EPI Meeting #1 Live-Blogging

–Holy cow. I wondered what “modified” accrual accounting is.* So, they use cash accounting for expenditures but accrual accounting for revenues? We need to talk about that some more.

–Grandstanding. Nobody said there would be a vote to eliminate the post-employment health insurance! It is, however, clear that the city can no longer continue to pay 87% of the premium. Kay pointed out that the premium seems to be too high.

–Mac (FAC) commenting on the fact that only 5 of 8 council members filled out the survey on EPI implementation priorities and we don’t know who did and who didn’t. No one from the Financial Advisory Committee was asked.

–Mike Peddle (FAC) pointing out inconsistency of having the “new revenue” priority so low, in view of the mid-term priorities set in the survey. Biernacki piggybacks on this due to union contracts making it impossible to adjust staffing levels.

–Povlsen says since top 3 are all insurance-related, might as well begin discussion on them tonight. City Manager Biernacki cautions us to be “expeditious,” but “methodical,” that the issues are complex “and emotional.”

–Povlsen wants to know what $29.4 million liability means. Assistant Mgr. Espiritu explains it means what would it cost DeKalb in total “if everyone retired today.” Established by FAC members: 110 current retirees plus current employees who will eventually retire (total 339). Teresinski: this is based on probabilities and valid. PEHP is currently funded at 0% and at this point is pay-as-you-go. Peddle: have to work to close the gap or it becomes more expensive.

–Biernacki states challenges: The question is not whether to provide health insurance. The state mandates it has to be offered. The question is who contributes what BUT we cannot change the city’s contribution for those employees who retired under the contract, according to city attorney & labor attorney. Called bona fides. (Police & fire are bona fides.) City must still pick up the tab for them. Dependents and other non-bona fides are different, and retirees who didn’t meet contractual obligations for service years, etc. Other groups we can talk about: future retirees (as in: changing current contracts), & future employees. Another wrinkle: folks who won’t qualify for Medicare in the future. Each group must be looked at individually because of legal, contractual, moral obligations — and the ramifications.

–Kay answers Medicare question: Part A is still available to all, for a price if someone hasn’t paid into the system.

–Peddle: The goal is to fund the gap. Gaps related to changing the pool, or changing the coverage, or changing who’s paying what.

–Povlsen: Need a breakdown of the groups and how much each is costing. Espiritu: about 1/3 of that process is already completed. Povlsen: Timetable? Biernacki: Narrow it down a little and we’ll take it to the actuary. Peddle: include the people who have a vested interest. Naylor: Get the numbers first. Biernacki: Need direction on phase-in timetables, too. If you don’t give a guideline, will have to get info for cut-off tomorrow. Some disagreement. Need numbers, projections first. Analysis promised.

–Gallagher asks for clarification on what the other communities in the health plan pool (about 50 total) provide. Answer: hardly any provide any sort of subsidy (for non-bona-fides) over and beyond state/contractual mandates. Peddle asks how DeKalb’s share in the pool is figured since DeKalb’s plan design is so much different — can they tell us how a change in the design would affect our costs? Try to get as much info on this as possible. Teresinski: the analysis should include these impacts.

–Liability insurance and workers’ comp: we are still self-insured on these. City has been gathering quotes, still waiting on one and will come back w/ a recommendation. Working on an internal safety policy as a piece of a larger overall risk management policy. Mac wants to see the audits associated with these. We are still waiting on them, says Mr. Espiritu. We are moving out of self-insurance. Peddle: We’ll be retaining some self-insurance, we are just protecting against catastrophic loss (or we will pay too much). It’s a matter of level of protection. Naylor: How many catastrophic events have we had since starting self-insurance? None. Peddle: But you get to keep more of your money. Teresinski: address catastrophic — we’ve had very significant cost increases as part of these budget problems. Mac: instead of depending on insurance companies’ proprietary info, which is used for the companies’ purposes, how about an independent audit that includes aggregate claims.

–Future meeting date discussed. And discussed. And discussed. September 22 and October 19 were selected.

–Council voted to go into closed session at 8:10 p.m.