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HomeMy WebLinkAboutCCMinutes - 10/13/04 WS MINUTES Eugene City Council Work Session McNutt Room--Eugene City Hall October 13, 2004 Noon COUNCILORS PRESENT: George Poling, Nancy Nathanson, David Kelly, Betty Taylor, Bonny Bettman, Gary Papd, Jennifer Solomon. COUNCILORS ABSENT: Scott Meisner. Mayor James D. Torrey called the meeting of the Eugene City Council to order. A. WORK SESSION: Health and Benefits Fund (Fund 623) Update City Manager Dennis Taylor introduced Risk and Benefits Manager Myrnie Daut, who was present to discuss Fund 623, the Health and Benefits Fund. He emphasized the importance of the topic to the City's budget-setting process. Ms. Daut introduced benefits consultants Del Johnson and Greg O'Hanlon of Willis of Oregon, Inc., who were present to answer questions. Ms. Daut provided a PowerPoint presentation regarding the fund. She provided an overview of the fund, and the programs it supported. She briefly described the rates-setting process and noted the executive managers' role in overseeing that process. Ms. Daut overviewed the benefits programs offered by the City to its employees and noted the role played by the bargaining process in establishing those benefits. Ms. Daut reported the City was advised in health care benefits issues by Willis of Oregon, Inc., an insurance broker/consultant, and AON Risk Services, an actuary/consultant. Ms. Daut provided the council with details and trend data regarding the City's Self-Insured Plan, observing that comparisons with other communities indicated Eugene was about in the middle in terms of costs. Ms. Daut identified the following issues regarding the fund: · Rising Medical/RX costs--medical trend · Large claims · Rate volatility · Accuracy of rate projections · Aging workforce · Retiree continuation Ms. Daut expanded on the issue of retiree continuation, sharing two graphs with the council to demonstrate the cost impact of the retirees on the self-insured and managed care plans. The graphs indicated much higher costs for the retirees, who State law mandates must be allowed to purchase health insurance through the City. MINUTES--Eugene City Council October 13, 2004 Page 1 Work Session Ms. Daut reviewed the City's cost containment strategies, which included an employee committee established to advise the City on benefits issues, the Benefit Study Group; employee premium cost sharing; pharmacy management; prevention; and disease management. Ms. Daut noted the Benefit Study Group's role in reviewing costs/utilization, employee education, and in reviewing plan design options. She provided additional detail on the City's cost containment strategies. Ms. Daut called attention to the levels of premium cost sharing for all employee groups. Ms. Daut noted the availability of further information at http://www.ci.eugene.or.us/HRRS/RISK.htm. Mayor Torrey called for council questions and comments regarding the presentation. Ms. Taylor said she had recently returned from a National League of Cities Human Development Steering Committee meeting and learned that Eugene was not alone in facing rising medical costs. She noted the league's support for a single-payer system. She understood that advertising and repackaging of drugs with new names was leading to higher health care costs. Ms. Taylor asked why medical trends were projected to go down. Mr. Johnson responded that trends were turning down because most carriers were experiencing growth in their surpluses and the contracts negotiated with provider groups were more favorable to them. He also believed that carriers who had resisted in investing in disease management and chronic care were starting to become more involved in those areas, and that also affected trends favorably. He pointed out that trends tended to be cyclical and carriers sometimes overreacted when costs went up by increasing premiums. Ms. Taylor was happy to hear about the wellness program and asked about the potential of giving participating employees half-days or days off to reward them for being healthy and to help them manage stress and reduce disease. Ms. Taylor said the City appeared to encourage early retirement but it also appeared that it cost more money to ensure those individuals. Ms. Daut agreed. The early retirees were increasing the City's health care costs because of the subsidy involved. She noted that the Public Employees Retirement System (PERS) reforms had increased the retirement age. Ms. Taylor was surprised to hear older employees cost more because of her experience that older employees tended to take less sick time. Mr. Johnson said it was true that older employees had higher health care costs, particularly with regard to prescription drug utilization and the average cost per script. The curve was particularly dramatic in that area. Mr. Papd asked when the City could reduce its administration to one plan. Ms. Daut said the City was securing a quote from ODS on the costs of administering the managed care plan. Mr. O'Hanlon anticipated ODS would evaluate the option during the upcoming winter. Mr. Papd determined from Ms. Daut that all employees had the choice of two plans and enrollment in the plans was about evenly split. The Pacific Source Plan had fixed co-payments for office visits and the City's self-insured plan was a preferred provider plan with an 80/20 cost split for most services. In the past, the City had attempted to get agreement from the employees about one plan but was unable to do so. Ms. Daut said the City hoped to have one plan but collective bargaining had an impact on that issue. MINUTES--Eugene City Council October 13, 2004 Page 2 Work Session Mr. Pap6 asked where the market was on co-pays and deductibles. Ms. Daut said the public sector lagged behind the private sector, where deductibles were higher. She noted that there were some public sector agencies with less than $100 deductibles. She said the City negotiates its benefits with its unions, and over time, health insurance had become a more important bargaining issue because health care costs had increased. The City negotiated changes in the plan but generally negotiated three-year contracts with its unions that could not be changed for three years. She said all the unions agreed to implement tiered pharmacy costs and to pay for a portion of their insurance premiums in the last round of bargaining, and now the City was attempting to negotiate plan designs with the unions, including increased deductibles and co-pays. Mr. Pap6 believed that the way to manage health care costs was through wellness programs. He said he heard about the City programs but it was his perception the program had not reached out to the employment base. He asked how the City was progressing in this area. Ms. Daut said the City's program was very comprehensive. The City offered health risk appraisals to all employees and the cost of regular physical exams were covered by the City's health plans. Family members could receive the appraisals for a small fee. Mr. Pap6 asked what percentage of employees took the health risk appraisals. The health and wellness program also had targeted health and fitness programs within department. Health and Fitness Director Steve Auferoth worked with each department to create their own tailor-made incentive programs for employees. For example, the Police Department worked very closely with Mr. Auferoth on creating health and fitness programs for police employees. Responding to a desire expressed by Mr. Pap6 for measurements to indicate how well the programs were working, Ms. Daut indicated the City had data in the risk report that would provide the council with data on information such as sick leave utilization factors and health risk appraisal participation. She emphasized the City wished employees to understand that managing their own health risks were key to reducing health care costs. Mr. Kelly complained about the lack of information accompanying the agenda item summary, suggesting a copy of the presentation should have been included so the council could be better prepared with its questions. Mr. Kelly asked what benefits-related issues the City should be prepared to lobby at the State legislature. Ms. Daut said the City reviewed the health insurance bills as they were introduced in every session. She worked with the League of Oregon Cities and LPGI to put forward agendas relating to health insurance. Mr. Kelly noted that the mayor and city councilors, if they wished to participate in the City's plans, pay 100 percent of the cost. Ms. Bettman asked about the nature of the large claims, and if there were trends involved. Ms. Daut said the the most common type of large claim involved premature births. Those events cost around $500,000 apiece. Ms. Nathanson arrived at the meeting. Ms. Bettman asked if there was a way for the City to avoid hiring individuals with preexisting voluntary health factors, such as smoking, to reduce the City's health care costs. She asked if there were legal issues involved. Human Resource and Risk Services Director Lauren Chouinard indicated that was difficult for the City to do for most job categories. Such a prohibition must represent a bona fide occupational MINUTES--Eugene City Council October 13, 2004 Page 3 Work Session requirement. He said the City had stipulated for many years that firefighters could not be smokers because of the cardiovascular risks to the employee. Mayor Torrey noted the short time remaining for the item and called for a motion to extend time for the item. Mr. Poling, seconded by Ms. Solomon, moved to extend time for the item by three minutes. The motion passed unanimously. Mayor Torrey expressed appreciation for the presentation. He said that the unions and the public all needed to hear Ms. Daut's message about the increasing costs of health care. The public did not understand the issue and why the costs of government were exploding. He suggested it would be in Eugene's best interest to identify the gross costs of employees, including salaries, benefits, and other costs over a five-period to demonstrate for the public the disparate impact of health insurance on the cost of personnel. He thought until the City successfully conveyed that message to the public, people would merely ~throw up their hands and say no" to City initiatives. B. WORK SESSION: Discussion of the Eugene/Springfield Multi-Hazard Mitigation Plan City Manager Taylor introduced the item, saying mitigation had an important role to play in reducing the costs and tragedy resulting from emergencies and disasters. He said that Emergency Program Manager Chuck Solin of Human Resources and Risk Services was present to present the Eugene/Springfield Multi- Hazard Mitigation Plan. Mr. Solin provided a PowerPoint presentation on the plan. He said three years ago, the Federal Emergency Management Agency (FEMA) provided the City with grant funding to begin work on a pre-disaster mitigation plan. Communities were being encouraged to develop such plans by the federal government. Mitigation was the steps taken to reduce damages, economic losses, or loss of life from potential emergen- cies. Examples of mitigation projects included elevation or acquisition of flood-prone structures and seismic retrofits of buildings. Mr. Solin said because emergencies know no boundaries, he had solicited Springfield's involvement in the planning effort, and that city had provided staff support for the effort. He anticipated that the two cities would adopt the plan independently. The plan encompassed all land within the Eugene-Springfield metropolitan area. A technical advisory committee made up of representatives from local utilities, the Army Corps of Engineers, and other agencies that would be impacted by a local disaster was formed. The technical advisory team reviewed hazards that pose risks to the community, evaluated the frequency and severity of potential emergencies, and identify goals, objectives, priorities, and actions for reducing community risk. Mr. Solin emphasized the plan was a guide, not a regulatory document. Mr. Solin briefly reviewed FEMA's requirements for mitigation plans. He noted that the plan must be in place for the community to be eligible for pre- and post-mitigation funding. The plan must be approved by FEMA, but first it must be adopted by the City Council. MINUTES--Eugene City Council October 13, 2004 Page 4 Work Session Mr. Solin noted that the plan was on the City's Web site and public meetings had been held to gather input. Mr. Solin briefly noted some of the hazards that had been evaluated, which included floods, winter storms, landslides, and volcanic hazards. Mayor Torrey called for council comments and questions. Mr. Kelly expressed appreciation for the work done by Mr. Solin and for his effort in involving the City of Springfield. He said he had been looking at the Risk Services Web page and had noticed the link to the full plan, which he had then reviewed. His questions were based on that review. Mr. Kelly said it would be useful if the plan was clear about its relationship to the City's Emergency Plan and the section of the Eugene City Code related to emergencies and the declaration of emergencies. He suggested that the Emergency Plan was more focused on response/recovery to emergencies as opposed to management and mitigation, the focus of this plan. Mr. Solin concurred. He added that some communities blend the two efforts together, but Eugene staff decided to keep Eugene's Emergency Plan focused on the implementation of the incident command system and response/recovery actions. Mr. Kelly suggested the two plans be cross-referenced. Mr. Kelly asked for more information about the public meetings held in conjunction with the plan. Mr. Solin said the meetings were announced on the City's Web site and noticed to the media. Those meetings occurred the second week of September 2004, and he acknowledged they were very lightly attended. Mr. Kelly did not think there was anything controversial in the plan but he questioned the adequacy of the notice that occurred regarding the meetings. He determined from Mr. Solin that notice of the meetings had gone to many parties, including the neighborhood associations, the Eugene Area Chamber of Commerce, and Lane County Homebuilders. Mr. Solin concurred that the topic was not controversial. Mr. Kelly referred to the chapter in the plan on terrorism, which referred repeatedly to %co-terrorist," a phrase which many people objected to as propagandistic. He noted that it was also the only type of terrorism specifically called out in the plan, and suggested the reference be revised. Mr. Poling determined from Mr. Solin that counties as well as cities were doing similar plans. Mr. Solin said the City had worked with Lane County to determine the boundaries for the planning efforts. Ms. Nathanson shared Mr. Kelly's interest in knowing more about the public outreach associated with the plan, acknowledging that many would find such information dry. She asked if staff received any comments. Mr. Solin said the most useful comments staff received were from representatives of other public agencies, such as the staff responsible for wellhead protection at the Springfield Utility Board. He noted that Eugene Water & Electric Board staff had provided a critique of the information on power lines. Ms. Nathanson noted her continuing interest in the issue of adequate security for communications lines. She did not think the City had done enough to evaluate its risks as they regarded the inclusion of redundancy into systems and ensuring that switching stations were secured from disaster. She encouraged additional thought be given to that issue. Ms. Nathanson also thanked Mr. Solin for involving Springfield in the plan. She said that his efforts around the plan were an example of where the council needed to recognize the impact of the additional demands it frequently placed on the organization. She said staff was involved in normal work and responding to MINUTES--Eugene City Council October 13, 2004 Page 5 Work Session changes in the law, and there was only so much organizational capacity. She suggested that staff keep the council apprised of what it was working on so the council did not add to the work load beyond what could be handled. Ms. Taylor asked about the difference between prevention and mitigation. She thought prevention was very important. She asked if the City was issuing building permits for construction on steep slopes without proper precautions. She believed there were buildings in south Eugene subject to slippage. Ms. Taylor said she continued to wonder why the City did not do a seismic upgrade to City Hall given that it would not be replaced anytime very soon and it was impossible to predict when an earthquake occurred. She suggested that something be done that saved lives at a minimum, even if the building itself could not be preserved. Mr. Pap~ also expressed appreciation that staff reached out to Springfield. He noted the disasters he had seen in the community and said the Thurston shooting was the most costly in terms of lives. Thinking of that made him wonder if the City was planning with its health providers for such situations. Mr. Solin said that after the meeting he would attend an exercise of the Lane County Emergency Preparedness Group, which included hospitals, and which in this instance was focused on how the community would respond to a pandemic flu epidemic. The City was working with the hospitals on a number of related issues. Mr. Pap~ asked if the FEMA program should be extended to encompass that effort. Mr. Solin said staff discussed the issue, but the plan did not generally reach to that level of specificity, although he acknowledged the plan got specific in terms of some of its actions, such as its mention of the leaf pick-up program and its relationship to flood control. Ms. Bettman requested a hard copy of the draft plan. She took note of the non-regulatory nature of the language in the plan and asked if the plan included any mitigation activities that would reduce damages and cost following an emergency event. Mr. Solin said the City was a member of the National Flood Insurance program and the City did not allow development in certain flood-prone areas unless the development met the program's standards. That was referenced in the plan as it was an example of a mitigation strategy. Ms. Bettman referred to the Earthquake Mitigation Project/City Hall and noted it was not included in the draft. She asked why, and if an analysis was available or would be available. Mr. Solin indicated the seismic benefit cost analysis for City Hall was an attachment to the plan. Ms. Bettman asked for informa- tion about what the analysis contained. Mr. Solin first noted the benefit cost-analysis was a FEMA requirement for funding; there was a complicated methodology one must go through to get the FEMA dollars. He said when the City did a benefit cost analysis on City Hall including the fire station, it did not rank high enough to get funding in Oregon. City Manager Taylor indicated the City had other facilities, such as fire stations, that ranked higher and that staff was likely to seek funding for. Ms. Bettman determined from Mr. Solin that the City had identified other key critical facilities such as fire stations that would rank better in the benefit cost analysis than City Hall because their purpose was to provide a direct emergency response. He said fire and medical response were considered more important than police response. The number of staff on site was also a consideration, and police staff did not get as many points for loss of life because they were frequently out of the building. Responding to a follow-up question from Ms. Bettman, Mr. Solin did not know if the benefit cost analysis was on line, but he would ensure that it was soon. MINUTES--Eugene City Council October 13, 2004 Page 6 Work Session Mayor Torrey suggested the report be bound in red rather than white so it was easier to find on a shelf. Mayor Torrey urged Mr. Solin to follow-up on Mr. Kelly's comments regarding the use of the phrase %co- terrorism" before the council considered the plan for adoption. Terrorism stood on its own and needed no qualifiers. Mayor Torrey complimented Mr. Solin on his ongoing efforts on behalf of the City of Eugene. He said his work made it possible for the City to receive grants from the federal government. City Manager Taylor said that the benefit of the work the City had done in mitigation planning had been demonstrated when the City had to deal with the January 2004 ice storm. Mayor Torrey solicited a second round of comments. Ms. Taylor referred to the City's leaf pickup program and suggested that leaves were more likely to be a hazard if moved into the street rather than left on lawns. She suggested staff consider that issue. Mr. Kelly suggested that the final draft document be placed online before the council was asked to adopt it. Mr. Kelly suggested the wording of the resolution indicate that the City aspired to the goals of the plan but did not commit the City to any expenditure of funds. The meeting adjourned at 1:26 p.m. (Recorded by Kimberly Young) Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Kimberly Young) MINUTES--Eugene City Council October 13, 2004 Page 7 Work Session