Last month the council had stated its intention to pass along the surcharge to early retirees – those under age 65, when they become eligible for Medicare – which it has paid since the surcharge went into effort in the 2006-07 fiscal year.
A 1998 city memorandum of understanding states that the city doesn't have to pay for more benefits for retirees than active employees.
Lakeport's insurance carrier, Redwood Empire Municipal Insurance Fund (REMIF), established the surcharge to reduce health care costs, and aimed it at early retirees because they use more health care, according to City Attorney Steve Brookes.
The surcharge costs $92.55 per person per month, $194.38 for two or $277.67 for a family on a monthly basis.
Brookes, whose job it was to lead the research on health care alternatives, said there wasn't much hope of finding a more affordable plan for retirees. The city, he noted, already has a “Cadillac plan.”
Although people have argued about the intention behind the MOU, Brookes said they have to look at the language. Different people were told different things when they were hired, he said, referring to past statements by retirees that they were promised the benefit.
“I wish I had a very good answer but I don't,” he said. “We're kind of back to where we were before.”
He acknowledged that some retirees who have families that are insured will see huge increases.
About 20 early retirees came to the meeting to show their concerns about the plan.
“We are no closer than we were over a month ago,” said Retired Police Chief Tom Engstrom.
“As I remember, the direction from this council was for the city attorney to research some options and to work with the retirees,” said Engstrom.
He explained that about a dozen retirees gave their contact information to the city and offered to work with city staff to work out a solution. They were supposed to meet last week then got the notice about Tuesday's meeting.
“We have not been part of the process,” said Engstrom, who explained that a group of people were being singled out. What would happen, he asked, if the insurance carrier determined that women used more health insurance and so should be charged more?
He pointed out that three City Council members receive city insurance (he didn't name them but the council members in question are Jim Irwin, Bob Rumfelt and Roy Parmentier). Engstrom asked if they were willing to give up a portion of their insurance, adding that he realized it would be difficult if they had to do so.
The question for Engstrom was, “Are you going to sock it to us tonight?”
Brookes said it takes time to get pricing information about the insurance options.
Parmentier asked if any of the retirees went out and made inquiries. Engstrom said they were told to wait for Brookes.
Brookes shot back that if someone in the audience is accusing him of lying they needed to come to the podium. Engstrom replied that he wasn't accusing Brookes of lying.
“It's a hard issue to get your hands around,” said Brookes.
He said he should have told the retirees that he had nothing to report. Brookes, who said he was on the phone until almost 6 p.m. Tuesday trying to get health plan information, told the council he's dreaded the meeting, just as they have.
Mayor Ron Bertsch asked if Brookes was waiting for calls back. Brookes said yes, he was waiting to hear from three people.
Bonnie Tringali, whose husband retired after many years of services at the city, referred back to a statement the council had made last year about updating the retiree health rules to settle the surcharge issue for current retirees.
Tringali said she was worried because that language hadn't been changed. “Will we be back again for a higher surcharge?”
Brookes agreed that they hadn't followed up on that language change from last year. “This is a complex issue. It may take some time.”
Tringali said retirees were told in previous years that they wouldn't get a raise but would have the health benefit instead. She said the early retirees are searching for another plan because of the surcharge.
Rumfelt suggested the simplest thing to do is have retirees on the same health plan as active employees. “The problem we come up to is the cost and how are we going to divvy it up,” he said. “We deal a lot with worry.”
Rumfelt said the updates on the situation have been the same, that there aren't many other options. He said he was confident Brookes was doing the legwork.
He said they should take more time to resolve the surcharge question. “We didn't follow through las year and it's probably our fault as much as anyone else's.”
Bertsch said he agreed with Rumfelt. Parmentier said he can't see dragging it out for six months.
The council agreed to bring it back for further discussion on Sept. 15, at which time staff will hopefully have more information.
Engstrom and his fellow retirees thanked the council for the extra time and effort.
Later in the evening, the council went on to accept its 2009-10 budget. An upcoming Lake County News article will report on that decision.
E-mail Elizabeth Larson at
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