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17-A Benefits Sub(12-08-03)MINUTES OF THE CITY OF PARIS CITY COUNCIL BENEFIT SUBCOMMITTEE DECEMBER 8, 2003 The City of Paris City Council Benefit Subcommittee met in special session, Monday, December 8, 2003, 10:00 A.M. at Paris Junior College, Bobby R. Walters Applied Technology Building, Room 1208, 2400 Clarksville Street, Paris, Texas. Chairman Jay Guest called the meeting to order with Councilman Joe E. McCarthy, and Councilman Jim Bell being present. Also, present were City Manager Michael E. Malone, City Attorney Larry W. Schenk, and City Clerk Mattie Cunningham. Chairman Guest announced that the first order of business was discussion and possible recommendations concerning employee Vacation Time, which is Exhibit 3 in the packet. Councilman Bell wanted to know if there have been any updates to the Personnel Policy Book. Gene Anderson, Director of Finance, advised that the only difference has to do with civil service employees as you will see in his response to Chairman Guest's letter. Mr. Anderson said that civil service employees with more than three years of service receive three additional vacation days annually. He said that is part of the Civil Service Law. Other than that, everything is still the same. Councilman Bell asked Mr. Anderson to explain the sell back. Mr. Anderson explained that an employee must have at least fifteen (15) days of unused vacation days as of October first of each year and that only five (5) days of vacation can be sold back at one time. He said that in no case can the vacation balance after sell back be less than ten (10) days. The rate of pay for vacation sell back will be calculated at 75% of the employee's actual pay rate on September 15. Councilman Bell asked if there was a limit on the amount of vacation that can be accumulated if the employee does not sell it back. Mr. Anderson advised that there is no cap on accrued vacation unless the employee is civil service and the Civil Service Statute requires a limit on their vacation. He said they were normally required to take their vacation in the year that it is accrued or shortly City of Paris Council Benefits Subcommittee December 8, 2003 Page 2 there after. Councilman Bell said for city employees other than civil service, they can have an unlimited accrued vacation. Mr. Anderson said that was correct. Councilman Bell asked if that could put the city in a very precarious position if an employee were to retire or leave the employment of the city. Mr. Anderson said if they leave with a large accumulation of vacation time and has less than 10 years with the city, they can only be paid for 20 days of that vacation. If they have 10 years or more they can be paid for 30 days of vacation and if they have more than 30 days they lose it. Mr. Bell asked if a person comes in and advises that they were retiring and they have 4 months remaining vacation and they want to take 4 months of it, and then retire in 4 months what happens. Mr. Anderson said that any vacation leave taken has to be approved by the department head. He said that if it was someone in my department he would not allow them to do that because he could not do without an employee for 4 months. Councilman Bell pointed out that there is nothing in the policy to prevent it. Councilman Bell said if he could accumulate all of the vacation days he wanted, and he accumulated two or three years' worth, then he decides to sell it back, and he is going to sell it back at 75% of the rate of pay he had on September 15 of which year and has had three pay raises. Would you go back to year one and calculate it based on the actual vacation, or does he get to sell it back to the city at the new pay rate. Mr. Anderson advised that it would be sold back at 75% of the pay raise of the previous budget year. Mr. Anderson advised that there is not going to be a case in your illustration where a year that someone has received more than a 25% pay raise. He told Councilman Bell that he had never seen anyone sell it back at a rate higher than what they earned it at because of the discount. Mr. Anderson said that was the purpose of the discount is to off-set that. Councilman Bell asked if it was normal for an industry to have a cap on the amount of vacation that can be accrued and a use it or lose it theory. Mr. Anderson advised said he did not know about industry, but it varies from city to city. Councilman Bell stated that he felt there should be a limit on how much vacation time someone can accrue. He said it does not have to be something that would be accumulated at one and one-half days a month. Mr. Anderson advised that City of Paris Council Benefits Subcommittee December 8, 2003 Page 3 during the first 10 years of employment vacation is accumulated at the rate of 8 hours per month. After 10 years of employment a person accrues 12 hours per month. Councilman Bell asked if this created any type of budget problem as the money is going out and if the sell back vacation it would have the discount in it is it going to cost the city for that employee one way or the other. Mr. Anderson advised that the only thing the city can do on that is look at historical usage and it fairly consistent from year to year and they budget on that basis. After discussion, it was the consensus of the committee to place a cap of 45 days on accumulated vacation for employees and they should use it, sell it, or lose it. Mr. Anderson asked, if they wanted that calculated as a specific point in the year, such as at the end of December after the employee has had a chance to sell that week if they were going to, or do they want to put a block on the computer where it will not track any hours or days over that amount. It was the consensus of the committee to stop tracking as of the date their last day they can sell it back, which is December L It is currently based on what is accumulated as of September 30 or October 1; however, they wanted to look at that. Mr. Anderson said another issue is the sell back date and one of the most requested issue he has from the employees is if the city could move that date up to November, because a lot of them use the sell back to buy Christmas, and by the time the get their checks by December 1 or later is really j ams them up for that. It was the consensus of the committee to move the sell back date to Novemberl or soon thereafter. City Attorney Schenk asked how to phase this in and he thought the last time they made changes like this, they made it effective to a particular date that would be the policy thereafter for accruing what they wanted to about vacation time that has been accrued in excess already. Mr. Anderson advised that Chairman Guest had asked for those employees who City of Paris Council Benefits Subcommittee December 8, 2003 Page 4 had in excess of 30 days accrued and there were 56 city employees and 6 Health Department employees that have more than 30 days of vacation time. He advised that he would furnish that information at the next meeting. Chairman Guest called for discussion and possible recommendations concerning Health & Life Insurance Benefits. He said that in the packet under Exhibit 1 Mr. Anderson has given them comparisons between what the current insurance is and what he is purposing they do. Chairman Guest asked Mr. Anderson to go down these comparisons and allow the committee to ask questions as he goes along. Mr. Anderson discussed the proposed changes and clarified that the RFP's that he will be sending out very soon will contain these changes because that is what had been discussed this past summer. He said he had a list of about 8 or 10 companies or people to send RFP's that have contacted him recently or anytime in the past. Councilman Bell said the plan revisions that he has quoted here states as of May 1, 2002, that is the plan that is currently in effect now. Mr. Anderson said yes, and the proposed plan is what we are looking at for changes. Chairman Guest advised that the plan and the proposed plan are not going to match up with the other exhibit. For example, the calendar year Physical Therapy, for instance, was 60 days and the proposed is going to a maximum of $2,000.00. Outpatient two months per diagnoses with the current plan and he is proposing to go to a$2,000.00 limit on Outpatient. Chairman Guest said for Speech Therapy, he went to a limit on it, increased air ambulance from $4,500.00 to $5,000.00. The calendar year in network individual deduction is going to be from $200.00 to $500.00. The calendar year deduction will go from $500.00 to $700.00. Councilman Bell asked what kind of increased cost does the employee have when a patient goes out of network. Mr. Anderson advised that the increased cost comes from the fact that the TML Network does not have negotiating rates for those providers for negotiated discount. Instead of paying the sum of a discount City of Paris Council Benefits Subcommittee December 8, 2003 Page 5 rate, they pay what the pool may give. Councilman Bell said the insurance company is going to pay it after that deductible. Councilman Bell said based on experience with the city employees, employees that the city has right now, do we have a lot of out of network claims, what is our network, describe that and who determines the network. Mr. Anderson advised that TML determines the network and that is whoever they can negotiate an agreement. Mr. Anderson advised that the network covers many providers all over the state. It does not necessarily cover every doctor that might be in town and there are two or three hospitals in Dallas, for example, that are not covered. Councilman Bell asked if Christus St Joseph's Hospital and Essent were covered. Mr. Anderson said that Christus is covered, but until Essent gets here, TML can come in and negotiate an agreement. Chairman Guest said the next item is in network family and currently the deductible is $600.00 and it is going to $1,500.00 traditionally it is three times the deductible. Mr. Anderson said that the first three that hits the $200.00 deductible satisfied the family deductible. Chairman Guest advised that out of network family is going from $1,500.00, and he suggested that $3,000.00 might represent more of the cost in talking to other people in the industries. Chairman Guest said that out of pocket maximum in network is $1,000.00 and Mr. Anderson has proposed $2,000.00. Out of pocket and out of network is currently $2,000.00 and he did not put a figure there. Mr. Anderson said he did not put a figure in there because it is deluding the limits because the employee could pay a large amount. He explained that an employee can go to basically any doctor in Paris and the hospital, most are all in the network. If they go to Dallas all they have to do is pick up the telephone or get on the web site and find out if the doctor that the employee is being referred to is in the network or no. If not they need to ask for one that is. Mr. Anderson said unless an employee is care flighted on an emergency situation, that is something that all employees needs to do to help hold the cost down. Chairman Guest said that in network copay it is currently 90% and the proposal is 80%. Out of network copay is currently 80% and the proposal is 50%. City of Paris Council Benefits Subcommittee December 8, 2003 Page 6 Chairman Guest asked that Mr. Anderson explain the facility charges. Mr. Anderson said that most of these deal with the steps to help to hold the cost down, such as second surgical opinions, pre-admission testing and home health care, hospice care and vision care the deductible will apply just like any other illness. Chairman Guest said the next item is office visit/consultation copay, which is only $15.00 and the proposed is $25. 00. Preventive care benefit is currently $20.00 copay and the proposal is no copay at 100% in network and out of network with the deductible waived. Mr. Anderson advised that they are trying to encourage people to get physicals and catch things early. Mr. Anderson explained that under prescriptions, in the past, employees went to local pharmacies, pay for the prescription, and the employee would file on the insurance and be reimbursed at 80%. Mr. Anderson said that the proposed is kind of a three tier copay based on generic or brand name. Mr. Anderson also explained that the mail service is for maintenance drugs. Mr. Anderson said that he was proposing disease management, which is primarily an educational tool where TML can look at claims history of an employee and can determine, for example, that we might have six employees who have had it. TML would mail them from time to time information on their disease and how to take care of themselves. Mr. Anderson said that the Pediarix Inj ection and Small Pox vaccination is added under wellness benefit like pool subject to annual cap both for injections and admin. Chairman Guest said that under today's market conditions, he felt that Mr. Anderson has done a good job of coming up with alternatives and alternative proposal that can be cost efficient, but they will not know anything until the bids come in. Chairman Guest asked if right now the city is paying $450.00 per employee and City of Paris Council Benefits Subcommittee December 8, 2003 Page 7 the employee is picking up the cost for family or child. On a question by Mayor Pro Tem McCarthy, Mr. Anderson advised that TML does not provide a hard copy of anything anymore because they encourage the employees to use the website. All employees have been given a book that explains how to reach the website. That way all the changes can be current on the website. Mayor Pro Tem McCarthy asked if there was access to a computer. Mr. Anderson advised that computers are available at the Paris Public Library. City Manager Malone said they could send out information that they can contact the Personnel Department for specific questions. Dick Boots, 2520 Clark Lane, was present telling the committee that he is a retiree from the City of Paris and he is not here representing anyone or any particular group. He said in the early 1980's, the department heads, City Manager, and City Council of the City of Paris met to really make an effort to improve the benefits for the employees of the City of Paris because the city was losing many employees to industry. He said they made a concerted effort over the months to improve those benefits. It came to a point where they were proud to interview because of the benefit package that the city had to offer and the revolving door has slowed tremendously since this was done. The employees are better employees and they have a sincere interest in longevity and staying with the city. He said it has made all the difference in the world. Mr. Boots said that the Police, Fire, Water and Sewer Departments are in good shape in the City of Paris. Without good employees, the city has nothing. Mr. Boots said the employees are the greatest asset of the city. He said as a taxpayer he appreciated this committee and the other Council Members efforts to do it right. Mr. Boots stated that he strongly believed that, right now, the City of Paris has the best employees that they have ever had ins every department. One of the reasons for this is the strong benefit package. Councilman Bell asked if there were any proposals brought forward on the life insurance. Mr. Anderson said that the current life insurance is $15,000.00 and has been for sometime and when he came to the city it was $3,000.00. Right after he came to the city it was raised to $5,000.00 and later it was increased to City of Paris Council Benefits Subcommittee December 8, 2003 Page 8 $10,000.00 for all city employees including the Police and Fire employees. Mr. Anderson advised the city pays the cost of the life insurance. TML also offers optional insurance that employees can obtain and pay for above that leveL Mr. Anderson said the police and firemen have some coverage under federal and state laws and if they are killed in the line of duty that would come into play, which is a pretty good amount. It was the consensus of the Committee to support the proposed changes as recommended. Chairman Guest announced that there the committee would take a short break at 11:05 A.M. The meeting was reconvened at 11:13 A. M. Chairman Guest announced the next item on the agenda was discussion and possible recommendations concerning Leaves of Absence, Maternity Leave, and Funeral Leave, which is under Exhibit 4 of the Personnel Manual. Councilman Bell said he thought that some of this was dictated by Federal and State laws. Mr. Anderson explained that for maternity leave is accessible under the FLMA and explained that is normally six weeks. If an employee's wife had a C-section and needed help that would be considered a medical necessity, but it would require a statement from the doctor of that necessity. He said that in some instances, they could require a second opinion regarding sick leave. Gene Anderson explained that sick leave is accumulated at the rate of one and one quarter working days for each full month of employment. He explained that an employee can accumulated up to 135 days of sick leave and it will be granted only for absence from duty because of personal illness or when a person's immediate family is ill and in need of care. Mr. Anderson said that immediate family consists of the employee's spouse, child, parent, father-in-law, City of Paris Council Benefits Subcommittee December 8, 2003 Page 9 mother-in-law or any relative living in the employee's home. Councilman Bell questioned the funeral leave. Mr. Anderson advised that one of the most requested issues regarding funeral leave was they needed to add grandchildren. He said at the present time immediate family members include spouse, child, parent, grandparents, sister, brother, mother-in-law, father-in-law, and relatives residing in the employee's home. Mayor Pro Tem McCarthy agreed that a grandchild should be added to the immediate family. After discussing the use of funeral leave for brother-in-law and sister-in-law, it was the consensus of the committee to have staff look at other cities and industries and see what their policies are and bring that information back to the committee. Chairman Guest asked about the sell back of sick leave. Mr. Anderson advised that for an employee to sell back sick days, they have to have and, in no case can the sick leave balance after sell back be less than 30 days. Mr. Anderson said that if an employee has 30 - 89 days it is sold back at 50%, between 90 - 119 day it is sold back at 75%, and 120 days it would be sold back at 100%. The Police and Fire employees upon retirement can sell back 90 days, the reason for this was trying to be equal with them. City Manager Malone explained that this is an incentive to keep employees from abusing the sick leave. He advised that most employees get to the 50% and 75% point of sale back. Chairman Guest said when they re-write the Personnel Policies to consider adding grandchildren to the immediate family for funeral leave. Chairman Guest announced that the Committee would adj ourn unti110:00 A. M. Tuesday, December 9, 2003. JAY GUEST, CHAIRMAN City of Paris Council Benefits Subcommittee December 8, 2003 Page 10 ATTEST: MATTIE CUNNINGHAM, CITY CLERK