Minutes - 08/25/2011MINUTES FROM THE HUNTSVILLE CITY COUNCIL MEETING HELD ON THE 25TH DAY OF AUGUST 2011, IN THE CITY
HALL, LOCATED AT 1212 AVENUE M IN THE CITY OF HUNTSVILLE, COUNTY OF WALKER, TEXAS AT 3:30 PM.
The Council met in a workshop and regular session with the following:
COUNCILMEMBERS PRESENT: J. Turner, Mac Woodward, Jack Wagamon, James Fitch, Lydia Montgomery, Keith D. Olson, Tom Cole, Wayne Barrett
COUNCILMEMBERS ABSENT: Don H. Johnson
OFFICERS PRESENT: Bill Baines City Mannar: Winston Duke, Director of Finance, Kristin Edwards. Deputy City Secretary
WORK SESSION — LARGE CONFERENCE ROOM— Discussion of proposed FY 11 -12 budget. [Winston Duke]
The Mayor called the work session to order at 3:30 p.m.
City Manager Baine introduced Pauline Drewry, HR Consultant and Lyndon Smith, President of Employer Plan Services,
Inc. / EPSI Benefits, Inc., both of whom had worked with the City's health care plan.
Smith stated that with a self- funded insurance plan and stop -loss limit of $75,000, the City had experienced a cycle with
respect to health care of collecting more than was paid out. However, he continued that FY 2010 -11 was a very large
claim year and that the increase in cost of health care for the coming fiscal year could be as high as 52 percent.
Although he felt the estimate was cautionary, he expected a significant increase due to predicted claim activity and an
increase to a $100,000 stop -loss.
Councilmember Woodward asked if the City had budgeted for the anticipated cost increase. Director of Finance Winston
Duke said the City had budgeted a $50 increase per employee but that measure would not cover the entire increase.
Woodward asked how much more the City would need to match the 52 percent increase, and Duke said between $200,000
and $300,000.
The Mayor asked about the percent of staff versus the percent of dependents nearing the stop-Ioss. Smith stated that, of
the seven large claims on City health insurance, six of those were for spouses. The discussion continued with questions
based on how comparatively normal the City's ratio of staff /dependent coverage is among other cities.
The Mayor asked if, when hiring, it was possible to ask any questions about spousal health risk, and Drewry said it is not
allowed at all. The Council continued to ask questions about spousal coverage, including when the last policy change
occurred, the number of insured spouses to date, and the number of insured spouses who could be insured through their
respective workplaces.
Discussion then shifted to the components of the City's Medical Platinum, Gold and Silver plans, and Smith said the City's
Platinum and Gold plans were extremely comprehensive. Several money- saving options including medical tourism were
addressed, and the Council briefly discussed the City's coverage as it compares to that of Walker County.
City Manager Baine shared his thoughts on health care, stating that he had been working on it for his entire time at the
City. He said the City was not keeping up with natural losses and benefit cost increases and that he felt the solution might
be to move to an insurance pool administered by the Texas Municipal League. He also said he was concerned that the
anticipated cost spike in FYI 1-12 would not be the last and that increased costs would absorb staff raises.
Councilmember Woodward said he didn't want any decreases to staff this year, and that he wanted to find a way for
employees to be able to take home the same amount of money this year as they did last year.
Smith said one way to assist in lowering health care costs would be to foster a culture of wellness among employees.
Baine said City tobacco users would soon face increased health costs and that the wellness committee had made some
progress among employees.
The Mayor summarized that the Council was focused on three issues — employee coverage, spousal coverage, and the
difference between a defined contribution and a defined benefit system of insurance. As a whole, the Council came to the
understanding that no changes could be applied to the City's health coverage in general until the 2012 -13 Fiscal Year.
The Mayor asked for closing comments. Councilmember Olson said he felt all employees should try to be self - insured.
Councilmember Cole said having health insurance encourages sickness and not providing that coverage would help
employees stay well. He also said shutting down the Wynne Home and other non - essential services would be painful but
would create the needed funding for insurance.
The budget session ended at 5:31 p.m.
Kristin Edwards, Deputy City Secretary