HomeMy WebLinkAboutDirection - Insurance Benefits for CouncilmembersCITY OF PALM DESERT
HUMAN RESOURCES DEPARTMENT
STAFF REPORT
REQUEST: Provide direction to staff relative to the administration of health and
related insurance benefits for Council Members.
SUBMITTED BY: Lori Carney, Human Resources Manager
DATE: January 8, 2015
CONTENTS: December 2014 Council Benefits Survey of Coachella Valley
Council Compensation Committee Report
Cost Comparisons calculations report
Recommendation:
By Minute Motion: Provide staff direction relative to the administration of
health and related insurance benefits for Council Members.
Executive Summary:
At its December 11, 2014, meeting the City Council directed staff to place on the
agenda an item considering the payment of health and related benefits for
Councilmembers and their dependents.
Staff requests direction on the payment of premiums for Councilmembers and
their dependents. Council may wish to consider one of the following options:
1. No changes — continue benefits as currently established;
2. Provide coverage at the same level as employees —
a. Premiums for Member + dependents up to 2"d highest PPO plan
b. Opt out cash limited to $150 per month.
Attached to this report as Exhibit A are the results of a December 2014
survey of Council salaries and benefits in the Coachella Valley and a cost
comparison for providing coverage to existing council dependents versus
the current methodology.
Staff Report
Council Benefits — Request for direction
January 8, 2015
Page 2 of 3
Background:
In May 2012 the City Council created an ad hoc committee consisting of
community members to consider the matter of Council Compensation and
benefits. This committee met several times over the summer and prepared a
recommendation for compensation and benefits structure for Council Members.
The Council first considered the report at the August 23, 2012, meeting and
adopted the committee recommendations on compensation at that time. The
matter of benefits was continued and was reconsidered at the November 15,
2012, meeting with the Council adopting the committee's recommendations as
presented.
The Council Compensation Committee's report is attached as Exhibit B and is
summarized below:
1. Salary shall be $22,500 annually for each Councilmember, to be adjusted per
provisions of Ordinance No. 1139. This was adjusted through the across the
board COLA on July 1, 2013, and is now $22,950.
2. Pension shall be in accordance with CalPERS.
3. Insurance Benefits shall not exceed $7,500 annually for each
Councilmember, to be adjusted to provide coverage at the second -highest
plan for an individual member, or Councilmember can receive an allowance,
which can be converted to cash. This has been adjusted as premiums
increased and is now $8, 807.40.
Changes to Opt -Out "In Lieu of Benefits" cash payment
State law requires that Council Members not receive benefits greater than those
received by employees, therefore changes to the level of benefits available to
Council Members will require changes to the "In Lieu of Benefits" payment
structure.
Under the current structure, Council Members who opt out of insurance coverage
receive the cash equivalent to the individual premium, for the second highest
cost health plan, as well as the cash equivalent for vision and dental plans. This
comes to $733.95 per month for 2015. This is not available to employees, who
are eligible for a flat $150 per month as an "In Lieu of Benefits" payment.
Because employees are eligible for fully paid coverage for their dependents, the
Staff Report
Council Benefits — Request for direction
January 8, 2015
Page 3 of 3
difference in "In Lieu of Benefits" payments was determined not to be in conflict
with the law.
If Council Members receive the same level of premium coverage that employees
receive, they must also receive the same "In Lieu" or "Opt Out' payments.
Fiscal Analysis:
Staff calculated the fiscal impact under three scenarios (spreadsheet
attached as Exhibit C):
• Scenario A — No Changes - annual cost $40,687.80.
• Scenario B — Provide dependent coverage and adjust "opt -out"
cash, no changes in enrollment — annual cost $41,735.28.
• Scenario C — "Opting -out' members enroll in PPO coverage based
on their family size — annual cost $76,485.40.
All the calculations are based on the current make-up of the City Council
and could change significantly based on changes in the family size and
insurance choices of future Council Members.
Submitted by`.
Lori Carney, Hu
Approval:
Reviewed:
i:�,,(I/
Resources Manager Paul gksAn, Director of Finance
n M. Wohlmuth, City Manager
Coachella valley Cities Exhibit A
Council Member Salary and Benefits - Summary
December 2014
Coachella
Yes
No
up to PersChoice PPO for
Yes
No, City pays all
Life
Individual + dependent(s) and
Insurance,
fully paid dental & vision.
use of City
[Pad
Cathedral City
Yes
Yes - varies
Full premium for individual
Yes
Yes 7% or 6.25%
Life
coverage (medical only) - up to
Insurance,
2"d-highest-cost plan for
Retiree
employee + dependent(s) and
Health
may apply credit from lower
cost plan to purchase of
vision/dental
Indio
Yes
Yes - varies
$1,225 to use for medical,
Yes
No, City pays all
vision and dental, ee+
dependents (eligible to receive
Life
it all in cash if they opt out)
Insurance,
LTD, EAP
La Quinta
Yes
Yes - varies
$1,312 to use for medical,
Yes
Yes, Members pay %
Life
vision & dental, ee+dependent
Insurance,
LTD
Palm Desert
Yes-
Yes - varies
up to 2"d-highest-cost plan for
Yes - optional
Yes, Members pay their
Life, LTD,
Individual
individual only and fully paid
full share
Retiree
Only
dental, vision, short -and long-
Health
term disability, life, AD&D
Indian Wells
No
N/A
no benefits for Council
No - new council
N/A
None
members
exculded.
Palm Springs
??
??
$1,568 for family Medicol,
Yes
??
??
vision, dental provided
cafeteria plan; more expensive
options would require out-of-
pocket
Rancho Mirage
Yes
No
Medical up to PERSChoice rate,
Yes
Yes - 6-7% moving to 7-
City cell
dental and vision fully paid, ee+
8% on 7/1/15
phone, Life
dependent
Insurance
and EAP
Desert Hot Spring! Yes
Yes - varies
cap on medical; fully paid
Yes - optional
Life
dental & vision ee+
Insurance
dependent(s)
CVWD
Yes - 75%
Yes - varies
75% paid by District/25% by
No
N/A
Ipad for
only
Board Member - up to family
District
coverage
113usiness
*Palm Springs did not respond to the survey
request.
2014 December - Council Sal -Ben survey
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2014 Council Benefits Exhibit 131
CITY OF PALM DESERT, CALIFORNIA
City Council! Compensation
Ad Hoc Citizens' Committee
- August 1, 2012 -
At the April 26, 2012, City Council Meeting, the City Council approved establishing a Citizens'
Compensation Committee ("the Committee") to review City Council compensation and bring a
recommendation back to the Council regarding appropriate compensation.
The Committee met five times between May 2012 and August 2012 and considered
comprehensive data compiled by City staff, heard a presentation regarding Council Health
Insurance and Pension Benefits, interviewed each Councilmember, and received a Comparative
Salary Report ("Salary Report") prepared by City staff dated July 18, 2012.
A public hearing was held on July 18, 2012, and input was received from five residents. No
written correspondence was received.
During the review process, each Committee Member evaluated the data independently. The
information was then discussed as a group. At the July 18, 2012, meeting, the Committee voted
on a recommendation and subsequently revised it at its August 1, 2012, meeting.
Findinas
1. Palm Desert City Councilmember duties are not defined in the Municipal Code.
2. City Councilmembers choose to spend additional hours in their capacity as a
Councilmember than what appears to be necessary.
3. The City of Palm Desert became a Charter City in 1997 as a cost savings measure, not
as mechanism to increase Council Salary.
4. Council Salary in a General Law City would be $18,816 per year, assuming a 5%
increase each year.
5. The significant increase in Council Salary that occurred in 2007 (from $20,130 to
$42,000) was not tied to an increase in Council responsibilities.
6. The position of Mayor requires an additional time commitment; however, since the
position is rotated yearly, the salary should remain the same as a Councilmember.
7. Current Palm Desert Council Salary is in the 100`h percentile of the Salary Report.
8. The Committee's recommended salary exceeds the 751h percentile of the cities
considered in the Salary Report.
9. Council Salary in 2007 was $20,130.
(Continued on next page.)
2014 Council Benefits
City Council Compensation
Ad Hoc Citizens' Committee Recommendation
August 1, 2012
Recommendations
Exhibit B2
Therefore, the Committee recommends that Salary and Benefits for Palm Desert
City Councilmembers be as follows:
Salary shall be $22,500 annually for each Councilmember, to be adjusted per provisions
of Ordinance No. 1139.
2. Pension shall be in accordance with CalPERS.
3. Insurance benefits shall not exceed $7,500 annually for each Councilmember, to be
adjusted to provide coverage at the second -highest plan for an individual member, or
Councilmember can receive an allowance, which can be converted to cash.
K
City of Palm Desert
Council Benefits Cost Comparison
December 2014
Exhibit C
Susan Marie Weber
Opt -Out
$
8,807.40
$
1,800.00
$
8,807.40
Bob Spiegel
Individual - PersChoice
$
7,132,80
$
15,671.40
$
15,671.40
Jan Harnik
Family Coverage - PersChoice
$
7,132.80
$
20,663.88
$
20,663.88
Sabby Jonathon
Opt -Out
$
8,807.40
$
1,800.00
$
15,671.40
Van Tanner
Opt -Out Health/enrolled
$
8,807.40
$
1,800.00
$
15,671.40
dental & vision
Total Annual Cost:
$
40,687.80
1 $
41,735.28
$
76,485.48
Increased Cost:
$
1,047.48
$
35,797.68
"Speculation - this is based on a "what -if" scenario in which the current Council Members who "opt -out" enrolled in the PPO.
Data used for comparison:
Council Opt -Out
2-party coverage
ramny coverage
Health
$ 657.32
$
1,188.80
$
1,545.44
Dental
$ 45.75
$
86.27
$
145.67
Vision
$ 30.88
$
30.88
$
30.88
Total monthly
$ 733.95
$
1,305.95
$
1,721.99
Annual
$ 8,807.40
$
15,671.40
$
20,663.88
Salary: July 12014
$ 1,912.50
$ 22,950.00
2014 - Council Benefits Costs