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09-07-1984 - Workshop ..--" r' 'J u CITY COUNCIL OF EDGEWATER WORKSHOP - SEPTEMBER 7,1984 MINUTES Mayor Ledbetter called the Workshop to order at 10:00AM in the Community Center. ROLL CALL - CITY COUNCIL Mayor David Ledbetter Councilman Melbourne Wargo Councilwoman Gigi Bennington Councilman Neil Asting Present Present Ar.r.Lved Later Present Councilman Jack Spencer City Attorney Jose'Alvarez City Clerk Connie Kinsey Pol ice Chief Douglas Betts Present Excused Pre,sent Present ROLL CALL - PENSION BOARDS Karen Rickelman Debbie Sigler Da v i d Pe tt i t Bret Te i te 1 baum Present Present Present Absent Wi 11 iam Lenz Reverend Canova Reverend Hardin Absent Present Present Also present was Mr. Jack Ascherl. Mayor Ledbetter stated the purpose of the workshop was to hear a presentation by Mr. Ascherl. Mr. Ascherl presented copies of the details of the City's insurance plans to Council and Pension Board members. He said all full time employees are covered under the plans. He noted that the City's group insurance plan is a very high qual ity and he reviewed the deductible of $100. and then 80% is covered, plus when the employee's 20% reaches $500. per person, then it's 100% for the remainder of that year. He noted that there's a prescription card at a cost of $2.00 per prescription plus a dental plan which covers 80% of the regular work and 50% of inlays, crowns, etc. with a maximum benefit of $1,000. per year. Iks. Rickelman asked if the $100. deductible was medical and dental combined and Mr. Ascherl said when he wrote it, it was a com- bined deductible but the booklet says it's a separate deductible. Councilman Spencer asked about the $1,000. 1 imit and Mr. Ascherl. stated it's for dental only, and medical is unl imited. Mr. Ascherl added that they waive the deductible for accidents. He reiterated that the City has a very good plan with turn around time of three'to five work i ng days. Mrs. Sigler asked if there1s something to explain in advance that a particular medical expense won't be covered. Mr. Ascher1 said they don't have scheduled in the contracts and costs vary throughout the country and they refer to customary and reasonable charges for an operation in that area. Councilwoman Bennington arrived at the meeting at this time, 10:10 A.M. Mrs. Sigler noted that it's a problem for the employee because they don't know until after the fact that a charge was too high. Reverend Canova asked if the employee has to pay when the insurance doesn't cover it and Mr. Ascherl repl ied that he told someone not to pay because the price was too high. Mayor Ledbetter pointed out that you have to sign the paper stating you'll be responsible for the bill and he referred to how the different insurance companies coordinate the payments. Mr. Ascherl said the City usually goes out for bid for group insurance when they have major changes in the plan design, if the service is bad, or if rates are not competitive. He compared Edgewater's rates to other cities and private firms and said Banker's gives credit for experience and the City's experience is good. He noted that the renewal is coming up December 1st and the experience looks good so he anticipates another good year and doesn't see any reason to go out for bids. Councilman Spencer asked about getting a second opinion on surgery and Mr. Ascherl said it's covered. Mr. Ascherl recommended considering going to $200. deductible and $1,000. for out of pocket costs to protect the rates for another year. Councilman Asting asked how valuable a second opinion is and Mr. Ascherl said with some operations they have to get. it and they pay $100. of the second opinion and the second opinion can't be by someone associated in any way and cannot perform the operation. }"..~ .. , ;' ~ o ./ .. Mr. Ascherl then reviewed pension information for general employees and said the pension plan covers all employees. He noted that when the plan was developed, they gave past service to employees already working here. He added they accrued past service I iabil ity to pay for the past service credit, and this plan is a defined benefit plan and is 2% times years of service and is based on rate of pay at retire- mente He added that Bankers' has more pension cases of our size than anyone else in the industry, and they administer the plan and invest the money. He noted that if a person works here less than five years and quits, that money goes back into the plan and is a credit. He said they have been putting into the plan about 10% of the pay and they put the money in the money market account as long as it's higher than fixed income accounts. He reviewed the earnings and said the average rate of return for 1983 was 11.60%. He said the cash deposited was $43,387.40 and $19,926.99 of the fixed income account was reinvested due to rollover of principal. Reverend Canova asked about the type of real estate they would invest in and Mr. Ascherl said they might buy a shopping center or complex. Mrs. Rickelman asked if the Pension Board determines how it's to be done and Mr. Ascherl repl ied yes. Mr. Ascherl said they should meet each year but there hasn't been any emergencies and the money market is less than the fixed account. Mrs. Rickelman asked if 100% of the money is in fixed income account and Mr. Ascherl repl ied yes, it's a long term investment account that you can1t move quickly. He read the 1983 beginning balance of $184,424.73 with various additions and with- drawals for a balance the end of the period of $247,036.00. He added that they set aside in a separate account the amount for retired people. He reviewed the expenses which totalled $2,908.07. Mr. Ascherl said the Pol ice fund is basically the same as for general employees but is designed to qualify for State money which is a 1% premium charge on insurance sold in the City. He added that it was about $14,000. last year. Mrs. Rickelman asked if the City has to put anything in that account and Mr. Ascherl said it should be what has to be actuarially sound. Mrs. Rickelman noted that the commitment was met, and it appears they were $4,000. over-funded now. Mr. Ascherl said he'd review it and talk with her later. He said the plan is designed for normal retirement at age 60 instead of 65 and they have to have additional benefits. Councilwoman Bennington asked if the annual percentage is less for Pol ice than for general employees and Mr. Ascherl said that's an accumulation over the years and they don't put the same amount in each account each time and it would include investments that went in five years ago perhaps. He said it's 11.43% for an average annual rate of return. Mrs. Rickelman asked what basis of earnings they use if an employee leaves before age 65 and works elsewhere. Mr. Ascherl said there's an accrued pension and it will be based on years of service up to the age of when they left and a discount, but they can't collect it until age 65. He added that if they take an early retirement that will be a discounted amount. Mrs. Rickelman asked what if the employee doesn't retire from here and Mr. Ascherl said it's only when they're here. Mr. Ascherl said he feels this is a good and secure fund for the employees, and he'd I ike to discuss the optional plan for employees at no cost to the City. Councilman Asting moved to adjourn the workshop. Councilman Wargo seconded the motion. Workshop was adjourned at II :03 A.M. Minutes submitted by: Lura Sue Koser -2- Council Workshop Minutes September 7, 1984