Hiatus - July 11, 2011

A hiatus is defined as “a gap in a series” and the City Council has a hiatus in its normal biweekly Council meeting schedule since they will not be meeting again until August 18th. A hiatus hernia is a gap or tear in the diaphragm and has absolutely nothing to do with what I am writing about, but I didn’t want there to be any confusion between the two.

During this hiatus in Council schedule we get the opportunity to step back from the sometimes frantic pace of meeting schedules and take stock of where we are. Let us focus on enjoying the summer while we dig out from the coating of dust from last week’s dust storm.

Tempe Supervisors Association
The MOU for the TSA expired on June 30, 2011. Despite efforts to put a replacement agreement in place prior to the expiration, we were unable to come to a mutual agreement and have declared an impasse in the meet and confer process. In order to allow time for that process to occur, the City Council approved a 90 day extension of the existing terms and conditions of the current MOU.

Photo Enforcement
At the July 7th Council meeting (prior to the hiatus) the Council voted not to extend the contract with Redflex to operate our photo enforcement program. The contract has been the subject of litigation over whether the City is obligated under the contract to pay fees for individuals who attend driving school in lieu of paying a fine for the citation. The contract term had been extended through the normal annual renewal process a year ago and is now scheduled to expire in mid-July. So at a minimum, there will also be a hiatus in photo enforcement. In the meantime, we expect to discuss with City Council in the near future the pros and cons of the photo enforcement program and seek their direction on either a contract extension, a new request for proposal process, or discontinuation of the program.

Many believe that photo enforcement is used as a revenue tool for cities. When Tempe set up its most recent contract, it was set up to cover our costs and that is essentially what it has done. Its purpose, however, was to increase the safety of our streets and intersections. A review of accident data since the program has been in place suggest about a 25% reduction in accidents on City streets. It is difficult to isolate the reason for that reduction to photo enforcement especially in light of the fact that there is no direct correlation between the intersections with photo enforcement and the accident reductions. It could be that drivers don’t know which intersections have photo enforcement so they act as if all have it. It is also possible that other completely unrelated factors account for the accident reductions. So stay tuned, more to come on this issue.

Retiree Healthcare
City Council received a report at the July 7th Informal Review Session regarding the health care plan for retirees. A proposal for ensuring that a plan be provided both short-term and long-term was presented to Council. The plan calls for moving the retirees who are not yet eligible for Medicare to a Health Reimbursement Account similar to, but not the same as, the Group 3 active employees hired after June 1999. Those active employees become eligible for a Health Reimbursement Account after 10 years of service with a monthly stipend after that. In the case of the Group 1 and 2 retirees, they would receive a monthly stipend when retired, which would be used to pay for their health care on a pay as you go basis. The stipend amount proposed for these retirees would be set initially to cover the cost of the ASRS Health Plan with a contribution of $10 per month for retiree only (up from $0 currently) and $176 for retiree and dependent (currently $158 for retiree and spouse, $245 for retiree and family and $106 for retiree and children). While retirees would not be required to participate in the ASRS plan, it is likely that many would. That plan is a United Health Care group with approximately 12,000 members plus dependents. Council supported an option to provide a higher stipend for retirees who live outside Arizona since the ASRS plan carries a higher cost.

Because the cost of the ASRS health plan is so much lower than the current City plan for pre-Medicare retirees, it makes it financially feasible for the City while keeping the retirees’ contribution to a minimal increase. The current City plan was compared to the ASRS plan by our actuaries and the ASRS plan was found to be equivalent to 95% of the current plan.

I would like to thank all the member of the task force that has been meeting on this weekly since April to try to craft a fair solution. I believe they succeeded. Council is expected to act on this new plan on August 18th with implementation by October 1. Meetings are being scheduled for current and future plan participant.

Tempe creates outstanding value for those we serve through shared vision, superior service and sustainable practices.

Charlie Meyer