Lakeport Council to pay retirees' health surcharge for rest of fiscal year

LAKEPORT – The Lakeport City Council decided Tuesday that the city will continue to pay a health care surcharge for early retirees for the duration of the fiscal year.


The issue has come up several times over the summer, as the annual discussion about what to do regarding the surcharge arose once again.


The city's insurance carrier, Redwood Empire Municipal Insurance Fund (REMIF), began requiring the surcharge of early retirees – defined as those who are under 65 and not yet qualified for Medicare coverage – in the 2006-07 budget year, according to City Attorney Steve Brookes.


The surcharge currently costs $92.55 per person per month, $194.38 for two or $277.67 for a family on a monthly basis, as Lake County News has reported.


A memorandum of understanding first signed with the city's employees in 1998 included language that said the city is not required to pay more for health care for retirees than it does for active employees. Brookes said that clause is in the new memorandum as well.


Active employees are now paying 12 percent of their health insurance premiums under the latest memorandum of understanding, Brookes said.


“Health insurance is a continued escalating cost that the council has tried to put some cap on,” said Brookes.


In order to do that, employees either have to share the cost, go to an inferior and less expensive plan, or the city has to wait to see what kind of health care plan comes out of Washington, DC, Brookes said.


Tom Engstrom, who retired from his job as the city's police chief in May of 2005, spoke on behalf of more than a dozen retirees who attended the meeting.


Engstrom said the retirees never intended to try to find medical insurance coverage on their own, as there is strength in numbers. Rather, he had hoped to see a committee formed during the open enrollment time so they could explore other coverage options in concert with the city.


He thanked Kevin Burke, his successor as police chief and the city's interim city manager, and Finance Director Janet Tavernier for their help in exploring options for retirees.


He said many of the retirees decided to stay at Lakeport rather than go other places and make more money because of the guarantee they had that they would receive complete health care benefits until Medicare coverage kicked in.


“The health insurance was a big factor in wanting to stay here,” he said. “So I elected to forgo a higher salary.”

While times are tough now, Engstrom read from a journal he had kept as police chief. One entry from January of 1998 recounted how the city's police officers lost their grievance against the city for back pay, resulting in five of his officers applying elsewhere for jobs. “I've never seen things this bad and I've been in this business for 30 years,” he wrote at the time.


Over the years, employees have given up pay raises and merit increases in order to maintain those health benefits, said Engstrom. He pointed out that, while active employees now pay 12 percent of their health benefits, they've also received a small raise so they're breaking even.


Challenging REMIF's notion that retirees are more expensive to ensure than active employees, Engstrom said he can't believe that he and his wife use more insurance now than they did when they had seven children at home.


He said it's unfair and possibly illegal for retirees to be singled out for the surcharge. Reading from a clause in the 2006-07 memorandum of understanding, Engstrom pointed out that several administrative job titles weren't included. Then, he read from the memorandum's nondiscrimination clause, which covers age and medical conditions.


Engstrom said he believed the city had settled the issue at its June 3, 2008, meeting, at which time the council appeared to have given direction to alter the language of the retiree health coverage rules to deal with the surcharge.


“I think you should just have the courage and integrity to do what you decided a year ago and continue to pay the surcharge,” he said.


Brookes said that although changes were directed, they don't know what those changes were supposed to be, as the meeting minutes don't specify them and the city no longer has the tape recording from that meeting.


Councilman Bob Rumfelt said he would vote against having the retirees pay the surcharge.


“They've earned what we told them we would give them,” he said. “We need to stand by our word. That's all we have in this world is our word.”


Councilman Roy Parmentier asked if the city had budgeted for the surcharge this year. Staff said it wasn't appropriated.


Parmentier moved to cover the surcharge for the rest of the fiscal year, with the city ceasing to pay it after July 1, 2010. Burke recommended funding the payments from general fund reserves.


Mayor Ron Bertsch said he has faith that some kind of health care solution will come out of Washington, but that in the mean time the retirees and the council have time to explore other options.


The motion passed 4-1, with Rumfelt voting no.


Parmentier suggested working with REMIF to get rid of the surcharge or going to a different plan.


E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow Lake County News on Twitter at http://twitter.com/LakeCoNews and on Facebook at http://www.facebook.com/pages/Lake-County-News/143156775604?ref=mf .

LCNews

Award winning journalism on the shores of Clear Lake. 

 

Search