From
Lisa Norris, Human Resources Director
Title
Ordinance amending the FY 2016/2017 Employee Insurance and Risk Management Fund Operating Budgets
Presenter
Lisa Norris, Human Resources Director
Recommended Action
Approve
Analysis
Employee Insurance Fund Summary (Attachment, page 1):
The Insurance Fund Operating budget requires an amendment due to various changes to revenues and expenditures projected through year-end as of June 6, 2017. Revenues increased by a net $103,186 from $19,420,308 approved to $19,523,494 projected resultant from various increases/decreases in employee and retiree contributions for medical, dental and vision insurance, as well as some miscellaneous reimbursements received this year. Reserves are projected to increase by $211,396 resultant from an additional "transfer in" from the Risk fund.We self-insure stoploss and reimburse ourselves from the Risk Fund Stoploss Reserve for any claimant who exceeds $400,000 in paid claims during the prior calendar year. This claimant reached $1,411,396 in total claims paid. We originally projected a reimbursement of $800,000 but are due $1,011,396 ($1,411,396 minus the $400,000 self-imposed stoploss deductible). The changes above increase Total Resources by $314,583 to $24,918,377. Expenditures increased by a net $934,405 to $20,669,560 resultant from substantial increases in active medical claims, along with minor increases in dental PPO costs, Health Care Reform fees, and miscellaneous costs, as well as minor savings in retiree medical claims, administrative fees and one-time costs. A summary of changes is reflected on the first page of the attachment. These expenses resulted in a "Total Appropriations" change of $965,405 to $20,709,560. All in, the Ending Resources are reduced by $620,823 to $1,742,470.
Risk Fund (Attachment, page 2):
The Risk fund is being modified as well. Revenues increased by $197,690 from $2,785,471 to $2,983,161 due to higher than expected property subrogation payments, TML insurance and other miscellaneous reimbursements. This modifes the Total Resources to $11,831,380. Expenditures increased by $90,259 from $3,006,373 to $3,096,632 resultant from various changes in operating expenses, premiums paid, and workers compensation/property losses. An additional $211,396 will be transferred in on a one-time basis from the Risk Fund's Stoploss Reserve, and we added a one-time expense of $39,253 fuel tank repairs. These changes result net increase to "Total Appropriations" of $340,908 from budgeted of $3,935,250 to $4,276,158. With the additional transfer out of $211,396 from the Stoploss reserve, that reserve is reduced to $1,418,332. All changes result in a new Ending Resources balance of $2,470,807. A summary is reflected on page 2 of the attachment.
Financial Consideration
Funding for the FY 2016/2017 Employee Insurance Operating budget amendment is available approving an ordinance amending the fund through revenue increases and drawing down the Ending Resources balance by the net difference. We understand the impact of this to our fund and will be submitting substantial changes in benefits for the 2018 plan year in the upcoming budget discussions.
Funding for the FY 2016/2017 Risk Management Fund budget appropriation amendment is available by approving an ordinance transferring out an additional $211,396 to the FY 2016/2017 Employee Insurance Fund on a one-time basis and reducing the "Stop/Loss Reserve for Health Insurance" by $211,396 along with the other changes noted, thereby modifying the Total Resources to $2,470,807.
This item was presented to the Finance and Government Committee on July 18, 2017.
Body
AN ORDINANCE OF THE CITY OF GRAND PRAIRIE, TEXAS, AMENDING THE FY 2016/2017 EMPLOYEE INSURANCE FUND BY INCREASING REVENUES BY $103,186, TRANSFERRING IN $211,396 FROM THE RISK FUND, AND INCREASING TOTAL APPROPRIATIONS BY $965,405, AND AMENDING THE FY 2016/2017 RISK MANAGEMENT FUND REVENUE BY $197,690, TOTAL APPROPRIATIONS BY $340,908 AND REDUCING THE STOPLOSS RESERVE BY $211,396
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS:
SECTION 1. That the FY 2016/2017 Employee Insurance Fund be amended by increasing revenues by $103,186, increasing the transfer in from the Risk fund by $211,396 to modify Total Resources to $24,918,377, modifying Total Appropriations to $20,709,560, thereby amending the Ending Resource balance to $1,742,470.
SECTION 2. That the FY 2016/2017 Risk Management Fund be amended by increasing Revenues by $197,690, Total Appropriations by $340,908 to $4,276,158, and reducing the Stoploss Reserve by $211,396 to $1,418,332, thereby amending the Ending Resource Balance to $2,470,807.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 18TH DAY OF JULY, 2017.