HomeMy WebLinkAbout2006-04-19-9:30AM-WORKSHOPBRAZOSCOUNTY
BRYAN, TEXAS
NOTICE OF MEETING
AND AGENDA
BRAZOS COUNTY COMMISSIONERS COURT
WORKSHOP SESSION
THE COMMISSIONERS COURT OF BRAZOS COUNTY WILL MEET IN A
WORKSHOP SESSION ON WEDNESDAY 19 APRIL 2006 AT 9:30- A.M. IN
ROOM 108 OF THE BRAZOS COUNTY COURTHOUSE, 300 EAST 26TH
STREET, BRYAN, TEXAS.
1. Call to Order
2. Presentation and discussion regarding Retiree Health Insurance and GASB
Statement 45.
3. Adjourn
The Brazos County Courthouse is wheelchair accessible. Handicap parking spaces are available. Any request for sign
interpretive services must be made two business days before the meeting. To make arrangements, call (979) 361-4102.
Office of the County Judge • 300 East 2e St. • Suite 114 • Bryan, Texas 77803 • Fax: (979) 361-4503
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COMMISSIONERS' COURT
WORKSHOP SESSION
April 19, 2006
The Commissioners' Court of Brazos County, Texas met in a
Workshop Session in the Commissioners' Courtroom in the
Courthouse in Bryan, Brazos County, Texas, beginning at a.m.
on Wednesday, April 19, 2006, with the following members of
the Court present:
Randy Sims, County Judge, Presiding;
Lloyd Wassermann, Commissioner of Precinct 1;
Duane Peters, Commissioner of Precinct 2;
Kenny Mallard, Commissioner of Precinct 3;
Carey Cauley, Jr., Commissioner of Precinct 4;
Karen McQueen, County Clerk.
Attached is a list of the citizens and officials in
attendance.
Attached is a transcript of the meeting.
Vol 7 Page /07.
I of 12
BRAZOS COUNTY COMMISSIONERS COURT
Retiree Health Insurance Workshop
April 19th, 2006
Sims: ...for retirees, I think we've got an exposure out there that ...because we are
going to have to decide what we are going to do and I think this is a
workshop session and I will call this workshop session into session. Katie, do
you want to talk to us about this please?
Conner: I know everybody loves the term GASB. GASB Statement 45 has been
issued and the chance for comments and regret is over. We are going to have
to implement it by 2008/2009. First I want to say right off the bat that I do
not have any preference on how you decide to take this. If you want to
(inaudible) I need your assistance in determining whether we are going to
continue covering retiree health insurance. Unfortunately the biggest question
that you're going to ask is, "How much is it going to cost." I don't have an
answer. To get the answer, we are going to have to have an actuary come in
and do an analysis to find out much we need to fund. One of the main
premises of GASB 45 is that rather than waiting until the employee retires to
put aside funds for their health insurance, you start putting aside funds now.
While they're earning. While I'm working. While Amy's working. While
we're all working. We have to start setting aside funds in preparation for
when they retire. Again, how much? I don't know. I can give you an
example. For example, TCRS is the best example of what I'm talking about
moving towards. Everyday, every time somebody gets a paycheck now 7%
comes out of their paycheck. But the county puts in 10.96%. For every dollar
I put in, yall put in ten... for every seven dollars I put in, yall put in ten.
Sims: 2.251 isn't it?
Conner: That's what I'm promised. Not guaranteed because yall could change it
before I retire. I'm only guaranteed it when I actually retire. Yes, 2.25 for
every dollar I put in. And the way TCRS has taken our ages, our group,
they've analyzed us a county of employees, how long they think we're gonna
live, how long we've been living, how long we're not gonna live, medium
age for retirement, what the interest earnings are going to be on the
money... they've taken all this information and analyzed it and come up with
the 10.96. GASB 45 is going to require the same type of analysis but for
health care for retirement. It's going to be that rather than a pay as you go,
which is what we're doing now, it's going to become a plan.
Sims: A trust fund basically.
Vol ~ 9 Page 100
2of12
Conner: Basically.
Mallard: As it should be. Because otherwise down the road all of a sudden there's not
any money. The same thing happened to A&M. They provided all those
services for their retirees and it eventually it had too many and it caught up
with them and there wasn't enough ...it just got so large, the retirees got so
large that it was a huge burden and they almost had to cancel all of their
health insurance. There was a lot of turmoil; this has been a few years back.
Sims: How did they solve their problem, do you know?
Mallard: Well they discontinued a lot of those programs that they had.
McLeod: (inaudible)
Sims: Really.
Mallard: It's a wonderful thing. I think everyone would like to have that benefit, I
know I would. But I have to sit up and say, "Well, but financially can we
afford to do it?" At some point in time there's going to be a real day of
reckoning. Obviously there are just a few retirees today but that number will
continue to grow over time.
Cauley: Does GASB 45 alleviate that?
Conner: It will not alleviate the number of retirees...
Cauley: No, no, no.
Conner: ...what it will do is it will help us in spiking or have real lows ...it will help
us even it out and plan for it. It will help us figure out how much...
Mallard: It will force us to pay today for...
Cauley: Tomorrow.
Conner: Yes.
Mallard: ...tomorrow's retirement.
Conner: How much do I need to put aside for the next thirty years to have this
covered? Because that's what it does, is it...
Vol 7q Page 109
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Cauley: Yeah, that's what I'm asking. Rather than waiting until you are on top of the
precipice...
Conner: For example, let me give you some real numbers that we're talking about.
Last year we paid $259,000 into our health care system for our retirees.
Retirees that have retired since January I of 2000 and ones that we agreed to
pay their health insurance for. That's only fifty retirees right now. We have
fifty eight currently eligible that are still working today. But that's double. It
could go from 259,000. to 500,000 in a year because they're all old enough
and you can't tell them they can't retire. And if they retire today, they have
health insurance. That's the goal of the GASB 45 to...
Cauley: Mitigate it.
Conner: ...yes. And the good news is that once we implement, we don't have to go
back and catch up for like my prior eight years service or anybody else's. We
don't have to catch up. We just amortize it over the next thirty years.
Mallard: As I understand it there is a difference between someone who retires before
age sixty-five and then retirees after age sixty-five because of Medicare?
Conner: Yes. What happens is if you retire before 65 the county is primary coverage
and Medicare is (inaudible).
(overtalking)
Conner: If you're sixty-five and you're retired then Medicare becomes the primary.
Cauley: Does the rate that we pay for that Medicare eligible retiree go down?
Conner: See that's the other part of this, we don't really have premiums because we
are self-funded. Yall had decided not to. The county still puts in $470.00
whether they are over 65 or not. But that was the choice of the
Commissioner's Court versus some insurance company telling us.
Cauley: But to keep the thing solvent...
Mallard
Conner:
Cauley:
That helps us keep it solvent.
Yes. We are solvent right now too, that's another point, yes.
Yes.
Vol 7 q Page 116
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Conner: If you decided to decrease that for the people over 65, you'd probably have to
increase how much you put in for me. That's my best example. But we are
solvent.
Sims: Ok. So you're saying we'd have to increase what we put in for you because
you are still working.
Conner: Not just because of that because you've still got claims. I mean you can
choose to decrease it for people who probably have less claims but your
claims aren't going to change just because you've decreased it. It's just going
to be more up here.
Mallard: It's still one bucket of money.
Conner: Yes.
Mallard: And there has to be enough in there to cover all of these assets.
Conner: There's nothing there to cover it now so whether you pay for it under the
guise of a retiree or an active employee doesn't matter doesn't matter, you've
still got to put the money in.
Sims: So basically with the retirees that we have that reached 65...when Medicare
becomes primary and our health insurance becomes secondary... that's where
we catching up. Because they're not using it.
Conner: I don't have an analysis at this time of how much over 65 is costing us and
how much under 65 is costing us. I did get an analysis but it looks like the
retirees (inaudible) $251,000. for retirees last year ...this year it looks like the
claims were about $293,000. But that includes retirees that pay for
themselves too. We have maybe about ten that retired before 2000 and so
they are paying their own (inaudible).
Mallard: See, it's only the folks from 2000 to today that have retired that are basically
getting an extra benefit. The people before that time are having to...it didn't
go back and pick up everybody that was a retiree before 2000. It just said
that, "as of today" which was whatever that date was in 2000.
Conner: January 1 s`
Mallard: All the retirees at that point forward were going to get this benefit.
McLeod: We did pick it up (inaudible).
Mallard: Even if we stop...
Vol 7 I Page / /
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Conner: We tried to get it back.
Mallard: Even if we stop...
Conner: We tried to get it back.
Mallard: Ok, but you couldn't.
Conner: At that time.
Mallard: And even if we wanted to stop it today, we could only do it for the future. We
couldn't do anything about that from 2000 to today.
Conner: Rod you can help me on this ...I wouldn't say that you can't, but you kind of
promised and you wouldn't have to have a contractual obligation to
(inaudible).
Cauley: Does GASB require us to have this actuarial evaluation every two years,
regardless?
Conner: No. If you decide not, that's the whole ...that's the whole goal of today is to
decide... obviously you can't make a decision ...but gather information to
make your decision on whether you want to continue covering retiree health
insurance. If you do, then yes, we have to have an actuary every two years.
Estimates from other counties on actuaries is about $20,000. So at the very
beginning we need to do an RFP and if we decide we want to continue it for
an actuary, there are other companies that will help us design the plan,
compile a GASB 45 financial reporting, and then manage the plan after that.
Help us invest them ...for a fee. And that's where they've said there are
several renovations out there.
Mallard: There is another option too that came to us in a workshop a year
ago... Richard Smith and I can't think of the other fellows name. Anyway,
they came to us and offered us private insurance so our retirees would not be
within the county self-insurance plan but they would be insured with private
insurance. And it is a different plan and I think there was an issue over
limitations on medicines. For over 65, I think our big benefit that we have
is...obviously anything that Medicare covers we wouldn't have (inaudible)
for. But anything over and above... which is the medicines. I'm not sure how
the medicines have changed in the particular...
Nichols: We have ...our scripts are as good if not better than what Medicare offers.
And so we or anyone eligible (inaudible) could make a decision on what they
Vol ? % Page //a
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wanted to do. And as long we provided (inaudible) and our plan is as good or
better than Medicare, then they do not have to go.
Sims: Who rates that? Who stands behind that statement?
Nichols: Our consultant for one, but our plan is a better plan.
Sims: Ok. That's what I'm asking because when somebody tells me that I take a
look at them with a jaundice eye and say, "Wait a minute, here now."
Nichols: Medicare still is not anything near what we have.
McLeod: (inaudible)
Mallard: Now I assume that we could alter our plan if we so desired where it would
not cover these extra things and set it up...
Conner: Yes. You can alter the plan to mitigate (inaudible) cost.
Mallard: You know, it's not whether we don't want to provide a benefit for our
retirees, I think we all do, but what can we afford to pay and what is the
liability. Now we say the actuarial can tell us that this is an escalating... that's
what happened to A&M, it escalated so high they said, "We gotta do
something." Because of the cost were so high it was becoming unaffordable.
And that's the concern for everybody. We would like to provide a benefit but
we have to do it knowing that we can continue to pay. It's kind of hard for
counties to go bankrupt but it's not impossible. And that would be a bad
thing. So whatever we promise we'll do, we want to know that we can
deliver. I think that's very important that we don't just come out and say we
want to provide this benefit and not know what the repercussions might be.
What we can afford to pay.
Conner: (inaudible)
Mallard: I don't know what it is. I mean it's just a black hole right now that I see, but
that's my concerns is...and maybe it's not real. Maybe we get and actuarial
and they say, "It's manageable." Because there is a limited number that are
going to be in that system at any one time. It's not just going to continue to
be this huge escalating number and it will be all right.
Conner: All I can tell you is, you know, leave it this way and it will get this huge
escalating number but if you limit it to different factors like only people over
60 can retire (inaudible). You could set the requirements.
Vol -71/ Page 113
7of12
Nichols: What Katie just said brought up something else and that is when someone
retires from another entity and their retirement is compatible with ours and
they retire from that entity and they don't get insurance and they come to
work for Brazos County, they can work here one month and get a retirement
and they can retire and keep our insurance.
Peters: That's been my concern for a while.
Nichols: I think this is something we need to look at to see if you have to retire
completely or have a whole time frame (overtalking) years of service with
Brazos County before (inaudible).
Peters: A&M's retirement beforehand was that you had to work out there five years
before you could retire and get it, and they changed that because even that
was causing problems.
Sims: What did they change it to, do you know?
Peters: I don't know what it is but somebody said you might have to work ten more
years so they made the change ...I know that at one time you could work out
there five years and if you were eligible for retirement you could get your
health benefits. And A&M changed that because they couldn't afford it. As
Loraine said, right now if they've got their eligibility from working
somewhere else and they retire after a month here, they get that health benefit
and it's costing the county.
Nichols: And people who have been here fifteen years that have really been
committed to working for the county ...I think there should be some kind of
requirement.
McLeod: Judge Jones was one of those.
Nichols: Right, several people.
Cauley: Of these fifty retirees, how many of them are double-dipping.
Connor: (inaudible)
Sims: We know how many are double-dipping.
Cauley: What I mean is that worked for the City of Bryan or College Station or A&M
and who have come here and worked for a little bit and get the insurance.
Mallard: I know of several.
Vol 79 Page /
8of12
Nichols: They're eligible to...
Conner: We can guess but I wouldn't be comfortable asking them.
Gallego: Maybe look at years they've worked here and can retire and that'd probably
(inaudible).
Nichols: I think if the employee fits our criteria to be eligible to retire that-it doesn't
mean they couldn't retire from the county.
Sims: Right.
Nichols: Because that's a whole different section there. Retirement and insurance is
totally different. That is where I got a question from someone else, Well, but
if I retire, then I'm going to keep it, but we need to put some criteria on it.
And that's what I think we should look at.
Mallard: Can we get the information from A&M personnel operations to see what they
did.
Sims: What does Bryan do? What does other cities do?
Mallard: They don't do it.
Peters: I don't think they offer it.
Sims: They don't offer it period?
Mallard: That's right. This is special.
Conner: I talked to the City of Bryan, they are self-funded like we are and they are
going to have to (inaudible) because they are (inaudible). (Inaudible)
remember how we talked about $251,000 we put and the $293,000 it would
cost, even if the employee paid, the retirees that paid...
Sims: Still got to subsidize it.
Conner: So you still have a contribution. They have to pay the premiums but it's not
enough, because it's a reduced rate.
Sims: So each year we have to make up the difference.
Cauley: Have we always had a deficit?
Conner: Good question.
Vol 9 Page 115.
9of12
Nichols: I don't think so.
McLeod: No. Because it didn't get larger.
Mallard: It just recently started in 2000 and it slowly ramps up.
McLeod: (inaudible)
Connor: (inaudible)
Sims: I personally think we do need to have this actuarial so that we see where we
are, maybe get some feedback from what we need to do in the future because
I certainly would be...it would be inexcusable for us to make decisions
without facts, number one. And number two to put county government in a
precarious situation in later years.
Mallard: It's already been done once so let's don't do it again.
Conner: Anyway, I'll put it in next year's budget. I don't think we should actually
spend anything before then. It will take a while to get an RFP together.
Mallard: Somehow in this process, I think it would be good to look at this full insured
plan for retirees. Evidently, it's not just us that is doing that because this
fellow sells it throughout the State of Texas as a plan that they utilize. But
it's not the same plan as what the Brazos County has. So we need to have
other options too to see what might work.
Conner: I would ask...since so many of the questions require some type of analysis,
it's hard to come up with them and I (inaudible). (Inaudible) start gathering
that kind of information. We can do some of it but it took us two days to
(inaudible).
McLeod: (Inaudible) Will this be insurance with proposed...
Mallard: Accepted by offer buyers? I don't know. I assume they have the networks
and whether the networks was exactly the same as the network we're under,
I can't answer that. It's a fully insured plan a opposed to self-insured plan.
McLeod: But would it determine how those retirees would have to...
Mallard: Yeah, if everybody has to go El Paso to see the doctor, that would probably
be bad. That's just all part of it. That's just one person that sells it, there may
be others that market it that would be part of the...if we looked at that, we
would have to look at all those situations. We're very blessed that most plans
Vol 7 7 Page 116
10 of 12
for doctors and all of that are pretty well all-encompassing. They don't seem
to have...
McLeod: (inaudible)
Mallard: I would say yes he did but it's probably not going to cover it 100%.
McLeod: (inaudible)
Mallard: That's correct.
Nichols: We could get our consultant to look into that.
Sims: And see what kind of network...?
Nichols: As far as a supplemental type plan for retirees. We'll get the actuarial to help
us figure out...
Sims: I know this happening everywhere, my sister retired from Southwest
Missouri State and that was one of the biggest problems that all state
supported schools are having. Do they want to continue to carry insurance on
retirees? And they didn't. And they fought it in court and they said there was
a commitment made by the Board of Regents and the State of Missouri and
the people lost. The employees lost.
Conner: I think we need to get started...
Sims: I do too. I do too. Absolutely. Ok. Put that on the agenda too.
Conner: Let's put it writing first.
Sims: Well, put it on the agenda so that we can approve going out. Ok?
Conner: Ok. I'll check it first (inaudible).
Sims: And this is important to our employees here in Brazos County to me. You
know, we just have to take a look and our employees have got to understand
that this is a balancing act with dollars to be honest with you.
Vance: I'd just like to say one thing; it is a sales tool that we use when we are trying
to hire employees. Because of the fact that in many cases we're not on the
same level of some of the other entities pay-wise. But having a good
retirement system or medical benefit system is one method of enticing people
to go to work for us. I certainly realize as much as anybody that you can only
approve so much.
Vol 7 q Page //7
11 of 12
Mallard: Well and the employee can't. I mean individual health insurance could be up
to a thousand dollars a month. It's huge.
McLeod: And some can't get it.
Mallard: That's right. And the closer we get to retirement age, the harder it is to get
coverage.
McLeod: Well, if they have a medical condition, they can't get coverage.
Mallard: That's right. Yeah.
Nichols: I do know the small entities that family coverage is at $1,900. a month.
Cauley: Might as well not have any...go on welfare.
Gallego: We should get stricter without cutting everybody out. So those that served
thirty years, maybe at least let them be still be entitled to insurance and cut
out the ones that...
Sims: Well that's something that we need to look at to see if we do need to revise
our policies on that. You don't just come to work for Brazos County and in
one day you become eligible for health insurance. That's wrong. Because
I've seen a lot of them ...a lot of them tend to go through the court systems,
i.e. bailiffs and this type of thing. All of a sudden they show up and they
work two months and then they're gone, they retire, they become
eligible... and I'm not knocking the bailiffs, I'm just saying that's where I see
most of it because they come and go. Other questions? Yes ma'am.?
Conde: I don't (inaudible)... mine's a little bit more confusing so I don't know if I
should bring it up in here or...because it not only affects my permanent
retirement (inaudible)
Conner: You know, that's kind of up to them because I don't think I (inaudible)
today, I can't. But I think (inaudible) we'll find out.
Conde: Ok.
Connor: That's my answer (inaudible).
Mallard: We're also looking at (inaudible) but that's a separate... it wouldn't be
figured into this as a retiree.
McLeod: Uh-huh. (positive)
Vol 71 Page //9,
12 of 12
Mallard: Really?
McLeod: (inaudible)
Conner: It's always been easier to say you get the same benefits as the Brazos County
(inaudible)
Sims: Well I know 911 went off on their own and they found a better policy. B.V.
COG went out on their own. But they went with Blue Cross, Blue Shield too.
McLeod: (inaudible)
Sims: Appraisal District (inaudible) they went out on their own.
Mallard: Once they get a certain size, employment-wise then it makes sense.
Sims: Ok. Any questions Commissioners? Any other questions?
Mallard: Please understand that we don't want to cut benefits but you just kind of look
at the numbers and find out what we can do. We certainly want to continue to
provide these benefits that we have in the past.
Female: You have an employee that worked for the in excessive of 20 years and they
have health problems. Is there anything going to happen immediately? If this
person is ready for retirement and they want to be covered?
Mallard: I don't know.
(inaudible)
McLeod: They are not going to do anything for a least several months.
Sims: Before we asked something that we have to make a decision on, I'm going to
close this workshop session. Thank you for coming.
End of tape.
Vol 7 I Page 112
The foregoing minutes of the Commissioners Court Workshop
held April 19 2006 , have been examined and
approved in open Court this the ~Q"] day of Jtak , 20" ,
in Bryan, Brazos County, Texas.
Duane Peters
Commissioner,
Precinct No. 2
arey C uley, Jr.
Commis ioner,
Precinct 4
Attest:
aren McQueen
County Clerk
Lloyd Wassermann
Commissioner,
Precinct No. 1
Kenny Malla d
Commissioner,
Precinct No. 3
Vol 7q Page l a D
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