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Home My WebLink About2006-05-18 Special MeetingMINUTES OF THE JOINT MEETING OF THE .. . FINANCE.., AQMINISTRATION AND HUMAN RESOURCES COMMITTEE & STEERING COMMITTEE SPECIAL MEETING -BENEFITS WORKSHOP Orange County Sanitation District Wednesday, May 18, 2006, 5:00 p.m. A joint meeting of the Finance, Administration and Human Resources Committee and the Steering Committee of the Orange County Sanitation District was held on May 18, 2006, at 5:00 p.m., in the Sanitation District's Administrative Office. (2) The roll was called and a quorum declared present, as follows: FAHR COMMITTEE MEMBERS: DIRECTORS PRESENT: Darryl Miller, Chair Mike Duvall, Vice Chair Bill Dalton Rich Freschi Phil Luebben Joy Neugebauer Mark Waldman Steve Anderson, Board Chair DIRECTORS ABSENT: Jim Ferryman, Vice Board Chair James W. Silva STAFF PRESENT: Jim Ruth, Interim General Manager Lisa Tomko, Director of Human Resources Lorenzo Tyner, Director of Finance Jeff Reed, Human Resources Manager Rich Spencer, Human Resources Supervisor Lilia Kovac, Committee Secretary OTHERS PRESENT: Brad Hogin, General Counsel Norbert Gaia Juanita Skillman FILED IN THE OFFICE OF THE SECRETARY ~ ORANGE r.n1, ITV ~ ... -, ... ,N.1 01S' If' (3) APPOINTMENT OF CHAIR PRO TEM JUN 28 2006 No appointment was necessary. - _L~:_:_:_,;<.!--' -IY L (4) PUBLIC COMMENTS There were no public comments. (5) OCSD BENEFITS PROGRAM OVERVIEW Lisa Tomko, Director of Human Resources, presented the District's employee demographics and an overview of the current insurance and retirement benefits program with its associated costs to both the District and to the employees. Ms. Tomko and Richard Spencer, Human Resources Supervisor, also reviewed possible cost reductions recommendations based on market trends for consideration by the Committee to mitigate other cost increases. ROLL CALL JOINT FINANCE, ADMINISTRATION AND HUMAN RESOURCES AND STEERING COMMITTEES Meeting Date: May 18, 2006 Time: 5:00 p.m. Adjourn: COMMITTEE MEMBERS Darryl Miller (Chair) Mike Duvall (Vice Chair) Bill Dalton Richard Freschi Phil Luebben Joy Neugebauer James W. Silva Mark Waldman Steve Anderson (Board Chair) Jim Ferryman (Board Vice Chair) OTHERS I Brad Hagin, General Counsel I I STAFF Jim Ruth, Interim General Manager Bob Ghirelli, Director of Technical Services Lorenzo Tyner, Director of Finance/Treasurer David Ludwin, Director of Engineering Jim Herberg, Director of Operations & --Management Lisa Tomko, Director of Human Resources Patrick Miles, Director of Information Technology Nick Arhontes, Director of Regional Assets & Services Mike White, Controller Lilia Kovac, Committee Secretary Jeff Reed, Human Resources Manager Paul Loehr, Human Resources Supervisor Rich Spencer, Human Resources Supervisor c: Lenora Crane AGENDA JOINT FINANCE, ADMINISTRATION AND HUMAN RESOURCES AND STEERING COMMITTEES OF THE ORANGE COUNTY SANITATION DISTRICT DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92708 SPECIAL MEETING --BENEFITS WORKSHOP Thursday, May 18, 2006-5:00 P.M. 1. Invocation and Pledge of Allegiance 2. Roll Call 3. Appointment of Chair pro tern, if necessary 4. Public Comments 5. OCSD Benefits Program Overview a. Lisa Tomko 30 Minutes l During the course of conducting the 'business set ~forth on this agenda as a regular meeting of the [ i Committee, the Chair may convene the Committee in closed session to consider matters of pending real I i estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code ! I Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. ' i ! Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) ! employee actions or negotiations with employee representatives; or which are exempt from public disclosure [ under the California Public Records Act, may be reviewed by the Committee during a permitted closed 1 [ session and are not available for public inspection. At such time as final actions are taken by the Committee ! j on any of these subjects, the minutes will reflect all required disclosures of information. ! L o,nHnnu .... ••••nuu.u.•.••·•·•·•••·••••·•••••·••••••·•••·••••• .. ••••••·•· .. ••••••••••••·· .. ··•n,I..I .n·v ••••·• .. •••·•·••••••••••• ,on,nu•·••••••••"noon' ....... , .......... ..,..,...,,,..,.-,Ho•••••·•••••••·••••••••H,..t•-•Onooo '••-f•••••·•••"'"""''·••nOo••••• .. ••· ... i 6. Closed Session a. Convene in closed session Conference with designated representatives Lisa Tomko, Director of Human Resources; Jeff Reed, Human Resources Manager; and Paul Loehr, Human Resources Supervisor, re Meet and Confer Update re contract negotiations for employees represented by 1 ). Orange County Employees Association; 2). International Union of Operating Engineers, Local 501, and 3). Supervisors, Professional Management Team (part of Peace Officers Council of California (Government Code Section 54957.6). b. Reconvene in regular session. 6. Adjournment 05/11/06 Page2 Agenda Posting: In accordance with the requirements of California Government Code Section 54956, this agenda has been posted in the main lobby of the District's Administrative offices not less than 24 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the office of the Board Secretary. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Board for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or because there is a need to take immediate action, which need came to the attention of the Board subsequent to the posting of agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 24 hours prior to the meeting date. Public Comments: Any member of the public may address the Board of Directors on specific agenda items or matters of general interest. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Board of Directors except as authorized by Section 54954.2(b). If you wish to speak, please complete a Speaker's Form (located at the table outside of the Board Room) and give it to the Board Secretary. Consent Calendar: All matters placed on the Consent Calendar are considered as not requiring discussion or further explanation and unless any particular item is requested to be removed from the Consent Calendar by a Director, staff member or member of the public in attendance, there will be no separate discussion of these items. All items on the Consent Calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the Consent Calendar shall be considered in the regular order of business. Members of the public who wish to remove an item from the Consent Calendar shall, upon recognition by the Chair, state their name, address and designate by number the item to be removed from the Consent Calendar. The Chair will determine if any items are to be deleted from the Consent Calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee or Board meeting held within five (5) days of this meeting per Government Code Section 54954.2(b)(3). Meetfng Adiournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955 (posted within 24 hours). Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Board Secretary's office at (714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. 05/11/06 Page3 , •••u n,.._•-••••·••no ••••• ............ ,, .............. ••uu oOtl• .... •·•••·•••·H••••uH•·••• ........ ~•••••••• .. • .. • ........................ ~•••"•••••u .. , .•• .., .................................. ,,.,, ........... ,,,,o.,,u••• .. •••••• .... •.•••• .. •n• .... •• .. •·•HH••uuuo,,,H· ,,,0,0010,0: !NOTICE TO DIRECTORS: To place items on the agenda for the Regular Meeting of the Board of ! !"Directors, items shall be submitted to the Board Secretary no later than .the close ot business 14 days I preceding the Board meeting. The Board Secretary shall include on the agenda all items submitted by ! Directors, the General Manager and General Counsel and all formal communications. : !interim General Manager James D. Ruth (714) 593-7110 jruth@ocsd.com 1 isoard Secretary Penny Kyle (714) 593-7130 pkyle@ocsd.com , !Director/Engineering David Ludwin (714) 593-7300 dludwin@ocsd.com l !Director/FinancefTreasurer Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com I jDirector/Human Resources Lisa Tomko (714) 593-7145 ltomko@ocsd.com i 1Director/lnformation Technology Patrick Miles (714) 593-7280 pmiles@ocsd.com l i Director/Operations & i l Maintenance Jim Herberg (714) 593-7020 jherberg@ocsd.com ! lDirectorfTechnical Services Bob Ghirelli (714) 593-7400 rghirelli@ocsd.com ! !Acting Director/Public Affairs Lisa Tomko (714) 593-7145 ltomko@ocsd.com ! j Director/Regional Assets & i !Services Nick Arhontes (714) 593-7210 narhontes@ocsd.com i lGen~ral. Counsel .............................................. Brad. Ho.gin.................................. (714) 564-26Qq __ .!2m.@~.:d~'«·S:PIT' ......................................... .! H :\dept\agenda\FAHR\FAHR2006\051806 Benefits Workshop\03.051806. Benefits Wrkshp Agenda.doc FAHR COMMITTEE -BENEFITS WORKSHOP Meeting Date 05/18/06 AGENDA REPORT Item Number 5 Orange County Sanitation District FROM: Lisa L. Tomko, Director of Human Resources Originator: Richard Spencer, Human Resources Supervisor SUBJECT: BENEFITS PROGRAM OVERVIEW GENERAL MANAGER'S RECOMMENDATION For information only. SUMMARY The informational presentation will include the following topics: ~ An overview of the OCSD benefits program for FY 2006-07 To Bel. of Dir. Item Number • Cost and enrollment information, premium rate history and cost savings data • Comparisons with other agencies and market place competitiveness PRIOR COMMITTEE/BOARD ACTIONS NIA PROJECT/CONTRACT COST SUMMARY NIA BUDGET IMPACT D This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. lZI Not applicable (information item) ADDITIONAL INFORMATION A staff report is attached which provides additional information related to OCSD's benefits program. ALTERNATIVES H:ldept\egende\FAHRIFAHR2006\051806 Benef~s Workshop\04.00.AR Bener~s Program Overview_FYOS-07.doc Revised: 06104/03 Page 1 N/A CEQA FINDINGS N/A ATTACHMENTS 1. Staff Report 2. Insurance Premium Rates 3. Insurance Premium Contributions 4. Leave Accrual Schedule H:ldept\agenda\FAHRIFAHR2006\051806 Benaf~s Workshop\04.00.AR Benefits Program Overvlew_FY06--07.doc Revisad: 06/04/03 Page2 OCSD Benefits Program May 18, 2006 Page -2-of 5 Further information associated with the health insurance and retirement benefits is included in the sections below. One other important note is that OCSD has contracted with an insurance broker to assist in obtaining quotes favorable to the District. Driver Alliant serves under contract to OCSD and is the broker of record for employee insurance programs. SUMMARY Group Medical Insurance Estimated Cost: FY 05-06 $3,807,604 FY 06-07 $4,132,115 Employees are provided a choice of medical insurance providers and plan options including Kaiser Health Maintenance Organization (HMO), Blue Cross HMO, and Blue Cross Point of Service (POS). All plans include an employee contribution to the premium and a co-payment amount. An annual deductible is also required on the POS plan. Beginning with the current MOUs, employees share the premium for all types of medical insurance coverage and any increases in monthly premiums. Prior to these MOUs, the insurance premium for "employee only" coverage was paid entirely by OCSD. Employees pay up to 10% of the HMO premium and up to 20% of the POS premium, depending on bargaining group affiliation. Any premium increases over the life of the MOU will be shared by OCSD and the employees. Dental Insurance Estimated Cost: FY 05-06 $562,032 FY 06-07 $562,032 Dental insurance is provided by Delta Dental. Employees have paid 20% of the premium for employee only and dependent plans since July 1, 2004. Vision Care Insurance Estimated Cost: FY 05-06 $119,295 FY 06-07 $119,295 Vision care insurance is provided by Vision Service Plan (VSP). OCSD covers the premium cost for employees and dependents. Life/AD&D Insurance Estimated Cost: FY 05-06 $85, 164 FY 06-07 $85,164 OCSD provides $50,000 term life/AD&D insurance for every employee. Employees may purchase additional insurance through voluntary term and universal life insurance programs. Employees in the manager group are provided an additional $50,000 of coverage. Members of the Executive Management Team receive the same benefit as all other employees. Disability Insurance Estimated Cost: FY 05-06 281,043 FY 06-07 $281,043 OCSD employees are provided a non-work related short-term disability indemnity plan that pays a benefit of 70% of weekly salary, not to exceed $840 per week, for up to 26 weeks following a fourteen day waiting period. OCSD provides a non-work related long-term disability indemnity plan that pays two-thirds of an employee's rate of pay at the time of the disabling incident, not to exceed $5,000 per month following a 90-day waiting period of continuous disability. OCSD pays the entire premium for full- OCSD Benefits Program May 18, 2006 Page -3-of 5 time employees after five years of service; employees with less than five years of service may elect to pay for the LTD premium as a voluntary benefit. Retirement Estimated Cost: FY 05-06 $9,398,700 FY 06-07 $11,768,700 OCSD employees are members of the Orange County Employees' Retirement System (OCERS). A comprehensive classification and compensation survey conducted in 2001 by the independent consulting firm of Johnson & Associates revealed that OCSD's retirement benefit was well below the competitors, including member agencies and other public employers. After extensive negotiations with employee bargaining groups, the Board of Directors in late 2003 approved a single plan for all employees to replace the two-tiered plan that had not been changed since 1979. The new benefit is commonly referred to as a "2.5% at 55" plan because it pays 2.5% of an employee's average salary (over a one or three year period, depending on date of hire) for every year of service at age 55 or older. The new benefit formula was negotiated with bargaining groups as part of the overall compensation package. The old formula provided an approximate 2.0% at age 57, or 2.0% at age 61 benefit, depending upon date of hire. Following is an example of the new benefit structure: Yrs of Age Service 55 20 55 30 Average Salary/Mo. $3,500 $3,500 Retirement Benefit $1,750 $2,625 Calculation (2.50% X 20) = 50% X $3,500 = $1,750 (2.50% X 30) = 75% X $3,500 = $2,625 Upon implementation of the change, each employee began contributing to the increased cost of the new retirement benefit. OCSD paid 4.5% of each employee's salary to OCERS since the early 1980's. This additional benefit was negotiated with the employee groups in lieu of a salary increase. As a result of the most recent agreements with the bargaining units, the percentage paid by OCSD was reduced from 4.5% to 3.5% effective July 1, 2005; employees are responsible for paying the 1.00% difference. In addition to the 1.0% increase difference, the average employee contribution rate increased by approximately 4.0% for the new retirement formula. Therefore, there was a total average increase of 5.0% for employees. Actual employee contribution rates are based on age at entry into the system; the average new employee rate will be approximately 7.02%. OCSD's required contribution rate also increased from 12.62% to 15.31% on July 1, 2005 and will increase to 20. 15% on July 1, 2006. Social Security and Medicare Estimated Cost: FY 05-06 $792,100 FY 06-07 $816,100 OCSD employees are not covered by Social Security and no contributions are paid. However, employees hired since 1986 have been subject to the Medicare premiums and are eligible for those benefits. Medicare premiums are 1.45% of an employee's gross income. Workers' Compensation Estimated Cost: FY 05-06 $425,000 FY 06-07 $310,100 OCSD carries only excess loss workers' compensation insurance with a deductible of $500,000 for each incident. A self-insurance fund has been established for the deductible and for the routine administrative costs. OCSD contracts with an independent, professional third-party administrator to manage the claims and to make recommendations to staff. OCSD Benefits Program May 18, 2006 Page -4-of 5 Unemployment Insurance Estimated Cost: FY 05-06 $18,700 FY 06-07 $2,000 OCSD is on an actual-claim-paid basis, which has historically resulted in an overall lower cost than insurance because of favorable claims history. Uniforms Estimated Cost: FY 05-06 $85,000 FY 06-07 $63,200 Many classifications of field or laboratory employees are provided uniforms and protective footwear or lab coats. This is a benefit to OCSD because employees are provided clothing that is identifiable and contamination from work clothing does not mix with home laundry. Summary Discussion of Paid Time-Off Provisions Paid time off provisions are different for the various employee groups and unions. All employees have the same holiday plan; however, vacation accrual, sick leave accrual and personal leave accrual varies by group. All leave programs have a maximum accrual limit and require employees to either take time off or receive an annual lump sum payment. These maximum limits keep OCSD's liability for compensated absences to a minimum. The liability is estimated to be $1.65 million as of July 1, 2006 (see attached Leave Accrual Schedule). Personal Leave Estimated Cost: FY 05-06 $1,019,300 FY 06-07 $1,318,700 Confidential employees and Operations and Maintenance personnel accrue personal leave at rates between 80 hours and 220 hours per year depending on length of service. Members of EMT may choose this option. Personal leave is the only leave accrual available to these employees and it is used for sickness or vacation. The maximum personal leave accrual is 400 hours. Vacation Estimated Cost: FY 05-06 $1,678,900 FY 06-07 $1,782,000 Employees not accruing personal leave earn vacation leave at rates between 80 hours and 200 hours per year depending on length of service. The maximum vacation leave accrual is 200 hours. Sick Leave Estimated Cost: FY 05-06 $753,200 FY 06-07 $ 829,800 Employees not accruing personal leave may also accrue sick leave at the rate of 78 hours per year. This leave can only be used in the case of illness of an employee or a family member. The maximum sick leave accrual is 560 hours. Hours exceeding the maximum must be exchanged for a payment of 50%. The percentage can increase to 75% depending upon the employee group and if that group's average use was less than 40 hours for the year. Holidays Estimated Cost: FY 05-06 $2,651,300 FY 06-07 $ 3, 134,600 All full-time employees are eligible for 12 holidays each year. If a holiday occurs on an employee's day off, that employee is granted compensatory time for a future use. If a non-exempt employee is required to work on a holiday, the employee is paid at overtime rates. CONCLUSION OCSD Benefits Program May 18, 2006 Page - 5 -of 5 The benefits program is an essential part of OCSD's human resources related programs. As demonstrated in this report and the related attachments, it is a complex program that is comprised of different elements integrated into a policy designed to meet the needs of the OCSD workforce while being managed to contain associated costs. A goal of the benefits program is to keep OCSD competitive in the labor market. As the availability of workers in the labor force changes, OCSD will be challenged to respond accordingly in order to attract, retain, and encourage top level employee performance while controlling the costs related to that effort. ORANGE COUNTY SANITATION DISTRICT Monthly Insurance Premium Rates !CARRIER KAISER PERMANENTE MEDICAL -HMO Employee EE+ 1 Dependent EE+ 2 or more Dependents BLUE CROSS MEDICAL -HMO Employee EE+ 1 Dependent EE+ 2 or more Dependents BLUE CROSS MEDICAL -POS Employee EE+ 1 Dependent EE+ 2 or more Dependents DELTA DENTAL DENTAL -DPO Employee EE + 2 or more Dependents VISION SERVICE PLAN (VSP) VISION Per Employee + Dependents EMPLOYEE ASSISTANCE PROGRAM EAP Per Employee METLIFE $50,000 BASIC LIFE METLIFE LONG TERM DISABILITY Per $100 of Salary (eligible after a 90-day waiting period) SHORT TERM DISABILITY Per Employee (eligible after a 14-day waiting period) 2005/2006 7/05 $282.71 $565.42 $800.06 $254.24 $533.65 $762.66 $439.68 $887.65 $1,272.41 $44.24 $119.55 $16.68 $1.76 $14.00 $1.00 $10.13 200&120011 7/06 $281.79 $563.58 $797.46 $289.83 $608.36 $869.42 $476.84 $963.18 $1,380.61 $44.24 $119.55 $16.68 $1.78 $11.75 $0.73 $9.82 PREMIUM CONTRIBUTIONS EFFECTIVE 7/1/06 EMT, Managers, SPMT, Confidential, OCEA Admin/Clerical OCEA Engineering/Technical & 501 EMPLOYEE DISTRICT EMPLOYEE DISTRICT TOTAL COST PAYS PAYS PAYS PAYS Per Month Per Month Per Month Per Month Per Month MEDICAL BLUE CROSS -POS Employee $ 95.37 $ 381.47 $ 47.68 $ 429.16 $ 476.84 EE + 1 Dependent $ 192.64 $ 770.54 $ 240.79 $ 722.39 $ 963.18 EE + 2 or more Deps $ 276.12 $ 1,104.49 $ 345.15 $ 1,035.46 $ 1,380.61 BLUE CROSS -HMO Employee $ 28.98 $ 260.85 $ -$ 289.83 $ 289.83 EE + 1 Dependent $ 121 .67 $ 486.69 $ 152.09 $ 456.27 $ 608.36 EE + 2 or more Deps $ 173.88 $ 695.54 $ 217.35 $ 652.07 $ 869.42 KAISER-HMO Employee $ 28.18 $ 253.61 $ -$ 281.79 $ 281.79 EE+ 1 Dependent $ 112.72 $ 450.86 $ 140.89 $ 422.69 $ 563.58 EE + 2 or more Deps $ 159.49 $ 637.97 $ 199.36 $ 598.10 $ 797.46 All Bargaining Units TOTAL COST EMPLOYEE PAYS DISTRICT PAYS DEL TA DENT AL Per Month Per Month Per Month Employee $ 8.85 $ 35.39 $ 44.24 EE + 1 or more Deps $ 23.91 $ 95.64 $ 119.55 VSPVISION Employee $ -$ 16.68 $ 16.68 EE + 1 or more Deps $ -$ 16.68 $ 16.68 BASIC LIFE/ AD&D $50,000 $ -$ 11.75 $ 11.75 LTD (Rate per $100 of Payroll) (Rate per $100 of Payroll) (Rate per $100 of Payroll) < 5 Years of Employment $ 0.73 $ -$ 0.73 5+ Years of Employment $ -$ 0.73 $ 0.73 STD Employee $ -$ 9.82 $ 9.82 ORANGE COUNTY SANITATION DISTRICT Leave Accrual Schedules Operations & Maintenance Personal Leave Years of Hours-Hours- Service Biweekl Annual 0 - 1 2.31 80* 2-4 5.38 140 5 -10 6.92 180 11 7.23 188 12 7.54 196 13 7.85 204 14 8.15 212 15 and over 8.46 220 *Only 60 hours may be taken during the first year; the 20 additional hours are credited after one year of service OCEA AND SPMT Vacation Years of Hours-Hours- Service Biweekl Annual 0 - 1 3.08 2-4 3.08 5 -10 4.62 11 4.93 12 5.24 13 5.54 14 5.85 15 6.16 16 6.46 17 6.77 18 7.08 19 7.39 20 and over 7.69 OCEA AND SPMT Sick Leave 80 80 120 128 136 144 152 160 168 176 184 192 200 Date of Hours- Hours- H ire Biweekly Annual Prior to 11/27/81 11/28/81 to present 3.50 3.08 91 78 ORANGE COUNTY SANITATION DISTRICT {714) 962-2411 www.ocsd.com Mailing Address: P.O. Box 8127 Fountain Valley, California 92728-8127 Street Address: 10844 Ellis Avenue Fountain Valley, California 92708-7018