 The Cheboygan Common Council Committee of the whole meeting to order for Thursday, September 15th 2011 roll call, please belt here born here Carlson here Decker here common excused item in here half excused Kittleson is here Maddachek Renfleisch here Racelor here Samson here Van Akron Vanderweel here and versey here 11 present we have a we have a quorum. Let's all stand for the Pledge of Allegiance, please Indivisible Allerman we are on live television again tonight, and so if you'd please put your mics on If anybody in the audience has a friend or a neighbor who is not able to attend and they want to watch this Meeting rebroadcast You can call Carrie Kautzer at W. S. C. S. TV at four five nine six six six three Four five nine six six six three Mr. Kautzer is available Monday through Friday from 8 a.m. To 5 p.m. And he would be able to provide you with the Schedule for the rebroadcast of this meeting Tonight last night we were able to get through once Items number one through 17 on the agenda and tonight We're going to be dealing with the rest of the agenda, but however before we get to item number 18 I would like to offer a public forum on the agenda item That we're going to be talking about tonight If anybody in the audience would like to speak you would have three minutes Does anybody wish to be heard tonight before we get into the agenda? Does anybody wish to be heard and For the third time does anybody wish to be heard? Nobody for public forum. We'll go right into into the agenda item number 18 on the agenda as discussion and possible action on the non-represented Entirely insurance benefits and that would be mr. Rice would be handling that our HR consultant I was wondering if we can combine both 18 and 19 Sure 19 is a discussion and possible action on proposed benefit changes for 2012 Proceed thank you. Good evening. All of you should have on your desk a 11 by 14 sheet or eight and a half by 17 whatever it is that outlines the benefits Let me take a couple minutes and walk through What you have here what we did was to take and take a look at what the non-represented group has now And what the three unions that are going to have to Decide on recertification or what have you at the end of this year have and then what's proposed for 1 1 of 12 So that you have a comparison of what it currently is and what we're proposing for the future At the top is Wisconsin requirement and I'll just go through the proposed Union employees will match the non reps and pay 50% of the total as of 1 1 2012 Health insurance Employees will pay 12% of the monthly premium currently they pay either 8 or 10 depending upon which Organization they're in Would pay 12% of the monthly premium if they elect to participate in the health risk assessment and biometric program We're introducing this in October Basically what it amounts to is the health risk assessment is a as an online Document that you complete talking about lifestyle Exercise those kinds of things that you do in your personal life and the biometric Is a blood draw that would take and look at your a1c would take a look at cholesterol All of those kinds of things. This is purely a an assessment that is between you and You not umr our healthcare provider none of the results individual results would go to the city the employee would receive back a report on the HRA and the biometric feedback that they took potential for disease or potential for other life Challenging illnesses going forward in the future and some suggestions in terms of what they could do to Correct the problems with the deficiencies in there in their behavior If they choose not to participate in that then the monthly premium would be 15% Number two spouses who are eligible for other insurance through their employer Would be required to pay an additional $50 per month in premium to participate in the city plan The reason for this is we simply want people if you have a spouse who is eligible for Insurance coverage under their employer to take that insurance coverage So if they choose not to then there's going to be a $50 additional cost to them We're going to institute office co-pays Employee would pay $30 for an office visit to a family practice MD The co-pay would be waived. However, if the employee chooses to go to the county clinic We're entering into an agreement with the clinic And there would be a $50 co-pay for office visits to specialists and those office Copays do not go against the deductible Part-time employees will pay 50% of their insurance premium as of 1 1 12 currently part-time employees pay nothing toward their insurance Do you want to wait for questions until the end? I've got all of a net flashed in already Would you rather wait till the end or would you want to take a question on what you've done so far? I don't care It's just something to a quick point out. I think it was chairman. I did it get some phone calls about this with the biometrics Clarify for them. I know it does but it does not any any of the results from that does not go into their medical records Correct. No, that was there are none of those but they wanted to hear it from you None of those records are kept in the city at all. Those are kept with UMR Again, I don't care to know any of that information All we get is a summary report of the people who Participate in the test saying hey, you've got employees who have these issues and so forth And this is part of a long-term plan that we're going to be doing in the health and wellness going forward People who have or subject to chronic diseases for example I have diabetes and they would they would provide a coach Later on next year or the year after to work with that employee for his or her benefit not necessarily for the cities But ultimately yes, would we benefit if we don't have those kind of diseases certainly? So that's the purpose behind it All our president Kittleson. Thank you Tom But we're not suggesting here I mean we know the employee pays the $30 cold pay for an office visit But that will be waived if they go to the county clinic however if a person still wants to continue with their own doctor That they've been with they don't necessarily you know, they they can choose to do that correctly We're not suggesting that they have to give up their doctor not at all Not at all. Thank you anything else The health risk assessment Excuse me the health reimbursement account is next on your list the city would Continue to take and fund 50% of the deductible for 2012 as we did in 2011 except Employees rather than having five hundred dollars that they would be responsible for on their deductible They would be responsible for 50% of it or in the case of single it would be from 500 to 750 in the case of family from a thousand to 1500 would be their responsibility Employees would pay the first 50% of the deductible the city would pay the second 50% Rollovers to end in 2011 in Currently in 2011 if you don't spend all of your health reimbursement account it rolls rolls over into the next year Those rollovers would end at the end of this year Employees would have 12 months to use any rollover money for medical expenses So at the end of 2012 the whole health reimbursement account program goes away All of them belt thank you. Have you Have you talked or thought about HSA accounts? we looked at HSA accounts two years ago and Decided that the health reimbursement count was as good as or better, and that's what we chose to do that We could take another look at HSA's The reason I ask is because an HSA account is that that employees that person's Money that they're putting into this account, and it doesn't disappear at the end of the year that rolls over Continually and then they can put whatever money they want into that account But I think there's other regulations that Dictate whether you can have the HSA account or not, but I'm not familiar with them But just curious whether you looked into that at all. We did Let me share with you the the long-term plan What we anticipate doing going forward in 2013 is Getting ourselves to the point where we have what's called a full flex cafeteria plan for benefit Which means that the city would agree to pay X number of dollars whatever that that sum is and then the employee has a menu of choices that they can make on various Benefits the health's savings account may be one of those in 2013 but they would have two or three options of medical they'd have two or three options of Other things as we'll talk a little bit later on about short and long-term disability and what have you so that's where We see ourselves ultimately ending up. This is kind of a Approach to getting us there in 2012 Thank you all of them built okay life insurance Currently the city pays the first month Are they employee pays the first month and the city pays the last 11 months going forward in? 2012 the employee will pay 50% and the city will pay 50% Long-term disability and short-term disability Let me skip that for just a minute and go down to the PTO program And I draw your attention to the last page that you have which kind of is a summary of the paid time off Let me walk through this with you and then I'll go back and touch on a couple of the other things on page one paid time off is a fairly common program in many businesses and industry today and it basically says The paid time off includes vacation time holiday pay Personal days sick days be readment all of those kinds of things rolled into one package So what we are proposing for? 2012 Employees with zero to one year of service would have a total of 120 PTO hours to use There would be zero vacation hours because they worked the first year to earn vacation for the second year Holiday would be 80 hours because we recognize 10 regular holidays And there would be 40 hours of discretionary which could be used for sick days could be used as a personal day for bereavement for whatever the employee chooses to use it for Years one to four 240 hours 80 hours of vacation 80 hours of holiday and 80 hours of discretionary Five to twelve years 280 hours 120 hours of vacation 80 hours of holiday and 80 hours of discretionary Years 13 to 20 320 hours 160 hours of vacation 80 and 80 and finally 21 plus years would be 360 hours total 200 hours of vacation 80 hours of holiday and 80 hours of discretionary If you go back to page one What we're doing then is we're taking and eliminating The sick leave or sick day program that we currently have in most of our areas Holidays are taken care of we're eliminating the floating holidays. We're standardizing on 10 throughout bereavement pay per se is eliminated It's included in the PTO program and personal days are included in the PTO program So we've tried to incorporate all of that into one plan Called the PTO plan If we eliminate the sick days We wanted to provide the opportunity for employees to purchase short-term disability insurance and long-term disability insurance Short-term disability insurance would be designed to cover the employee on the ninth day of illness or the ninth day of accident For a total of 26 weeks The employee would receive 66 and two-thirds percent of their base pay They would pay for the insurance because it's voluntary Which would mean that the benefit that they have would be non-taxable if they chose to take and purchase the long-term disability plan The long-term disability plan would begin on week 27 and continue to age 65 Again at the same benefit level of 66 and two-thirds percent of their base pay Again, they would pay for it. So it would not be a taxable benefit when they receive the money Tom how much do you know what the premiums are going to be on those yet? We have the premium for the short-term disability. It's based upon pay I looked at it. I were a $50,000 base pay would be about $7 a month Something like that. I'm still waiting for the LTD ones, but they're gonna be approximately the same. We're a little bit less than that Okay Moving on to page two there will be no vacation carryover. However An exception can be made by a department head if there are Extenduating circumstances and our goal would be if that indeed does happen to limit that to five days at the most Some of our organizations have the opportunity to purchase vacation. We would eliminate that going forward overtime pay would be standardized throughout most of the city with the exception of police and fire and transit at overtime pay over 40 hours per week at time and a half workers compensation start at beginning January 1st Would be 66 and two-thirds percent of base pay Which is the recognized standard throughout most of business and industry as you can see ours have 80% of base pay The dental insurance plan going forward has not changed from what it currently is or will not change and The vision insurance plan will not change Tom getting back to That that health clinic. I think the other night at celebrity ingredients as you mentioned something about chiropractic Do you want to explain that to the Alderman how that's going to work? the Shabuigan County Clinic has Sent us a proposal that they would be willing to enter into a joint venture with us They currently contract with Intera who provides the services through the Shabuigan County Clinic For a fee of $50 per visit for a routine what we would call office visit and $45 for a chiropractic visit Currently they do not have a chiropractor, but they are in the process of recruiting and hiring one so by January or so of next year. They should have chiropractic services available in Talking to Mike collard who is the HR director for the county? He indicated that they were able to save approximately 21 to 25 percent of their medical costs through the the clinic last year, so Obviously the costs are going to be less the clinic is designed to Provide services of a routine nature flu shots vaccinations those kinds of things well, baby visits The kind of things that you would normally go to the doctor for there Yeah, you know if it's going to be something very serious the nurse practitioner there would refer you to your physician And obviously if there was a specialist you'd go to that person as well, so The feedback that we've received from not only Mike and some of the people in the county but also from one of our own older persons is the fact that the clinic is working well So that correct mr. Research, that's correct. Thank you, sir Any other questions on the clinic, okay? unused sick leave and good attendance Currently in various contracts and programs When an employee gets ready to retire There if you qualify for an attendance good attendance program bonus years ago, which stopped you have so many hours That you've got banked for that Unused sick leave you've got so many hours that you have banked for that all of those accumulate and That is a pot that's used to To pay out or it is a payout at the end of your working life And some of those have amounted to somewhere in the neighborhood of 15 17 19,000 dollars Rather than paying that I wasn't out in cash going forward The vet we they're not employees are not losing the value of that money They're going to be simply using it to pay the Medical premium for their retiree insurance So that is a change there Any questions on that person kiddles him? Thank you So this program ends in 2011 You're saying there'll be no cash payout The value of the good attendance bonus and sick day accrual may be used to pay for medical insurance premiums after the employee retires I Guess what I'm asking is then what if that program ends then what happen? Are there are some employees that? are in the you know sort of Maybe you know For five three years away from retirement. How how is that going to affect them? Well? You may recall that when I presented this to salaries and grievance We made a commitment or I made a commitment to our employees that we would hopefully have all of this finalized By October 1st October 15th at the absolute latest To provide them with enough time to make decisions regarding retirement and those kinds of things going forward So employees have a choice in terms of whether they want to take the program as it exists today which results in a cash payout upon retirement and Leave the city or to continue because they're not going to be losing any money out of this necessarily It's just going to be used to pay for medical premiums So they will be they're not going to lose that they will be able to use it for medical Right when they retire Got alderman racer. Thank you. Mr. Chair. Thank you. Mr. Rice. We did have previous discussion regarding this and looking at the possibility of Giving a percentage payout of this to the employees that choose not to use our health insurance I think it's important that we understand and no offense to any of the employees But the ultimate goal would be to get our retirees off of our insurance plan. That's where the money is actually accruing not necessarily Trying to keep them in our program By allowing them to use all of their cash at the end for the retirement an example I'm a city employee. I retire. I have let's just say ten thousand dollars in this account and my wife has insurance That I could get on to well instead of getting on to that insurance and Losing the whole ten thousand dollars that's in there. I Feel the wise move is I'm going to stay on the insurance and take a single plan I have my wife take a single plan and use the money up. It's basically free money Instead, how about we give the employee the benefit of a percentage 50% or whatever we come up with after a while to pay him out The then to get him off of our insurance plan onto their wife's or spouse's or a new plan that they can get for cheaper And thus save the city a lot of money in the long run with the insurance because obviously I believe you'll agree our retiree insurance is probably one of the highest Benefits that we have that we're paying. Absolutely a couple of comments on that if I may number one the As we break down our employees in terms of claim costs the The retirees in the age group 53 to 64 account for over a million dollars of our claims, which is over 20% of the total claims cost for the city You need to understand that under the current program if a person who retires from the city Chooses not to participate in the insurance program with the city. They cannot come back and get it later on. They're done So that would be a drawback to what you're proposing The average payout and I took a look at some of them today For an employee who leaves the city under this program would be somewhere between 6,000 and 23,000 25 thousand dollars And it depends upon how much they had in their good attendance bonus and how many sick days they've been able to crew So it's substantial Tom do you want to want to employee retires is It part of their exit interview or whatever you do when they retire Is there any coaching done and what's available out there with private insurance like? Medicare Advantage plans or stuff like that versus what the What the insurance would cost them if they stay with the city Or are they pretty much on their own to make those decisions? Two years ago when we were with Humana I asked them if they could provide us with a group insurance plan for people over age 50 who retired The answer was no When we went with you mr. I asked the same question and got the same answer No, you kid. There are no group programs that will provide for retire So they have to come into ours the options available to retirees are if you are in very very good health You know you might want to take and go out and purchase a high deductible plan to protect yourself and Assume the risk that you're going to go for the next eight nine years whatever it is to late 65 without any major problems but that's why most of the people choose to continue on our insurance because Number one. It's an outstanding program. It is expensive for them But you know it assures them that they have the coverage in case anything catastrophic happens I and I understand and I know from personal knowledge that the market for somebody When I retired it was 58 or 59 and the market out there for a gap policy between You know mid late 50s up until 65 is very expensive on the open market, right? I was just shocked at what it was So I was I was happy when I could qualify for Medicare Because of my disability and I could get on one of those advantage plans that saved me over 500 bucks a month But in that interim period before you're eligible for Medicare, the premiums are just astronomical on the open market this year In 2000 late 2010 we did make available to Our employees over age 65 a supplement plan, which I think probably two-thirds of them chose Which saved them on the average between three and four hundred dollars a month Apparently the gremlins have moved down to my I guess I just want to take a second and explain again The unused sick leave and just maybe clarify mr. Rice can explain help me out with this and explain when we look at the amount of money that you talked about between Six and twenty three thousand dollars for these employees. You have to look at exactly what this is It's unused sick time. That's actually good A good Program for good attendance now. They're getting paid out some of these thirty eight dollars per day and some of them sixty Where the average sick day or day of work is probably worth a good 160 to 240 dollars So they're actually saving the city by not using these days on their sick leave account and it's accruing at a lower portion Maybe a quarter of a percent towards the end payout, which we're looking at eliminating here So that's where the sick day someone that started here 30 years ago And it was a good employee as it says good attendance and didn't use sick days the 12 is allowed a year and they and they increase Basically gets this as a good attendance at the end other areas and Jurisdictions have Where the whole thing is accrued and paid out the whole amount Based on the hours eight hours per day based on your hourly rate when you retire So I mean this actually was a savings for the city When they were not using the sick days If everybody had to use all 12 of their sick days each year We would have been accruing a much larger bill throughout this employees 30 years than what we're looking at here Just a matter of clarification so we don't look at the money and go. Oh my god This is just a terrible amount. Oh, Mr. Riesla. Let me let me suggest to you that the people who didn't use it were paid for eight hours So they the city paid the eight hours of pay plus we accrued the eight hours of pay for the sick leave that now We're gonna pay out when they retire So they were here so we didn't have to have somebody else come in and fill their position. Well another eight hours. That's true I just wanted to clarify that because not the shocking factor of my god This is a lot of money each employee. It's actually what they had earned by not being sick. That's right being dedicated to the city Thank you Alderman versi and Tom what's the number of people that actually we're worried about right now paying out? Do you have a number on that qualify for this plan that we would potentially pay out? It would be the number of people who are eligible for a retirement benefit under wrs and we've had people Probably 41 to 45 people who have requested the numbers for retirement this year 11 have definitely said yes, we're going to retire. There's another 20 to 25 that could potentially retire But every employee will receive this benefit at the end for the time they have currently in The benefit will be frozen at the end of this year. There will be no more accrual of the benefit It'll be locked in at the rate of pay that was on on in December and that's what will be the benefit going forward represent Kittleson Great ladies first, but then I just want to under but what about the people who are you know fall into the that area That you know, they have some time to go yet in the in the city working and they Came into their job expect, you know Working that into their retirement plan Knowing that that was going to be how it was going to be at the end for them And now that is no longer Well, how many people fall into that working what into their retirement plan working that either that that good attendance the cash payout They were not going to be able to have it They'll it'll be used to pay the insurance premiums which they have to pay anyway if they're going to be on in on a city's insurance plan You're going to pay it one way or the other Yeah, if you're 55 53 years of age and you're going to retire if you get Let's say it's $17,000 you're going to pay $1,700 a month going forward for insurance For the city insurance. That's what the family plan costs on a monthly basis Alderman Samson. Thank you, Mr. Chairman. Just so I can clarify. This is only Or if they choose to go with the city insurance plan that they would get that They accrued so many dollars Instead of getting that payout if they if they They won't have an option at that point when they retire. They're only going to have the option of well you Theoretically have an option. Yes, because you could choose to not continue on the city plan and go out and purchase your own insurance plan But at the age of 53 55 58 60 You're not going to find a group plan that you'll be able to enroll in so you're going to have to buy your own Individualized insurance which is Alderman born already mentioned. It tends to be extremely expensive. We're sure sure I understand that But but they still get that money. So can they apply that they don't Outside plan. No, so they lose it nothing. So that's why they were the whole career But now you just think take it away and you get nothing going forward. They would lose it If they chose with the city, that's correct. Okay again back to my point forcing him to stay with the city We're an offense. We don't want Okay, they're going to crewing 20% of what we're paying outside. Okay, thank you. Thank you all in the Samson Alderman versi Thank you, Mr. Chairman. So actually going back to what Alderman Reisler said is if we did change this into a 50% payout we actually get them off the insurance sooner because that and even if they do stay on the insurance They have half the amount of money to pay for it gets them to go off sooner The only way that that would make sense is if they if we paid out the 50% with the understanding that they would not be on the city's insurance anymore You know the long-term goal, and I'm sure mr.. Remodio is going to address this later on is we have Huge long-term costs that the city has to bear as you take and look at all of the retiree benefits that we have to pay going forward They're absolutely huge in the millions of dollars And so what we're trying to do now is take some steps there We can begin to curb some of those long-term costs for the city Alderman Reisler, thanks and Tom one of the other concerns that we do have is that let's say we have 20 to 40 people retire at $20,000 apiece That's going to be several hundred thousand dollars We're going to have to look at coming up with in 2012 to cover this From the 2011 budget that we didn't have ready, correct Well, if they retire they're going to have to retire before the end of this year, right? It's going to be dollars at like this year if 20 to 40 of them retire We need that money this year to put in their bank to pay out for insurance claims that obviously I don't think we have budgeted for That was another concern Thank you, Alderman Reisler Have all the employees or the non reps had a chance to look at this plan and have it explained to them I had a meeting this afternoon and one yesterday and explained this to those that chose to attend So there are some who do who have not seen the plan yet. They didn't attend. They haven't seen it President Rin please. Thank you It sounds harsh when we look at the past practices versus other post practices But I think you know, also not we're not comparing Just those two things past and proposed we're also comparing Private versus public sector and just to give an example I know if I retire for my current employer, I have no insurance when I retire I have to buy all my insurance to retire early before 60 for me to be 67 I think before I retire my particular age cohort And my retirement is whatever I put in my 401k Matched by that up to 50 cents on the dollar for my employer You know, that's the reality of what's out there right now. So this sounds absolutely harsh But there's still benefits here that the average worker is not going to get in the private sector right now So people understand that as well that that that it's not cutting everybody off at the knees in my impression It is balancing it more with the private sectors with doing and it's still a better plan than what I have in my current employer You're absolutely correct if I my comment on that for just a minute When I first came into the city and I began to look at the benefit programs and so forth quite frankly I couldn't believe what I was reading because all of my business experience has been in the private sector When a municipal employee or a state employee under the WRS system retires The average payout for those people is somewhere between 70 and 80 percent of their normal Take-home pay for the rest of their life I don't know of anyone in the private sector that has guaranteed payments of 70 to 80 percent in their retirement So that's a perspective you need to consider as we took a look at the at the whole package And what the private sector who comprise most of the taxpayers that pay the taxes that pay our salaries live with So yes, Alderman Riffelich that was a consideration as well Do you have something I do just one comment to you Alderman This is basically kind of like taking it when the company comes back to this Oh, by the way, you're not going to get the 50 cents on the dollar now You're not going to get your IRA paid out because we can't I mean, this is what you're doing to these employees that have basically Use this benefit for 20 to 30 years of dedicated service to the city and not using the sick days To now coming back and saying thank you for all your good work, but get out and we're keeping your money It's similar to that that happened that happens all the time too. I understand I guess I'm just saying my opinion is I don't think that it's that's the right thing to do well With all due respect all of them and raise her that's the real world out there I mean, there's tons of companies that With all due respect It's actually not the real world because these employees signed on for this job were recruited into these positions Knowing what the benefits were and that's what the public sector benefits were now I understand they're different from private, but the private employee also had the opportunity to become a public employee Well, but the point with all due respect it also comes to the point where we can't afford it anymore We can't go on like this, but I don't think we can take everything all done at one time Thank you President Rinplige Thank you My grandmother was employee of Sears retired from Sears had promises from Sears in retirement And those were taken away after retirement It has happened And for her she may already made plans in retirement. That's not as if she was changed before she retired I have worked at employers who when I did sign on had fantastic medical plans I Had the opportunity to work for my work form fantastic that changed the plans changed It does happen all the time and not pleased when it happened to me But as for working the public sector for the last six seven years, I've been a beer salesman I don't know any more in this state that I can do it in the public sector So I disagree on the best as I can I have a great employer that I'm convinced with but I'm very satisfied with the R. I think it's a very good medical plan compared to what I've had in the past but When I retire if I retire before my social security agent and Medicare age I'm paying a hundred percent of my premiums, and I'm paying basically a hundred percent of my retirement plan When my employers contribute they do so usually 50 cents on the dollar up to 3% or 6%. That's it that's standard out there and It's harsh. I'm not up here to say we have to you know, try our best to make employees feel bad. Absolutely not but When the employees call me and ask me why are we doing this? It's because of all the other phone calls. I'm getting people saying I can't afford all of this because I don't get it myself in the private sector anymore And that's where I have to look that's where I have to weigh Do we take this step now? And if not now when? I see no reason not to take it now and Help our citizens and our taxpayers who may not even have benefits as good as mine There's plenty of working people out there without insurance What do you tell them? We don't take this stuff right now So I I also have not seen anything from WRS on down that Is less than what I have at this point in time and that includes long-term short-term paid time off insurance Workers comp that's 66 and two-thirds versus the higher percentage. That's all standard. That's all stuff that I have So I welcome these changes I think it's time And it will definitely save the taxpayers Appropriate lists and I feel horrible at the employees who have made plans are seeing these changes right now, but unfortunately You know, there's plenty promises in the public in the private sector that have been broken as well lately and Those people who had it brought promises broken to them are the ones that are paying for these benefits right now Alderman Samson's first. Thank you. I'm president of inflation. Thank you. Mr. Chairman That's me sound kind of funny sometimes coming from me because sometimes they can surprise myself, but as much as I Don't agree with a lot of the contracts and everything that was agreed to up to this point I am strongly against a lot of the things that have taken place over years and years and years and years But they were still agreed upon under what situation doesn't matter at this point, they're still agreed upon as Much as it's happening in the private sector as it does the public sector that well if you you know You're guaranteed or you're promised or you have a contract that says you get this on this day And then you get to that day and that company whether it's public or private takes it away. That doesn't make it right period If you enter into an agreement Good or bad for one side of the other that agreement should be honored I'm not for a lot of the things that were agreed upon but they were agreed upon So if that's one of those things where in my contract it says as I'm working here 10 15 20 years later That you're going to be able to accrue next number of dollars and I choose to Work my schedule around that and I don't use the sick time or I don't use those The time I don't take the time off because I'm anticipating getting a payout at some point down the road or at least portion of that benefit and then all of a sudden I get to that point and you say you'm going to take it away That just doesn't that to me just doesn't sound right When there's agreement already in place and you start taking that away. So I Agree that a lot of the things that have happened over time weren't very Pleasant and they're probably dead wrong, but it did happen. It's in place. We got to deal with it And then make different agreements better agreements from this point forward Thank you all of them Samson all of them raceler. Thank you, Mr. Chair President right flesh I'm sorry that your mom did not get her promise of retirement I don't think that Sears had quite as much money invested in her through the training of 20 to 25 years for some of these employees and again, I'm not going to pick on anyone in particular But I will the fire chief sitting in the back with his thousands and maybe Tens of thousands of dollars invested in him as our fire chief that we've invested in these employees That we are doing a disservice to the city by losing them by me coming to and I apologize fire chief But coming to you and saying chief decide by October 15th If you want to stay or you want to reap the benefit and and and take this money payout I think we owe it to these employees with their vast experience and the money We don't have to pay now to spread this out over a period of time and say let's take this position here And and let's okay. Let's go WRS. It's gone great. Let's go with the The next step it's gone. It's great the next step. Let's do it over a period of five years Why rush apologize again chief the chief to get out when We don't necessarily want him to get out We want him to stay and use his knowledge as long as we can because we paid a lot of money for him We paid a ton of money for the training you have and I'm not gonna ask you how much but I know it's Thousands and thousands because I know what we stick in our employees the same as the police the same with DPW the same with any of these workers here We have stuck so much money into these people that we're now just basically saying Here's a here's a month make a decision get out or Stay and and lose these privileges that you have that you signed on for and that you did so I We made a commitment to these employees. We need to follow through we can wean some of this stuff out over a period of time But we're we're basically jumping into the pool too fast Thank You all the one raceler Let me continue as we go through the list until we finish On page three the retirement bonus Retirement bonus is in our labor contracts. It is not something that the non-represent employees get Basically what it amounts to is a dollar bonus per month Time is the number of months between they the month they retire and they turn age 65 So in some cases if you take 120 months times 58 dollars and 14 cents and figure it out yourself You know, it's lots of money We are eliminating that as of 1 1 proposing that The post-employment health plan that's really number seven or 18, I think Jim or 17 whatever it was anyway Currently the non-represented employees have a have a program that says if you have Served as a non-represented employee when you retire if You are an exempt employee Exempt from overtime You can have insurance coverage with the city For up to 10 years Or until age 65 The premium if you if you take single coverage is paid for 100% 100% by the city If you take family coverage 60% of the premium is paid for by the city If you're a non-represented employee You can retire five years and Have 100% of single coverage and 50% of or a 60% of family coverage paid We took a look at this program and we said We need to take and make some changes to it Because again, it's very expensive and not really affordable going forward So we've taken and broken the group down into Three tiers or classes Class one are all of the current non-represented employees in the plan who meet the Retirement eligibility Benefit for WRS What this means is all of our employees currently who have 15 years of service with the city Five as a non-represented employee and our 55 years of age and over Or in the case of police or fire 50 years of age would be grandfathered and covered and they have the same plan coverage That they have today going forward. I Think that's a group of about 14 or 15 people if I recall correctly for everyone else that is Currently covered under the non-represented employee Retiree insurance program. They would be in tier two or class two All employees in class two will be grandfathered in the plan. However, their benefit will be Exempt employees rather than ten years. It would be five years Non-rep non-exempt employees rather than five years It would be two and a half years and the employee would pay 50% of the premium going forward We would have a third tier of employees Which would be all new employees hired who are non-represented and Or new new employees going in as represented employees As of January 1st will be eligible for 18 months of Cobra coverage upon a retirement They would pay 50 a hundred percent of the single or family premium for the coverage So everyone who is currently in the non-represented plan would be either in tier one or tier two Any new employees hired or new employees becoming non-represented would be falling into tier three any questions Alderman belt the people with less than five years Would fall into that class two Some of these people have taken on move from the Union position into the management position and when they signed on they I'm not going to say they're guaranteed. They were guaranteed this but they signed on into the management position with the understanding that This benefit was going to be there when they got to retirement age now we're going to reduce that for them That's what we're proposing Okay, I guess I don't quite agree with that but Ladies and gentlemen This was not an easy Decision to make this wasn't The kind of opportunity you look for and say how can we do something like this? When you take a look at the financial cost of the benefit plans that our employees have enjoyed for years It's huge when I came into the city in 2009 The 85% of the general fund was spent on wages and benefits 85% of our general fund over the last two years. It's gone down a little bit When you take a look at the long-term costs of these programs It's virtually unsustainable and I think if you were to take a look at other municipalities and state governments It's unsustainable the state of Illinois is bankrupt and their retirement plan is no funding whatsoever Our reserves are enough to cover the wrs So, you know, I don't know when it would be a good time to do these kinds of things If we could have reduced them like Alderman Reisler suggests, you know, we could do it But the costs still remain for time coming so There's no joy in this when I had our meeting this afternoon. I said to our employees I'm not expecting you to walk out of here with a smile on your face This is not good news but if you take a look at it in in the perspective of as Alderman Reinflish pointed out to us our employees still have above average Rates compared to manufacturing Our employees still have above average fringe benefits and our employees still maintain blow average costs for those benefits Compared to the rest of the world President Rinflish. Thank you. I Mentioned a word that caught my ears the unsustainable When I met my wife I was working third shift at Lear both in the Union both working third shift There's promises made there to us being a member of the Union as well Benefits hours and so on but when That company became unprofitable and in consolidation The head office basically looked at the various company plants and decided which one were more sustainable which ones were unsustainable Unfortunately the civilian leader plant became unsustainable because of the costs and the costs were The benefits they had those well salary and benefits So the benefits that I enjoyed at that time which are still not as good as what would be out of past practices here wrs and so on Weren't even close to what was here, but We're so expensive that and so unsustainable that I unsustain myself out of a job You know my own benefits cost me my job and close this plant down if you will That's the definition of unsustainable you pointed out at Illinois is bankrupt That's what we're facing it down the road here is is unsustainability of these benefits for the employees But the city just can't disappear can't close it down and and sell it off to the next highest bidder Open up a recycling plant here in the city or something that's going on the Lear plant. We can't do that We just can't lay off everybody and not have any services So we have to find ways that do make it sustainable and I agree that that no one's taking the joy or pleasure in this one When it comes to Again, not the word guarantee, but promises or they when people signed up for various for the work itself or for management solutions or so on They have been told certain things They have certain expectations But if we don't change it now, when do we because if we don't change it now We're gonna maintain the unsustainability down the road and who ultimately is the employers. It's not me It's not the 16 of us. It's the taxpayers at home the taxpayers home who don't have these benefits We have don't have any income or in raises who are unemployed at higher rates And they have been in the last 20 30 years in the city You know at that what are we at 10% or so versus the 4% we were just a couple of years ago That's who the employer is that who is paying the salary and benefits That's who's on the hook for the unsustainability of our current plan and that's all we have to make the changes So I completely understand anybody saying that that it's unfair. It's not right. I agree with that It's not it is unfair. It isn't right But explain that to the owners of the city who pay the salary and benefits who are on the hook to pay these benefits In a current situation that's unsustainable I have a tough time explaining to them why we wouldn't choose to do This now why we wouldn't choose and at least bring this more in line with what's going on in the private sector And again in line does not mean equal. It's closer. It's still better than the average person does in the private sector and For Alderman Riesler, it was my grandmother at Sears She spent a lot of her time invested in that and her changes came after she retired She had already made her plans So I do take great offense to say that she's not as important as anybody else because if she lived in the city She'd be the one paying for unsustainable benefits even though her promises were broken So and she doesn't live in the city. She moved out upon retirement because she couldn't afford to live in the city so Thank You President rimflash I know of I know of small business people here in Sheboygan. I'm talking about small businesses Two employees three employees firm players where the owners of those businesses LLPs are paying $750 a month for their medical insurance with a $10,000 deductible and co-pays So if you you run the quick numbers on that they're paying $19,000 out of pocket before they collect $1 of benefits And and that's that's what's happening out there and you go up I challenge any of you to go up and down a street and call on some of the small businesses And if they're willing to share it, you're going to hear exactly the same thing. That's what's out there and I was a small business man myself Luckily, I was able to get coverage through through my wife's policy at Kohler company But I had to pay because of my income maximum into Social Security every year plus Fund my own IRA separate every year fund my own retirement I had none of that as a self-employed person and I'm just telling you Some of you know some of the city employees go knock on some doors Or if you have relatives that are that have a business if they're willing to share it with you Ask them what they're paying for their medical insurance. It's unbelievable. Can you imagine paying? $19,000 out of pocket before you get $1 in benefits. It's out there. Just check with the with the small business people That's what's happening right now Any other questions for mr. Race? Alderman Riesler. Thank you. I'm going to make a motion that we accept the WRS and the health insurance portion of this document and Refer the rest back to the salary agreements committee to work on a long-term structured plan To look at addressing some of these benefits over the next five to ten years Please repeat is to accept we accept the WRS portion WRS And the health insurance forward the document back to set everything grievance to work on a plan With staying some changes over the next five to ten years In what part would that be for the changes over the next to five to ten years everything else on the document? We can review and put things in pull things out and to work on changes so then if this if this motion fails to send this back to sell the grievances then the The the Recommendation of the council then if your motion fails all of them in racer then this would be sent to the council to Pass the proposal as is that my understanding if someone were to make that motion Work on the changes for the next time What did you just repeat that again and the changes to the rest of the document or future for future the future changes for the next five to ten years The next five to ten years Before we before we take the vote on that I do have all president rent place. Did you have something that you wanted to say? Yeah, I just wanted to say that if that motion fails. I will make the motion to Prove the entire document forward on to council the recommendation so I at this time I'll vote no on this motion at this time for the public's sake pay time off I Just wanted people to sink in what Mr.. I said sunk through what's being proposed You work for an employer in one year See my current employer I had to work the entire year before I got any vacation time, which is the same thing listed here Some places only 40 hours one week some place this plan and my current employer was to two weeks so 80 hours I Don't get holidays off. There's five holidays there, but I'm generally working them under this plan in the year one You get basically two weeks of holidays the ten holiday pays holiday days 80 hours and I have one sick day one bereavement day One whatever day one paid a time discretionary day five hours this plan offers 80 hours That is a total of six weeks in your first year that you have and pay time off after working one year here So again for those that are home that are thinking that we're doing something horrible I challenge them to find out where else you can work for one year and get six weeks of discretionary time You know pay time off vacation time and discretionary time I Think this plan while while drastic change is still more than fair So I will not support the motion at this time And I hope that the council or the committee of the whole will support me in referring this to the full council of the positive recommendation Thank You president in place is there any other discussion I Thank You mr. Chairman if I can just ask out of all of these other benefits here because right now I see the unused sick leave and good attendance The retirement bonus those two are those accrued on a cruel basis, so if you have so much time in You should expect Number dollars is it am I saying that correctly? Those two areas are on a cruel basis, so if you go 20 years with the city Right No, I guess what I guess my point is if you go so long working with a company whether it's public or private You go through a near original agreement that you have established says if you was if you didn't use the sick time or you accrued Whatever it is, and this is what you can expect on this day that you retire out of all of those I see the unused sick leave and good attendances on an accrual basis that when you retire you if you had Six six thousand dollars worth of accrued time that you didn't use that that's on an accrual basis is the Retirement bonus the same way similar words built up retirement bonus is the the dollar amount Times the number of years or the number of months between the day you retire and the day you turn 65 it's a mathematical formula and that is amount that is an amount that's put into an account to pay your insurance premiums Right now right now. Okay, you don't have to be here more than a year to earn it and all those kinds of things. It's there Okay, so so it basically accrues so if you put some time in I mean it's a bonus. Okay, you're in some The others are based upon Sick days that weren't taken based upon good attendance, right? Okay, that's why we eliminated because it is nothing but a cash bonus or Semi-cash bonus because it's used to pay premiums. Okay. Okay. Okay. Thank you. Thank you all of the Samson. Is there any other discussion? There's no discussion Take the role, please. Would you want to read the motion again is to? Accept the WRS and the health insurance and forward the the doc the rest of the document back to salary and grievance to work on The future the changes the future changes for the next five to ten years Chief Herman Sure Would you I know it's hard for you to come up so talk louder Thanks, because we are on live television Actually had something written on the sick leave portion also, but I won't get into that. I'm one of the people that has dragged themselves into work every day of my career pretty much And expected that to be there as a payout at the end, but I totally understand Where the city's coming from? They've treated me well my entire career But my question on the paid time off is has this ever been done in a municipality because I can see Problems with that time Especially in protective services and I would think also in the DPW. I think a Conscientious employee is going to save those ten days until December to make sure that they Get sick some in their family didn't die Whatever else If I as a department had now have to give all my staff Ten days off at the end of December. I won't have anybody there from I think this year I looked December 13th on And that's the question I have is if that's been addressed I've not researched other municipalities. I did talk to Appleton Appleton passed some changes at their Council meeting last week if I recall and I think PTO was one of those There are other cities that are looking at that just like we did So I don't know in the past Whether they have but there are many cities looking at it now with the changes that are going are taking place Well as you as you go through You know most employees have some time during the course of the year They get sick or they may not get sick, but their wife gets sick or their kids get sick or on and on and on Or they have a time when they have to go to a dentist appointment or a doctor appointment All of those things are things that are covered under the discretionary time You know, we don't want people to have to lie about why they're taking the day off They want to take their kids to the zoo take a discretionary day don't call in sick So the fact of the matter is is that likelihood is that is that a likelihood? I suspect not there may be some days left at the end of the year that haven't been taken that people would want to take But I don't think all of them are going to save 10 days till the end of the year so Anything else chief, you know, I guess in the fire department by the police department is the same and I would think DPW There are we're at 24 7365 days or we have to have somebody here and In the fire department we only allow four people off at one time So I I don't know how we're going to address that when somebody comes to me and says well, I'm taking my personal day off today When it's sick leave it's legitimate. I have to let them go but otherwise You know, we need to know how to address this as department has chief I have a question for you How do you cover that? There's one way I? Call in overtime and that's going to cost what time and a half more money double time on a holiday exactly President Rinflesh Tom Rice answer my question. Thank you Any other discussion is everybody clear what we're voting on Repeat again Okay, all the role, please Belt I Warren no Carlson no Decker, hi. I'm in is excused Hammond He's excuse. Sorry about height a man. No Cough is excused Kittleson says aye At a check is excused Rinflesh no Reisler I Samson no Vanderwheel no Versi no We have four eyes seven nose Motion fails motion fails All of them are in place I move to refer the document to the full Common Council with a positive recommendation We have a motion and a second to refer the document to the full Common Council positive recommendation thank you all of them in place and All of them in Samson under discussion. Thank you, Mr. Chairman. I Kind of want to go somewhat the same line. I don't work within a lot of these areas that you do Cory, but The part that gets me is the accrual basis They've earned it Based on the current agreement that they have that they worked under for over many years Whether that's a group a good agreement or not a good agreement Is beside the point it's an agreement and yes, I understand there's unsustainability and there's things like that But there's things we got to pay for we got to take care of this And that means making better decisions now we have more flexibility with negotiating now at this point forward So we make do with what then now we've made a lot of changes here. Is there a way that maybe I could Amend that or something to at least include a little more discussion with the retirement bonus and the Unused sick leave and go to tenants at least discuss those Pretty gone back to the salaries and grievance. We could have discussed how we want it to and change whatever we want We'd had more time to look at it and to I'm at least looking at those two main areas there is my concern So you want to make an amendment to the amendment that? President Is that what you say? He didn't make an amendment though getting why he made a motion he made a motion to send the plan That we were presented with tonight to the council with a favorable recommendation the entire plan And I believe we have a second on that we had a second on that So if you would want to make if you would want to make an amendment to that With your concerns we can we can we can vote on that amendment if you'd like to Then I'd at least like to make an amendment at least those those two areas the unused sick leave and go to tenants and the retirement Second So we're gonna make an amendment to the point of order President remplacement. Thank you, Mr. Chair As a maker of the motion I find that the Amendment is not a friendly amendment, so I don't accept the motion motion on is right now to Pat pass it through with a fair recommendation They can vote that down and do a different motion But also it's all only recommendation coming from this cap from this committee There is time between now and when it comes back in front of the council to amend it in front of the council as well Thinking we're just making a recommendation at this point in time It's not a done deal today in any case but if if More changes need to be made They can do so after we take this vote on this one, but I don't see as a friendly amendment to my motion I Won't accept the one accept the motion because it's not a friendly amendment So is there any discussion on the original motion? By Alderman Rindflay's president Rindflay's to send this back with a positive recommendation, Mr. Chair. Oh I'm sorry Thank you, Mr. Chairman. So so right now my initial amendment request was denied Yes, so can I now make a friendly amendment to this request right? So then I would like to make a friendly amendment request to at least Go back over and continue looking at the unused sick leave and good attendance and retirement bonus resident Rindflay's I Guess has a point of order I object My recommendation is to not accept that as a friendly amendment. I don't accept that the second would also have to accept it But I do not Who is the second? These are you choosing not to I'm not going to accept. I'm not going to accept the motion My thing is Alderman Raceler my thing is broke under discussion Just to clarify if we vote to approve this and send this portion to council There will be no change in the unused sick leave and I'll go back to my original point and I hope we do not agree on many things But Alderman verse you will agree with me on that We are keeping our retirees on our sick plan for a longer period of time than we should by not Trying to get him paid out in cash until he or having the opportunity to go on a spouses We are spending way way too much money and probably more money on that than we're saving in the whole plan For what one surgery is going to cost a retired person and we're actually picking up some of the portion of the bill So this is a very expensive vote. We're about to take Carlson, thank you chairman. What's the average age of a retiree in the city of Sheboygan right now? Fire Department and and police probably 56 55 but right now what we're talking about doesn't apply to please fire correct I don't know the age of the others. So it doesn't so what we're voting on does not affect police or fire correct Okay, so what what's okay, what's the average age? I'm sorry So 57 they retire. They're not eligible for Medicare or Medicaid correct So even if we pay out a percentage of that bonus say they get $5,000 I don't see that as an incentive to leave our plan Considering we just got done talking about it's the reason you either take the cash the private plans that are available are way more expensive and That $5,000 $10,000 is not going to get them very far from the age of 57 correct when they're eligible for Medicaid But if your wife has insurance that you can get on do we have any it's $5,000 Do we have any numbers of like? The percentage of people that could possibly go to their wife's plan if that's no that's kind of a hard number to try To come up so at this point we really don't know But we do know that There's really no incentive to leave because they're gonna be paying a lot more out-of-pocket for a private insurance since we don't have numbers based on spousal insurance Correct correct it could be for any reason they could leave to go to a higher deductible because they're healthy And less and pay less. I guess let me myself personally. I wouldn't take a $5,000 payout I would stay on the city insurance anyways Yes Currently there are one six people in fire and one person in police who are non-represented employees That's it. So and so is what you're saying that even if they do stand the plan. It's really not that much money Because it's six or seven people I'm saying that the effect of the plan is going to be on a lot more people than just those people in the police And fire and the answer is you know if you're going to provide them with an option That's fine But recognize the fact that if you're 57 years old and you have a chronic disease There's no way you're getting off of our insurance. You could pay off from 10,000 and there's not gonna they're not gonna leave I guess that's the point I was trying to make and I didn't make it as clear as you did What I'm saying is there that that small amount of payout is not an incentive to leave our insurance program the cost of our Insurance program commercially would be huge Huge it would be unaffordable for most people Director of Mordio, please step up Just add one more comment right now in our current retirement plan. We have 16 non rep people Last year the 16 people cost the city. I'm just slightly over a million dollars in health claims It's about 62,000 dollars a person As we continue these plans our post-employment Obligations that Tom talked about continue to grow as those 16 people stay in and another 14 come in that could potentially retire this year Now we have 30 people that liability goes from a million one a year to 2.2 million to 3.3 It continues to grow and as we look at that liability liability for the city That's what we're trying to limit by limiting retirees on the plan That's the single biggest cost to the city Our health insurance claims cost the general fund seven million dollars a year So seven million dollars of the thirty four million dollars that we spend from collecting taxes Goes to pay health And I've got seven million dollars for 400 people 16 of them generate a million That's the issue Alderman Riesler Thank You mr. Moya, so the question I have goes back to the point of on the unused sick leave Is it not is it in your opinion? Mr.. Opinion is it a good idea to try and pay the people out if they'll accept it and get off of our health plan a Portion of the money obviously. Well, yes, but again We have a qualifying event when we do that And a qualifying event means that we're really not providing insurance for a person And they got 18 months of cobra So regardless of what we do they're on our plan for 18 months But in the event where the spouse can can pick it up or the event where they can can do something different that they don't If they have a spouse then yeah, that works I mean, it's a huge cost savings if even for a few of the people that retire have the ability to go and say correct Right now if I drew a line in the sand and said I would pay everybody their rate of pay For all of the unused sick leave in the city for every employee At the end of last year that number was three million dollars That's another liability and the city pays as it goes just like it pays as it goes for medical costs So as we continue to let these benefits accrue We continue to continue and continue to pay them out until we can't afford to pay anymore Any other question Dr. Morio, I guess is if 30 people leave and they're probably 30 of our senior people We're gonna pay 30 of those people out this year instead of spreading it over some time by not forcing them to retire That's correct. That's correct, and we don't specifically know exactly where we're gonna get that money from You might we don't have a specific way. We will be Significantly over budget. Thank you Thank you all the racer any other discussion Okay, I think we're set to vote on that and I vote would send this plan as presented back to the council with a favorable recommendation Please call the roll belt no foreign I Carlson, right? Decker Heidemann, hi Kittleson says no Brinflige, hi Racelor, no Samson, no Vanderweel, hi Inversy I We have six eyes five no Motion carries So that that then covers items number 18 and 19 on the agenda next We will make a motion to go into closed session under the exemption provided in section 19 0.851 e Wisconsin statutes for the purpose of discussion deliberation or formulation of negotiation strategies Relative to possible collective bargaining agreements where competitive and bargaining reasons require a closed session We take a five minute break Pardon me five minutes What five minute break? Oh sure Why don't we make it we'll resume at nine o'clock. Thank you. You want the motion first or yeah, let's Yeah, let's let's have let's do the motion. We have the motion in a second. We're going to close session back I think we can do that all in favor right or do we have to take a vote on We can see all right We're going in the closed. Hi. I pose chair both side. We're in closed And I just want to mention here that when we go into closed session, it'll just be the older persons director of modio and Tom racer human resources consultant only