we have a • drafted a revised section titled 9.9.2 Political OfFce for the committee's consideration. As requested, language was added to specifically indicate that employees could not seek office for the Bangor City Council while they are employees. Based on the committee's request, we also added a section that did not require employees to take a leave of absence while campaigning. We incorporated a section that requires the employee to notify the City Manager in advance of seeking political office. This would enable the City Manager to make a determination of whether the position sought and the position held by the employee would be either incompatible or in conflict. Finally, a new section added states that if the elected office and the city position are determined to be incompatible by the City Manager, and if the employee is subsequently elected to � the position he or she is running for, then the employee would be placed on a leave of absence during that time. The current policy states that the employee woufd be required to separate employment if it was determined that the positions were incompatible. Bob stated in summary that we have attempted to find a middle ground between the current policy which is fairly restrictive and the other end of the spectrum which is to eliminate the provision altogether and leave it wide open. We have attempted to draft language that incorporates the desires from most recent committee and attendees and strike a fair middle ground attempting to balance the rights and desires of employees with the needs of the employer. � � Councilor Farrington asked how long a leave of absence would be granted as it may affect the city job, and would the position remain open or be filled? Bob stated that part of this would be addressed up front when the City Manager makes his determination of whether there is a conflict or compatibility issue. At that point the City Manager will look at these issues, such as whether there are conflicts, how long the position can stay open, and whether there are staffing or operational issues created by a lengthy leave of absence. If there are some of these issues present, then the City Manager will make a ruling that the position is incompatible. Councilor Farrington stated that in situations where a City Employee has been called to military service that the City has an obligation to hold their job open. Bob stated that this is correct and federal law prescribes certain duties and responsibilities that employers have in terms of retaining someone's position if they are called to military service. This issue is also addressed separately within the personnel rules and regulations, and in our various labor agreements. Councilor Farnham asked if the school system and school board had a policy � similar to this, as it appeared that a number of teachers had run for legislature? Bob stated that there is a state law that allows teachers to run for office and receive a leave of absence. Councilor Farnham asked if this should be difFerent from a city employee, or why the state law just covers teachers? Councilor Baldacci stated that the teacher statute had been in place for awhile. He asked if there were any public comments, or any other members of the council wish to comment? He noted that Councilor Palmer had joined the meeting. � Bob stated that Norm had suggested that an additional line be added to the draft to indicate that it is not otherwise in conflict with our code of ethics, to which the Committee agreed. Councilor Baldacci asked if he meant an amendment to the policy. Norm stated that this would be a part of the draft for council's approval. A motion on the proposed policy was made, seconded and approved to recommend to the full Council. ' � ' � 2. Request to Waive or Review Golf Course Non-Resident Permit Policy A request was made by an individual to review a previous decision made last fall. The decision at that time required non-resident taxpayers to pay the non- resident fee. Previously, non-resident taxpayers would pay the resident fee. This policy change had been a recommendation of the Parks and Recreation ; Advisory Committee and the Parks and Recreation staff. � ; Ed stated that Non-Residents who own property can have a membership, but they must pay the non-resident fee. Frank Comeau gave background information as to why this policy was implemented. Parks and Rec had a total.of 24 non-resident permits sold, of these 24, 10 are made up of 2 groups of people each group owning a separate lot. One lot is valued at $100, which means that each person in that group is paying the city approximately $2.00+ in taxes. The other lot is valued at $4,000, total tax is $104. Ed asked what is the difference in the rate between non-resident and resident? � Frank replied that the difference was $225, $550 for single resident and $775 for single non-resident. Frank stated that this problem has been occurring over the last couple of years. The first group purchased a lot in 2000, and the second group purchased their lot in 2001. Golf Pro Brian Enman has been receiving a lot of complaints from individuals that they didn't think this was fair. So Brian and Frank brought it before the Advisory Board, and then to Government Operations for revision. Councilor Baldacci wanted to know who didn't think it was fair? Frank replied that the other people did not think it was fair that these two groups were getting the resident rate while paying a minimal tax. A recommendation was made that non-residents be allowed to purchase a permit if they owned and paid taxes on property in Bangor, however they should pay the non-resident rate. Non-residents who do not own property and pay taxes are not allowed to purchase permits. This is a problem that will just continue to escalate, and more groups will want to purchase permits in this manner. Councilor Baldacci asked if there were any comments or questions from the public. � • Ben Birch spoke and said that he was the person that requested the consideration for the grandfathering clause. He stated that he was a non- resident, that he researched this a year ago. He said that he was advised that if he became a taxpayer, that he couid become a member of Bangor Muni. He stated that at the time he had a friend, Bernie McLellan and his brother Bill, that owned a vacant piece of land in Bangor. H� stated that he has known Bernie since 1984, and Bernie offered to add him to his list so that he could become a joint tenant. He stated that he was surprised that the change was made last fall, and that it was his understanding that there would be grandfathering for those individuals already in the program, and that the change would affect only new individuals going forward. Therefore he thought it would be reasonable to request the same thing on his behalf. Councilor Farnham stated that the grandfathering that the committee did prior was for those individuals who were non-residents and would not have the opportunity to have a membership at all. Frank Comeau confirmed this. Mr. Birch asked what credentials would the committee need to verify residency? � Would it be a valid driver's license with a Bangor address, PO Box, or what other stipulations would be required? Frank Comeau said that what the department asks for from the resident is a real estate tax bill in that person's name. He stated that they do not have to be a resident as long as they are a real estate tax payer. What proof are you asking for to prove that a resident is a resident? Frank stated that generally there is a mailing address on the tax bill, or they may ask for a driver's license or some proof of residency. He said that sometimes this might slip through the cracks. Regardless of the number involved, the real issue is whether there should be a differential for non-residents, as was considered last year and adopted by the Committee. Councilor Farnham stated that the Parks and Recreation Advisory Committee was certain that there should be a difference between resident and non-resident. This was also discussed at the council level, so that the very best deal goes to the people who live in fihe city. At this time there was no talk of a • grandfathering, because on a given year all memberships are open and available. � No one is given any more chance of getting a membership this year based on the fact that they were members last year, because all memberships are open each year. Therefore there was no need to grandfather in this case, because non-residents are still getting a benefit because they are allowed to get memberships. Councilor Farrington stated that to follow up as to the purpose of the law as that of a resident deserving a break on membership price due to paying taxes. He stated that he was discouraged if someone could manipulate something by paying a $2 tax and getting a $225 benefit that this may conform to the � structure of the law, but it certainly doesn't conform to the purpose of the law. If the structure doesn't fit with the purpose, perhaps the law needs to be changed. Maybe we should do the same thing that we are trying to do with the Auditorium, that if we can't get any help from outlying areas, that we raise the price and give tax break to residents. Another way is to say at what point do your taxes justify a reduction in this benefit you get because you are a taxpayer. My inclination is to keep it on a resident basis, yet if there is some manipulation going on because of this then change the rule to make it fair. Councilor Baldacci noted that Councilor Tremble had joined the meeting. He � asked if any other council members had comments. Councilor Palmer clarified that if he was a business owner in the city yet a non- resident, then he would pay the non-resident membership rate. He wanted to know how long this had been in effect. Bob stated that this is what went into efFect last fall. Councilor Farnham stated that you are allowed a membership even though you are not a resident, based on your taxpaying status. Bob said that prior to last fall you were given a resident rate instead of a non- resident rate. Councilor Palmer wanted to know what the waiting list looked like. Frank Comeau stated that there was no waiting list, anyone who is a properly owner, paying taxes, may belong. There are a few people grandfathered from way back when it used to be that anyone could join. When it was closed off to non-residents, those 12 people • were grandfathered. � Ed stated that this was a compromise at the time, because the consultant's recommendation was to eliminate all memberships, and the council did not want to do this as they wanted some opportunity for non-residents to be able to purchase memberships. Councilor Tremble wanted to know that originally if you were a non-resident and did not own property or pay tax, what rate did you pay for membership? Frank Comeau stated that he was not sure of the rate, but it was the non- resident rate. Councilor Tremble noted that some of the complaints he had received were that non-residents who may own an apartment building and pay $2, 000 in property taxes cannot pay the resident membership, yet some of their tenants, who pay no properry taxes, can purchase resident memberships. He stated that non- residents still get the benefit of purchasing a membership, provided they own property, and that sometimes things just aren't necessarily going to be fair for all. Councilor Farnham noted that there are residents in Bangor who pay taxes to � support the school system, yet do not have children in school, so we could go on and on with the issue of fairness. Councilor Tremble noted that the Golf Course is a self-sustaining entity and does not rely on the property tax for their operation. Bob stated that the calculation for the value of the group of 23 is about $5,300, which is the difference between what they used to pay for resident membership versus what they now pay for non-resident membership. Councilor Farnham said that in hindsight that we should have notified these individuals prior to them applying for their new membership and finding out about the non-resident rate. We should send out notices for this year. Councilor Palmer stated that there is a marketing piece here that maybe 7onathan could use for potential future businesses here that an advantage is that you can become a member of the one of the finest golf courses in the state. This is also another reason for City employees and others to relocate and live in Bangor for this opportunity. Hopefully we could get these two issues over to )onathan's group. • Councilor Farrington asked what the resident and non-resident rates are? � Bob replied that the resident rate is $550 for a singie and $775 for non-resident single, a difFerence of $225. The resident coupie rate is $720 and non-resident couple rate is $985, a difference of $265. For the senior couple, the resident is $495 and the non-resident is $985, a difference of $490. - I Councilor Farrington asked what the difference was for a daily rate. Frank replied that the only difFerence for greens fees is that Bangor residents get a $1.00 discount each time they play. Councilor Farnham said that we should talk about that in the fall. Councilor Farnham asked how and when the senior citizen discount should take place? And should that apply in this case? And should it apply to any membership? Is there a senior single rate? Frank replied that the senior single rate is $410 for residents. Councilor Farnham asked if someone could get the senior single rate regardless of his or her resident stated? � Frank replied that this is for member resident status only. A question was asked if the board was going to vote on this issue this evening. Councilor Baldacci asked if there were any other comments or a motion. Bob stated that the current provision as voted by the committee last fall was that there were folks such as Ben and others who are non-residents that own property in Bangor, the list of 23, who will be paying the non-resident fee. If you wish to change that and allow that group to pay a resident fee, then you could make a motion to that efFect. If you wish to continue the current plan, then there would be no motion needed unless you want to reaffirm the vote that was made last fall. Councilor Baldacci asked if anyone wished to initiate a motion to change the policy as is outlined on page 17? Seeing that no motion has come forward, at this point we would leave the policy the way it is — non-resident taxpayers will pay the non-resident rate. 3. Group Health Insurance Review Process — Update � � Bob introduced and welcomed several people that have been involved with our Health Insurance Review process, people from the non-union side and from the union side. We have folks here from Public Works, Police, Fire, and Harry Courtois from our Labor Relations Department who has been working with our unionized group. Bob noted that last fall he had talked to the committee about the process that we were going to be starting with our Health Insurance Program. We have created two committees, the Non-Union Committee and the Union Committee. Both have had the opportunity to hear from several different representatives about the health insurance issues. We have heard from Anthem Blue Cross and Blue Shield, our current provider, our independent health insurance consultant who works for the City of Bangor, representatives from the Maine Municipal Association who run a group health insurance plan for municipalities around the state, Bob Bourgault, a member of the City of Portland Self Insured Health Insurance Advisory Committee over the last three or four months. There have been several options that have come out of these meetings: 1. Remaining with Anthem BC/BS with the current plan offerings/benefit design. 2. Remaining with Anthem BC/BS with different plans and/or benefit design. 3. Joining the Maine Municipal Employees Health Trust � 4. Establishing a City of Bangor self-insured health plan with operational assistance of a Third Party Administrator. 5. Providing an annual lump sum payment to employees in lieu of the City providing a group health insurance plan. Employees could choose to purchase insurance on the open market or use the funds to pay for health insurance costs. 6. Reconfiguring the current plan design of the health insurance plans enabling the City to seek proposals from other health care vendor/providers. (The two current health insurance plans we have are not offered by any other health insurance provider, tlierefore we are locked into Anthem BC/BS). We have contract language with our unions that requires us to bargain those sorts of changes, and we are mindful to work with the Housing Authority, Library, retiree group (160 retirees), and active employees. � We have three recommendations, based on what the employee committees has suggested: 1. We have prepared and issued a request for proposal for a Third Party Administrator, which would start us down the road of exploring a self-insured group plan. The proposals are due back on April 3ra 2. We continue to work with Anthem to minimize our projected rate increase, � tentatively 16%, which sounds high, however compared to 20% two years ago, and 27% last year, it is a better number than we had hoped for. � 3. We will talk about estabiishing Section 125 Plans, which wili provide empioyees with tax benefits in dependent care and heaith care. There is a general consensus with both Committees in the following areas. • The City should continue to work with all empioyees to address and find solutions to group health care. • The City should continue to explore the benefits and limitations of a self- insured health care plan. • We need to work aggressively with Anthem BC/BS to minimize any rate increases, if that happens to be the option we continue with as of July 15t • We should move forward with establishing a Section 125 plan, which will provide relief to employees as they pay health related costs. • Cost shifting of premiums, whether having the city pay more or employees pay more, is not a solution to the problem that we are facing. The true solution lies more with what sorts of plans are we going to offer, what is the design of the plans, are we going to look at self insurance, and what options does the marketplace ofFer to us. Bob stated that the real root of the problem is much larger than the City of Bangor and the State of Maine, that this is a national problem. � Our efforts have identified some potential solutions, some potential very good ideas, and to provide an opportunity for the committee to hear this. I would appreciate anyone from either committee providing details that I may have missed or left out. Councilor Baldacci asked if the council had any questions. Councilor Farrington stated that the Section 125 was a good idea, and then asked if we had ever calculated what the percentage of benefits should be of our compensation package. He estimated that it was currently at 30-35%. Bob stated that it depended on what health care plan you selected. For employees who did not select health care, the range would be 12-18%. For employees that take single coverage the range is probably 20%, and for employees that take family coverage, the range is probably closer to upper 20s to lower 30s. Ed stated that we had not set a percentage, and that this would be difficult to do except for non-union employees, because these issues are subject to negotiations and part of our union contracts. He said that there is a breakdown � on employees' paychecks of what the employee pays and the benefit the � employees receive, so that we could give a breakdown by individual and organization. Councilor Farrington stated that regarding Self-Insured Plans, that there is usually a cap, and if you can get a carrier to insure above the cap, you should never insure beyond what you can afford to cover yourself. He said that Self- Insurance was the way to go. Ed commented that we should take a look at Self-Insured, but for a couple of reasons. Our rates our dependent upon our experience and administrative costs. The advantage that we have is that we don't carry any on-going liability, what we are told to pay this year is what we have to pay, that's it. The carrier accepts the risk. Our current plan has catastrophic coverage that kicks in when any individual's claim exceeds $100, 000. He said he was not sure if there were aggregate coverages on the health care market anymore. He talked about his prior experiences with Self-Insured Plans. Portland is run�ning huge deficits based on improperly setting rates based on budget rather than experience. We have to be firm on our commitment based on what the TPA requests, to make sure we have reserves, etc. � Councilor Palmer stated that we should look at programs to keep people healthy as we look toward an aging work force. Ed talked about our Safety programs, and that retirees and dependents are the majority of our health care plan. Bob talked about the cost saving options with Anthem; possible changes include changing the drug card from 5/15 to 10/20/30 drug card, which will save us 1- 2% of our premium. The other area is in administrative costs, which is projected at $885,00 per year. We have requested a breakdown of the costs. This represents 16% of our bill, and includes the risk factor. Harry Courtois noted that this area is not part of the negotiation process. Councilor Tremble asked about the total cost of health insurance, and if any change to the costs of prescription coverage and deductibles would have to be negotiated. Bob noted that our total costs are in the 4-5 million-dollar range, and that any change in plan design would need to be negotiated. All groups need to agree to the changes. A benefit of moving to a Self-Insured Plan allows us to design a � plan that meets everyone's needs. � Councilor Baldacci asked about bids for plans. Bob noted that we could not get bids for our current plans,, as these plans do not exist in the marketplace. He said that one way or another that we would be paying more for insurance whether in increased premiums, higher deductible costs, or fewer things covered. Bob stated that this was to provide the committee with an update, and noted that we had a June 1� deadline to notify Anthem if we were switching. Ed noted that this was a national problem, however no one has been able to come up with a solution, and he welcomed any ideas or solutions to the problem. Bob noted that we have had great cooperation from both groups. Councilor Tremble said that the committee appreciates the cooperation, as they also feel the frustration of trying to give raises and having them get eaten up by increased health insurance premiums. Councilor Baldacci said that he appreciated the update. � 4. Request to Establish Section 125 Cafeteria Plans Bob noted that currently the City offers a Section 125 plan to employees covering health insurance premiums, group life insurance premiums, and dental plan premiums. This is effectively allows the employee to save taxes on premiums, which could amount to more than $100 per week, administered by the City. What we are proposing are the Medical Care Reimbursement Account and the Dependent Care Reimbursement Account. These plans are somewhat more complicated in that employees elect have deductions from their checks into a separate account from which eligible expenses can be paid. We do not have the staff administer and manage these accounts. Most companies outsource this benefit. My recommendation is to seek proposals from companies to manage this for us. For example, the School Department's administrator charges $3/month per account for the first plan or $4/month for the employee electing both plans. Employees can contribute up to $5,000 per year per plan. The committee discussed that this was a use it or lose it plan according to IRS guidelines. Bob noted that it was important for employees to carefully plan their contributions. � Councilor Farrington wanted to know if the administrative costs were covered by the employee or the employer. Y � Bob stated that for the proposed plans the costs would be paid by fihe emplayee, and far the current plans, the City pays for the administrative costs. CounciEor Farrington stated that the anly dawnside to this plan is that the employee may lose money if they do not have the expenses to get reimbursed. Bob agreed that it is the emplayee's obligation to make a good estimate on what ta contribute. There was a discussian about who gets the forfeited funds, the government or the emplayer, and Bob is going to check on this. Councilor Tremble asked if employees could draw advance funds ta cover expenses as long as future deductions would caver the expense, and what would happen if an employee left the City's employment before the contributipns had � been deducted. Bob affirmed that empioyees cauld draw in advance, and that the organization would absorb the loss of contributions if an employee left early. These loss�s would be offset by any forfeiture ta the plan. � Both Union and Non-Unian groups recommend these p(ans, as we are trying to find ways to stretch their health care daflars. This request was moved, motioned, seconded, and unanimously passed. Meeting adjourned. �