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HomeMy WebLinkAboutAgenda - 06-17-2003-8gORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 17, 2003 Action Age Ada Item No. o__~c' _ SUBJECT: County Commissioners' Compensation -Salary Adjustment and Health Insurance Continuation Policies DEPARTMENT: County Commissioners' Office PUBLIC HEARING: (YIN) No and Personnel Department ATTACHMENT(S): INFORMATION CONTACT: 1 -Draft Revision to Board Policy - Margaret Brown, Board Chair, Commissioners' Salary Adjustments Extension 2130 2 -Draft Revision to Board Policy, Elaine Holmes, Personnel Director, "County Contribution For Extension 2550 Commissioners' Benefits" TELEPHONE NUMBERS: 3 -Survey of Commissioner/Council Hillsborough 732-8181 Health Insurance Continuation Chapel Hill 968-4501 Options at End of Term Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider updating the Board's policy on "Commissioners' Salary Adjustments" to include the same salary increases as those granted employees under the Classification and Pay Study and amending the Board's policy on "County Contribution for Commissioner Benefits" to provide that the County makes the same health insurance contribution for a County Commissioner who leaves office after two terms and continues to participate in the County's health insurance coverage as it does for a employee who retires with 10 years County service. BACKGROUND: Salary Adjustments for County Commissioners Over the past years the Board's policy has been to link salary adjustments for County Commissioners to those increases provided for Orange County employees. In 1991 the Board adopted a policy providing that Commissioners' salaries are adjusted by the amount of any employee Cost of Living Increases. In 1999, the Board amended this policy to provide that Commissioners' salaries also are adjusted in December of each year by the amount of any In- Range Salary Increase granted employees for that year. The Attachment 1 draft policy revision clarifies and refines the policy by linking Commissioners' salary adjustments to any general salary increases adopted for County employees. For example, for 2002-03, there has been no Cost of Living Increase or In-Range Salary Increase for employees and consequently no adjustment in Commissioners' salaries. For 2003-04 there also is no planned Cost-of Living Increase or In-Range Salary Increase for employees. However, the Board approved in May implementation of the Phase 1 Classification and Pay Study for County employees and this included a 2.5 percent service based salary increase for employees effective April 14, 2003. For 2003-04, Phase 2 implementation proposed for April 26, 2004 includes a second 2.5 percent service based salary increase for employees with four or more years County service as of April 14, 2003. As written the policy would link salary adjustments for Commissioners to any general increases granted employees, unless the Board instructed staff differently. This is similar to the action taken by the Town of Chapel Hill. For example, the Attachment 1 revision to the Board's policy would extend the same service based salary increases as those provided to County employees to County Commissioners. Because any such adjustment must be adopted through the Budget Ordinance for 2003-04, the proposed effective date for the equivalent of the 2.5 percent service based increase granted employees in April 2003 through Phase 1 Classification and Pay Study implementation is July 1, 2003. The second service based increase would be linked to the effective date for Phase 2 Classification and Pay Study implementation for employees. Health Insurance Continuation Policy At its May 8, 2002 meeting, the Board of Commissioners amended the Board's policy on "County Contribution for Commissioners Benefits" to provide that a County Commissioner may continue to participate in the County's group health insurance at the end of the Commissioner's term in office by the Commissioner paying the full cost for such health insurance coverage. Prior to that action, Orange County provided health insurance benefits for County Commissioners, but such coverage endeer the Fede al COBRA~aw for up to 18emonthsf by the with the option to continue coverage and Commissioner paying the full cost. Attachment 2 is a proposed amendment to the Board's policy that would provide that, if the Commissioner has served at least two fos healtht assurance coverage that t makes for anhe same contribution for the Commissione employee who retires from Orange County with 10 or more years service as a permanent employee. Under current retiree health insurance policy, this means that the County would pay: 100 percent of the cost for employee only coverage and a dependent subsidy for dependent coverage under the County's group health insurance. • At age 65 when Medicare becomes the primary insurer, 100 percent of the cost for Medicare Supplement coverage, not to exceed the amount contributed for employee only coverage for current employees. At the request of the Board, Personnel surveyed surrounding cities and counties as to their handling of Commissioner/Council members' health insurance coverage at term end. Attachment 3 summarizes the survey results. Of the eight cities and counties surveyed who offer health insurance coverage to Covmm~as~Oran /e Counlty offer ar heath nsurancee, Chapel Hill, Durham and Wake Counties) as g continuation option in addition to COBRA: Alamance provides for continuation of group health coverage after two terms (eight years) with the Commissioner paying 50 percent of the cost. • Town of Chapel Hill provides such coverage on the same basis as for a retiring part time employee. • Durham County provides such coverage after three terms (six years) with the County paying 100 percent of the cost. Wake County provides such coverage at age 62 with the County paying 50 percent of the cost if the Commissioner serves one term (four years) and 100 percent of the cost if the Commissioner serves two or more terms (eight years). FINANCIAL IMPACT: The fiscal year 2003-04 costs of the salary adjustments equivalent to the service based increases under the Classification and Pay Study is about $1760. Of this $1,470 is the cost for the 2.5 percent salary adjustment effective July 1, 2003 and $290 is the cost of the Phase 2 adjustment of 2.5 percent effective April 26, 2003, if authorized. The cost of the health insurance continuation benefit would be the cost of the County contribution for health insurance, if a Commissioner became eligible and elected to participate in this coverage. No cost is projected for 2003-04. RECOMMENDATION(S): The Manager recommends that the Board adopt the revised policies on Commissioners' Salary Adjustments and County Contribution for Commissioners Benefits as shown in Attachments 1 and 2 effective July 1, 2003 and direct staff to incorporate the specific amounts in the Budget Ordinance for 2003-04. 4 Attachment 1 POLICY: Commissioners' Salary Adjustments (Replaces Policy 480, "Salary Adjustment for the County Commissioners" Adopted January 22, 1991 and Policy 481, "Commissioners' Compensation Adjustment" Adopted June 1, 1999) The following policy applies in determining salary adjustments for County Commissioners. 1. Cost of Living Increases: The Board of County Commissioners authorizes that the same f"+~cost-of-living adjustments be applied to County Commissioners' salaries as are applied to all other permanent Orange County employee salaries unless instructed differently by the acting Board. 2. In-Range Salary Increases: The Board of County Commissioners authorizes that the salaries of the County Commissioners will be adjusted each year by the percentage amount equivalent to the In-Range Salary Increases established for permanent County employees in that fiscal year. The salary adjustment will be effective December 1 of each fiscal year. 3. Other General Salary Increases: The Board of County Commissioners authorizes that the salaries of County Commissioners will be adjusted by any other general salary increases granted to permanent County employees. This includes adjusting Commissioners' salaries effective July 1, 2003 by the equivalent of the 2.5 percent service based increase granted permanent employees in April 2003 with implementation of Phase 1 of the Classification and Pay Study. It also would include adjusting Commissioners' salaries by the percentage amount of any service based increase for employees when authorized to be effective as part of Phase 2 of the Classification and Pay Study. 4. Implementation: The Board of Commissioners directs the preparation of the annual Budget Ordinance to include the adjustment to the amount of compensation for Board members as described in this policy. The Board of Commissioners adopts the Commissioners' compensation amounts for the fiscal year through adoption of the Budget Ordinance for that fiscal year. Attachment 2 POLICY: County Contribution for Commissioner's Benefits (Proposed Amendments Shown in Bold Type) 1. The Board of County Commissioners authorizes that the compensation of the County Commissioners will include the County contribution for health insurance, dental insurance, and life insurance that is provided for permanent County employees, provided the Commissioners are eligible for this coverage under the insurance contracts and other contracts affecting these benefits. The Board further provides that County Commissioners may continue to participate in the County's group health insurance at term end as provided below. / If the County Commissioner has served less than two full terms in office (less than eight years), the Commissioner may participate by paying the full cost of such coverage. The covered County Commissioner pays Orange County 100 percent of the cost of required premiums monthly. If the Commissioner is age 65 or older, Medicare becomes the primary insurer and group health insurance ends. / If the County Commissioner has served two or more full terms in office (eight years or more), the County makes the same contribution for health insurance coverage that it makes for an employee who retires from Orange County after 10 years service as a permanent employee. If the Commissioner is age 65 or older, Medicare becomes the primary insurer and group health insurance ends. The County makes the same contribution for Medicare Supplement coverage that it makes for a retired County employee with 10 years service. As with retiree health insurance for employees, the County provides no cash payment in lieu of such coverage. 2. The Board of County Commissioners further authorizes that the compensation of the County Commissioners will include a County contribution for each Commissioner to the Deferred Compensation (457) Supplemental Retirement Plan that is the same as the County contribution for non-law enforcement County employees to the State 401(k) Plan. 3. The Board of County Commissioners directs the County Manager to incorporate in the Budget Ordinance each fiscal year a County contribution amount for each Commissioner's health, dental and life insurance equivalent to the County contribution amount for Permanent County employees. 4. The Board of County Commissioners further directs the County Manager to incorporate in the Budget Ordinance each fiscal year a County supplemental retirement contribution for each commissioner that is the same as the County contribution for non-law enforcement County employees to the State 401(k) Plan. 5. The Board of County Commissioners adopts the County contribution for Commissioners' health, dental and life insurance and supplemental retirement for the fiscal year through the adoption of the Budget Ordinance for that year. Attachment 3 Survey of Commissioner/Council Health Insurance Continuation Options At Term End Health Insurance Health Insurance City/County Offered to Council Continuation Options Paid by Medicare or Supplement at the End of Term Commissioners? Yes after 2 terms 50% County 50% County Alamance County Yes (4 year terms) 50% Commissioner 50% Commissioner Carrboro No N/A N/A N/A Town Pays After Town Pays After 5 Years - 12.5% 5 Years - 12.5% Chapel Hill Yes Yes after five years 10 Years - 25% 10 Years - 25% 15 Years - 37.5% 15 Years - 37.5% 20 Years - 50% 20 Years - 50% Chatham County Yes Only COBRA N/A N/A Durham City Yes Only COBRA N/A N/A Durham County Yes Yes after 3 terms 100% County 100% County (2 year terms) Orange County Yes after 1 term 100% 100% (Present) Yes (4 year terms) Commissioner Commissioner Raleigh Yes Only COBRA N/A N/A If under age 62, 100% N/A COBRA only Commissioner After age 62 eligible Wake County Yes as a retiree: With 1 term in office 50% County 50% County (4 years) 50% Commissioner 50% Commissioner With 2 plus terms 100% County 100% County (8 years)