VACAVILLE — A Vacaville benefits package that provides lifetime health care to retirees is “not sustainable” and puts the city at risk of losing employees and services to the residents, according to a 2018-19 Solano County grand jury report.
The report also found that the City Council did not receive material that “adequately address the long-term financial impact on the city’s (Other Post-Employment Benefit).”
The Other Post-Employment Benefit “provides lifetime health care to its future retirees (current employees), retired employees, their spouses and children up to the age of 26 as a retirement benefit.” The report states the unfunded liability for the program, as of 2018-19, is $124.65 million, and the benefit cost is “not sustainable.”
“Failure to address this problem could result in loss of employees and corresponding loss of services to its citizens,” the report states.
This was one of three reports released Thursday by the grand jury. The others were about the county In-Home Supportive Services and alternative uses for treated water from wastewater treatment plants.
The report notes the city’s effort to address the issue with employees hired in or after December 2018, but those efforts have done little to address the issue when it comes to current retirees and active employees.
The city’s liability with the California Public Employees’ Retirement System and increased payroll costs have “exacerbated” the situation.
The report issued five findings, and to some of those, multiple recommendations, which includes the conclusion that the city has not done enough to address the situation.
The grand jury recommends the city “Identify potential solutions to lower OPEB costs through updated policies and labor relations strategies. For example, negotiate and implement a fixed . . . contribution toward retiree health care rather than based on a percentage of the Kaiser Bay Area pricing.”
It also recommends that the city “establish a citizen oversight committee charged with studying OPEB and proposing recommendations to the council.”
Another recommendation is to better prepare information about the benefit package and “prepare future communications for decision-makers and stakeholders in simpler language to better explain the magnitude of OPEB debt and potential impacts.”
In a related recommendation, the grand jury notes that when related issues come to the City Council, they should not be placed on the consent calendar, which is reserved for generally routine matters.
“Placing OPEB issues (such as health care premium rate changes) on the Consent Calendar hinders public awareness of and input to City Council decisions,” the grand jury concluded.
On another issue of transparency, the report states that “changes in health plan rates announced by CalPERS were not brought before the City Council and the public.”
June 28, 2019
Daily Republic
By Todd E. Hansen
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