Employee Benefit Trust Minutes - 05/15/2007 (3) CITY OF WICHITA FALLS
EMPLOYEE BENEFITS TRUST BOARD MEETING
May 15,2007
Present: Bill Sullivan, Chair
Darron Leiker, City Manager
Jim Dockery, Finance Director
Gail Garmon, Employee Benefits Coordinator
The meeting was called to order at 4:00 p.m.
Agenda Items:
Approval of Minutes
Jim Dockery made a motion to accept the minutes of the March 5 meeting. Darron
Leiker seconded the motion. Motion carried.
Financial Statement
Jim Dockery stated that claims paid to date total $3,610,307. The projected surplus for
the year should be between $412,000. and$776, 212. depending on total claims paid over
the next five to six months.
Discussion of Actuarial Study
Jim Dockery presented a report showing the results of the actuarial study by Gabriel,
Roeder, Smith& Co. The report showed the retiree unfunded (our current pay as you go
system) accrued liability to be $85,601,116 and the pre-funded liability to be
$54,933,864. the report further stated that the unfunded liability normal cost(one year
cost for all retirees)to be $2,183,276 and$975, 699. under the pre-funded option. The
annual required contribution to the plan under the unfunded option is $7,477,103 or
$9,838.per active member and $5,594,744 under the pre-funded, or$7,362. per active
member. The reported showed that while the retiree health care costs were in excess of
2.5 million dollars, premiums paid by retirees only totaled $655,000. which means the
City paid the remaining two million.
In summary,the actuarial report concluded that the current benefit package for retirees is
a fairly"rich"one; that the ratio of active employees to retirees is approximately 3 to 1;
the plans with older age participants cost more; retirees are paying 25%vs. the City at
75%; and, having no service eligibility requirement causes significant costs.
•
Consider Additional Services from Actuary
Jim Dockery reported that the actuary can do several scenarios aimed at reducing the
liability. He presented material outlining several of their suggestions. After some
discussion, the Board authorized Jim to request additional services from the actuary to
prepare three scenarios for Post 65 Participants and six scenarios for Pre 65 Participants
(future retirees). The Board will later meet with representatives from the actuarial firm to
go over the findings before presenting it to the Council.
Jim made a motion to request the additional services at a cost of$750.00 per scenario.
Bill Sullivan seconded the motion. Motion carried.
Other Business
Jim Dockery reported that he had received an accounting of the 2006 Flex Spending
Account program from Alt Benefits. Of the original $394,000 in pledged contributions,
$374,000 was actually collected. With actual money paid out and what was left by those
who did not use all of their allotted benefit,the City lost only$192.00.
The meeting was adjourned at 5:40 p.m.
Respectfully submitted,
Gail Garmon
Employee Benefits Coordinator
I r
f"-t
"Wills,Gwendolyn L." To "'Gail.Garmon@cwftx.net"'<Gail.Garmon@cwftx.net>
<GLWills@Pharmacare.com>
cc "Cassie Stennett(E-mail)"<c.stennett@comcast.net>
05/14/2007 02:14 PM bcc
Subject RE:City of Wichita Falls
Good afternoon Gail, we will be able to set up separate invoices for the retirees and those under
Medicare. To process this request we would need to create two new accounts for the City of Wichita
Falls. We currently have account account 001 and with in that account we have groups V7710001 and
V7710005.
We can set up the retirees and Medicare members by a new account number of 002 for the retiree and
003 for Medicare and then we will set up or billing system to bill by account so you would have three
separate invoices going to you one for 001, 002 and 003.
Or if you want to set the retirees and Medicare up at the group level then we could keep them under
account 001 and you would have group number V7710001, V7710005, and the retiree and Medicare
groups and we could bill at the group levels giving you four invoices.
We will be able do either one above.
Also, we can run a history report of total claims and cost for members over the age of 65. This would give
you the total amount you have paid for the retirees for 2006. Please let me know if you would like this
report.
Thanks
Original Message
From: Gail.Garmon@cwftx.net [mailto:Gail.Garmon@cwfbc.net]
Sent: Monday, May 14, 2007 10:48 AM
To: Wills, Gwendolyn L.
Subject: Fw: City of Wichita Falls
Forwarded by Gail Garmon/CWF on 05/14/2007 10:47 AM
Gail Garmon/CWF
To glwills@pharamcare.com
05/10/2007 03:43 PM cc
Subject City of Wichita Falls
Hi Gwen
In order to comply with GASB 45 we need to be able to tell what we are paying in prescription
costs for our retirees. Right now the bill comes in with all scripts filled lumped together.
' •
Would it be possible for us to maybe put the retirees into a separate group and get a separate bill
for those?We actually would need to separate the retirees into two groups (one for retirees not on
Medicare(under 65)and one for those on Medicare).
Thanks
Gail
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Jim Dockery/CWF To "Newton,Joe(Dal)"<joe.newton@gabrielroeder.com>
ioo. 05/16/2007 10:05 AM cc Bill Sullivan/CWF@CWF, Darron Leiker/CWF@CWF, David
Winney/CWF@CWF,Gail Garmon/CWF@CWF
411. bcc
Subject Re: Draft Report
Joe: our Employee Benefit Trust Board met yesterday and authorized additional services for your firm to
prepare several scenarios and how implementing those scenarios would reduce our Annual Required
Contribution Amount and Unfunded Accrued Liabilities. Specifically, it is my understanding that each
scenario would cost an additional $750.00. We would like you to work up the following scenarios:
Post 65 Participants:
• Eliminating the post 65 benefit by offering a private insurance plan just for Medicare Supplemental
Services with the participants paying the full cost of the premium.
• Increasing the cost sharing to retirees for the existing benefits to a 50% City, or 40% City participation
rate.
• Offer a private insurance plan for Medicare Supplemental Services with the City providing
$100/monthly assistance on the premium.
Pre 65 (Future Retirees):
• Require a Service Eligibility Requirement(Age and Service)to receive the current benefits such as
the Rule of 75 or 80, with a minimum age of 50.
• Increase the Shared Cost between the City/Retiree to 50% City, or 40% City.
• Increasing the Spouse/Dependent Shared Costs of the Premium.
• A Tiered Sharing Plan
• A Defined Contribution Approach
• Lowering the Benefits Offered Such as higher out of pocket expenses.
We were hoping that you could be able to present your findings and scenarios to our Employee Benefit
Trust Board and a few Council members sometime in late June. This meeting would be fairly informal in
a conference room setting to get detailed questions on the table and begin to develop recommendations.
We would also like for you to come back on July 17 to present your draft findings with recommendations at
a regular Council meeting that we plan to have a pre-budget discussion on this issue.
Please let me know if you need any additional information on these scenarios, need to clarify the
additional cost for these services, or if you wish to discuss anything in detail.
Thanks.
Jim Dockery
Director of Finance
City of Wichita Falls
(940)761-7462
"Newton, Joe (Dal)" <joe.newton@gabrielroeder.com>
"Newton,Joe (Dal)"
<joe.newton@gabrielroeder.c To <Jim.Dockery@cwftx.net>
om>
cc
05/03/2007 03:44 PM
Subject Draft Report
Jim,
I have attached the draft report. Please take a few days to review.
I am out Monday and Tuesday of next week, but perhaps we can set up a conference call for Wednesday
or Thursday. I would like to have the conference call to discuss preliminary results. We can then
schedule a date for me to come and present the draft report and projection results in person.
I would like to have the conference call first incase there are some"managing liabilities"type work you
wanted me to bring with me. Such as alternative plan designs, etc. I know we had discussed that there
would be optional work after the report was out, but since the valuation process took longer than
expected, hopefully we can add some efficiency to the next step of the project.
Let me know if you have any questions. I will be in tomorrow afternoon and then you can reach me on my
cell Monday or Tuesday of next week.
Thanks
Joe
Joseph P. Newton F.S.A., E.A.
Gabriel,Roeder,Smith&Company
5605 N.MacArthur Blvd
Ste 870
Irving,Texas 75038-2631
Telephone:469-524-1807 Mobile:214-498-9198
Fax:469-524-0003
joe.newtonCa�oabrielroeder.com
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......ski
2824va107.rtf
City of Wichita Falls
Additional Cash Requirements for Prefunding
Current PayGo Costs
-RAGagi (Otl
Total Claims $ 2,731,155
Premiums collected from Retirees (655,561) --- Q
Net PayGO costs $ 2,075,595 - U)
Incremental Cash Requirement- Level Dollar Amortization
Annual Required Contribution $ 5,594,744 /3.Al)s-Vi d
Less PayGO Costs $ (2,075,595)
Addional Cash Requirements $ 3,519,149
kt, 4- .Q.611)
Incremental Cash Requirement -Level Precent Amortization (3%)
Annual Required Contribution $ 4,372,244 l 4.1
Less PayGO Costs $ (2,075,595)
Addional Cash Requirements $ 2,296,649
All expected cash flows shown for FY2008
,,cam 'C\��-11 "2 `* Q n-i`- 90
Sheet1
Level: Product: Paid Period:Data Fields: Account 00(All 03-2007 to(null, null, nu
Total Payments
$664,636.08
Page 1
Sheet1
Level: Product: Paid Period: Data Fields: Section 000
Paid Month Eligible Amount Provider Savings Amount Total Payments
March 2007 $798,281.74 $348,357.98 $298,670.63
April 2007 $736,335.81 $298,581.58 $275,777.29
Page 1
5/15/2007 Best Case Worst Case
Apr Sept Apr Sept Apr Sept Apr Est Est
YTD 04 YTD 04 YTD 05 YTD 06 YTD 06 YTD 07 YTD 07 YTD 07
REVENUES:
EBTOffice 17,325 32,665 31,430 16,040 23,450 12,130 26,000 25,000
Vernon 784 784 347 676 676 - - -
Iowa Park 1,579 3,798 4,191 1,687 3,049 - - -
Electra - - 3; - - - - - -
Interest Income Other 332 654 °t6` 1,804 2,088 3,270 950 5,000 3,300
Interest Income Tex 3,132 5,599 fir' 0,069 44,532 39,332 78,451 49,589 90,000 80,000
Employees 696,090 1,298,488 •"804,064 1,369,205 806,797 1,391,087 835,813 1,428,000 1,428,000
City 2,989,420 5,176,184 ;^'`: 3,727,401<- 4,949,085 !,825,650 5,181,377 2,767,300 5,531,416 5,531,416
Flex Spending Reimb - - - - 172,756 293,302 - - -
Ex Employees 15,489 32,103 16,847` 28,677 18,487 36,230 14,979 34,000 32,000
Prior yr Reimb 34,783 34,783 44,209 44,209 "r 21,490 21,490 51,511 51,511 51,511
Retirees 229,281 438,504 it 303,765 514,241 1'331,058 577,024 382,601 578,000 578,000
Misc 20,198 29,332 18,862 37,764 ;` 18,534 99,264 170,402 230,000 185,000
Oper Revenue 4,008,413 7,052,894 ,: 4,957,676 7,025,485 7,708,670 4,285,275 7,973,927 7,914,227
•
Year End Adjust - - -
Total Revenue 4,008,413 7,052,894 4,957,676 7,025,485 5,254,595 7,708,670 4,285,275 7,973,927 7,914,227
EXPENSES
Salaries 62,935 112,351 63,800 115,240 65,353 118,464 64,327 126,000 126,000
Overtime 3,372 6,527 3,846 7,252 4,596 5,729 114 500 1,000
Terri Pay
FICA 5,001 8,957 5,091 9,192 5,208 9,242 4,709 9,677 9,716
Retirement 7,289 13,164 7,599 13,922 ,991 14,327 7,656 15,231 15,291
Life
Health 7,740 10,320 9,675 12,900 10,238 13,650 7,163 14,325 14,325
Supplies 3,979 6,208 2,054 4,829 1,658 2,298 2,113 3,000 3,500
Maint
Telephone 294 502 271 467 351 606 474 650 750
Lease
Prof Fees 165 165 - 126 1,000 1,000 1,600 15,000 17,000
Med Exams 2,109 4,765 2,482 6,626 2,085 2,085 2,200 2,200
Travel 636 636 - 50 104 300 300
Ed Reg 150 150 150 150 150
Memberships
Binding 3,409 5,281 1,996 3,417 3,185 5,169 3,566 5,200 5,200
Postage' 3,703 6,399 4,039 6,558 3,134 4,992 859 5,000 5,600
Claims/Adm Fees 3,681,901 6,876,509 3,028,152 6,443,854 3,373.674 6,623,519 3,516,990 7,000,000 7,300,000
Flex Spend Payments - - - - 172,756 293,302 - -
Other 1,379 601 482 482 482
Total Expenses 3,782,533 7,053,163 3,129,005 6,625,034 3,651,379 7,094,533 3,610,307 7,197,715 7,501,513
Difference 225,880 (269) 1,828,671 400,451 1,603,216 614,137 674,968 776,212> 2,714