DEPARTMENT: Human Resources
DEPARTMENT HEAD: Joe Angelo, Chief Human Resources Officer
COUNCIL DISTRICTS IMPACTED: City-Wide
SUBJECT:
MHBT Contract Amendment and Second Extension
SUMMARY:
This Ordinance ratifies and authorizes the City Manager or her designee to execute an amendment to and extension through December 31, 2014 of the professional services contract with MHBT Inc. to provide for consulting services related to (a) review, analysis and modeling of options for the health benefits provided to the City's uniformed police and fire employees and (b) assisting the City in the negotiations for a contract extension with United Healthcare Insurance Company. This amendment will increase the compensation payable to MHBT under the contract by $250,000 for a total contract value not to exceed $300,000 and will be appropriated and funded from the Employee Benefits Fund. The term of this contract will be extended through December 21, 2014.
BACKGROUND INFORMATION:
The Mayor and City Council appointed a 13-member Healthcare and Retirement Benefits Task Force in the fall of 2013 to study healthcare and pension and provide short term and long term recommendations to reduce cost. The Task Force included members representing active and retired civilian and uniform city employees, business leaders, and pension and healthcare subject matter experts. The Task Force met a total of eight times beginning on October 28, 2013 and concluding on February 3, 2014.
MHBT was engaged to provide consulting support on the topic of healthcare for the Task Force. The original contract was for $50,000. This Ordinance would ratify an amendment and extension of the Professional Service Contract with MHBT to provide consulting services for the City's uniformed Police and Fire active health benefits, support collective bargaining negotiations, and assist in the negotiations of the contract extension with the City's third party administrator, United Healthcare Insurance Company (UHC).
MHBT has been instrumental in analyzing utilization information in the Police and Fire Uniformed Health Benefit plans during the extensive work of the Task Force. As the city is in the early stages of Collective Bargaining with the Public Safety Unions, continuity of health benefit plan analysis is crucial. The ratification of this contract amendment and extension will facilitate timely and consistent information necessary for successful labor negotiations. Additionally, the city is beginning preparations for the FY 2015 budget process. It will increase efficiency to utilize MHBT not only for labor negotiations, but also budget analysis, preparation, and FY 2015 healthcare rate setting for the uniformed plans. At the conclusion of labor negotiations, the day-to-day operational benefits consulting work for the city's Uniformed Health Benefit plans may be transitioned to the successful vendor selected in a currently-open request for proposal process.
ISSUE:
Not amending this contract extension will require obtaining a new contract and the completion of an RFP process, which will result in delay or disruption of services of collective bargaining negotiations.
ALTERNATIVES:
The alternatives to amending this contract extension will be to obtain a new contract. A new contract will require the completion of an RFP process, which will result in delay or disruption of services of collective bargaining negotiations.
FISCAL IMPACT:
The estimated amount for the amendment is $250,000.00 and funds will be appropriated in the Employee Benefits Fund.
RECOMMENDATION:
Staff recommends approval of this ordinance to execute an amendment and contract extension with MHBT through December 31, 2014 subject to and contingent upon approval by City Council.