June 11, 2010

 

REPORT OF THE RULES, POLICY AND INDUSTRIAL
RELATIONS COMMITTEE/COMMITTEE OF THE WHOLE

 

Honorable Board of Directors
Golden Gate Bridge, Highway
  and Transportation District

Honorable Members:

A meeting of the Rules, Policy and Industrial Relations Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Friday, June 11, 2010, at 9:30 a.m., Vice Chair McGlashan presiding.

Committee Members Present (5): Vice Chair McGlashan; Directors Elsbernd, Newhouse Segal, Sanders and Snyder
Committee Members Absent (2): Chair Pahre; President Boro (Ex Officio)
Other Directors Present (7): Directors Cochran, Kerns, Moylan, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly

Committee of the Whole Members Present (12): Directors Cochran, Elsbernd, Kerns, McGlashan, Moylan, Newhouse Segal, Sanders, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly
Committee of the Whole Members Absent (7): Directors Brown, Campos, Chu, Dufty, Grosboll, Pahre; President Boro (Ex Officio)

Staff Present: District Engineer/Acting General Manager Denis J. Mulligan; Auditor-Controller Joseph M. Wire; Attorney David J. Miller; Deputy General Manager/Bridge Division Kary Witt; Deputy General Manager/Bus Transit Division Teri Mantony; Deputy General Manager/Ferry Transit Division Jim Swindler; Deputy General Manager/Administration and Development Z. Wayne Johnson; Disadvantaged Business Enterprise Program Administrator Gail Jackson; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Lona Franklin

Visitors Present: Marina Secchitano, Inlandboatmen’s Union of the Pacific (IBU or Coalition); Alex Tonnison, International Federal of Professional & Technical Engineers Local 21, AFL-CIO (IFPTE Local 21)

     
1.

Approve FY 2010/2011 through 2012/2013 Disadvantaged Business Enterprise Goal on Federal Transit Administration Assisted Projects

In a memorandum to Committee, Disadvantaged Business Enterprise Program Administrator Gail Jackson, Deputy General Manager/Administration and Development Z. Wayne Johnson and General Manager Celia Kupersmith reported on staff’s recommendation to approve actions relative to the FY 10/11 through FY 12/13 overall Disadvantaged Business Enterprise (DBE) goal, as follows:

  1.
Establish a 3.1% proposed goal applicable to $46,562,400.00 in contracts assisted by the Federal Transit Administration (FTA) anticipated for the three forthcoming fiscal years, and authorize the General Manager to publish notice of the proposed goal, in accordance with federal regulations governing the establishment of DBE goals;
 

2.

Authorize the General Manager to formally adopt the FTA goal if no public comments are received that require further consideration or modifications of the proposed goal by the Board; and
  3.
Authorize staff to submit the District's overall DBE goal for FTA-assisted contracting opportunities to FTA by August 1, 2010.
     
 

The staff report stated that, as a recipient of federal transportation funding, the District is required to have a diversity program for the participation of Disadvantaged Business Enterprises in District contracting opportunities. In March 2010, the U.S. Department of Transportation (U.S. DOT) issued new regulations directing that henceforth federal grant recipients set overall DBE goals on a three-year basis and that, accordingly, the District’s goal methodology will be submitted to FTA every three years based upon anticipated FTA-assisted contracts for the three forthcoming fiscal years. Based upon an evaluation of contracting opportunities for projects anticipated to receive FTA funding during the next three fiscal years, staff recommends establishing a 3.1% overall DBE goal. The staff report provided a breakdown of the number of contracts anticipated to be awarded in FY 10/11, the total amount of those contracts and the amount of FTA funding expected. Of the 15 identified contracts, one is a District Division contract, five are in the Bus Transit Division and nine are Ferry Transit Division contracts.

The staff report stated that U.S. DOT regulations require that the maximum feasible portion of the annual overall DBE goal be achieved using race-neutral means. The staff report stated that past success supports the District’s decision to continue with an all-race-neutral program for FTA-assisted contracts, and described the District’s goals and DBE achievement from FY 00/01 through 09/10, in detail. The staff report stated that, in an effort to “level the playing field” for DBE firms, over the past three years District staff has greatly expanded its race/gender-neutral efforts to introduce small businesses to District contracting and procurement opportunities. A Guide for Small Businesses Interested in Doing Business with the Golden Gate Bridge, Highway and Transportation District has been published and is available on the District website. The District has participated in outreach events with the primary purpose of introducing District opportunities to a wide array of construction and engineering firms, as well as product suppliers and manufacturers. The District has received very positive feedback from these activities.

The staff report stated that the District’s proposed 3.1% overall goal for FTA-assisted contracts reflects staff’s determination of the level of DBEs ready, willing and able to participate in the District’s U.S. DOT-assisted contracting activity for FY 10/11 through FY 12/13. The staff report stated that the District's proposed FY 10/11 through FY 12/13 DBE goal for FTA-assisted contracts must be submitted by August 1, 2010, to qualify for continued federal funding. The staff report identified FY 10/11 through FY 12/13 overall DBE goals for FTA-assisted contracts in detail.

A complete copy of the goal methodology, including a complete breakdown of relative DBE availability and base figures per contract, is available for review in the Office of the District Secretary. A copy of the staff report is available from the Office of the District Secretary and is posted on the District’s web site.

At the meeting, Ms. Jackson summarized the staff report, stating that it deals only with federal transportation funds. She requested the Board’s approval, and stated that once action has been taken to approve this item, it will be advertised for a period of 45 days for public comment. If no comments are received, it will be submitted to the Federal Transportation Administration (FTA) on August 1, 2010. She stated that the FTA has changed its reporting requirements from annually to once every three years, so the policy now before the Committee will apply to contracts for the next three years.

Discussion ensued, including the following inquiry:

  • Director Sanders inquired as to the range of percentages for agencies situated similarly to the Golden Gate Bridge, Highway and Transportation District (District). In response, Ms. Jackson stated that the District is unique from other Bay Area transit agencies, in that it not only operates a bus transit system, but also a ferry transit system and that a large percentage of the District’s FTA funding is devoted to ferry projects. She noted that over the past several years the District’s annual DBE goal percentage has ranged between 1% and 4.5%. Mr. Mulligan added that Ms. Jackson had investigated the District’s situation in regard to DBE availability for ferry projects with that of the Washington State Ferry System, which has similar needs in terms of building ferryboats and ferry facilities. A study was done, with the result being a three percent goal. He reiterated that there are relatively few companies engaged in ferry-building.

Staff recommended, and the Committee concurred by motion made and seconded by Directors STROEH/SOBEL, to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors approve actions relative to the FY 10/11 through FY 12/13 overall Disadvantaged Business Enterprise (DBE) goal, as follows:

  a.
Establish a 3.1% proposed goal applicable to $46,562,400.00 in contracts assisted by the Federal Transit Administration (FTA) anticipated for the three forthcoming fiscal years, and authorize the General Manager to publish a Notice of the proposed goal, in accordance with federal regulations governing the establishment of DBE goals;
  b.
Authorize the General Manager to formally adopt the FTA goal, if no public comments are received that require further consideration or modifications of the proposed goal by the Board; and,
  c.

Authorize staff to submit the District's overall DBE goal for FTA-assisted contracting opportunities to FTA by August 1, 2010.

Action by the Board at its meeting of June 11, 2010 – Resolution
NON-CONSENT CALENDAR

     
 

AYES (12): Vice Chair McGlashan; Directors Cochran, Elsbernd, Kerns, Moylan, Newhouse Segal, Sanders, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly
NOES (0): None
ABSENT (2): Chair Pahre; President Boro (Ex Officio)

     
2.

Approve Actions to Effectuate Compliance with the Federal Mental Health Parity and Addiction Equity Act of 2008

Staff Report

In a memorandum to Committee, Director of Human Resources Harvey Pye, Deputy General Manager/Administration and Development Z. Wayne Johnson and General Manager Celia Kupersmith reported on staff’s recommendation to approve actions to comply with the requirements of the Federal Mental Health Parity and Addiction Equity Act of 2008, effective July 1, 2010, as follows:

  1. Modify the District’s HMO medical programs with Blue Shield of California and Kaiser Permanente, and its Employee Assistance Program, to comply with the new parity requirements; and,
  2. Exercise the District’s discretion to utilize an annual option to opt out of the Act’s requirements for its local government self-insured PPO medical program for the coming fiscal year subject to further regulatory guidance from federal agencies regarding the recent health care reform legislation.
     
 

The staff report stated that the Mental Health Parity and Addiction Equity Act of 2008 (the Act) was enacted in October 2008, and will be effective July 1, 2010, for the District’s medical plans. The Act requires group health plans that offer mental health (MH) or substance abuse (SA) benefits to provide those benefits on par with medical and surgical benefits. The Act prohibits plans from imposing financial requirements (e.g., co-pays) or treatment limits (e.g., outpatient visit limit) on MH/SA benefits that are more restrictive than the predominant financial requirements or treatment limits that apply to substantially all medical and surgical benefits, and it bars separate cost sharing and treatment limits for MH/SA benefits. The Act also makes permanent the prohibition on lower annual and lifetime dollar limits for covered MH benefits from the 1996 Mental Health Parity Act, and expands this prohibition to include covered substance abuse benefits. Out-of-pocket costs, benefit limits, prior authorization and utilization review processes must also be on par with those applicable to medical and surgical benefits. The new parity requirements also apply to both in- and out-of-network benefits. Thus, the Act requires changes in the District’s existing benefit plans. The staff report identified each of the proposed benefit changes to the District’s Kaiser and Blue Shield HMO medical programs that will be required to bring them into compliance with the expanded MH/SA parity requirements. The staff report stated that the additional annual cost associated with adjusting benefits to the District’s HMO programs is estimated to be $7,500.00 to $10,000.00.

The staff report stated that the costs for bringing the District’s self insured PPO program into compliance with the MH/SA requirements is significantly higher, ranging from $152,000 to $173,000 annually. The Act permits state and local governments to opt out of the Act’s requirements for self-insured health benefits programs. Given the substantial cost increase, the District’s difficult economic condition, and the availability of other health benefits offerings for employees through the Blue Shield and Kaiser Permanente HMOs, staff recommends that the District exercise its discretion to opt out of the MH/SA parity requirements for its self-insured Blue Shield PPO program at this time. Exercising this option is consistent with the District’s adopted Financial Plan for Achieving Long-Term Financial Stability approved by the Board on October 30, 2009. The staff report noted that these changes are subject to meet and confer sessions with the Union Coalition and the Amalgamated Transit Union (ATU), which are currently underway and will be concluded before the July 1, 2010, deadline for compliance.

At the meeting, Deputy General Manager/Administration and Development Z. Wayne Johnson stated that the Act requires that medical plan dollar limits and co-pays must be equalized with other services. In addition, the Act provides an opt-out for self-insured plans. He stated that the District’s Blue Shield PPO is such a self-insured plan. Mr. Johnson stated that staff recommends not bringing the Blue Shield PPO plan into parity at this time, and noted that another opportunity to do so will be available in one year.

Public Comment

Marina Secchitano, IBU, stated that letters from the IBU on the instant topic have been submitted. She stated that the District recently presented proposed changes to labor members and that the Coalition applauds the District for increasing HMO plan coverage. She stated that many employees are covered by the District’s self-insured Blue Shield PPO plan and that not providing similar changes to this plan is not in the spirit of the Act. She stated that labor believes that the District, as a public agency, should set an example for California and the nation. She requested reconsideration of the subject and a recommendation to increase coverage for all the District’s medical insurance plans.

Alex Tonnison, IFPTE Local 21, stated that Local 21 supports the position of the Union Coalition that the District should provide parity for all employees. He stated that providing parity for only two-thirds of employees is not in the spirit of the Act.

Discussion

Discussion ensued, including the following comments and inquiries:

  • Director Moylan commented that he was in agreement with bringing the District’s medical plans into parity as required, and inquired as to whether the decision should be made by employees. In response, Attorney Miller stated that the question of how to effect changes to the medical plans offered to employees by the District is a policy issue. He stated that the Act permits the recommendation presented by staff. He stated that staff’s recommendation has been presented to the ATU and agreement has been reached. District representatives also have met and conferred with the Coalition. He stated that action must be taken by June 30, 2010.
  • Director Sanders inquired as to whether the recommendation resulted from a federal mandate. In response, Mr. Mulligan stated that it did, and added that the Act provides an opt-out for self-insured agencies.
  • Director Newhouse Segal commented that this item should be discussed by the full Board.
  • Director Snyder inquired as to how employees covered by Blue Shield PPO gain access to their MH/SA benefits. In response, Mr. Mulligan stated that the Act allows reduction of medical coverage down to the level of MH/SA levels, or an increase in MH/SA benefits up to the level of other medical coverage. The Act requires equalization for HMO plans.
  • Director Elsbernd inquired as to the degree of utilization of MH/SA benefits by District employees. In response, Mr. Johnson stated that there has been little pressure to increase MH/SA benefits.

Staff recommended, and the Committee concurred by motion made and seconded by Directors STROEH/ELSBERND, to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors approve actions to comply with the requirements of the Federal Mental Health Parity and Addiction Equity Act of 2008 (the Act), effective July 1, 2010, as follows:

  1.
Modify the District’s HMO medical programs with Blue Shield of California and Kaiser Permanente, and its Employee Assistance Program, to comply with the new parity requirements; and,
  2.

Exercise the District’s discretion to utilize an annual option to opt-out of the Act’s requirements for its local government self-insured PPO medical program for the coming fiscal year, subject to further regulatory guidance from federal agencies regarding the recent health care reform legislation.

Action by the Board at its meeting of June 11, 2010 – Resolution
NON-CONSENT CALENDAR

     
  AYES (12): Vice Chair McGlashan; Directors Cochran, Elsbernd, Kerns, Moylan, Newhouse Segal, Sanders, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly
NOES (0): None
ABSENT (2): Chair Pahre; President Boro (Ex Officio)
     
3.

Public Comment

There was no public comment.

     
4.

Adjournment

All business having been concluded, the meeting was adjourned at 9:45 a.m.

     
     
     

 

Respectfully submitted,

s/ Charles McGlashan, Vice-Chair
Rules, Policy and Industrial Relations Committee