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Home My WebLink AboutCommittee of the Whole Packet for 04/02/2018 AGENDA Committee of the Whole Meeting 5:30 PM - Monday, April 2, 2018 7th Floor, Conferencing Center, 7th Floor, City Hall – 1055 S. Grady Way 1. Affordable Housing Task Force Update 2. Insurance/Benefits Annual Report Including Deferred Comp Plan Update a) Benefits Presentation b) Risk Insurance Review Presentation Health Plan Overview April 2, 2018 AGENDA ITEM #2. a) •There were no significant changes in medical coverage or plan design last year. •The dental benefit was slightly improved in that cleanings and other preventive care no longer count toward the $1,600 maximum annual benefit. •All vendors were renewed, except Stop Loss, which was changed from Symetra to Optum with a 5.1% decrease in premiums. •Employee premiums increased by 1% for medical and 4.6% for dental. Overview of Health Plan Changes AGENDA ITEM #2. a) - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2009 2010 2011 2012 2013 2014 2015 2016 2017 Med/ Vision RX Dental Excess / Admin City Prog Health Plan Cost Trend +0.5%+8.3%+8.5% Total cost –Per Employee Per Month +3.4% +12.5%-2.0%+6.3%-5.4%AGENDA ITEM #2. a) 32% 42% 70% 21% 7% 29% 47% 67% 16% 6% 20% 28% 58% 12% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% Preventive care visit in past year (age 18+) Colorectal cancer screeningin past 3 years (age 50-75) Mammogram in past 2 years (age 50-64) Lipid screening in past year (M 35+ / F 40+) Diabetes screening in past year (age 45+) Renton Other Cities All HMA Rate of Preventive Care Visits AGENDA ITEM #2. a) Prevalence of Chronic Conditions 10% 16% 5% 14% 18%18% 9% 13% 4% 15%16% 18% 11% 15% 6% 14%14% 18% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Asthma Depression Diabetes Lipid Disorders Musculoskeletal Hypertension Renton Other Cities All HMA AGENDA ITEM #2. a) $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 Cityof RentonHMA –WashingtonCitiesClaims Compared to Other Employers Annual Employer Paid Medical & Rx Claims All HMA Clients AGENDA ITEM #2. a) Deferred Compensation Plan Overview April 2, 2018 AGENDA ITEM #2. a) 457(b) Deferred Compensation Plan •The Renton Regional Fire Authority (RRFA) employees continued to participate in the plan on a temporary basis when the RRFA formed in July 2016. •A longer-term solution of creating a multi-employer plan reduces cost and administrative burden for both entities. •The City and RRFA have agreed to jointly operate a single plan, with the option of leaving the plan by giving 90 days’ notice.AGENDA ITEM #2. a) 56,174 80,684 89,584 99,233 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 2012 2016 2017 Avg. 34 WA Plans Average Participant Balance + 11% 2016-2017 Deferred Compensation -Plan Growth 55,000,000 80,442,025 94,689,977 66,233,413 $0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 2012 2016 2017 Avg. 34 WA Plans Total Plan Assets +17% 2016-2017 AGENDA ITEM #2. a) 4,049 22,702 62,805 133,963 149,804 131,834 2,717 15,532 54,018 108,168 163,463 273,132 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 <25 25-34 35-44 45-54 55-64 >64 Your Plan Peer Benchmark Deferred Compensation –Balance by Age AGENDA ITEM #2. a) Deferred Compensation -Plan Performance 16.47%15.63%15.46% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% Renton 60% / 40%Avg. 30 WA Plans Average Investment Returns 2017 7.67% 6.92%7.34% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Renton 60% / 40%Avg. 27 WA Plans Average Investment Returns 3 Year Annualized AGENDA ITEM #2. a) •In leaving ICMA-RC and The Hartford in 2013, there was a $150,000 termination fee. •TIAA’s fee was one of the two most competitive of nine proposing vendors. TIAA agreed to amortized the termination fee over a seven year contract term. •After amortization of the termination fee is complete, the Plan should have a reduction in the recordkeeping fees in 2020. •The Admin fee is used to pay for investment advisory services and plan oversight. •Accrued admin fees over expenses is returned to participants in December. 0.24% 0.33% 0.07% 0.07%0.17% 0.09% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% Total Plan Cost -2017 Recordkeeping Fee Admin Fee Avg. Investment Total Cost: 0.48% Total Cost 0.49% Renton Ave. 31 WA Plans Deferred Compensation –Fees & Expenses AGENDA ITEM #2. a) Questions What questions do you have?AGENDA ITEM #2. a) RISK MANAGEMENT 502 Insurance Fund Review for 2017 AGENDA ITEM #2. b) 502 Fund The 502 Fund is an Internal Service Fund that pays the city’s premiums, claims costs within the deductible or self-insured retention, and related administration expenses for the following insurance coverage: Liability -General, Automobile, Public Officials, Employment Practices, Employee Benefits, Airport, Cyber, Underground Storage Tank Pollution, Stop-Gap, and Law Enforcement. Property –Buildings, Inland Marine (Equipment), and Public Art. Flood and Earthquake. Automobile Physical Damage (not auto replacement). Workers’ Compensation. Boiler and Machinery. Employee Fidelity/Crime Bonds. Unemployment Claims. 2 AGENDA ITEM #2. b) 502 Insurance Fund History Total Expenditures 2013 = $3,156,955 2014 = $3,079,769 2015 = $3,672,618 2016 = $4,285,494* 2017 = $2,761,531 *Includes 1-1/2 years of property insurance premiums and numerous workers’ compensation claim settlements from previous years. 3 AGENDA ITEM #2. b) WORKERS’ COMPENSATION Definition: Statutory coverage of employees plus the optional coverage of volunteers for occupational injuries and illnesses as directed by the Washington Department of Labor & Industries. 4 AGENDA ITEM #2. b) Workers’ Compensation Insurance •City is self-insured. •Excess insurance begins at $500,000 per claim. •Excess insurance premium is based upon an actuarial analysis of the past 10-years claim history. •100% employer paid –Employees do not contribute toward benefits. •The City utilizes a Third Party Administrator to process and manage its workers’ compensation claims. Our third party administrator services remain with Eberle Vivian, Inc.5 AGENDA ITEM #2. b) Workers’ Compensation Costs and Claims* Valued as of 1/31/18 6 AGENDA ITEM #2. b) Workers’ Compensation Claim Numbers by Department 7 0 5 10 15 20 25 30 35 40 45 50 2013 2014 2015 2016 2017 AGENDA ITEM #2. b) Unemployment Claims Comparison City-Wide 2013 –2017 8 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 2013 2014 2015 2016 2107 AGENDA ITEM #2. b) Definition: Property insurance provides internal financial protection to city-owned property from perils such as fire, theft, vandalism, flood, earthquake, and weather damage. Property covered includes the insurable portions of buildings, contents, public artwork, and mobile equipment. $50,000 per claim deductible. 9 PROPERTY AGENDA ITEM #2. b) 2017 Insured Property Values City-Wide as of 7/1/17 •Structures (>$50,000):$259,250,683 •Building Contents: $28,692,336 •Automobiles (>$25,000):$8,945,007 •Inland Marine (Equipment): $1,359,071 •Public Art: $260,078 •Total Insured Property:$298,507,175 10 AGENDA ITEM #2. b) Property Coverage Cost* City-Wide 2013 -2017 Insurance Losses Premium = Total Cost 2013:$158,492 + $282,466 = $440,958 2014:$121,476 + $298,720 = $420,196 2015: $93,492 +$327,783 = $421,275 2016:$185,581 + $500,451 = $686,032 2017:$255,668 + $317,826 = $573,494 * Property coverage includes Buildings, Contents, Mobile Equipment, and Public Art. -Property deductible was $25,000 per claim in 2010-13 and increased to $50,000 per claim in 2014. $100,000 deductible authorized in 2015 but not used due to favorable pricing. -2016 premium is for 1-1/2 years coverage. 11 AGENDA ITEM #2. b) LIABILITY Definition: Helps protect the city’s financial statement from the financial risks imposed by lawsuits and claims of negligence. Current insurance coverage includes a $250,000 per claim self-insured retention. 12 AGENDA ITEM #2. b) Incurred Annual General Liability Costs Based Upon Date of Incident (City-Wide, valued as of 1/31/18) Claim Costs + Insurance = Total Expected (reserved plus paid)Premium Cost 2013: $229,154 + $421,021 = $650,175 (WCIA)2014:$456,629 + $484,447 = $941,076 (WCIA)2015: $550,180 + $477,240 = $1,027,420 (WCIA) 2016:$86,175 + $272,039 = $358,214 (self-insured)2017: $290,617 + $271,081 = $561,698 (self-insured) 2018:??+ $271,947 (self-insured) 13 AGENDA ITEM #2. b) Numbers of Liability Claims (City-Wide 2013-2017)* 2013:66 2014:62 2015:61 2016:33 2017:73 Total:295 * Based upon date of incident. Claims can be made within 3-years of the date of the incident. 14 AGENDA ITEM #2. b) 15 Numbers of Liability Claims by Service 2017 0 5 10 15 20 25 30 AGENDA ITEM #2. b) •Recovery of costs incurred to repair damage to city- owned vehicles and property from responsible third parties: 2013: $118,200 2014:$ 68,638 2015:$104,045 2016:$190,761 2017:$186,898 16 Recovery of Property Losses AGENDA ITEM #2. b) CURRENT STATUS •Renton’s liability program became self-insured on 1/1/16, following Council approval. •Approximate savings of over $200,000 per year. Total savings since leaving WCIA on 1/1/16 is over $600,000. •Liability third party administrator is used only when needed. Risk Management settles 60% of claims, in house. •Increased involvement by City Attorney’s office on liability claims with litigation potential. •Workers’ compensation self-insurance program has seen a significant reduction in costs since the RRFA formation. 17 AGENDA ITEM #2. b) CURRENT RISK CONCERNS •Joint and Several Liability •Police Liability concerns have eased some since last year •Aging subsurface infrastructure •Traffic congestion 18 AGENDA ITEM #2. b) •QUESTIONS? 19 AGENDA ITEM #2. b)