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HomeMy WebLinkAbout2007 EOCC MinutesREVISED MINUTES Elected Officers Compensation Commission Tuesday, March 6, 2007 — 5:00 p.m. Tenth Floor Council Conference Room, City Hall An informal meeting was called to order as a Committee of the Whole at 5:23 p.m. ROLL CALL U, Bill Castanier Fredrick Hogan Max Zemer =' EXCUSED ABSENCE gl Jv �� Elliot Glicksman r Pat Curran OTHERS PRESENT Jack Roberts Don Kulhanek Terese Horn COMMUNICATIONS The Elected Officers Compensation Commission (EOCC) staff person provided the committee members with a revised copy of the EOCC Past Recommendations Chart. A letter from the City Clerk Chris Swope requesting a day and time change to March 20th for his appointment with the EOCC was received. A letter of resignation from Cyril A McGuire was received. BUSINESS Election of Officers for 2007 Session Pending. Reports, Presentations, Commission Questions, and Discussion Mr. Ambrose provided a presentation on the financial status of the City. He submitted reports "Lansing's Budget Challenges", "Bernero Administration Takes Lead on Employee Health Care Saving", and the "City of Lansing Wage Increases by Bargaining Unit Chart". He reported that the City is financially strong; however, there needs to be recognition of the increase in cost of doing business which is at a larger growth rate than the revenue that is coming in. Health care costs are significant and has been historically increasing by 12 to 13%. Pension costs are increasing with next years costs projected to increase by as much as 1 %. He reviewed the issue of retiree health care and the City is required to begin pre - funding on retirement health care, whereas, currently, the City only pre -fund pensions. The City has historically paid as we go. This creates a significant high liability. If we were to pre -fund retirement health care for next year at the level indicated by actuarial sketches, the City would need to budget an additional $5 million dollars. In response to increasing health care costs, the Mayor is proposing change to health insurance. Cost -sharing health care premiums, provide retiree health care for the employee and not the family, and raise co -pay in health care benefits. Mr. Ambrose stated that the City's budget challenges have been present for some time. For the past four years, the City has spent more than it takes in. The use of Reserves cannot continue. The Administration will not recommend raising taxes to resolve this problem because they are concerned that it would decrease the number of people living in the City. The long and short of this problem is that the workforce will be smaller next year. Positions becoming vacant during this year will not be filled in order to allow for a reduction in positions which does not require layoffs. He made note of the chart included in his report showing the increase in salary and fringe benefit costs of employees are increasing at a higher rate than City revenues. He indicated that about a quarter of city revenues sharing comes from the State and a good half of that is at risk. Half is guaranteed and half is depending on the State law providing how much would be given to the municipal government. Mr. Ambrose submitted a chart on wage increases for bargaining units from 2003 to present and some that have already been negotiated which includes up to 2009. Mr. Ambrose stated that in response to these increasing costs, Mayor Bernero has proposed changes in health care coverage for Executive Management and is expecting changes for the bargaining unit employees, effective July 1, 2007. He requested that the Commission be provided a copy of the Mayor's actions, which were recently provided to Council. In response to a question whether anything could be done administratively, Mr. Ambrose stated that last year the City, working with he bargaining units, switched to self -funding health care for BCBS and saved on expenses. They are in the process of pursuing a Pharmacy Benefit Manager in order to reduce pharmacy costs. Pharmacy costs are about half of the health insurance costs. They would like to go to a three tier bargaining unit for prescription. He stated prescription mail -in orders initially appeared to be a good idea, but it has now been found that the costs were just shifted to the employer. The current projections for the upcoming budget year indicate that there will be a gap between projected revenues and expenses of between $5 million and $10 million or between 4% and 9% of the current General Fund budget. Mr. Roberts reported on the proposal that was presented in the past with respect to retirement health care opt -in. A percent of their salary would have to be go toward the health care in order to be current and the Councilmember would need to be an elected official for at least 15 years. Mr. Ambrose indicated that he would be before the Commission at the next meeting as the Mayor's representative. OTHER None. PUBLIC COMMENT None. ADJOURN The meeting was adjourned at 6:05 p.m. Respectfully Submitted, Terese Horn Recording Secretary Interim Legislative Assistant Lansing City Council MINUTES Elected Officers Compensation Commission Tuesday, March 13, 2007 — 5:00 p.m. Tenth Floor Council Conference Room, City Hall Mr. Roberts suggested that as the past Chair, Mr. Glicksman lead the meetino'—t lgatst until the election of officers. .— -� The meeting was called to order at 5:10 p.m. r c ROLL CALL' Bill Castanier Fredrick Hogan Max Zemer Elliot Glicksman Pat Curran All members listed above were present and a quorum was met. OTHERS PRESENT Jack Roberts, Law Don Kulhanek, Law Terese Horn, Staff Randy Hannan, Mayor's Office Jerry Ambrose, Mayor's Office Carol Wood, Councilmember APPROVAL OF THE AGENDA AGENDA APPROVED AS PRESENTED. COMMUNICATIONS Mr. Glicksman suggested incorporating the items under "New Business" at this time. His recommendation was supported by the Commissioners. Letter of Resignation from Cvril McGuire COMMISSIONER CASTANIER MADE A MOTION TO ACCEPT THE LETTER OF RESIGNATION FROM CYRIL MCGUIRE. MOTION SECOND, BY COMMISSIONER CURRAN. MOTION CARRIED, 5-0. 1 Letter From Citv Clerk Chris Swope Reqardinq the Appointment with the Commission RECEIVED AND PLACED ON FILE. Election of Officers for 2007 Session ➢ Nomination for Chairperson COMMISSIONER HOGAN NOMINATED ELLIOT GLICKSMAN AS THE CHAIR OF THE COMMISSION. COMMISSIONER CURRAN SECOND THE MOTION. MOTION CARRIED, 5-0. ➢ Nomination for Vice Chair COMMISSIONER CURRAN NOMINATED MAX ZEMER AS THE VICE CHAIR. THE MOTION WAS SECONDED. MOTION CARRIED, 5-0. Reports, Presentations, Commission Questions, and Discussion Interview of Jerry Abrose/Mayor Bernero Mr. Ambrose, Executive Assistant and Chief of Staff to the Mayor, appeared before the Committee as a representative for the Mayor. The letter of March 12, 2007, outlining the Mayor's recommendations was distributed to the members. The Commissioners reviewed the letter for consideration. After the Commissioners had time to thoroughly review the letter, Mr. Ambrose highlighted the particulars. The initial portion of the letter explained the projected deficit of $5 to $10 million for FY 08. It explained the reason for the gap being the rising costs of employee compensation and health care benefits. He made note of the information in the letter explaining the cause for a projected deficit and explained it was because of health care benefits increasing two to three times faster than City revenues. The Mayor believes that it is not an appropriate time to increase the compensation for City Elected Officials. His recommendation is to maintain elected officials' salaries at the current level and for the Commission to take the appropriate steps to make the same changes to the elected officials' health care benefits as he proposes for his cabinet and bargaining units. He stated the costs of health coverage for an employee, annually, is about $13,000 and the proposed changes would reduce the costs to approximately $12,000 for a saving of $1,000 per officical/employee. There was review and clarification with respect to the recommended changes in health care benefits. N Mr. Roberts suggested that the health care needs are thought about in two different sets: 1) health care for those who are current City employees and 2) retired City employees still receiving health care benefits. He highlighted from the fringe benefit summary for elected officials the retirement Health care provision and its history for elected officials. Mr. Ambrose stated that there was no change recommended in the dental coverage. He clarified that the proposed retirement health care coverage is prospective and does not include those elected officials who are currently covered by the retirement health care fringe benefit. Mr. Roberts stated that he would bring forth to the Commission at the next meeting an updated Elected Officials Fringe Benefits Plan. Mr. Ambrose clarified that no change from the Defined Contribution Retirement System is proposed for elected officials. Mr. Roberts explained that in the Fringe Benefit Summary, #7 under the heading of the City's Defined Contribution Money Purchase Pension Plan of the Fringe Benefit Plan states the option for Councilmembers who want retirement health care. He explained the conditions of the option offered in #7. This section provides health care coverage for those who selected it of "up to 100% of the premium for the current base plan health care coverage provided to active officials. Elected official that have at least 15 years of service with the City and of the age 55, the same health care coverage as provided to active elected officials, was available at the same cost of 3.25% of the Councilmembers gross pay in order to have it the same coverage as active members." Ms. Curran questioned why the health care discussion and documentation in the Mayor's proposal is dealing with both elected officials and bargaining units. Mr. Ambrose stated that the Mayor felt that the elected officials should adopt the same changes to health care as proposed for the bargaining units and that will be that will be provided to his cabinet. Mr. Glicksman commented that the recommended changes all deal on the contractual basis, and questioned how Commission's recommendations would be affected by those basis' set by the Administration. Mr. Roberts stated that the recommendation of the Commission creates the strength of a contract. Mr. Glicksman clarified his question as questioning the Commission's freedom to higher or lower the recommendations that were made by the Mayor listed in the letter of March 12, 2007. Mr. Roberts confirmed that the recommendations of the Commission has the real effect of setting future benefits within the guidelines. Mr. Ambrose explained that they have been working with the insurance companies establishing the proposed health care changes. He commented on the option to create a Pharmacy Benefit Manager in order to offer more savings. 3 The medical insurance "op -out" benefit was clarified that when an elected official is elected and if he/she would like to op -out of the health care program, something would have to be provided to show that they were covered by another health care plan. The condition of the op -out is that they have alternative coverage. Mr. Roberts stated that he would provide the Commission with documentation updating elected officials' fringe benefit package for the Commission's consideration if and when changes are determined. ➢ Interview with Councilmember Carol Wood Councilmember Wood appeared before the Commission for a brief interview and thanked the Commission for the opportunity to serve as a Councilmember and her honor to do so. She reported that she has held office for two terms and looking forward to the third term. She commented that it is her preference to work as many hours as a full time elected official instead of hours expected of a part time elected official. However, she does not expect to be paid as a full time employee and will not be asking for a salary raise. However, she does propose the Commission implement a vision plan that was offered to some employees; it is offered through a Vision Service Plan and is known as Blue Vision. It is paid for out of the employee/elected official's own pocket at a minimal cost because of being offered at a group rate. She submitted supporting documentation on the plan for the Commission to review. She offered answering questions that the Commission would like to direct to her as a Councilmember. Mr. Roberts stated that the Blue Vision is available to the Teamster's 580 and Council staff. Mr. Glicksman commented about the Mayor's recommendation apparently offered to create a cost savings. He questioned the actual savings for such a small group; 10 elected officials. The most that could be saved would be $10,000 for all elected officials. That really doesn't amount to much of a savings when one thinks of a projected deficit from $5 to $10 million, especially, considering that Council has not accepted raises since 2002 and the cost of living keeps increasing. In response to question raised by the Commission, Councilmember Wood stated that Council, as a body, truly believes that Lansing can overcome its difficult times. She provided some examples of positive actions and goals reached by the City, i.e. number of drug houses drastically reduced. Council was able to reach their objective, but it was a slow hard process. However, the slow process achieved a positive change made within the City. She explained she looks at issues as one job at a time, its turn -around time, and whether there is movement in the right direction whether it be,slow or not. She stressed the need to have better communication between the 10th and 9th floor. Dr. Hogan exited at 6:23 p.m. 11 At the request of a Commissioner, Councilmember Wood provided an explanation of what is a "rain garden". OTHER None. Public Comment Mr. Don Kulhanek was introduced to the Commission as the attorney that may be staffing the EOCC in a couple of years. OTHER None. PUBLIC COMMENT None. ADJOURN The meeting was adjourned at 6:34 p.m. Respectfully Submitted, Terese Horn Recording Secretary Interim Legislative Assistant Lansing City Council Approval of Minutes on: -J 5 MINUTES Elected Officers Compensation Commission Tuesday, March 20, 2007 — 5:00 p.m. Tenth Floor Council Conference Room, City Hall The meeting was called to order at 5:05 p.m. ROLL CALL Bill Castanier — arrived 5:10 p.m. Fredrick Hogan Max Zemer Elliot Glicksman Pat Curran All members listed above were present and a quorum was met. OTHERS PRESENT Jack Roberts, Law — arrived @ 5:36 p.m. Don Kulhanek, Law Terese Horn, Staff Chris Swope, City Clerk Sandy Allen, Councilmember Harold Leeman, Council President APPROVAL OF THE AGENDA COMMISSIONER ZEMER MADE A MOTION TO APPROVE THE REVISED AGENDA AS PRESENTED. MOTION CARRIED, 4-0 COMMUNICATIONS None. BUSINESS SESSION Approval of Minutes COMMISSIONER CURRAN MADE A MOTION TO APPROVE THE MINUTES OF MARCH 13, 2007, AS REVISED. MOTION CARRIED, 4-0. Reports. Presentations, Commission Questions. and Discussion ➢ Interview with Chris Swope Mr. Swope provided an overview on his responsibilities. He spoke in support of the proposed health care changes made by the Mayor and indicated that he felt that the proposal had merit. His understanding is that these changes for the elected officials are proposed as more of an incentive move than it is a cost effective proposal. He explained the disclosure which all elected officials are required to fill out dealing with financial conflicts in the City as it relates to their elected official position. ➢ Interview with Sandy Allen Councilmember Allen encouraged and requested assurance that she has retirement health care as long as she is an elected official and serves for 15 years; the same retirement health care benefits as employees. She expressed her commitment to the City and as an elected official but also explained that it takes a lot of hard work. She suggested that the Council President should receive more in compensation than they make now because of the responsibility that it holds; $20,000 is not enough. Her recommendation was to increase the President's salary to $25,000. As far as the Vice President, she would leave that up to the discretion of the Commission. She would not ask that the salary for the other six Councilmembers be increased. She indicated that she possibly would not be able to accept a raise if it was offered because of the economy and its anticipated negative perception by the residents of Lansing. In response to Dr. Hogan's question, Councilmember Allen stated she was not aware of the Mayor's proposal for the Council; even though, she was aware of one for employees. Councilmember Allen commented that even though she does not have knowledge of his proposal for elected officials, she would hope that the Commission would not recommend any cuts in health care benefits. Mr. Roberts arrived @ 5:28 p.m In response to Mr. Glicksman, Councilmember Allen indicated that it is her opinion that there might be a problem with residents' acceptance of an increase in compensation for Councilmembers, whether it is for just the Council President or all members. Mr. Roberts provided the Commissioners with an updated Elected Officials Fringe Benefits Summary in which Section 7 (providing for a retirement healthcare benefit that was offered on a one-time basis and no longer in existence) under the 1990 Defined Contribution Retirement System Summary was removed. He informed the Committee that he also did a strike -out of the sections no longer valid; Blue Care Network -Health Central and company that administers the disability policy. Councilmember Allen voiced her appreciation for the Commission's efforts and devotion to their responsibility as an EOCC Commissioner. ➢ President Harold Leeman Council President Leeman thanked the Commission for inviting Councilmembers to their meeting to express ideas or concerns. He noted his twelve years of being an elected official, which he has been Council President for the last two years. He commented about the amount of time Councilmembers spend together and provided examples of meetings where discussions on City issues take place. The issues are becoming more difficult. He remarked about the time that some of the Councilmembers spend going to meetings, i.e.; neighborhood meetings, special 2 community meetings, events, and more. He made note of the expense that is absorbed for gas, especially now at the price of gas, because of the miles placed on a vehicle to drive around town. The public expects them to be at meetings, and they are there. The Council has reined in the Council Rules trying to omit problems that occurred last year. He reported on the favorable ruling on the case of Timmon vs. City of Lansing; therefore, they are trying to stick to the rules. However, some residents just like to push it to the limit. Ms. Curran questioned Council President Leeman about whether he believes there should be a raise for Council. Council President Leeman stated that it is his opinion if a pay raise is not offered and accepted, it might become an issue later for the Commission. If a raise isn't offered and accepted, the Commission may have to play catch-up with respect to wages for Council because of the number of years not given a raise. The current wage of Councilmembers in comparison to the cost of living may be significantly low. The citizens do not understand the amount of time and work the Council puts in to act on their responsibilities. He feels that they give the residents the best bang for their buck. Mr. Glicksman reported on the proposal of the Mayor and summarized the proposal as the Mayor really recommending a decrease in pay because of the higher rates in co -pays for health care. Councilmember Leeman stated that he respects the Mayor and Administration, but he feels that this Commission should do the balancing act and make a recommendation based on what they feel is fair. Mr. Glicksman asked Council President Leeman to speak on the responsibility of the President opposed to other Councilmembers. Council President Leeman stated that he feels there is more responsibility placed on the President and recited some of the issues that he stresses about; i.e., relationship between the Mayor and Council and staffing issues. He has tried to work with the Mayor and colleagues as much as possible. He tries to provide information to members before it is put out in the media. He commented about the stress the President has placed on him because of things that happen in the Council meeting and other matters. He commented about the Michigan Municipal League and explained that he does what he can do to understand what is going on at the state level. Councilmembers have a lot of time put into the Committee of the Whole meetings along with the Council meetings. They do what they can do to move things forward. He commented about the President has to balance opinions of new and old members. He commented about the decrease in the number of staff and the amount of work that is placed upon them. He remarked about the number of staff that they would like to add to the Council and the Internal Audit Office. Council President Leeman thanked the Commission for dedicating their time to this effort. ➢ Councilmember Dunbar Councilmember Dunbar, by means of a conference call, stated that she would support adding more burdens to the Council for insurance, co -pays, or anything that could help relieve the burden of City. She was questioned how she would feel about elected officials being offered an eye care plan, Blue Vision Plan, which is now offered to Council staff. Mr. Roberts explained to Councilmember Dunbar that the Commission has the prevue over the benefits and salary for the elected officials. He informed her that there has been discussion about offering Councilmembers the benefit of BLUE VISION for eye care. He reported to her on the costs for the coverage of vision. He explained the difference in the plan for single and families. Councilmember Dunbar supported the Blue Vision eye care plan as long as the Councilmembers would be paying for it themselves. NEW BUSINESS None. COMMISSION MEMBER COMMENTS Mr. Zemer remarked about Councilmember Allen's request for confirmation that she was covered by the retirement health care plan. He questioned Mr. Roberts as to Councilmember Allen's coverage by the retirement health care plan. Mr. Roberts clarified that they only had one opportunity to opt -in and that was in the first year it was offered. He explained the gamble that elected officials took if they did opt -in. If an elected official did opt -in but did not serve a full 15 years, the retirement health care would not take affect when they retire, even though, they paid the cost of 3.25% for this benefit. Mr. Roberts will talk to the benefit person and investigate whether Councilmember Allen has been included in the retirement fringe benefit package and report to the Commission at the next meeting. He will also bring a copy of the last two recommendations made by the Commissions; years 2003 and 2005. OTHER None. PUBLIC COMMENT None. ADJOURN The meeting was adjourned at 6:14 p.m. Respectfully Submitted, Terese Horn Recording Secretary Interim Legislative Assistant Lansing City Council �� 7 Approved on .19 MINUTES Elected Officers Compensation Commission Tuesday, March 27, 2007 — 5:00 p.m. Tenth Floor Council Conference Room, City Hall Z, CALL TO ORDER The meeting was called to order as a Committee of the Whole at 5:05 p.m. Roll Call Bill Castanier — Excused Absence Fredrick Hogan —Excused Absence Max Zemer Elliot Glicksman Pat Curran Mr. Glicksman remarked although there is not a quorum and no official action can be taken, he, as Chair, would like to go into a Committee of the Whole session as suggested by Mr. Roberts to allow time to obtain views of the commissioners who are present. Others Present Jack Roberts, Law Don Kulhanek, Law Terese Horn, Staff Chris Swope, City Clerk Sandy Allen, Councilmember Harold Leeman, Council President COMMUNICATIONS None. BUSINESS SESSION Approval of Minutes None Considered. Reports, Presentations. Commission Questions. and Discussion ➢ Recommendation of EOCC Commissioner Curran voiced her belief to offer elected officials Blue Vision eye care as it would be self supporting by the elected official. She suggested that it just be offered to the City Council and City Clerk. She stated that it might be a good idea to provide raises so that wages are not way behind the costs of living, but she did not have an idea on how this could be done this year with the City financial condition as it is now. However, her initial opinion is that the healthcare cuts recommended by the Mayor could be a good thing. Commissioner Zemer stated that he did not think the Mayor's recommendation on the healthcare benefits is appropriate. He commented it is his opinion that the intent of the proposal made by the Mayor is to drive it down through the organization. He knows these wages and benefits were determined based on the bargaining unit agreements. Commissioner Glicksman voiced his view and stated that he was in favor of the eye care benefit. However, we are an independent commission and vote independently based on the information provided to the Commissioners and interviews with the elected officials. This is the first time in all the years that he has served on the Commission for the Mayor to recommend something for a separate body of government. He did not believe that the Council, who carries out their obligations and puts in many hours and serves relentlessly, should be deprived from benefits for the little bit of pittance that would be saved and placing the burden on their backs for a reduction in healthcare now offered because of a recommendation by the Mayor. He is opposed to adopting the provisions based on this. He is concerned about the City's budget and is aware of what would be perceived by a small raise in wages. Therefore, he would not be able to recommend that, but he would support providing the same benefits as they are currently and offer the Blue Care Vision eye care. He suggested that the language of the recommendation for this year not be the same as the recommendation of either 2003 or 2005 but of a combination of both recommendations. After hearing the points made by Commissioners Glickman and Zemer, Commissioner Curran indicated that she was moved by their comments, and they may have changed her view on this matter. Mr. Roberts questioned if there were any comments or concerns about his recommendation to strike out the portion of the benefits on the BCBS Health Central or the portion making a one- time offer for retirement healthcare for elected officials. The Commission requested that Mr. Roberts remind them of this issue at the time they are discussing their recommendation. Mr. Roberts clarified that the Mayor, Clerk, and Council could have a different recommendation and other alternatives could be discussed. Commissioner Glicksman questioned if the Councilmembers receive a gas allowance. Mr. Roberts reported that they do not receive a gas allowance, but it is his opinion those expenses would be eligible as a work related expense and could be used as a deduction in their taxes if they keep a log on the amount used. Mr. Roberts read the answer he provided in a communication about the question raised at the last meeting with respect to the qualification of Councilmember Allen as it relates to the retirement healthcare benefits. He reviewed the criteria that Councilmembers had to meet in order to be eligible. The document was read into the record. Councilmember Allen did not request to receive the retirement healthcare nor has she paid into the system. 2 It was the consensus of the Commission that it was their duty to provide this information to Councilmember Allen. Mr. Roberts stated that the Commission could direct staff to draw this to her attention, or, if they would like, the Commission could change the Rules. However, if that is recommended, it should be changed for all Councilmembers. It is his understanding that the Personnel Department contacted her various times. Moreover, there were Councilmembers that did elect to participate and paid in to the system but did not receive any benefits because they did not serve the City for 15 years. In response to Commissioner Glicksman about whether the City paid into the retirement healthcare benefits, Mr. Roberts reported that the City provides funds for everything but the 3.25% covered by the elected official. He commented that there might be a way of offering this retirement healthcare benefit again. The Commission could offer this benefit by means of the elected official paying the approximate amount that would have been paid in since the one-time offer was made, approximately $9,000. Mr. Roberts questioned if the Commission would consider something in writing or verbal from Councilmember Allen this year or wait until the next year the Commission meets to consider elected officials compensation and fringe benefits. It was the consensus of the Commissioners that they would allow Councilmember Allen to attend another meeting this year to plead her case. It was the consensus of the Commissioners to meet tomorrow, Wednesday, March 28, 2007 at 11:30 a.m. and provide notice of an alternative date as Thursday, March 29, 2007 at 11:30 a.m. Commissioner Curran suggested that the recommendation for the Mayor include implementation of his recommendations on the healthcare benefits but have the healthcare benefits remain the same as it is currently for the Clerk and the Council. Mr. Roberts stated that the Commission has the prerogative to make different recommendations for each group of elected officials. He reported on the different wages for the President, Vice President, and Councilmembers. Mr. Roberts made copies of Commissioner Glicksman's marked copy of recommendation made in the April 1, 2003, and in March 24, 2005 outlining a proposed recommendation for this year. Commissioner Curren questioned if the change in healthcare benefits for the Mayor should be included in the Elected Officials Fringe Benefits Plan. Mr. Roberts stated that it probably would be better to have it remain as is now so that everyone has the same Fringe Benefits Plan document. The changes in the Mayor's Fringe Benefit Plan would be outlined in the Commission's recommendation. Keeping them separate, he felt would be less confusing. Staff is to contact Dr. Hogan and Bill Castanier to notify them of the meetings scheduled for the next two days. OTHER None. PUBLIC COMMENT None. ADJOURN The meeting was adjourned at 6:00 p.m. Respectfully Submitted, Terese Horn Recording Secretary Interim Legislative Assistant Lansing City Council Approved on:� M MINUTES Elected Officers Compensation Commission Wednesday, March 28, 2007 —11:30 a.m. Tenth Floor Council Conference Room, City Hall CALL TO ORDER The meeting was called to order as a Committee of the Whole at 11:33 a.m. Roll Call Bill Castanier Fredrick Hogan Max Zemer Elliot Glicksman Pat Curran Others Present Jack Roberts, Law Don Kulhanek, Law Terese Horn, Council Staff Randy Hannon, Mayor's Staff COMMUNICATIONS None. BUSINESS SESSION Approval of Minutes COMMISSIONER CURRAN MADE A MOTION TO APPROVE THE MINUTES OF MARCH 20, 2007, AS SUBMITTED. MOTION CARRIED, 5-0. Reports, Presentations. Commission Questions, and Discussion Recommendation Commissioner Glicksman announced that Councilmember Allen is back before the Commission because after researching her question as to whether she was included in the retirement healthcare benefit, it was found that she is not a participant. Therefore, with the Commission's concurrence, she will be allowed to state her case as to why she should be allowed now to participate. Councilmember Allen voiced her appreciation to the Commissioners for their research in her healthcare benefits. She stated that Mr. Roberts explained to her that she did not sign up during the one-time offer for retirement healthcare. She respectfully urged the Commissioners' consideration in allowing her to sign-up at this time. She stated that she was willing to borrow money to pay the annual contributions of 3.25% of the costs of the retirement healthcare that would have been paid into the system if she had been a participant in the plan. Commissioner Zemer questioned if there is a way for her to buy into the system, and if that were possible, would it set precedence? Mr. Roberts informed the Commission that they could change the benefits for the Councilmembers as long as they are considered and treated alike. Consideration should include how the benefits would affect other members and the budget. He reviewed the historical circumstances surrounding the one-time offer to include elected officials in the retirement healthcare. He estimated costs for an elected official to buy into the retirement healthcare system (paying premiums that would have already been collected) approximately $9,000 and for a family about $13,000. There is only one councilmember at this time requesting to be included in the retirement healthcare provision. In order to treat all members the same, the Commission would have to again open the window up for a period of time (possibly 30 days) to allow any councilmember who is eligible to receive this benefit the option to buy -in by paying the 3.25% of salary cost for the benefit. The total costs would be calculated by multiplying the number of years served with the annual 3.25% salary cost for each year since the councilmember came into office (or since July 1, 2001, for those in office on said date) up to the date to be included in the plan. Allowing councilmembers another opportunity to opt -in to this benefit, is one solution. Payments as compounded interest at a fair rate should also be part of the total payment required. There would still be a requirement that in order to collect the retirement benefit, they would have to serve a minimum of 15 years. Another option for the Commission is to allow councilmembers to opt -in without costs, and the final option would be not to allow any councilmember another opportunity to opt - in to the retirement healthcare. Commissioner Zemer talked about the possibility of applying a 5% penalty on the 3.25% initially collected on an annual basis for any official that would like to buy -in to the retirement healthcare at this time. Mr. Roberts commented about the process followed by the Personnel Department during the one-time 2001 opt -in option for retirement healthcare for elected officials. He reported that there was a letter sent out to officials providing them the information and guidelines to follow if they chose to opt -in. At that time, the offer was consistent with what was being offered to current employees. It was reported that some councilmembers did opt -in and remained in the system while others did not, but all officials had equal opportunity and well informed about the option. Commissioner Glicksman commented about his position that a decision should never be final. However, there is concern with respect to allowing one councilmember this benefit without offering it to others who do not have it. He stated he believed this issue came to the Commission's attention in good faith by a councilmember with the misconception that she really had participated in this program. When Councilmember Allen made that comment during her interview with the Commission, some commissioners were surprised; therefore, we used our own counsel to address the question and find out what options are available with respect to a decision. It was his opinion that she did not do it as a disingenuous fact. With the understanding that it is his consideration that a decision should not ever be final, he would take the position to support opening up the window again for a period of time for all elected officials to have another opportunity to opt -in. Commissioner Castanier spoke in opposition of providing another window of opportunity for elected officials to opt -in to the retirement healthcare benefits. He stated that he felt very badly about the situation. However, when he has made a bad decision, he was not able to change it, whether it was in part by law or contract. Many people have made the wrong decision and have not been allowed to change it. Commissioner Curran commented about the difficulty of elected officials making a decision not knowing if they would be here in 15 years. Thirty days is a short time to make a decision on the rest of the life. Commissioner Zemer indicated that he would like to offer the retirement healthcare benefit again for all elected officials who are not signed up. He recommended attaching the 5% penalty on the total unpaid salary balance for those who would decide to sign-up now and opt -in to the plan. This would help support the costs associated with this benefit and make calculations easier. He commented about the amount of responsibility placed on elected officials and the commitment required in order to make informed decisions on behalf of city residents. Commissioner Hogan supported providing a window to elected officials allowing them another opportunity to opt -in, but he recommended that it be done on a regular basis, i.e. every two years. It was his opinion that if the retirement healthcare is offered now to elected officials who already had an opportunity, providing those a second opportunity to opt -in, then it should be opened again for those who took office after the first window opportunity, allowing a second window of opportunity. This would then need to be done every two years to provide the same opportunity in determining if they want to opt -in after they have more of an idea whether they would serve the required 15 years. Mr. Randy Hannon, Mayor's staff, appeared before the Commission during the public comment time and urged the Commission to consider the recommendation made by the Mayor regarding elected officials' salaries and fringe benefit packages and affirmative action be taken. There was discussion highlighting the pros and cons in offering this benefit option an additional time or for reoccurring periods. Responding to a request about citing any historic examples, Mr. Roberts reported on the circumstances surrounding the opportunity provided to the City employees "window people" to buy back in to the defined benefit system. He stated that these employees were allowed to buy back in but only a short window was offered to do so, and if they did buy back in, they had to buy in at 100% or only buy whatever they could afford. Commissioner Glicksman commented about employees having an annual option of which healthcare they would like to be covered by for the next year of those offered by the City; the annual enrollment period. Mr. Roberts stated that there is a cost to opening up the retirement healthcare option again and the lump sum that officials would pay to buy -in would not come close to what the City would pay for the benefit over the retirement period. This would have a significant impact on the City's budget. COMMISSIONER ZEMER MADE A MOTION TO PROVIDE ANOTHER WINDOW OF OPPORTUNITY TO ELECTED OFFICIALS TO OPT -IN FOR RETIREMENT HEALTHCARE WITH THE PAYMENT OF THE COSTS FROM TIME THEY BECAME AN ELECTED OFFICIAL, OR COULD HAVE SIGNED UP IN JULY 2001, TO THE TIME THEY WOULD START PAYING IN ANNUALLY FOR THIS BENEFIT ALONG WITH A 5% PENALTY FOR A SECOND OPTION SIGN-UP ONLY. MOTION SECOND BY COMMISSIONER CURRAN. MOTION DID NOT PASS: 3 IN FAVOR & 2 OPPOSED (Castanier and Hogan). COUNCILMEMBER CURRAN MADE A MOTION TO RECOMMEND THE PREVAILING SALARY AND MAKE MINOR CHANGES TO THE FRINGE BENEFITS PROVIDING THE MEANS FOR ELECTED OFFICIALS TO OBTAIN ADDITIONAL MEDICAL BENEFITS BY PARTICIPATING AT THEIR OWN EXPENSE IN AFLAC, A PAN PROVIDING THE OPPORTUNITY TO PAY FOR MEDICAL INSURANCE PREMIUMS, UN -REIMBURSED MEDICAL EXPENSES, AND DEPENDENT CARE COSTS WITH PRETAX DOLLARS OR SUPPLEMENTAL INSURANCES THAT MAY BE PURCHASED ON A PRETAX BASIS, AND OFFERING THEM THE MEANS TO PURCHASE AT THEIR OWN EXPENSE A VISION PLAN THROUGH BLUE CROSS BLUE SHIELD VSP 12/12/12 VISION PLAN THAT WOULD PROVIDES FOR VISION EXAMS, LENSES AND FRAMES, AND CONTACT LENSES WITH A CO -PAY. MOTION WAS SECOND BY COMMISSIONER CASTANIER. MOTION CARRIED, 5-0. The Commission discussed the process for approval of minutes of this meeting. It was the consensus of the Commission to have the recording secretary prepare the minutes of this meeting and transmit completed minutes to each Commissioner for their review. After a two week period if there are no concerns or requested changes to the draft minutes expressed by the Commissioners, then the minutes will be deemed approved. Thereafter, the recording secretary will file the minutes as approved with the City Clerk. If the recording secretary is informed of any concerns or requested changes to the draft minutes, the minutes are to be amended and sent out again to the Commissioners for their review and another two week period would be provided for the Commissioners to contact the recording secretary about any concerns. This would continue until all concerns are addressed and revisions are made to the minutes to reflect a true synopsis of the meeting. All minutes of the EOCC would then be filed with the City Clerk. ON A MOTION FOR PROVIDING THE PROCESS FOR APPROVING MINUTES OF THIS MEETING: THE COMMISSION APPROVED THE AFOREMENTIONED PROCESS FOR THE APPROVAL OF MINUTES OF THIS MEETING. MOTION SUPPORTED AND CARRIED, 5-0. ADJOURN The meeting was adjourned at 12:45 p.m. Respectfully Submitted, Terese Horn Recording Secretary Interim Legislative Assistant Lansing City Council M