2017-04-27 Agenda with Backup AGENDA
City Council Employee Benefits Ad Hoc Committee
April 27, 2017
A Work Session of the City of Denton City Council Employee Benefits Ad Hoc Committee
(formerly"Employee Leave Ad Hoc Committee") on Thursday, April 27, 2017, at 10 a.m. in the
City Manager's Conference Room, 215 E. McKinney, Denton, Texas at which the following
items will be discussed:
NOTE: Work Sessions are public meetings, and citizens have a legal right to attend, they are not
public hearings, so citizens are not allowed to participate in the session unless invited to do so by
the Chair.
1. Approve the minutes from the March 24, 2017, ad hoc committee meeting.
2. Review, discuss, and give staff direction on the employee benefits/policies for City of
Denton employees.
3. Set future meeting dates and topics.
CERTIFICATE
I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the
City of Denton, Texas, on the day of , 2017 at o'clock
(a.m.) (p.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY MANAGER'S CONFERENCE ROOM IS
ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT.
THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING
IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED
MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-
RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED
THROUGH THE CITY SECRETARY'S OFFICE.
Non Civil Service Sick Benefits
Change Options
OPTION 1:
-Implement a graduated plan
0 to 5 years = 8 hours per month (96 hours per year)
5+to 10 years = 9 hours per month (108 hours per year)
10+years = 10 hours per month (120 hours per year)
Proposed
Years of Denton Current
Hours Accrued Per
Service Accrual per Year Year Change in Hours
0- 1 96 96 0
1-2 96 96 0
2-3 96 96 0
3-4 96 96 0
4-5 96 96 0
5-6 96 108 12
6-7 96 108 12
7-8 96 108 12
8-9 96 108 12
9- 10 96 108 12
10— 11 96 120 24
11— 12 96 120 24
12— 13 96 120 24
13— 14 96 120 24
14— 15 96 120 24
15+ 96 120 24
Non Civil Service Sick Benefits
Change Options
OPTION 2:
Change accruals from 96 hours per year to 120 hours per year to match Civil
Service (15 days per year). This would match 50%of the cities surveyed.
Proposed
Years of Denton Current
Hours Accrued Per
Service Accrual per Year Year Change in Hours
0- 1 96 120 24
1-2 96 120 24
2-3 96 120 24
3-4 96 120 24
4-5 96 120 24
5-6 96 120 24
6-7 96 120 24
7-8 96 120 24
8-9 96 120 24
9— 10 96 120 24
10— 11 96 120 24
11— 12 96 120 24
12— 13 96 120 24
13— 14 96 120 24
14— 15 96 120 24
15+ 96 120 24
Vacation Carryover and Payout Options
Note: there are no statutory requirements for vacation carryover or payout, even for Police and
Fire.
Current policy:
Police Civil Service and
Fire Civil Service
Non-Civil Service Fire Civil Service
Benefit Employees Working
Employees Employees Working 40 Shift
hours
VACATION
Maximum 320 hours 320 hours 480 hours
Annual Carry
Over
Pay Out Upon Accrued hours up to Accrued hours up to Accrued hours up to
Termination^ 320 hours 320 hours 480 hours
^Pay out upon termination is only allowed if the employee has completed 6 months of
employment, has not been terminated for gross misconduct, and has returned all City property
on or before issuance of the employee's final pay check
OPTION 1
Don't change carryover amount but change the number of hours eligible for payout. For
example, keep carryover at 320 (480 for Fire CS), but only allow payout up to 240 hours (360 for
Fire CS).
As of 2/20/17, there are 214 employees who have more than 320 hours (480 hours for Fire CS):
NCS = 157 employees
Police CS = 53 employees
Fire CS =4 employees
Changing the payout to 240 hours (360 hours for Fire CS) would affect a total of 392 employees;
however 214 are already over the maximum allowable hours to be paid. An additional 178
employees would be impacted by this change.
NCS = 281
Police = 81
Fire CS = 30
To implement with less negative impact on employee morale, could either:
A. Grandfather in existing employees and implement policy change to coincide with the
new fiscal year (with employees starting October 1, 2017).
OR
B. Don't grandfather, but to avoid employees potentially requesting a lot of time off in
order not to "lose" hours upon termination, could pay employees the difference in the
maximum hours allowed to be paid. The approximate cost is included in the chart below
based on balances as of 2/20/17 (note: Police and Fire payout will be slightly higher
because their time is paid based on hourly rate plus certification and incentive pay. For
purposes of this report, only the hourly rate was available).
Number of
Employees Cost to Pay Down to
Employee Group Impacted Reduced Cap
Non-Civil Service 281 $ 961,931.40
Police Civil Service 81 $ 317,756.23
Fire Civil Service 30 $ 97,129.16
Total 392 $ 1,376,816.79
This is a large amount, so the pay down could be phased in over 2 or 3 fiscal years. See
examples below.
2 year Phased-in
Scenario YEAR 1 - 320 to 280 (Fire CS 480 to 420) YEAR 2 - 280 to 240 (Fire CS 420 to 360)
Number of Number of
Employees Cost to Pay Down to Employees Cost to Pay Down to
Employee Group Impacted Reduced Cap Impacted Reduced Cap
Non-Civil Service 229 $ 927,082.05 52 $ 34,849.35
Police Civil Service 69 $ 308,507.48 12 $ 9,248.75
Fire Civil Service 14 $ 65,188.61 16 $ 31,940.55
Total 312 $ 1,300,778.15 80 $ 76,038.65
3 Year Phased-In YEAR 1 - 320 to 300 hours YEAR 2 - 300 to 280 hours YEAR 3-280 to 240 hours
Scenario (Fire CS 480 to 440) (Fire CS 440 to 400) (Fire CS 400 to 360)
Number of Cost to Pay Number of Cost to Pay Number of Cost to Pay
Employees Down to Employees Down to Employees Down to
Employee Group Impacted Reduced Cap Impacted Reduced Cap Impacted Reduced Cap
Non-Civil Service 200 $881,720.30 29 $45,361.74 52 $34,849.35
Police Civil Service 60 $289,441.18 9 $19,066.30 12 $9,248.75
Fire Civil Service 12 $60,543.26 8 $20,966.04 10 $15,619.87
Total 272 $1,231,704.74 46 $85,394.08 74 $59,717.96
OPTION 2
Change carryover 240 hour (360 for Fire CS); maximum payout would reflect carryover.
Same comments as above for implementation.
OPTION 3
Implement a graduated carryover plan based on years of service as follows:
Less than 10 years = 240 hours
10+years = 320 hours
As of 2/20/17, the number of employees by years of service (through 9/30/17) are as follows:
Years of Service Non Civil Service Police Civil Fire Civil Service
through 9/30/17 Service
Less than 10 years of 678 (63.84%)
63 (37.28%) 58 (33.72%)
service
10+years of service 384 (36.16%) 106 (62.72%) 114 (66.28%)
Maximum payout would reflect carryover.
The cost to pay down the hours for employees with less than 10 years of service is as follows:
Number of
Employees Cost to Pay Down to
Employee Group Impacted Reduced Cap
Non-Civil Service 56 $ 147,441.22
Police Civil Service 14 $ 25,512.11
Fire Civil Service 11 $ 15,278.29
Total 81 $ 188,231.61
Vacation and Sick Payout Cost
FY 14/15 through FY 16/17(through 3/17/17)
FY 14/15 FY 15/16 FY 16/17through 3/17/17
#of Vacation Pay #of #of Vacation Pay #of #of Vacation Pay #of
Employee Group Employees Out Employees Sick Pay Out Employees Out Employees Sick Pay Out Employees Out Employees Sick Pay Out
Non Civil Service 76 $293,484.20 - $ - 84 $335,107.74 - $ - 57 $197,411.73 $ -
Police Civil Service 8 $ 78,506.57 8 $139,491.78 5 $ 39,570.25 5 $ 89,815.28 2 $ 23,428.55 2 $ 58,336.56
Fire Civil Service 2 $ 28,640.93 1 2 $ 56,971.30 3 $ 32,095.76 1 3 $ 90,574.87 1 $ 3,397.61 1 $ 32,028.16
Total 86 $400,631.70 1 10 $196,463.08 92 $406,773.75 1 8 $180,390.15 60 $224,237.89 3 $ 90,364.72
$597,094.78 $587,163.90 $314,602.61
Employee Vacation and Sick Pay-Out Examples
Employee Category Job Type Department Hire Date Term Date Check Date Pay Out Type Hours Hourly Rate Gross Pay
Police Civil Service Vacation 203.5 $ 38.47 $ 7,829.26
Police Officer POLICE 9/8/2001 5/31/2016 6/10/2016 ------------------ ------------ ------------------ --------------------
Sick 139.5 $ 38.47 $ 5,366.98
Vacation 320 $ 44.52 $ 14,245.76
Police Sergeant POLICE 3/1/1982 12/31/2014 1/9/2015 ------- - --- ---- ---
Sick 720 $ 44.52 $ 32,052.96
Fire Civil Service Vacation 453 $ 29.60 $ 13,407.89
Fire Driver FIRE 9/14/1981 12/4/2015 12/11/2015 ------------------- ------------- ------------------ --------------------
Sick 225.5 $ 29.60 $ 6,674.35
Vacation 107.5 $ 41.29 $ 4,438.57
Fire Battalion Chief FIRE 9/2/1978 3/25/2016 4/1/2016
Sick 1080 $ 41.29 $ 44,592.12
Non Civil Service Field Worker WASTEWATER 9/15/2014 11/6/2015 11/13/2015 Vacation 51.5 $ 15.53 $ 799.74
Senior-manager TECH SVC 10/25/1976 1/4/2016 1/22/2016 Vacation 241.5 $ 59.64 $ 14,401.85
Mid-manager SOLID WASTE 8/29/2011 2/3/2017 2/17/2017 Vacation 142 $ 36.15 $ 5,133.30
Director AIRPORT 2/16/2009 2/24/2017 3/3/2017 Vacation 29 $ 61.89 $ 1,794.67
Summary of Health Plan Changes
2013 - 2017
2013 2014 2015 2016 2017
Increased Deductibles X
Increased Out-of-Pocket Maximums X X
Increased Emergency Room Copayment X X
Added a Prescription Drug Deductible X
Increased Gold Plan Premiums X X X X X
Increased Silver Plan Premiums X X X
Increased City Contributions X X X X X
Increased Bariatric Surgery Deductible X
Increased Physician Office Visit Copayment X
Increased Prescription Drug Copayment X
Eliminated Out-of-Network Benefits X
Added a Provider Premium Designation Office Visit
Copayment X
Added a "Spousal Surcharge" X
Added a Clinic "No Show" Penalty X
7v
or
DENTON
2013-2017 Plan Change Comparison
Executive Summary
2013 Plan Year
• Increased in-network deductibles from $500/$1,000 to $750/$1,500 individual/family on
the gold plan and $1,000/$2,000 to $1,500/$3,000 individual/family on the silver plan
• Increased the in-network out-of-pocket maximums (OOPM) from $1,500/$3,000 to
$2,000/$4,000 individual/family on the gold plan and $4,000/$8,000 to $5,000/$10,000
individual/family on the silver plan
• Increased the out-of-network deductibles from $1,500/$3,000 to $2,250/$4,500
individual/family on the gold plan and $2,000/$4,000 to $3,000/$6,000 individual/family
on the silver plan
• Increased the out-of-network OOPM from $4,500/$9,000 to $6,000/$12,000
individual/family on the gold plan and $8,000/$16,000 to $10,000/$20,000
individual/family on the silver plan
• Increased the emergency room copay from $200 to$250 for both the gold and silver plans
• Added the annual prescription deductible of $50/$150 individual/family for any tier 2
(formulary), tier 3 (non-formulary), or tier 4 (specialty drug) prescription
• Increased premiums by 16% for the gold plan and 34% for the silver plan on employee
contribution, and by 7%for city contribution
2014 Plan Year
• There were no plan changes to either plans (gold and silver)
• Increased premiums by 10% for the gold plan and 6% for the silver plan on employee
contribution, and by 6%for city contribution
2015 Plan Year
• Increased the in-network OOPM from $2,000/$4,000 to $3,000/$6,000 individual/family
on the gold plan and $5,000/$10,000 to $6,000/$12,000 individual/family on the silver
plan
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• Increased the out-of-network OOPM from $6,000/$12,000 to $9,000/$18,000
individual/family on the gold plan and $10,000/$20,000 to $12,000/$24,000
individual/family on the silver plan
• Increased the emergency room copay from $250 to$300 for both the gold and silver plans
• Increased the bariatric surgery benefit deductible $2,250 to $2,500 for both the gold and
silver plans
• Increased premiums by 5%for the gold plan and no rate increase for the silver plan, and
by 2%for city contribution
2016 Plan Year
• Removed out-of-network benefits for both the gold and silver plans, except emergency
room (ER) and Radiologist/Anesthesiologist/Pathologist/Lab (RAPL) services in a hospital
setting
• Added a premium designation (tier 1) office visit copay level for Primary Care Physicians
(PCP) at $15 copay for the gold plan, and $25 copay for the silver plan; and Specialty Care
Physicians (SCP) at $25 copay for the gold plan, and $35 copay for the silver plan
• Increased the regular office visit copay for PCP from $20 to$25 for the gold plan, and $30
to $35 for the silver plan; and SCP from $30 to $35 for the gold plan, and $40 to $45 for
the silver plan
• Added the Virtual Visit (telemedicine) benefit at $15 copay for the gold plan, and $25
copay for the silver plan
• Increased the retail prescription (30-day supply) copays from $7 to $10 for generic (tier
1), $35 to $40 for formulary brand (tier 2), $50 to $60 for non-formulary brand (tier 3),
and $100 or 20%coinsurance, whichever is less to $125 or 20%coinsurance, whichever is
less for specialty drugs (tier 4)
• Increased the mail order prescription (90-day supply) copays from $14 to $20 for generic
(tier 1), $87 to $100 for formulary brand (tier 2), $125 to $150 for non-formulary brand
(tier 3)
• Increased premiums by 5%for the gold plan and no rate increase for the silver plan, and
by 6%for city contribution
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2017 Plan Year
• There were no plan changes to either plans (gold and silver)
• Added the spousal surcharge of$25 per pay period ($600/annual), if a spouse is covered
on a City health plan and has other coverage offered (typically through their employer)to
them
• Added the "no show" penalty fee, after three missed appointments, when a member fails
to cancel a provider appointment at the Employee Health Center (see schedule below):
Missed Appointments Penalty
One missed appointment Warning Letter/email
Two missed appointments Warning Letter/email, Reminder of next step
Three missed appointments $50 fee
Four missed appointments $50 fee
Five missed appointments $75 fee
Six missed appointments $75 fee and banned from the clinic for six months
• Increased premiums by 10% for the gold plan and 6% for the silver plan on employee
contribution, and by 6%for city contribution
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