HomeMy WebLinkAboutReso 91-006 - Approve the extension of and amendment to contract between the COR and VSP for Emp Vision Care RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING AN EXTENSION OF AND AMENDMENT TO THE CONTRACT
BETWEEN THE CITY OF REDDING AND VISION SERVICE PLAN FOR
EMPLOYEE VISION CARE, AND AUTHORIZING THE MAYOR TO EXECUTE THE
NECESSARY DOCUMENTATION WHEN AVAILABLE.
WHEREAS, pursuant to the terms of the attached Report to City
Council (forming part of this Resolution) dated December 19, 1990,
the Director of Personnel Services has recommended the following:
( 1) Extending the City' s current contract with Vision Service
Plan for two years from January 1, 1991, through
December 31, 1992 ; and
( 2) Amending the composite rate to $10 . 50 per employee per
month.
WHEREAS, based on said recommendations, City Council deems it
to be in the best interests of the City to enter into said
extension and amendment; and
WHEREAS, it has been determined that this matter is
categorically exempt from the provisions of the California
Environmental Quality Act;
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of
the City of Redding as follows:
( 1) That the contract between the City of Redding and Vision
Service Plan is extended for a period of two years from
January 1 , 1991, through December 31, 1992 ; and
( 2) That the composite rate is amended to $10 . 50 per employee
per month.
BE IT FURTHER RESOLVED that the Mayor of the City of Redding
is hereby authorized to execute the necessary documents
effectuating the above extension and amendment when available, on
behalf of the City of Redding; and the City Clerk is hereby
authorized and directed to attest the signature of the Mayor and to
impress the official seal of the City of Redding on the aforesaid
documents, when appropriate.
I HEREBY CERTIFY that the foregoing Resolution was introduced
and read at a regular meeting of the City Council of the City of
Redding on the 2nd day of January , 1991 , and was duly adopted at
said meeting by the following vote:
AYES: COUNCIL MEMBERS: Arness, Dahl , Fulton, Moss & Buffum
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
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ATTEST:
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FKRM APPROVED:
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CITY OFIODDING
ITEM NO. 4-9- REPORT TO CITY COUNCIL.
MEETING DATE 1-2-91
APPROVED BY
DEPARTMENT DIRECTOR DATE : December 19 , 1990
CODE : P-100-150-160
ITV MANAGER
FROM: Director of Personnel
SUBJECT : Renewal of Vision Contract
Background
As part of the City' s employee benefit program, vision coverage is provided
for City employees . Most employees have dependent coverage, depending upon
their bargaining unit .
The City provides this coverage through a contract with V. S . P . (Vision
Service Plan) . The current contract has monthly rates of $4 . 00 for employees
only and $8 . 80 for employees with dependents expiring December 31 , 1990 . The
current annual premium for this benefit is $51 , 912 . 00 . V. S . P . is proposing
a rate increase due to high utilization of the plan by employees . Originally
V. S . P . proposed a two rate structure alternative; one based upon 12 months
and the other based upon 24 months . The 24 month rate increase would have
been based upon $5 . 65 for employees and 812 . 40 for employees with dependents
I for a total annual premium of $73 , 164 . 00 . However, staff believed we could
), achieve a lower rate and therefore, V. S . P . was asked to determine another
rate alternative based upon a composite structure . Based upon this
evaluation the proposed rate increase would be $10 . 50 per employee per month
for a total annual premium of $67 , 032 . 00 . This rate would be guaranteed for
24 months and represents a savings to the City of $6 , 132 . 00 over what was
originally proposed by V. S . P . It should be pointed out that additional costs
savings are achievable by such measures as raising the $25 . 00 deductible .
However, this would necessitate meeting and conferring with applicable
bargaining touts . It is staff ' s opinion that this could be accomplished
through the course of the normal meeting confer prccess .
Staff would therefore recommend the proposed composite rate of $10 . 50 be
accepted.
Issues
Should the contract with V. S . P . be extended for two years from January 1 ,
1991 through December 31 , 1992 with a composite rate of $10 . 50 per employee
per month.
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Alternatives
1 . Renew with V. S . P . for two years with rates of 510 . 50 .
2 . Direct staff to "shop the market" for another vision provider .
Recommendations
staff ' s recommendation is to extend the City' s contract with V. S . P . for 24
months with a composite rate of 510 . 50 per employee per month .
Attachments
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� Letter dated December 10 , 1990 from V. S . P .
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VSP
"VISION SERVICE PLAN
VICKI E.BURT 100 HOWE AVENUE, SUITE 100 SOUTH
Account Executive SACRAMENTO,CALIFORNIA 95825-8293
(916) 481-8720 Telefax (916) 481-3668
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December 10 , 1990
Mr. James G. Bristow
Director of Personnel
CITY OF REDDING
760 Parkview Avenue
Redding , California 96001
Dear Jim:
It was a pleasure speaking to .you recently over the telephone, and
this letter will provide you with further information regarding the
upcoming January 1 , 1991 renewal .
As you know, the current program at City of Redding is VSP' s Plan
A which provides an examination every 12 months , lenses every 24
months , and frames every 24 months, subject to a $25 .00 deductible .
The current rates for this program are $4 .00 for employee only, and
$8 .80 for employees with dependents . Since January 1 , 1990, when
the program discontinued being a part of our underwriting pool and
became individually rated, we have incurred losses of over
$15 ,000.00. This does not appear to be a function of the dependent
coverage being added to several of the units , but simply high
utilization on the part of the members. For your reference, I am
enclosing a copy of the most recent utilization report.
As you know, VSP' s initial renewal request was an increase to $5 . 65
for employee only and $12 . 40 for employees with dependents ,
guaranteed for an initial 12-month term. However, in an effort to
demonstrate our concern over this sizeable increase, VSP is
offering the following renewal options.
1 1 ) Guarantee the renewal rates of $5.65 and $12 . 40 for a term of
24 months.
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2 ) Renew the program at rates of $5 .45 for employee only and
$11 .95 for employee with dependents for a term of 12 months.
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OFFICES NATIONWIDE
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Mr. James G. Bristow
December 10 , 1990
Page Two
If you would like to consider other plan options , such as
increasing the deductible, please do not hesitate to let me know.
VSransh the City' s business , and we hope to continue our
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Enclosure
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