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PERSONNEL & FINANCE SEPTEMBER 12,2012 4:00 P.M. 2013 BUDGET REVIEW—SESSION#6 Committee Members Present: Karen White, Gavin Ferlic, Dr. David Varner, Henry Davis Other Council Present: Tim Scott,Valerie Schey, Dr. Fred Ferlic Derek Dieter Citizen Members Present: Tammy McNally, Julaine James Others Present: Mayor Pete Buttigieg, Mike Schmuhl, Mark Neal, John Murphy, Bob Allen, Ned Broadwater Agenda: 2012 Budget Review—Session#6 Chairperson Karen White opened the review by asking the Council to list their questions following today's presentation and correspondingly asked the administration to answer all questions at future review sessions now scheduled for Monday, September 17,2012 and Wednesday, September 19, 2012. In addition she asked the administration,to list and justify all new positions along with their funding source. Karen then turned the hearing over to Mark Neal, City Controller. Mark began noting a new state law requiring the Council to review the 2013 Transpo budget. This would be scheduled for Monday, September 17, 2012 at 5:00 p.m. The Controller then moved to a review of the city's health insurance plan for its employees. Before introducing Ned Broadwater from Gibson Insurance the firm managing the city's self-insured plan, Mark cautioned that the current plan needed a thoughtful structural review. For years the plan has been low on cost premiums for employees but high on benefits. This approach had always been seen in the past as a way of providing a generous benefit to employees somewhat compensating for lower salaries than found for comparable skills in the private sector. Today with rising health care costs exuberated by an aging work force this model requires a$1.4 supplement from cash reserves to break even. This is the case in spite of the city's wellness program whose benefit though real are hard to quantify. Also taken into account is a recently commissioned actuarial analysis of claims history. Mark referred to fund 711 for actual budget history. Ned Broadwater from Gibson Insurance took over to explain the City's current plan. As previously stated, it is a self-funded plan in which the City purchases stop loss coverage for losses over$300,000 per claim. Gibson acting as an advocate for the City negotiates rates with Anthem Blue-Cross Blue Shield based upon claims history.