Item O1
-Revised 2/95
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: January 17.2001
Division:
County Administrator
Bulk Item: Yes
No --X-
Department: County Administrator
AGENDA ITEM WORDING:
The following are items to be included under the County Administrator's report:
a) Discussion on Town Meeting in SugarloafKey If '2. ~ @ (p PM
b) Confirmation of Town Meeting to be held in Big Pine Key
c) Status of study on Social Service Transportation Program J<.~/K G- 0 s-l....:Ic.
d) Approval for the Administration to work with the County Commission offices to establish a date
for a special meeting to review issues pertaining to the group benefits program (see attached)
ITEM BACKGROUND:
PREVIOUS REVELANT BOCC ACTION:
ST AFF RECOMMENDATIONS:
TOTAL COST:
BUDGETED: Yes
No
COST TO COUNTY:
1'-..
REVENUE PRODUCING: Yes
No
AMOUNT PER MONTH
Year
APPROVED BY: County Atty_
OMB/Purchasing _Risk Management _
DIVISION DIRECTOR APPROVAL:
-::I ~~
James L. Roberts
DOCUMENTATION:
Included
To Follow
Not Required
AGENDAlTEM#~J'~~
DISPOSITION:
ISSUES PERTAINING TO THE GROUP BENEFITS PROGRAM
In Fiscal Year 1994, the County adjusted the financing of the group benefits
program by utilizing more than judicious amounts of fund balances to support the
program and reduce tax impact. The result was that during Fiscal Year 1995, and
subsequently, the County had to undertake some significant adjustments to reestablish the
appropriate funds and reserves and to establish a more effectively controlled program.
The Board of. County Commissioners should be aware that the program covers active
employees and dependents as well as retirees and dependents. The program also covers
the same group benefits for the Constitutional Officers and the Sheriff.
The County made some decisions that had a stabilizing effect on the program.
For example, the establishment of a pharmaceutical card appears to have had the impact
of the effect of stabilizing medical costs. Over the years, when medical costs were rising
4 to 12 % nationally, Monroe County's increases were at a minimal.
During that period also, the Government Accounting Standards Board (GASB)
has been in the process of determining a change in the manner in which governments will
have to identify their long term liabilities. This follows a similar change in general
accounting standards for the private sector. It is anticipated that any time in the future,
those standards will be formally adopted and the County will be obligated to follow.
An actuarial analysis in 1998 identified a long-term risk exposure of
approximately $65 million for Monroe County. That amount would either have to be
funded (not possible) or listed as an unfunded liability which would have significant
impacts on our financial status. The analysis was based upon projected expenses for
existing and future employees and retirees, who now receive group benefits at no charge
(as a result of a decision of the Board of County Commissioners in 1998).
In 1999, the Board of County Commissioners adjusted the eligibility requirements
for retirees to be eligible for the free group health insurance. The liability was reduced to
approximately $26 million. That number has since increased because of the increasing
number of retirees. Other changes were discussed but not acted upon. As was the case
in 1998, in 2000, a Task Force comprised of the County's Personnel Polices and
Procedures Review Board (staff), and appointees of County Commissioners and the
Constitutional Officers met and reviewed a number of options. Those options were
designed to reduce the long-term liability further.
One issue that needed to be considered was whether the two incorporations in the
Lower Keys would be successful. If that were to be the case and the County were to
eliminate a significant number of additional positions, there would be less positions
paying into the group benefits program with an increasing number of retirees. This is a
scenario similar to what is happening to Social Security nationally. Now that we know
the two incorporations did not occur, further analysis can be developed.
It is important for the Board of County Commissioners and the Administration to
reform the group benefits program to reduce the long-term liability, to reduce the
potential impacts on tax payers, and to stabilize or reduce the overall costs.
For that reason, approval is requested from the Board of County Commissioners
to schedule a special meeting for this purpose. The meeting and documents provided
beforehand will include a history of the issues involved, actuarial analyses, options for
the future, and recommendations by the Task Force identified above. As per previous
instruction from the Board of County Commissioners, all active and retired employees
who are effected by the program will be notified of the meeting.