Wednesday, November 17, 2010

Paid Time Off May Replace Leave Programs

The Executive Appropriations Committee met on November 16th to discuss sick and annual leave benefits versus paid time off or (PTO). The committee heard a presentation on the differences between the two options and the fiscal impact of going to a PTO system. As of this moment, a bill has not been presented to the legislature for consideration. However, it is being discussed as a potential cost-saving measure. UPEA will continue to track this issue throughout the upcoming legislative session. For further information, including a copy of the report, please visit

Over the course of the past decade, several private entities have changed how their annual and sick leave systems work in an effort to streamline their leave programs. Many companies moved to a Paid Time Off (PTO) System that does not differentiate between sick and vacation leave. Employees are given a set number of hours a year that they may use in whatever manner they wish. If they do not get sick, they can use it all as vacation time. However, if they are sick frequently, PTO may end up being used for that purpose.

Such a system differs somewhat from the current system that state employees enjoy. Currently each employee receives a certain number of annual leave hours and sick leave hours, based on their years of service. Annual leave must be scheduled ahead of time and can be used for vacations, personal matters, etc. Sick leave can be used when an individual is ill or needs to go to a doctor’s appointment.

State employees also have a great benefit that they may use upon retirement. An employee may save their pre-2006 sick leave hours to purchase health insurance. Sick leave hours earned after 2006 can be cashed in upon retirement to be placed into a health savings account to use toward medical purchases. This benefit has been instrumental in helping productivity in the state of Utah, and ensuring that employees use their sick leave wisely.

Would a PTO program take away from this benefit? At this time, it is not known. However, UPEA is currently concerned about such a program because of the effect it might have on the current Sick Leave Benefit upon retirement. Also, if it does not impact current employees, will it be just for new employees? While UPEA is still seeking answers to this question, it is still cause for anxiety.

Many studies have indicated that when a company has moved to a PTO-based system, the leave hours given to employees has dropped, or cannot be carried over from year-to-year. UPEA’s concern is that employees will be negatively impacted by such a move. The report presented to the committee suggested lowering the amount of PTO hours that employees could earn to 130 hours per year. A current employee with less than five years of service earns 208 hours per year in both sick and annual leave.

UPEA is continually keeping in contact with legislators and other policy-makers that may potentially be close to this issue to ensure employees are protected and maintain the best benefits possible. As more information develops, UPEA will send emails or additional communications to its members.

Friday, October 22, 2010

High Deductible Health Plan in Works?

The Legislative Health and Human Services Interim Committee gathered together on 20 October, 2010 to discuss the State Employee Health Insurance plans. Senator Chris Buttars brought in Don Ruzicka, an independent insurance broker, to explain a proposed health insurance option for state employees.

Ruzicka discussed the costs associated with the current insurance plans that include co-pays, deductibles, co-insurance payments, premiums, and out of pocket maximums, stating that it is very complicated and continues to get more and more expensive year after year. The 3rd party pay system that is currently in place is not cost effective and incentivizes overutilization.

In his statement about what he sees as a marketable plan for the state, Ruzicka discussed a Qualified High Deductible Health Plan (HDHP) that would simplify insurance and create positive incentives for health lifestyles and be more cost effective. In the HDHP, Ruzicka stated that the deductible would be somewhere around $2500 for an individual and $5000 for a family. After the deductible is met the co-insurance payment would be 100%, meaning that any additional costs exceeding the deductible would be covered.

In addition, a Medical Reimbursement Fund (MRF) would be set up by the employer of $1000 for an individual and $2000 for a family to be used to cover some of the deductible costs. For employees to reach their deductible with this contribution, the most they would spend would be either $1500 or $2500. Also, if an individual did not use their full amount allotted in the Medical Reimbursement Fund, the employer could elect to provide a taxable bonus to the employee with the excess funds.

Ruzicka stated that the plan could save the state as much as a third of what is currently being spent on the traditional plan.

When asked if a bill was going to be run to implement such a plan, Senator Buttars mentioned that he may run a bill or try to implement some type of pilot program.

Representative Brad Daw asked what the difference was between this and a HDHP with a Health Savings Account (HSA). Ruzicka answered that the money is locked up into the HSA, where the MRF could provide positive incentives through a bonus program.

PEHP was listed on the agenda to provide comment on this plan, but was not given an opportunity to share their views in the committee.

UPEA has a seat on the Health System Reform cost Containment Workgroup that meets monthly. HDHP/HSA plans have been discussed extensively in the workgroup. UPEA is currently looking into different plan designs that would benefit state employees with multiple insurance options. If there are any questions, please contact Christy Cushing at or (801) 264-8732 ext. 216.

UPEA Acts on ORS GAP Report Concerns

Over the course of the past few months, UPEA staff has been working with the Office of Recovery Services (ORS) employees and management regarding a new productivity measurement. ORS began tracking activity within certain computer programs in July, to measure activity and productivity. The measurement, termed GAP time, was applied to each employee’s job plan to maximize the use of resources to accomplish ORS objectives. As a result of not meeting the GAP measurements, several telecommuting employees were moved back to the office, while others lost their exercise privileges.

Despite 6 months of the ORS administration educating employees of the upcoming changes, with the implementation of the GAP report in July, many ORS employees became very concerned with their performance objectives. Several individuals expressed a lack of knowledge about the changes and altered their work habits in a manner that was not conducive to a comfortable work environment, which created low morale within the agency.

UPEA took the concerns of ORS employees to Department of Human Services Executive Director, Palmer Depaulis. In addition, Association staff member, Kory Cox, spoke to the Director of ORS and held a meeting to bring employee concerns to the table.

On 10/12/10, the GAP report was removed as a component of an employee job plan. While the GAP report will no longer be a performance objective on the annual performance plan, it will still be measured as a monitoring tool to ensure employees remain effective and productive. This news came as a welcome gesture, as it will ease many employee concerns and will allow individuals to concentrate on productive behaviors in the workplace, while not needing to manipulate their jobs in an unhealthy matter.

UPEA advises that ORS employees continue to document time away from their desks, and report mid-day personal leave time to their supervisors. The Association supports creating a positive work environment and believes that the change in measuring GAP time will improve employee morale.

UPEA encourages employees to work toward attaining a positive attitude toward future GAP measurements and other changes that may come as a result of the tough economic times. It is important, especially in this difficult economy and budget year, that state employees create value in their employment, perform their jobs, and become indispensible in their public employment.

Tuesday, August 17, 2010

Recommendation: Don't Privatize

The Utah Public Employees Association attended the Executive Appropriations today at 1:00 p.m. at the Utah State Capitol. The Public Consulting Group presented data on the feasibility of privatizing the Forensic Unit at the State Hospital; the privatization of the Woodland building; and privatization of the Transitional Living Center at the Utah State Developmental Center. The study focused on three areas of feasibility: Financial savings, organization and service consequences.

The study results for the USH Forensic Unit found $1.7 million in savings due to reductions in employee total compensation. However, an increase in staff turnover could negativity impact continuity and quality care for patients.

The USDC TLC & Woodland units would save $117,000 in gross savings through privatization. Savings from reductions to employee total compensation would increase staff turnover. However, it would also negatively impact continuity and quality care for patients.

The recommendation from the study is that it may be financially possible to privatize the units for a cost savings, but reductions in employee total compensation can adversely affect continuity and quality care for patients. The recommendation made by Public Consulting Group is that the privatization of the USH Forensic Unit and USDC Semi – secure Units should not be pursued.

Todd Losser
UPEA Representative

Wednesday, August 4, 2010

UPEA Endorses Herbert for Governor

Salt Lake City - The Utah Public Employees’ Association has announced their endorsement for Governor Gary Herbert and Lieutenant Governor, Greg Bell, during a press conference on Wednesday, August 4, 2010 at 10:00 a.m.

The Utah Public Employees Association (UPEA) is Utah’s largest representative of public employees. Founded in 1959, UPEA has a history of selecting and endorsing political candidates based upon their willingness to work with public employees. Governor Herbert demonstrated this willingness and dedication to public employees during the 2010 Legislative session.

The association typically avoids endorsements based on political affiliation.

Jeff Horrocks, Chairman of the UPEA CAPE Committee, said, “Political affiliation often plays a role in labor politics, but UPEA carefully analyzes candidates’ willingness to meet with employees and address their concerns before offering an endorsement.”

The association’s Citizen Action by Public Employees, or CAPE, Committee voted to endorse Governor Herbert after interviewing both candidates. In addition, CAPE also reviewed the candidates’ running mates for Lieutenant Governor, which made a significant impact on the association’s endorsement.

Horrocks said, “State employees have already benefited from Governor Herbert and Lieutenant Governor Bell’s approach to managing the State’s workforce.”

Horrocks added, “Governor Herbert has given employees fair consideration during the 2010 Legislative Session. The Utah Public Employees’ Association values his experience and his fairness in managing Utah’s workforce.”

Tuesday, July 20, 2010

Career Service Audit, Unexpected Conclusions

The Legislative Auditor General conducted an audit of the State's Career Service System to address legislators' concerns that poor-performing employees are difficult to dismiss. The audit highlighted Florida, Georgia and Texas as states that have limited merit systems, but failed to conclude whether or not Utah would benefit from a change.

The audit did conclude that managers have used poor judgement while conducting performance evaluations and while implementing discipline for employees. One glaring example from the presenter's PowerPoint showed an employee who was disciplined for downloading 52 pornographic images on a state computer, in violation of the IT Acceptable Use Policy. The employee was rated "successful" in an evaluation, despite the blatant violation.

Committee members commented that the audit highlights poor training of managers and the failure of management to use built-in discipline measures. Representative Dave Clark, R-Santa Clara, went so far to say that the merit system was not on the chopping block, but that he would personally take action if DHRM cannot address the management issues raised by the audit.

UPEA believes that the years of hard work and relationship building with legislators regarding this specific issue, contributed to the positive comments regarding state employees and the merit system. While no action was taken specifically with the audit, the Committee sent the review to the Government Operations and Political Subdivisions interim committee for their input. UPEA will continue to monitor the Career Service Status issue as further information arises.

The recommendations of the audit included:
The Legislature consider the following options regarding the state’s career service system:
Maintain the current system with improvements.
***Adopt a procedure similar to that in the judicial branch, in which an employee could be dismissed after being formally disciplined twice.
***Implement changes that have been made in other states, including the following:
***Phasing out career service status for supervisors and higher positions.
***Phasing out career service status for employees who change positions within the state system.
***Requiring all new employees to be hired at will.
***State agencies require all new managers to attend the DHRM training course on how to be effective managers.
***DHRM place greater emphasis on encouraging all managers in the state to attend their training course “The Art and Science of Supervision.”
***DHRM consider whether management training should be required for all managers in the state.
***DHRM ensure all agency managers use Utah Performance Management.

Committee Still Favors 4-Tens Despite Audit

UPEA Officers and Employee Representatives are currently attending the Audit Subcommittee Meeting. Committee members are currently discussing the 4-Tens Work Week audit.

Representative Dave Clark, R-Santa Clara, stood up for employees after auditors lambasted flexible schedule benefits found in the 4-Tens work week. He said, "I don't want to connote that well intentioned benefits encourage the proverbial UDOT worker leaning on a shovel. I would want [the Executive Branch] to take a conscientious look at policy."

Clark agreed that productivity needs to be measured and decisions made on metrics.

Lietentant Governor, Greg Bell, highlighted increasing workloads and decreasing budgets to emphasize how employees have increased productivty through "doing more with less."

Overall, the audit called for better measurements and flexibility within government to address customers' needs. The audit did not recommend eliminating 4-Tens and the committee complimented the Executive Branch for addressing the program.

More to come as it happens.

Monday, July 19, 2010

Legislative Audit of Merit System

UPEA was recently apprised of an audit that was conducted regarding the Career Service System, or Merit System. The report will be presented in the Legislative Audit Subcommittee tomorrow afternoon. According to our sources the Legislative Auditor’s Office may make recommendations to change the merit status of state employees. The report includes several options regarding implementation of a new career service system.

If you are able to attend the meeting, we would encourage you to do so on your own time.

Date: Tuesday, July 20, 2010
Time: 1:30 PM
Place: 250 State Capitol Bldg.

This will be an educational opportunity since the Audit Subcommittee has not accounted for public comment on the agenda. UPEA will also provide an update after the meeting.

This is a serious matter that affects all public employees and will be taken into account with any future political endorsements.

Thursday, July 1, 2010

UPEA Changes in Utah State Bulletin

The changes that UPEA requested in the DHRM rules as noted in the blog posting dated June 17th, 2010 can be found in the Utah State Bulletin linked here.  If you have any questions, please don't hesitate to contact UPEA.

Monday, June 21, 2010

UPEA met with PEHP to discuss Federal Health Care Reform

Last week UPEA met with PEHP to learn how federal health care reform will potentially affect PEHP. Through reading the two federal health care bills, PEHP has speculated how the mandates will probably affect them and if there will be additional costs. PEHP does not yet know what those additional costs will be, as that is still being determined. UPEA will continue to stay updated regarding this issue.

The two federal health care reform bills are: the Senate Bill - Patient Protection Affordable Care Act - signed 3/23/2010 and the House Bill - Health Care and Education Reconciliation Act of 2010 - signed 3/30/2010.

The purpose of these two health care bills are to improve access to health care. There are several mandates within the bills, and some of these mandates apply to only grandfathered plans, new plans or both. A grandfathered health insurance plan is a plan that existed before 3/23/2010 and does not make significant changes to their plan to lose grandfathered status. PEHP currently believes they are a grandfathered plan; however they have not yet been informed of their status.

Grandfathered Plan Mandates:

After 9/23/2010

1. No pre-existing condition exclusion for children under the age of 19.
  • Currently PEHP requires a 9 month waiting period.
  • This will be an additional cost for PEHP.

2. Two types of limits on benefits:

  • No lifetime limits on dollar value benefits or type of care
  • Only allowed "reasonable" lifetime or annual limits on nonessential benefits.
  • PEHP plans to change to annual limits for both types of changes to keep this as cost neutral as possible.

3. Dependent children will be allowed to stay covered on employee health insurance plan until age 26, regardless of whether or no they are a dependent. This does not apply to the child if they have their own group coverage.

  • Spouses or dependents of the dependent are not covered, only the dependent child.
  • Only allowed to be added to insurance plan at the insurance carrier's open enrollment date.
  • This will be an additional cost to PEHP.

4. No recession or termination of coverage without prior notice, with the exception for intentional misrepresentation or fraud.

  • Does not apply to PEHP.

After 1/1/2011

1. Underwriting conditions - 85% threshold required for large employers (employers of 50 or more employees).

  • If a plan falls below the threshold in a year, the plan shall refund premiums to employees on a pro-rated basis.
  • This should not affect PEHP, as PEHP is a self-funded plan, always within 90% threshold.

After 3/23/2012

1. PEHP will be required to provide uniform summary plan description.

  • Content and format required by statue.
  • Must provide notice no later than 60 days notice to a change in plan.
  • PEHP is not affected.

After 1/1/2014

1. No waiting period larger than 90 days, for every one of all ages.

  • This will be an additional cost to PEHP.

2. No pre-existing exclusion may be applied to all, at any age.

  • This will be an additional cost to PEHP.

3. Essential benefits can no longer have lifetime limits, only reasonable annul limits.

  • PEHP is trying to keep costs neutral.

4. Dependent coverage required up to age 26, even if they are eligible for another insurance plan.

  • This will be an additional cost to PEHP.

Government Plan Issue - Effective Immediately

Health Insurance plans for government employees can choose to be exempt from four federal health care regulations, including the Mental Health Parity Act, Women's Cancer Right's Act, the Newborn Act and Michelle's Law. Currently PEHP complies with all of these federal laws with the exception of the Mental Health Parity Act. Amendments made to this part of the federal health care reform bills do not clarify if government plans will have to comply with all four of these specific health care regulations. PEHP is waiting for an answer as they are currently unsure whether or not they will have to comply with the Mental Health Parity Act. If so, this would be an additional cost to PEHP.

Thursday, June 17, 2010

UPEA's Work Brings Results

Changes have recently been announced by the Department of Human Resource Management this week. The changes will be reflected in the next Utah State Bulletin (7/1/2010) and will go into effect in August. Many of the modifications were made as a result of the hearing that UPEA requested.

The substantive rule amendments that UPEA influenced include:
(50) Highly Sensitive Position: A position approved by DHRM that includes the performance of:
(a) safety sensitive functions:
(i) requiring an employee to operate a commercial motor vehicle under 49 CFR 383 (January 18, 2006);
(ii) directly related to law enforcement;
(iii) involving direct access or having control over direct access to controlled substances;
(iv) directly impacting the safety or welfare of the general public;
(v) requiring an employee to carry or have access to firearms; or
(b) data sensitive functions permitting or requiring an employee to access an individual's highly sensitive, personally identifiable, private information, including:
(i) financial assets, liabilities, and account information;
(ii) social security numbers;
(iii) wage information;
(iv) medical history;
(v) public assistance benefits; or
(vi) [household composition; or
(vii) ]driver license

UPEA requested that “household composition” be removed or defined as the term is very vague and could be interpreted in a number of ways.

(a) All recruitment announcements shall include the following:
(i) Information about the DHRM approved recruitment and selection system; and
(ii) opening and closing dates.
(b) Recruitments for career service positions shall be posted for a minimum of seven calendar days.

UPEA requested that this information be added back into the rule so as to ensure that the hiring process is outlined in rule.

It is the State of Utah's policy to provide all employees a working environment that is free from discrimination and harassment based on race, religion, national origin, color, gender, age, disability, or protected activity or class under state and federal law.

UPEA requested that discrimination be added back into the rule as discrimination can occur without harassment. It is important that this is verbalized in the rule.

UPEA was very instrumental in making these positive changes. UPEA is grateful to DHRM for listening to the concerns of our organization and for their ongoing communication with the Association.

Friday, June 11, 2010

Paid Time Off May Replace Leave Programs

Since the legislative session ended in March, UPEA has been hard at work trying to make sure we stay ahead of the curve when it comes to possible legislation affecting public employees. Through UPEA’s contacts and legislators UPEA staff hears of budget, health insurance, and many issues prior to any action being taken up on Capitol Hill. Some discussions come to fruition and others don’t. This year we have heard rumor of another piece of legislation that may affect public employees – PTO.

Over the course of the past decade, several private entities have changed how their annual and sick leave systems work in an effort to streamline their leave programs. Many companies moved to a Paid Time Off (PTO) System that does not differentiate between sick and vacation leave. Employees are given a set number of hours a year that they may use in whatever manner they wish. If they do not get sick, they can use it all as vacation time. However, if they are sick frequently, vacation may not be an option.

Currently, each employee receives a certain number of annual leave hours and sick leave hours, based on their years of service. Annual leave must be scheduled ahead of time and can be used for vacations, personal matters, etc. Sick leave can be used when an individual is ill, needs to go to a doctor’s appointment, or just needs a “mental health” day.

State employees also have a great benefit that they may use upon retirement. An employee may save their pre-2006 sick leave hours to purchase health insurance. Sick leave hours earned after 2006 can be cashed in upon retirement to be placed into a health savings account to use toward medical purchases.

This benefit has been instrumental in helping productivity in the state of Utah, and ensuring that employees use their sick leave wisely.

Would a PTO program take away from this benefit?

At this time, it is not known. However, UPEA is currently concerned about such a program because it may affect current Sick Leave Benefit upon retirement.

Also, if it does not impact current employees, will it be just for new employees? While UPEA is still seeking answers to this question, it is cause for anxiety.

Many studies have indicated that when a company has moved to a PTO-based system, that the leave hours given to employees has dropped, or cannot be carried over from year-to-year. UPEA’s concern is that employees will be negatively impacted by such a move.

UPEA is continually keeping in contact with legislators and other policy-makers that may potentially be close to this issue to ensure employees are protected and maintain the best benefits possible. As more information develops, UPEA will send emails or additional communications to its members.

Thursday, June 10, 2010

UPEA is Hard at Work – Protecting your Rights

On June 8th, 2010, UPEA staff and representatives presented at a DHRM Hearing that UPEA requested regarding proposed rule changes that are to go into effect on July 1st.

UPEA shared concerns regarding rule changes including modifications to the recruitment, highly sensitive position, employee development, and discrimination and harassment policies.

UPEA staff insisted that employees are concerned that job positions continue to be recruited through a "competitive" and transparent process as this is a core merit principle.

UPEA and DHRM staff held a healthy discussion on the highly sensitive positions and information regarding "household composition" being added. UPEA requested that this term either be removed or defined as it is vague in nature.

While no changes were made immediately, DHRM staff expressed a willingness to look at and change a few items that were discussed. It will remain to be seen what actually gets some attention.

As an additional note, because of the efforts of UPEA - with regard to the DHRM rule changes, a section was added into the rule that allowed RIF’d employees that were rehired within a year to reinstate their Program I Sick Leave hours rather than having them all go back to Program II Sick Leave. This benefits employees as they will be able to use earned Program I hours upon retirement.

Wednesday, May 26, 2010

Federal Health Care Reform & Public Employees

Federal Health Care Reform & Public Employees
Friday, May 21, 2010
12:00 – 1:00
Presentation by the Utah Health Policy Project

The Utah Public Employees’ Association hosted an open forum regarding Federal Health Care Reform and invited the Utah Health Policy Project (UHPP) to present.
UPEA invited all members to participate in the May 19th meeting at the UPEA headquarters. Members were particularly interested in how the reform would affect public employees and whether or not the reforms would solve ballooning premiums within PEHP.

HSAs Not the Solution

The UHPP Board of Trustees Chair, and former PEHP Executive Director, Linn Baker, opened his presentation with a discussion about Health Savings Accounts (HSA). He said that state legislators are endorsing the public employee HSA, which is tied to a High Deductible Health Plan, as a primary benefit for state employees.

Baker predicts that healthy people would opt for the HSA over the traditional PEHP plans because healthy people wouldn’t anticipate ever getting sick. However, a mass migration of healthy members to HSAs would leave high risk individuals in traditional plans. The premiums and deductibles for HSAs and traditional plans are both tied to utilization. Therefore, people in the High Deductible Health Plans would be subject to the same increases in medical costs as people in the traditional plans. Overall, HSAs would not solve the problem of rising medical costs.

Reform Should Give Insured Peace of Mind

Federal reform attempts to solve the problem of rising medical costs by placing restrictions on insurance companies, by requiring everyone to be insured, and by providing incentives to businesses that carry insurance for employees. Jessica Kendrick, UHPP Community Engagement Director, introduced attendees to two families that exemplify problems within the current health insurance system. Her examples addressed issues of pre-existing conditions, gaps in coverage and families who are priced out of the health insurance market. Baker linked these problems to the health insurance industry and brokers who serve as go-betweens.
While private plans are paying go-betweens and lobbyists huge sums, the Public Employee Health Plan costs are driven by the larger market—not profits. Public employees should have an interest in the health care reform because current policy decisions will influence future health care costs to public employees.
Also, Baker said the reform should give some peace of mind because insurance companies can no longer set limits on coverage and requires those companies to cover individuals faced with job loss. Lastly, the legislation should result in more transparency for consumers.

Controversial Mandate

Public employees will probably feel the after affects of health reform as a response to changes in the private sector. Baker said that expanding health insurance coverage may cause premiums to increase, but the federal reform addresses this through the controversial mandate that requires everyone to participate in a health insurance plan.
Theoretically, rising premiums would be mitigated by a healthier risk pool that will result from universal coverage. Currently, some people who can afford to insure themselves choose not to pay premiums—and then use emergency care services to the detriment of those who pay premiums.
Those individuals who choose not to insure themselves would be penalized through the tax code.
Utah is one of 18 states prepared to sue the federal government for requiring all individuals to carry health insurance. Baker suggested that the state could use its resources to apply for federal grants that would lower premiums by addressing malpractice claims and fraud.

Cost Critics

Vocal opponents to the federal reform cite costs as an overall point of opposition. Baker suggested that health care costs have increased more than 10% per year with no ceiling. He said the reform’s initial costs fall well below the cost of doing nothing. The Utah Health Policy Projects gives an unequivocal answer to reform critics:

“The economy remains fragile, and getting health care to millions will have a price tag. But we pay a price for doing nothing as well. The question is: which price is higher? We currently spend more than $2 trillion dollars a year on health care. The Patient Protection and Affordable Care Act will make a short-term investment of roughly $100 billion a year to lower costs and provide coverage to almost all the uninsured. This is absolutely necessary in order to get control of the real cost drivers like "fee for service" payment systems that encourage more "treatments" but discourage prevention. Only with reform will small businesses and families begin to see stability in their premium costs. The new legislation will create true competition to get better prices out of insurance companies. It will provide safer care so we don't spend billions extra to treat preventable mistakes like hospital acquired infections.”

The Utah Health Policy Project has resources to help users understand the reform. Baker also recommended the Reform Implementation Station to understand specific scenarios:

The Utah Public Employees’ Association is tracking the issue very closely and will be directly involved with any decisions that affect public employees. We will update members periodically on issues regarding health care.

Thursday, March 11, 2010

HB 140 Goes for Guv's Signature

HB 140, Human Resource Management Amendments (Rep. Brad Dee), passed the House for the final vote on Wednesday morning (3/10), was signed by the Senate President and House Speaker Wednesday afternoon, and will be enrolled for the Governor’s signature.

UPEA is appreciative for Rep. Brad Dee’s willingness to work with us in ensuring merit principles were kept intact within the State Personnel Management Act.

Tuesday, March 9, 2010

HB 140 Substituted in Senate - Sent Back to House

This morning, at approximately 11:15 AM, the Senate debated 1HB 140 (sponsor Rep. Brad Dee). Senator Dan Liljenquist, the senate sponsor of the bill, began the discussion by substituting the bill amending some provisions that UPEA had requested. UPEA lobbied very hard on the bill to ensure that merit principles within the Personnel Management Act were kept in place, including appealable items.   Liljenquist stated that "the bill has been worked on very aggressively by the Utah Public Employees' Association."

The bill passed both the Senate 2nd and 3rd reading calendars with a 20-5 vote. Because the bill was amended, it was sent back to the House for a final vote. It was placed on the House concurrence calendar, and should pass prior to the end of the legislative session.

Friday, March 5, 2010

Budget: Retirement and Health Insurance Update

Last night, Executive Appropriations met and recommended covering the entire 2.1% retirement contribution rate increase.

In addition they recommended covering half of the 12% or $23 million health insurance increase. UPEA is currently meeting with PEHP, the Governor's Office of Planning and Budget and DHRM to work out the final details for the remaining health insurance increase.

Tuesday, March 2, 2010

HB 140 Advances to Senate

At approximately 11:30 this morning, HB 140 was uncircled, substituted, and amended. The sponsor, Representative Brad Dee pointed out that the substitute “included language that UPEA had requested.” Rep. Dee highlighted several of the things that the bill would do, including UPEA’s own draft legislation that streamlines the grievance process making it less costly and less time consuming for the employees and the state.

UPEA acknowledges there are issues with the current pay plan, as no step increases have been given since 2001. As a result, UPEA fought hard to deal with the compression issue and has long advocated a fair and equitable system which rewards all employees though performance increases. This bill will allow the legislature to provide merit increases in any incremental amount, and not limiting it to the current 2.75%. UPEA also added language to the bill that ensures employees are treated fairly, uniformly, and consistently.

UPEA has been carefully studying this bill to continually watch for any inclination to remove pieces from the merit system. The majority of our concerns were heard and acknowledged through this bill.

Rep. Dee mentioned that this bill is employee friendly. Through working with Rep. Dee, UPEA has been able to negotiate several items to improve this bill, enhancing its friendliness to employees. UPEA is very appreciative to Rep. Dee for working closely with us in resolving our concerns.

1st Substitute HB 140 passed the House 56 – 14, and will be sent to the Senate for further consideration.

SB 94 - Dead in Rules

Yesterday Sen. Liljenquist asked for SB 94 - Supplemental Benefit Amendments for Noncontributory Public Employees - to be removed from the Senate 3rd Reading Calendar and sent to the Senate Rules Committee for defeated bills.

This bill would have suspended the 1.5%, the state contributes in employees' 401k. Now the bill is dead.

Monday, March 1, 2010

Senate Retirement and Independent Entities Committee

The Senate Retirement and Independent Entities Standing Committee met today (March 1, 2010) to discuss HB 233 - Retirement Office Amendments, SB 171 - Higher Education Retirement Amendments, SB 240 - Retirement Participation Amendments. Dan Anderson presented on all three.

HB 233 - This bill modifies the Utah State Retirement and Insurance Benefit Act by amending provisions related to appointment of board members, purchase of service credit, disability benefits, and termination of employment on the retirement date.

SB 171 - This bill gives a 1 time opportunity to chose URS as their retirement system if the employee has prior service credits with URS. This legislation will only affect a small group of individuals.

SB 240 - This bill allows for USTAR employees to opt out of the benefit retirement system and into a defined contribution retirement system.

All three bills passed out of the Senate Retirement and Independent Entities Committee with favorable recommendation unopposed.

Friday, February 26, 2010

Retirement Bills in Retrospect

The Utah Public Employees' Association is proud that its members and supporters have fought hard for the retirement system. UPEA members have had the courage and conviction to stand up for a system that has served them well. Our members have stood up for employees who will guide UPEA and public service for generations.

Although UPEA does not support 2nd Sub SB 43 and 3rd Sub SB 63, we support the amendments and truly appreciate the hard work that has gone into the bills. UPEA would like to thank Senator Daniel Liljenquist and Representative Brad Dee for facilitating negotiations.

In our gratitude, UPEA would especially like to thank Representatives Jim Dunnigan, Wayne Harper, Ronda Menlove, Stephen Sandstrom and Mel Brown for their exceptional commitment to protecting the retirement system. The Senate and House Democrats have also been strong supporters for public employees.

3rd Sub SB 63 Vote

Yes 46

No 26

Abs 3

Third Substitute SB 63

The House voted to substitute Second Substitute SB 63 with a 3rd substitute. Third substitute SB 63 includes all of the amendments mentioned in the previous post.

Prior to the final vote several legislators commented on this bill.

Rep. Dee said 3rd Sub. SB 63 may not be a perfect vehicle for fixing the retirement system. However, Utah can't delay a year because it will result in waiting two or more years at a severe cost to the state. He added that the new bill would be studied very closely; however, the state needs to stop the bleeding, and then run the actuarial study this year.

Dee said, "If changes need to be made, let's man up. 18% of private industry have retirement. They are all moving to a 401(K) SYSTEM. Everyone of these plans is in trouble. Fewer than 1/2 are actually receiving the benefits that they were promised. Utah is in the cutting edge. We fix it now, because we know that we've made a promise to the employees in the system. Protect my retirement system. That is what I am doing. We are keeping the promises to those that we have hired. "

House Democrats continued to support employees' concerns that the state is moving too fast on this decision. Rep. Phil Riesen, D-Salt Lake City added that the crisis behind these bills may contain rhetoric.

Rep. Litvak said that, although the process has been open and fair, perhaps the body is not able to address the full compensation package before making changes to the retirement system. Litvak said he couldn't support the bill because the legislature needs to address the entire compensation package at one time.

Representative Brown admitted that the state is in serious economic times. He said that the bill is written for both good times and bad times. In bad times, the risk is shifted to the employee. However, in good times, the bill adds compensation. He said the bill will be a really good benefit for employees.

Representative John Dougall, R-Highland, said that retirement is sacred, but the world is changing. The commitments that are being made, he said, need to change going forward.

Ben Ferry, R-Corrine, called previous question, which ended debate.

Dee extended his appreciation to employee groups who have made the legislative body think about the changes they are making. Dee added that the state has much more work to do regarding employee compensation.

"Let's make this whole and start to work on the other issues," Dee said.

Second Substitute SB 63

House sponsor, Representative Brad Dee, testified that pension systems must be funded at 100%. He said that Utah's pension was doing fine until 2008. If the pension continues on this path, he said Utah's pension will become completely unfunded.

"Is that the message that you want to send employees today?" Dee asked.

Representative Jim Dunnigan, R-Taylorsville moved Amendment 10. The amendment allows a public safety employee to buy out up to 5 years early. Public safety does not have this option in the current retirement system.

Dee accepted the amendment as friendly and added that legislators worked late into last night to design these compromises. The motion passed.

Dunnigan added Amendment 9, which address concerns that employees won't have enough retirement benefits to survive upon retiring. Dunnigan moved to provide an additional 25% in retirement benefits.

Dee said that this was a good compromise for employees, understanding that the state will, "Increase payment on our house just a few more years."

Representative Eric Hutchings, R-Kearns lauded Dunnigan for his work on the bill.

Dunnigan's motion to amend passed.

Representative Harper moved Amendment 6, which takes the multiplier for each year of service from 1% to 1.5%. Dee accepted this amendment. Harper clarified that this multiplier only applies to new-hires hired after July 1, 2011. The amendment passed.

Representative Stephen Sandstrom, R-Orem, moved Amendment 8, which allows employee who didn't vest with the retirement system to come back within 10 years (instead of 5) to vest with the state. The amendment also allows plan members to contribute to another 401(k) plan of the member's choice.

Dee said, "I have more friends than I ever realized. This is a friendly amendment too."

The motion to amend passed.

Representative Carl Wimmer, R-Herriman, moved Amendment 11. The amendment extended the election of the spousal death benefit. UPEA will update members when we learn more about this amendment. The amendment passed.

Representative Ronda Menlove, R-Garland, moved Amendment 12. This amendment requires yearly reports and a study of the retirement system after the system is 100% restored. This amendment allows an ongoing dialog about the retirement system. Dee supported the motion to amend.

The motion passed.

As of this writing, the bill has been circled to clean up the bill and add the amendments.

3rd Sub SB 43 Vote

YES 55
NO 20

Passing in the House and will be sent to the Senate.

3rd Sub SB 43

House sponsor, Brad Dee, presented the 3rd Sub SB43 amended as follows:

  • Employees may collect pension while re-hired with a public entity AFTER a 1 year "hard separation." Employees must elect, at the time of rehire, whether they would like additional service credit OR to collect their pension while employed.

Representative David Litvak, D-Salt Lake City, asked about the 1 year cooling off period for employees who change careers after retiring and rehiring for a public entity. Dee clarified that employees must have a year-long separation.

Litvak added that SB 43 in its original form raised considerable concerns. However, the substituted bill, Litvak said, is an improvement to the current system. The amended bill still creates two classes of retired-rehired employees, but Litvak felt the legislation could be tweaked over the next year.

Representative, Sheryl Allen, a long-time employee advocate, proposed an amendment to allow employees who rehire on a half-time basis to collect their retirement within that one-year period. The motion to amend was opposed by the sponsor, Dee, who said it would maintain the status quo. Dougall and Ipson also opposed the bill. The amendment failed.

As of this writing, no votes have been cast.

10:30 Time Certain for Retirement Bills

Third Substitute Senate Bill 43 (Post-Retirement Employment Amendments), and Second Substitute Senate Bill 63 (New Public Employee Tier II Contributory Retirement Act) will be debated by the House today at 10:30 a.m. UPEA is bracing for the debate and anticipating amendments to the bill. We will update the Blog as things happen.

Wednesday, February 24, 2010

House Retirement and Independent Entities Committee

This afternoon the House Retirement and Independent Entities Committee met to hear and discuss SB Second Substitute 43 and SB Second Substitute 63.

Before the discussion began, Rep. Sandstrom motioned to adopt Third Substitute SB 43. The new substitute bill requires that a retired employee take one year off public employment before rehiring on with a public entity. After such year, if the employee rehires he/she has the option of either suspending his/her pension and accruing additional service credit or the employee can continue to receive their pension and new salary. In addition, the employer would have to pay the amortization rate that currently goes into employees' 401k to the retirement system (for instance, 14.22% in the big system).

After Sen. Liljenquist explained both bills, many of the Committee members had questions. Rep. Duckworth asked if he thought there would be a mass of retirements because of fear, even though both bills don't affect current employees' pension. Liljenquist responded saying, "I would hope not...there is some risk with SB 43...but we have to start somewhere." Rep. Hansen asked Liljenquist if these two bills will remedy the $6.5 Billion losses experienced in 2008. Liljenquist responded "no these bills will not remedy the gap now, they will overtime." Rep. Christine Watkins asked if employees would still be allowed to purchase up to five years of service credit in the new system. Liljenquist said yes, after 30 years of service in the new system. Rep. Watkins also questioned if by dropping the multiplier to from 2% to 1%, would the legislature create a whole new class of poor people?

In addition to the Committee member's questions, members of the public asked how such a complex issue could continue being amended and substituted throughout the session, even only an hour prior to the committee meeting.

Sheri Waters spoke on behalf of UPEA reemphasizing and stating, "there are many positive spin offs of a solid pension program that go beyond recruitment and retention of competent and qualified employees and educators. Utah is a great state because it has a great foundation. Even pension dollars sent to Utah recipients are largely spent helping Utah's economy. UPEA appreciates Sen. Liljenquist's ideas and his attempts to maintain a pension program, along with his desire to hold [current] public employees harmless for the market downturn. While we are not happy with the momentum these retirement bills have taken, we are respectful of the process and we continue to communicate our hope for the future. We do agree there are areas that should be tweaked. UPEA's one request is simply to hold back the tides of change for a year and allow the independent actuaries to review the data before drastic changes are made to the Utah Retirement System. The argument continues to be made that there will be time to make additional changes once the actuarial review has been completed, however we are all keenly aware of the time and effort that is involved in adjusting a bill once it has been signed into law. It seems to me that we are trying to dig a foundation for a house without doing the Blue Stakes check first. With the projected agency budgets as they are, it is anticipated that there will be very few new hires that will occur this year or the next. So the costs savings of a new plan for prospective employees may not be realized for many years. There are some who are advocating that the urgency to follow through with these change right now it critical. Our plea continues to be, please hold off on overhauling the retirement system until the independent study is finalized."

Before the vote Rep. Harper noted how he's made commitments not to harm current retirees and members of the system. He continued to say, "I like parts and I dislike parts of it...something needs to be done. Is this the right way? I have serious concerns with it...There are some amendments still being drafted that may make this viable, I still have some angst with this bill...unfortunately I think it needs to go to the House floor for debate."

Senate Bills 43 Third Substitute and 63 Second Substitute passed through the House Retirement and Independent Entities committee this afternoon, with a party line vote. Due to the committee recommending both bills move forward, our last hope is with the full House of Representatives. UPEA encourages all of our members to take action and contact their legislators as soon as possible to request they delay the passage of any retirement bills until further study is completed. If you need assistance in finding out who your legislator is, please visit or call 801-264-8732.

Monday, February 22, 2010

HB140 Human Resource Management Amendments

The House Government Operations and Political Subdivisions Subcommittee convened to discuss bills, including House Bill 140, Human Resource Management Amendments.

UPEA has been negotiating with the bill’s sponsor, Rep. Brad Dee, R-Ogden, and DHRM to find an equitable middle ground between management and employees.

During testimony, Dee said, “Out of all the labor groups, UPEA has been very helpful. They’ve negotiated very hard.” Dee promised to continue negotiations with UPEA.

Initially, the bill struck a number of employer actions that employees could grieve. UPEA has made headway to include issues of personnel rules and equitable administration of benefits. We are working on issues concerning written reprimands, salary and wages.

HB 140 passed the committee 6 – 3. UPEA will update members as the bill progresses.

Retirement Update

Friday February 19, 2010 – the Senate Floor heard SB Substitute 43 and SB Second Substitute 63. These two retirement bills passed through the Senate Floor and were sent to the House Floor for future debate.

SB Substitute 43 passed with a vote of 20 Yes, 8 No and 1 absent. A link to the latest version of the bill is This bill would affect reemployed retirees.

SB Second Substitute SB 63 passed with a vote of 19 yes, 9 no and 1 absent. The second substitute created two separate new retirement systems for new hires, hired after 7/1/2011. Originally there would have been only one retirement system for all public employees throughout the state. Now the bill would create a public safety / firefighter retirement system and a public employee retirement system. A link to the latest version of the bill is This bill would affect all new employees hired after 7/1/2011.

SB 94 was circled and remains on the Senate 3rd Reading Calendar behind 4 other bills. A link to the latest version of the bill is This bill would affect all current employees hired after 7/1/1986, by eliminating the 1.5% state contribution in employees’ 401k.

Thursday, February 18, 2010

Senate Bill 94 Passes

This bill would suspend the 1.5% defined contribution benefit for state employees hired after 1986. Senator Gene Davis cast a notable no-vote and added, "I am voting no for this because it shows how easy it is to cut a defined contribution benefit."

This bill, along with SB43 and 63 will move on to the House after a final vote in the Senate.

Landmark Pension Reform Moves to House After Final Senate Vote

Y 20

N 8

A 1

The Gamble

Senator Brent Goodfellow, speaking in opposition to SB63(New Employee Tier II contributory Retirement Act), raised concerns about passing a bill and then making changes in the future. He noted that future changes would undoubtedly contain fiscal notes that, based on state revenues, may prevent beneficial changes to the new retirement plan.

Senators Lyle Hillyard and Howard Stephenson, who spoke in favor of SB 63, noted that the pension system is a gamble for taxpayers. Senators grappled with the degree to which the pension is a risk. On one hand, Senator Liljenquist said that the current pension system is the one thing that can bankrupt this state.

Senator Jon Greiner pointed out that the state has returned a 9% on its pension investment up until 2008. SB 63 assumes a worse-case-scenario that is unlikely based on past trends.

As of this writing, no votes have been cast. Update pending.

SB 43 Vote

Passed on party lines plus one nay vote from Republic Senator, Jon Greiner.

Ant vs. Grasshopper and SB 43

A Republican public employee, Senator Jon Greiner, has testified on SB43 (Post Retirement Employment Amendments) during today's Senate Floor time. Greiner invoked the fable of the ants and the grasshopper. He labeled the employees the ants and the nation's financial institutions the locust. His allegory suggested that public employees are shouldering the burden of irresponsible institutions.

Additionally, Greiner asked the bill's sponsor, Dan Liljenquist, whether or not the bill would favor non-state employees who hire with the state after retirement.

Liljenquist conceded that out of state new-hires and new-hires entering public employment from the private sector would not be impacted by current legislation. It would follow, then, that public employees who retire would have a disadvantage in pay over non-public employees who become re-employed with the state.
Greiner asked, "Why would we send this through without putting it to a task force?"
As of this writing, no votes have been cast on SB43. Update coming soon.

Keep the Message Alive!

I know that the rally is over and that the three bills we rallied against passed committee on a partisan line vote, but the fight is not over. Today, the three bills (SB43, SB63, SB 94) are going to be heard on the Senate Floor at around 3:00 p.m. If you would like to listen to the debate, go to: and find the Live Audio link under "What's Happening."

If the bills pass the Senate, they will move into the House. If you haven't talked with your State Representative, now would be a good time. Visit to find your legislator.

If you would like to see a complete list of the bills that UPEA is tracking, log in to If you have questions about any of the bills UPEA tracks, please call 801-264-8732.

If you would like to schedule an Employee Representative to visit your worksite, we would really like that. Call 801-264-8732. We'll update soon!

Wednesday, February 17, 2010

Retirement Update

Last Friday 2/12/2010, the Retirement and Independent Entities Committee met again. From 12-3pm committee members listened to public comments not heard last Wednesday, and voted on each of the bills: SB 43 (reduces benefits for rehired retirees), SB 63 (reduces retirement benefits in half for new hires as of 7/1/2011), and SB 94 (eliminates the 1.5% contribution to current employees’ 401k). Each bill passed through the committee with a 3-2 vote, with Sen. Liljenquist, Sen. Bramble, and Sen. Butters voting for each bill, and Sen. Goodfellow and Sen. Mayne voting against each bill. Now SB 43, SB 63, and SB 94 go to the Senate floor for discussion. The bills are currently on the Senate Time Certain – 2nd Reading Calendar. It is expected that the Senate floor will hear the bills tomorrow – Thursday 2/18/2010.

To clarify, Sen. Liljenquist’s SB 42 – Retirement Eligibility Modifications – is being held in Rules. Sen. Liljenquist has committed he is not pushing SB 42 and it will remain in Rules and die there. SB 42 would have increased the Public Employees Retirement System from a 30 year system to a 35 year system, and the Public Safety Retirement System from a 20 year system to a 25 year system over the next five years. This would have affected both current and future employees.

However, Sen. Liljenquist has pulled this bill because of UPEA’s efforts and members contacting him and their individual legislators.

Wednesday, February 10, 2010

Retirement and Independent Entities Committee

Opposing sides gave little ground during today's Senate Retirement and Independent Entities Committee meeting at the capitol. Utah Public Employees' Association has made their arguments clear through Saturday's rally and a year's worth of work leading up to today.

There wasn't much left for Liljenquist's presentation except to rehash his proposals and the dire circumstances behind his proposals. UPEAadded voices to the economic impacts families face in light of retirement changes. Sheri Watters testified that her family has a long history of public service and that the retirement system has served their family fairly.

Senator Brent Goodfellow raised questions about Utah's current retirement system. He addressed the scope of SB 63 in light of an improving economy and improving stock market.

Goodfellow said, "Yes we have problems, but they're not the same problems we had when the DOW was at 6500."

SB 63 assumes the worst case scenario for our retirement system over the long run.

Liljenquist added that employees will defer compensation increases well into the future because of the retirement downturn. However, he did not say how any savings in the retirement system will go toward compensation.

Under the pro temp chairmanship of Senator Bramble, the committee opted to continue hearing testimony on Friday, at noon, before taking action on the three senate bills.

UPEA will update you soon!

Retirement Press Conference

Sen. Liljenquist held a press conference Tuesday 2/9/2010 “designed to shed light on the retirement system” and his three retirement bills. He explained how the losses URS experienced in 2008 has “created a massive problem for URS.” He continued to note how “there is not an option to do nothing. Doing nothing just exacerbates the problem.”

UPEA has never supported not doing anything. UPEA supports the Governor’s budget which funds the 2.1 contribution rate increase. UPEA has met with numerous individuals who have repeatedly noted that if the contribution rate increase is funded, URS will not go bankrupt, but remain fiscally sound. UPEA continues to push for an independent taskforce to study the retirement issue over the next year before legislation to change the system for both current and new employees goes into effect.

Update on HB 140

UPEA staff met with DHRM about HB 140 yesterday (2/9/10). In the meeting, DHRM explained that the intent for changing the pay system was to try to encourage more merit pay increases by removing the steps from the pay plan. If only 1% is available, the legislature could grant a 1% merit step increase rather than being limited to 2.75%. UPEA is in the process of researching the plan, and will be meeting with DHRM again next week to discuss UPEA’s viewpoint on this plan.

The changes to the grievance process as explained were due to conflicts that have been found with the Attorney General’s Office and costs associated with the grievances handled at the Career Service Review Board.

UPEA has scheduled a meeting for Thursday (2/11/10) with the sponsor of the bill, Representative Brad Dee.

Tuesday, February 9, 2010

HB 140

Late Friday evening a new bill became publicly available that deals with State Employees. HB 140, Human Resource Management Amendments, was introduced to the House on 2/8/10. It has been sent to the Rules Committee for assignment.

HB 140 is something high on UPEA’s radar, because it deals with several public employee issues, including:

· Taking the merit steps out of the pay scale

· Changing the language related to the post-retirement sick leave benefit

· Changing the grievance process

· Changing the grievable actions that may be taken to the Career Service Review Office

On 2/8/10, UPEA met with legal counsel to ensure that staff understood what was being presented. UPEA staff also has a meeting scheduled with the Department of Human Resource Management on 2/9/10 to discuss the intent behind the proposed changes.

UPEA will continue to update members as to what is happening with HB 140 as more information becomes available.

Thursday, February 4, 2010

Executive Offices & Criminal Justice

Executive Offices & Criminal Justice 2/3/10

The committee heard from County Sheriffs, the Board of Pardons, and Department of Corrections. The fiscal analyst went over the budget brief on each department.

Tom Patterson, the Executive Director of the Department of Corrections, presented on the budget of DOC. Some of the items that were discussed to address the 5% total budget reduction were to close the Parole Violator Center which would save $7.6 Million, eliminate meals for Correctional Officers which would save $400,000, and close two prison housing units which would save $3.8 Million.

Corrections discussed the risks involved with closing Special Services Dorm and OQuirrh 5 housing unit. If these two pods were to close the Utah Prison would be over maximum capacity by 215 beds. This would mean releasing 215 inmates early, and the prison would still be at maximum capacity. Tom discussed the risks involved to staff and also to the public with releasing inmates early and also operating a prison that is over crowded.

Retirement and Independent Entities Committee

The House Retirement and Independent Entities Committee met today and passed three bills through the committee with a favorable recommendation. The bills are H.B. 215 Amendments to the Public Employees’ Benefit and Insurance Program Act – Risk Pools, H.B.233 Retirement Office Amendments, and H.B.83 Sub 1 Public Employees Retirement – Spousal Election.

H.B. 215 Amends the Public Employee’s Benefit and Insurance Program Act risk pools for full-time enrollees at an institution of higher education from full time equivalent enrollment of less than 18,000. Currently it is less than 12,000 full time equivalent students.

H.B. 233 modifies the Utah State Retirement and Insurance Benefit Act by amending provisions related to appointment of board members, purchase of service credit, disability benefits, and termination of employment on retirement date. This is URS annual “clean up” bill, which intends on clarifying the statue in Title 49 – or the Utah State Retirement and Insurance Benefit Act. UPEA was originally concerned with the original bill and talked to Dan Anderson, URS’ attorney about amending the bill. The bill was amended in committee today.

H.B. 83 Sub 1 requires the Utah State Retirement Office to provide written notice (within 30 days of a change and at least 60 days prior to retirement) to a retiree’s spouse of the retirement allowance option made by the retiree under the Public Employees’ Contributory or Noncontributory Act.

Health and Human Services Appropriations Committee

House Democratic Caucus 2/2/10

UPEA staff attended the House Democratic Caucus on 2/2/10, where the House Democratic Caucus discussed various items, including HB 1- Education funding, the Ethics legislation, and various housekeeping items.

Much conversation surrounded the ethics bills that have been presented thus far, including increased financial disclosure, lowering gift limits, and limiting on uses of campaign funds.

Health and Human Services Appropriations Subcommittee 2/1/10

In the Health and Human Services Appropriations Subcommittee held on 2/1/10, the committee discussed several issue and budget briefs that had to do with the Departments of Health and Human Services. These issue and budget briefs are linked below.

Department of Health
Epidemiology and Laboratory Services
Health - Federal funds
Health - Intent Language follow up from prior year.
Health - Executive Director Operations
Health Systems Improvement
Workforce Financial Assistance
Community and Family Health Services
Local Health Departments
Health Nonlapsing Balances
Social Services Related Revenue Options
Substance Abuse and Mental Health
Division of Aging

The Utah Association of Counties also spoke to the impacts of potential cuts to the Health and Human Services line items described above. They are very concerned about the trickle down effect that this may have on local health departments and governments.

Wednesday, February 3, 2010

Overview of Utah's Retirement System

On Tuesday 2/2/2010 UPEA staff attended the Office of Legislative Research and General Counsel’s (OLRGC) “Bagels and Briefings – Overview of Utah’s Retirement System.”

Policy Analyst Ben Christensen went over the history and membership of the retirement system. Currently there are 155,667 employees in the Public Employee Noncontributory Retirement System (or the Big System), of which 52% include public and higher education employees, 20% include state employees, 27% include counties and local districts. Christensen also discussed the retirement allowance formula of years of service multiplied by 2% and the average of an employee’s 3 highest salaries. Lastly Christensen noted how the financial losses of 2008 affected the retirement system as a whole.

Next fiscal analyst Danny Schofield noted how the URS Retirement Board asked for a 2.1% contribution rate increase for the public employees contributory and noncontributory systems. According to the URS Retirement Board, if the contribution rate increase is funded, the retirement system will remain actuarially sound. In addition, URS annually expects at least a 7.75% investment return. In 2009, URS received a 13% return on investments. Schofield also spoke about the $23 million PEHP increase for FY 2011.

Lastly Darin Underwood from the Auditor General’s Office discussed the Reemployed Retiree Audit, presented to the Audit Subcommittee and Retirement and Independent Entities Committee November 2009.

UPEA is at the forefront of the retirement discussion and will continue to present arguments and information on how URS is still the best funded retirement system in the country.

House Republican Caucus Lunch

House Republican Caucus 2/2/2010

Speaker Dave Clark spoke on his Health System Reform Amendments Bill (which is still being written). He noted that the bill intends to:

“Increase Transparency” –
· Instructs the Utah Insurance commissioner to develop a method so that health insurer’s claims can be compared.

“Equalizes the market” –
· Bill is going to optimize health insurance choice for Utah businesses and their employees.
· Equalizing the defined benefit and defined contribution, so each market does not skew the other market unfairly.

“Allows employers coverage flexibility” –
· Employers will be able to choose either defined benefit or defined contribution plans inside the Exchange.
· Within the Exchange there will be a premium aggregator with expanded employee choice.
· The defined benefit plans in the Exchange, will not be able outside the Exchange in the regular insurance market.

“Makes health care costs controllable and predictable for Utah businesses and gives employees expanded coverage option and more control over their health care dollars” –
Expands the defined contribution market and how both employers and employees can pay for their health insurance within the Exchange.

UPEA is tracking how Health Systems Reform is being brought about in the small employer market, as Speaker Clark’s vision includes expanding the Utah Health Exchange to the large employer market in 1-2 years.

Monday, February 1, 2010

Appropriation Reviews

Commerce and Workforce Services Appropriations Subcommittee 1/27/2010

Budget Presentation Utah State Office of Rehabilitation
· The agency is not requesting any money. Executive Appropriations has asked for a 4% ongoing reduction. USOR is funded by the Uniform School Fund and Federal Funds.
· The Center for Public Policy presented information on the economic impact of services provided by USOR. Every $1.00 USOR spends on providing services its citizen clients the state receives back $5.64 through income taxes.
· Those who acquire services through USOR get higher wages. Since September 30, 2009 USOR has helped 3,116 people find employment and stay employed for at least 90 days.
· The public commented and asked that the subcommittee not eliminate night and weekend services provided at the Sorenson Center.

Budget Presentation Department of Financial Institutions
· This department currently regulates 109 financial institutions throughout the state – including credit unions, banks, trusts, payday lenders, etc.
· In 2009, the department eliminated 4 vacant positions.
· The agency runs on $5.9 million and is totally funded through the fees that go into the general restricted account. They do not rely on any money from the General Fund.
· 2009 was the first year that the department’s unused funds were not placed back into the general restricted account, but into the general fund, which resulted in the department to eliminate 4 vacant positions. Every year prior, the unused money always has returned to the general restricted account. If money continues to be taken out of the restricted account, the fees would have to be increased to cover their budget and that would require legislative action as the fees are in statue.

Budget Presentation Public Service Commission
This agency regulates the utility companies ensuring that they are charging reasonably priced utilities.
This agency does not receive any money from the General Fund. Their budget is entirely covered from a public utility fee of 1% of their revenues.
The Commission is not asking for any increases in their budget for the rest of FY 2010 or FY 2011, as their budget and number of employees has been the same since 1994.

Commerce and Workforce Services Appropriations Subcommittee 1/28/2010 – CANCELLED – Next Meeting will be held on Monday February 1, 2010.

The Department of Natural Resources Appropriations Committee reprioritized the budget list for FY 2010. Below is the updated budget list. The employee furloughs have already taken place.
Natural Resources Appropriations Subcommittee
Proposed 4% One‐Time Budget Reductions, FY 2010
Jan. 20, 2010
Rank Agency Division Item Reduction
1 DNR DNR Admin One Day Furlough (8,100) (8,100) 0.0%
2 DNR Forestry One Day Furlough (8,700) (16,800) 0.0%
3 DNR Oil & Gas One Day Furlough (5,600) (22,400) 0.0%
4 DNR Wildlife One Day Furlough (32,900) (55,300) -0.1%
5 DNR Parks One Day Furlough (26,500) (81,800) -0.2%
6 DNR Geological Survey One Day Furlough (10,600) (92,400) -0.2%
7 DNR Water Resources One Day Furlough (8,900) (101,300) -0.2%
8 DNR Water Rights One Day Furlough (20,500) (121,800) -0.2%
9 PLPCO Public Lands Reductions (13,300) (135,100) -0.3%
10 Ag General Admin. Replacement with Dedicated Credits (135,000) (270,100) -0.5%
11 DNR Forestry Replacement with Restricted Funds (1,456,800) (1,726,900) -3.3%
12 Ag General Admin. Retirements (196,500) (1,923,400) -3.6%
13 Ag General Admin. Current Expense (114,600) (2,038,000) -3.9%
Office of the Legislative Fiscal Analyst 1/20/2010
14 Ag General Admin. Travel (in‐state) (50,000) (2,088,000) -3.9%
15 Ag State Fair Reductions (27,000) (2,115,000) -4.0%
Subcommittee Total General Fund Budget 52,874,800

House Democratic Caucus
On 1/28/10 the Public Employee Retirement Coalition (UPEA, UEA, USEA, and FOP) had the opportunity to present their views on the proposed retirement changes to the House Democratic Caucus. Each group highlighted the bills that are currently being presented, the effects of such bills, and that the coalition would like to see the issue reviewed in an interim study prior to taking any action.

UPEA provided talking points, historical information regarding contribution rates, and a recent Forbes article showing that Utah is in good shape to avoid financial failure due to pension funding.

Several of the legislators in the caucus expressed concern, stating that this issue will negatively impact the workforce. Many indicated that there is a need for public employees to be actively involved in the legislative process by contacting their legislators and educating the public.

UPEA indicated that they will update the legislators on the progress of the campaign, and again encourages all public employees to contact their legislators.

Capital Facilities and Governmental Operations Appropriations Subcommittee

On 1/28/10, UPEA attended the Capital Facilities and Governmental Operations Appropriations Subcommittee. The Legislative Auditor General’s Office presented “A Performance Audit of the Department of Technology Services” to the committee. The auditor stated that they are suggesting several efficiencies that can be found in the department and highlighted some recommendations that would help DTS better manage IT resources, develop a better strategic plan, and enhance the oversight and accountability of the department.

The DTS Executive Director, Stephen Fletcher, seemed sincerely grateful for the audit, as it helps to have another set of eyes to help them find a better way to move forward. He indicated that they have begun to implement several of the recommendations and have plans in place to continue working toward a more efficient service oriented model.

Fletcher gave a few examples of how they have been able to reach those efficiencies, including: eliminating 134 jobs through managed attrition, consolidating servers, and improving measurement of service levels. Through the positive recommendations given, DTS has been able to strengthen its processes and continues to look for new initiatives to find efficiencies.

Health and Human Services Appropriations Subcommittee
UPEA attended the Health and Human Services Appropriations Subcommittee on 1/28/10. In the meeting the Department of Health presented the changes that they have implemented through a reorganization of structure. The reorganization that took place last year consolidated 4 divisions into 3, and also looks to save the department close to $400,000 in ongoing funds, by consolidating high level positions.

The committee also discussed ways that the state could save money on Medicaid expenses. Michael Hales, Deputy Director of the Department of Health, indicated that they have implemented several changes based on an audit report that was completed last year.

Representative Dougall asked if the department could outsource some of the Medicaid administration to private companies. Hales indicated that some outsourcing has already been done through Healthy U and Molina Health. However, they are willing to look at alternatives depending on the scale of the

Thursday, January 28, 2010

Appropriation Subcommittee

HHS Appropriation Subcommittee 1/27/10

The Health and Human Services Appropriation Subcommittee met on 1/27/10. In the meeting they briefly discussed the Base Budget bills that will be submitted in both the House and Senate. There were a couple of changes that were recognized and added to the Base Budget priority list for the subcommittee. The committee added 3 items to the list for the Department of Health. The 3 items are related to the FY2011 budget recommendations listed last on the following link.
FY 2011 Base Budget Recommendations

The committee was also presented with the following reports that were specific to the Department of Health.

Health Care Financing
SB 87 Follow Up
Federal Disallowance
Children’s Health Insurance Program
Medicaid Mandatory Services
Medicaid Optional Services
Medicaid Providers: A Snapshot
UPEA is committed to tracking the State Budget and will continue to provide critical updates as they are received.

Health and Human Services Appropriations Subcommittee

The Health and Human Services Appropriations Subcommittee met to discuss the FY10 budget on 20 January, 2010. The Legislative Analysts Office put forward their proposals, using the 3% cut that the Departments of Health and Human Services have already implemented in accordance with Governor Herbert’s Executive Order. The recommendations that Legislative staff put forward can be found online, including the “Reductions Already Made”, “Base Budget Recommendations – Staff Proposal”, and “Optional Reductions”.

Legislative staff is proposing that DHS extend the hiring freeze to save more money, target all programs to take a 0.75% budget reduction – so as to spread the cuts equally across the board, and tap into the Disabilities Trust Fund to make up the $10 million reduction that is needed to amount to the required 4%. Representative Powell, suggested using more money from the Disability Trust Fund to remove DSPD services from the 0.75% cut – keeping their funding in tact. The committee agreed to those changes and removed DSPD from the backfill prioritization list.

The Analysts Office is recommending cuts that the Department of Health agrees with. However, prioritization was the difference in the recommendations given. Dr. Sundwall indicated that the reorganization is a large contributor to the savings found in DOH. He also stated that the Medicaid Restricted Fund account may be a reasonable option to plug the gaps that are found in the FY2010 budget, as the committee is requesting cutting one-time funds. Despite the recommendations made by Dr. Sundwall, the HHS Appropriations Committee decided to implement the recommendations made by the Legislative Analysts office.

The overwhelming hope of the committee was that the Executive Appropriations Committee would backfill many of the recommended reductions to the departments, rather than having to rely on such drastic cuts to critical programs and services.