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Some items from The Rio Linda Elverta News, August 11, 2005:
Water District retirees get inflated health benefits?
Open Letter to the Rio Linda/Elverta Community Water District Board of Directors
Water Board Meeting August 15
Published in Rio Linda Elverta News August 11, 2005 - Scroll for other articles

Water District retirees get inflated health benefits?Rio Linda Elverta News August 11, 2005

This is the real story

by Jay O'Brien

A handbill, recently distributed at the Rio Linda Plaza, referring to the health benefits granted a retiree from the Rio Linda/Elverta Community Water District (RLECWD), restated a misconception that seems to be held by some. It says "upon employee's retirement, [an] employee who had reached the age of fifty, with five years of service with the District, would be eligible for lifetime medical benefits..."

This statement is misleading and incomplete.

The fact is, that if someone's entire work history only consists of five years with RLECWD, that person, upon retirement when over fifty years of age, would NOT be eligible for retiree medical benefits paid for by RLECWD.

Retirement health benefits for retirees, under the California Public Employee's Health System (CalPERS), do not kick in until the employee reaches five years of service with RLECWD plus five years or more of service in other jobs covered by CalPERS (for a total of ten years). At this point, the District share of health benefits costs for retirees starts at 50% of the cost; this increases to 100% after 20 years of employment, as covered by a "Vesting Schedule".

The Vesting Schedule takes into consideration all employment covered by CalPERS plans, not only time with RLECWD. The RLECWD Vesting Schedule is exactly the same as the State's "Public Employees' Medical and Hospital Care Act" schedule.

For example, if an employee works for 15 years or more with another government agency, such as a City or County, and then moves to RLECWD for five years before retiring, RLECWD will pay the retirement medical costs. It works the other way also, with someone moving out of RLECWD to another District before retirement.

The Vesting Schedule was enacted by RLECWD Resolution 2004-01 passed March 15, 2004 with a unanimous vote by Directors Mel Griffin, Robert Blanchard, Mary Harris, Doug Cater and Jerry Wickham.

What does this cost the ratepayer? The RLECWD 2005-6 Budget, approved unanimously on June 20, 2005, approved $32,924 for "Retirees/Board Insurance" for the year. Based on 4384 connections, that represents just under 63 cents per month per connection to pay medical benefits for the four RLECWD retirees.

A possibility to reduce future retiree health benefit expense was passed up last year. The Board directed a resolution be prepared that would have capped retiree benefits. The resolution was defeated at the June 2004 Board meeting. Had either Director Mary Harris or Director Robert Blanchard voted in favor of the resolution, it would have passed, with a savings to the District of potentially up to $597 per month for each employee and family. See The NEWS, June 24, 2004, for more details: http://rlenews.com/04/040624.html#RLECWD .
Published in Rio Linda Elverta News August 11, 2005 - Scroll for other articles

Open Letter to the Rio Linda/Elverta Community Water District Board of DirectorsRio Linda Elverta News August 11, 2005

I respectfully request that the RLECWD Board of Directors consider rescinding the resolution to terminate the district's contract with CalPERS health insurance, at least until such time that a tentative agreement can be reached with another provider, outlining rates, benefits, and eligibility, and ensuring that this change is in the best interest of the district, its ratepayers, its employees and retirees.

I am concerned that the current board is making the same mistakes of which some current board members have accused a previous board. Without a tentative agreement with another provider, how can we be assured of cost savings, or that there will not be unanticipated ramifications?

Here is an example of the potential unintended consequences to which I am referring. The provider the board has mentioned as an alternative to CalPERS is ACWA. ACWA's website describes their product as follows:

"Come join the many ACWA members currently providing affordable benefits to their employees, retirees and directors today."

Coverage for directors? Further research into ACWA's eligibility requirements states that all directors and their eligible family members are eligible for insurance coverage during their term of office. Furthermore, the participation guidelines require that all eligible employees not enrolled under another health plan must be enrolled with ACWA. Under these guidelines, the term "employee" is defined as including all employees, retirees, eligible directors and eligible surviving family members.

Granted, there is a clause that states that each agency may establish more restrictive eligibility requirements, but it appears as if the board would have to act affirmatively to do this. And this does not take into account that one retired director is currently eligible for benefits under a grandfathered status. Whether or not the district would be allowed to discriminate and cover this director without covering other eligible directors is unclear. It seems to me this is the same sort of situation that resulted in the coverage of retirees Adams and Ray with CalPERS. Without a tentative agreement with ACWA, what assurance do we have that history will not repeat itself?

Ostensibly, the board states its reasons for switching insurers is a cost saving measure. I do not see how we can be assured of cost savings without a tentative agreement, or a proposed rate schedule from ACWA, at the very least.

This sentiment was echoed by employees at the July 18, 2005 board meeting.

Extracts from the meeting transcripts:

Employee: "If the benefits through CalPERS turn out to be the same price as another insurance company, why did we change?"

Board President Nelson: "They're not the same price."

Employee: "OK. You didn't answer my question. If, bottom line, because what we found out today, there's no cost savings. If there's no cost savings, why are we changing?"

Nelson: "We feel that there is a cost savings."

Employee: "That's not what we heard today." (From ACWA.)

Again, if the board wishes to promote cost savings as the reason for their action, why not work with ACWA and present a proposal, complete with rates and benefits, to compare with the current CalPERS contract and assure the public, employees, and retirees that the board is acting in their best interest?

The board established an ad hoc committee to review employee health benefit issues. That committee was even allowed to hire a special attorney. They spent over 7 months, and $11,000 and counting, of the ratepayers' money, yet they can't even produce definitive rate comparisons between providers or detailed alternative proposals at the ensuing public meeting?     

It appears to me as if all this time and money has been spent mainly on figuring out how to take away retirees Mason Adams' and Tom Ray's medical insurance, and to determine how to criminally prosecute Mike Phelan and Jerry Wickham, in addition to cutting or eliminating their benefits.

This conclusion can be reached by a review of Chiurazzi's invoices for services to the district, which include charges to perform duties such as "do email to the District Attorney's office on potential crime," and interview former board members to investigate something that has already been reviewed and concluded, though apparently not to the satisfaction of those directors bent on seeing others criminally prosecuted.

Furthermore, the board justifies having closed session meetings by admitting that there are concerns about "pending and potential litigation" concerning employee and retiree health benefits, and thus it has been determined that "a significant exposure to litigation" exists. This is disturbing as "pending litigation" suggests that someone may have already filed suit.

The release of the documents prepared by attorney Richard Chiurazzi only serves to provide further details and confirm the committee's, and by extension, the board's agenda.  

How much are these lawsuits going to cost the district? Are the undetermined "cost savings" worth the risk and costs of litigation?

Thus, I appeal to the board to reconsider their decision to terminate CalPERS without thoroughly researching an alternative. Have a public workshop, include the employees, and invite ACWA to make a presentation and answer questions.

Act in good faith and show the employees, retirees, and your constituents that this action is being taken in their best interest. Avoid even the appearance of impropriety and quell any speculation that a board member or members are using public means and moneys to promote a personal agenda that would, at best, provide no real cost savings, and would surely be detrimental to the long term health of the district.

Thank you for your time and consideration.

Sincerely,
Debbie Courtney
Elverta
Published in Rio Linda Elverta News August 11, 2005 - Scroll for other articles

Water Board meeting

Aug. 15 Depot/Visitors Center

In July the RLECWD Board voted to pull out of the CalPERS health insurance program, following their special attorney's advice. Their attorney advised, "the Board would no longer be responsible for the medical insurance of retiree[s] Tom Ray and Mason Adams."

The Board decided to kill the CalPERS employees and retirees health benefit plan without first selecting a replacement plan. The Board decision was made without receiving input from the affected employees or retirees.

See related article, Water District Retirees Get Inflated Health Benefits?  See also the story in The NEWS, July 28, 2005, Page 1.

The NEWS is aware of a letter to RLECWD from a law firm representing a retiree. It demands the Board rescind its action to dump CalPERS Medical and states that a suit will be filed against the District should that action not be rescinded.

The RLECWD Board could reconsider their action to dump CalPERS medical at their August 15 meeting, scheduled for 7PM at the Depot/Visitors Center, 6730 Front Street, Rio Linda. The public is welcome at Board meetings.
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