HomeMy WebLinkAboutOrdinance 22795-06-2017Ordinance No. 22795-06-2017
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE
RETIREE HEALTHCARE TRUST FUND BY $2,500,000.00 FOR THE PURPOSE OF
FUNDING HEALTHCARE AND RELATED EXPENSES; PROVIDING FOR A
SEVERABILITY CLAUSE; MAKING THIS ORDINANCE CUMULATIVE OF PRIOR
ORDINANCES; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; AND
PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS:
SECTION 1.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2016-2017 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the Retiree
Healthcare Trust Fund of $2,500,000.00, from transferred funds, for the purpose of funding healthcare and
related expenses.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or void
for any reason by a court of competentjurisdiction, such decision, opinion orjudgment shall in no way impair
the remaining portions, sections, or parts of sections of this ordinance, which said remaining provisions shall
be and remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance 22393-09-2016 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance are in
direct conflict with such other ordinances and appropriations, in which instance said conflicting provisions of
said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4
This ordinance shall take effect upon adoption.
APPROVED AS TO FORM AND LEGALITY: CITY SECRETARY
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DenislC: McElroy,`Assistant City Attorney ary J. �y r
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ADOPTED AND EFFECTIVE: June 20, 2017
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/20/2017 - 4rdinance Na 22794-06-2017 & Ordinance
No. 22795-06-2017
DATE: Tuesday, June 20, 2017 REFERENCE NO.: G-19043
LOG NAME: 14GROUP HEALTH PLAN CLAIMS
SUBJECT:
Authorize Transfers and Adopt Appropriation Ordinances Increasing Funding in the Group Health
Insurance Fund and Retiree Healthcare Trust Fund by a Combined Amount of $10,500,000.00 from a
Combination of $3,000,000.00 in Reallocated, Previously Appropriated Funds and $7,500,000.00 in Newly
Appropriated Funds for Payment of Healthcare and Related Costs (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that City Council:
1. Authorize the transfer of $3,000,000.00 of contributed revenue in the Risk Financing Fund to the Group
Health Insurance Fund;
2. Adopt the attached ordinance increasing receipts and appropriations in the the Group Health Insurance
Fund by $10,500,000.00, from a combination of $7,500,000.00 in net position and $3,000,000.00 in
transferred funds, for the purpose of paying healthcare and related costs through the end of the current
plan year;
3. Transfer $2,500,000.00 from the Group Health Insurance Fund to the Retiree Healthcare Trust Fund;
and
4. Adopt the attached ordinance increasing receipts and appropriations in the Retiree Heaithcare Trust
Fund by $2,500,000.00, from transferred funds, for the purpose of healthcare and related costs through
the end of the current plan year.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions to provide additional
funding for the payment of healthcare and related costs through the end of the current plan/calendar year
from a combination of reallocated Risk Funding contributions and net position.
In the adopted Fiscal Year 2017 budget, the Risk Financing Fund was provided with contributions from
various departments and funds for use in covering anticipated losses and claims. Because losses and
claims have been coming in at a lower-than-projected amount, Staff is recommending that $3,000,000.00
be transferred from Risk Financing for use in paying healthcare costs. This action will have a zero net
effect to expenditures in the contributing operating funds.
The transferred funds would then be appropriated along with $7,500,000.00 in net position in the Group
Health Insurance Fund for use in paying claims for active and retired employees. Adoption of the above
recommendations is anticipated to provide sufficient funding for all healthcare costs through the end of the
Logname: 14GROUP HEALTH PLAN CLAIMS Page 1 of 2
current plan/calendar year.
For the Fiscal Year 2017, the City implemented a variety of cost-mitigation strategies including, among
others, introduction of a RX90 program, a requirement for generic prescriptions across the board, a step
therapy approach to pharmacy benefits, a reformatted specialty drug tier, an increased employee out-of-
pocket maximum, and an increased Emergency Room co-pay. While staff believed these efforts have
avoided a higher growth rate, costs have continued to rise. Management is actively evaluating various
plan changes for year 2018 that are intended to address these trends.
The Group Health Insurance Fund is expected to end Fiscal Year 2017 with an overall deficit of
approximately $7,500,000.00 after taking the actions proposed in this M&C.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of this supplemental appropriation ordinance, funds
wiil be available in the current operating budget, as appropriated, of the Group Health Insurance Fund and
the Retiree Healthcare Trust Fund.
At the conclusion of Fiscal Year 2016, the Risk Management Fund did not meet the minimum reserve
requirements as outlined in the Financial Management Policy Statements. With the action recommended
in this Mayor and Council Communication, the Risk Management Fund is expected to be further from
meeting the reserve requirement in fiscai year 2017 but is projected to end the Fiscai Year with a positive
fund balance.
FUND IDENTIFIERS (FIDs�:
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CERTIFICATIONS:
Submitted for City Manager's Office b�
Oriqinating Department Head:
Additional Information Contact:
Logname: 14GROUP HEALTH PLAN CLAIMS
ctivity Budget Reference # mou
Year (Chartfield 2)
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. Year Chartfield 2
Susan Alanis (8180)
Brian Dickerson (7783)
Margaret Wise (8058)
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