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05-10-11 Public Safety and Human Resources CommitteeCITY OF EDMONDS PUBLIC SAFETY AND HUMAN RESOURCES COMMITTEE MEETING MINUTES May 10, 2011 Committee Members Present: Council Member D.J. Wilson Council Member Diane Buckshnis Others present: Police Chief Al Compaan, HR Director Debi Humann, Assistant Chief of Police Gerry Gannon, Recreation Services Manager Renee McRae, Parks Maintenance Worker Jesse Curran, Dawn Curran, Engineering Technician JoAnne Zulauf, Executive Assistant Cindi Cruz and Building Maintenance Operator Larry LaFave The meeting was advertised to start at 5:00 pm. Since the Committee Council Members were not present at that time, those present for the meeting (noted as "Others Present" as listed above) disassembled at 5:37 p.m. The PS/HR Committee re -convened at approximately 6:20 pm at the request of Council Member(s) D.J. Wilson and Diane Buckshnis. Other attendees included Evelyn Wellington and HR Director Debi Humann. Snohomish Regional Druq & Gang Task Force, 2011-2012 Interlocal Agreement Chief Compaan explained that this item seeks authorization for the Mayor to sign the FY 2011-2012 interlocal agreement with the Snohomish Regional Drug and Gang Task Force. Since January 1988, the City of Edmonds and other Snohomish County cities have been participants in the Snohomish Regional Drug Gang Task Force (SRDGTF) with offices in Everett. The SRDGTF receives the majority of its funding through a U.S. Department of Justice grant. The grant amount is based on the number and population of municipalities that participate. The required matching funds for the federal grant come from Snohomish County and the participating municipalities. Edmonds' share for July 1, 2011 through June 30, 2012 is $9,998, an increase of $197 over last year's share. Funding for this item is included in the 2011 Edmonds Police budget. The interlocal agreement and the funding received from participating entities, sets forth the operational framework for the SRDGTF, and has done so since 1988. Action: Forward to the City Council consent agenda with a recommendation to approve. Self -Insurance There was some discussion by Council Member D.J. Wilson and Council Member Diane Buckshnis as to the meeting start time. Council Member Wilson stated that he had requested that the meeting time be changed to 6:00 pm due to a schedule conflict. Council Member Wilson requested that another meeting time be scheduled to discuss the health insurance agenda item and he requested that HR Director Humann provide him with the names of the attendees who were present earlier. There was some discussion between HR Director Debi Humann and Council Member(s) Wilson and Buckshnis as to whether or not rescheduling an additional meeting would be feasible (as some of those present were spouses of employees) with a possible meeting date of Monday, 5/16/11 @ 5:00 pm. Council Member Buckshnis asked Council Member Wilson to explain/clarify his cost estimates with regard to his projection of the approximate $3M cost for health insurance premiums from AWC along with an additional $1.4M for reserves. Council Member Wilson explained that he had worked closely with Volunteer Consultant Jack Loos for his projected cost estimates on a self -insured model [as precise figures based on claims experience rating/history are only projections due to the inavailability of our claims experience/history from the Association of Washington Cities (AWC)]. Council Member Buckshnis pointed out that the model provided by Council Member Wilson detailed a total projected cost of approximately $4.4M (including reserves). There was some discussion between Council Member Buckshnis and Council Member Wilson that the $4.4 million would be comprised of the current monthly premium accrual in addition to the $1.4 million the City currently had in reserves. HR Director Humann stated that she recalled having a discussion with Wells Fargo (who was the City's health insurance consultant) and Jack Loos as to the new (upcoming) health care reform legislation. Her recollection was that the State required that each self -insured organization had to be fully funded within a specified period of time. HR Director Humann asked if Council Member Wilson knew what that period of time was. He responded he did not. Council Member Wilson stated that as long as our total City's insurance costs (under a self -insured plan) did not exceed $3M each year (the current cost of our premiums with AWC), the additional $1.5M reserve fund would continue to grow. HR Director Humann pointed out that this would also have to include the cost of the third party administrator, stop loss coverage provider(s), and any other costs associated with self-insurance. Council Member Wilson affirmed that this was correct. HR Director Humann inquired as to whether the council meeting on 5/17/11 was to ascertain Council approval to go to market in order to ascertain hard data that could be brought back to council [for further consideration of a self- insurance plan]. Council Member Wilson responded that he wasn't sure as to the direction (from council at this point) and was open to suggestion. Council Member Buckshnis stated that the City does not have the money to fund the self-insurance plan, unless the safety reserve was used. There was some discussion between Council Member Buckshnis and Council Member Wilson to further clarify the breakdown of costs in his self-insurance model [between the reserve fund amount and the cost of claims for the benefit of council]. HR Director Humann stated that it seemed reasonable to ascertain more information [on actual plan costs for a self - insured plan]. She explained that with knowledge of the particular plan/benefits desired, and with the help of HR to put together a census, it would make sense to go to market and find out what the actual costs would be for self- insurance. HR Director Humann stated that when the Heath Benefits Committee went to market with Wells Fargo, they encountered some problems that included being blocked by AWC from obtaining meaningful quotes, not having the claims history/experience available to us, needing AWC to release information on all of the retirees and COBRA individuals currently on AWC plans, and finding reasonable quotes for our LEOFF 1 retirees. Council Member Wilson suggested putting together a resolution to bring forth to council for approval (within the next three months) that includes preparing a census of information [based on our AWC-insured employee pool, retiree pool and LEOFF 1 retiree pool] and sending it out to the market to obtain [self] insurance provider quotes. HR Director Humann also pointed out that approval for a budget [for the consultant going out to the market] should also be included in the resolution. Evelyn Wellington inquired as to whether the insurance provider quotes would be for fully funded or self -funded (self -insured) plans only and whether or not the intent was to transition over to a self - insured plan in the next three months. Council Member Buckshnis stated that it would take longer than three months, but that it would [in her opinion] lower the largest cost (which is the administrative cost portion of the total premiums cost) for our health insurance benefits if we went to a self -insured plan. HR Director Humann stated that she believes there are still a lot of concerns about the viability of self-insurance: 1) due to the size of the employee group at the City [to be insured]; 2) if the City does not pass a levy and there are resultant layoffs, the employee group size could be reduced even further and; 3) due to the impending impacts of healthcare reform legislation. Council Member Wilson stated that his concerns are that the "right" questions have not been asked and the "right" answers have not been ascertained with regard to finding out all the information possible on self-insurance [before making a final determination to not look further into the City pursuing self- insurance]. HR Director Humann explained that there was another healthcare consortium, Clearpoint [which the City Health Benefits Committee had explored] that offers a platform for self -insured plans that may be viable at some point in the future for possible estimated plans savings. There are a handful of cities that have chosen to use Clearpoint (such as Kirkland and DesMoines) and it will be of benefit to the City to see how these cities' plans perform to determine if a cost -savings was realized and to consider whether they may be a good provider choice. 2 There was some discussion that followed by the committee and an audience member regarding why organizations (such as AWC) withhold risk pool and claims experience/history information and other possible cost -savings measures. Council Member Wilson explained that as benefits such as health insurance are a mandatory subject of collective bargaining, there are some issues involving contract agreements that must be considered that could lead to arbitration and that there are political impacts. In his opinion, creating a culture in the City of "ownership" regarding healthcare [through self-insurance] is a goal. There was some additional discussion that followed by an audience member and the Council Members regarding collective bargaining agreements within the City. Non -Represented Compensation Policy HR Director Humann distributed copies of the City's Non -Represented Compensation Policy to the Committee dated 12/16/10 (which was also provided to council) as well as additional background information in a memo on the scope of work to be performed by a compensation consultant (as requested by Council Member Michael Plunkett). This draft scope of work includes a three part RFQ/RFP process. According to HR Director Humann, it seemed to make sense to separate out the scope of work into three sections since the council may determine that it would like to have some of the survey work done "in house" [by HR staff with the help of temporary employees, not the consultant]. Council Member Wilson inquired as to whether other cities handle their compensation surveys in the same manner. HR Director Humann stated that she had discussed with our comparable cities how they handle their compensation surveys and only a few had used consultants (such as the City of Lynnwood) and that these surveys were almost always handled primarily "in house" by HR staff as the City traditionally has for a number of years. HR Director Humann stated that her draft scope of work included: 1) an analysis and review of the current compensation policy; 2) a review and update of all employee job descriptions (which has not been performed since 1997 and is also mandated by WCIA through a personnel audit that requires this work to be completed by October of 2011 or a monetary penalty will likely be imposed) and; 3) conducting a comprehensive compensation market - based survey using comparable cities. HR Director Humann further stated that she was unclear as to the direction Council wanted to take as the scope of work had been left to her to bring back to Council and that she understood her draft scope was a starting point. Council Member Buckshnis inquired as to whether or not HR Director Humann could recall if she had provided this information packet to the levy committee. HR Director Humann responded that she did not believe it had been included in that process because nothing had been decided yet but that she had sent it in February as an agenda memo for the March 2011 HR Committee Meeting. Council Member Buckshnis stated that she would look to see if she had the information and would let HR Director Humann know if she needed another copy. Furthermore, Council Member Buckshnis stated that she believed that this compensation survey is a good idea as she is regularly asked question by the public about our compensation policy and about how it compares to the state and other comparables. Council Member Wilson stated that he also believes that having a compensation consultant review the policies, etc. is a good idea. Additionally, as Council Member Wilson pointed out, the HR Department is minimally staffed [as are many departments in the City], therefore, the review and update of all job descriptions should be handled by the consultant so that HR Director Humann can focus on other HR workload items. Council Member Wilson further suggested that HR Director Humann create an RFQ/RFP for the second defined item in the scope of work (update of job descriptions) and bring that forward to council. In response to some comments made about comparables, HR Director Humann stated that, in her opinion, if the appropriate market comparables are not selected for the compensation survey, it could greatly alter [skew] salary figures. She further added that if comparables do not include the market from which we lose our employees or recruit from, they are not generally useful for retention and recruitment. Financial Analyst Position Council Member Wilson suggested that the financial analyst may best serve the City's needs by being an employee of the City opposed to a contractor for the Council. There was some discussion that followed about the financial analyst position as a contract versus full time or part time employee position to be further discussed in the future. Council Member Buckshnis suggested that this topic be put on hold until the Finance Director vacancy is filled. The meeting adjourned at 6:58 pm.