The Greensboro City Council discussed the health insurance plan for city employees for over two hours on Tuesday, August 16, and after numerous votes finally voted to go back to start from scratch with a whole new request for proposal (RFP) process.
The issue was pretty straightforward, but you never would have known it from the discussion.
The city hired the consulting firm AON at a cost of $97,000 to make a recommendation on awarding the contract. AON considered two respondents, United Health Care (UHC), which currently has the contract, and Cigna, and recommended the contract be awarded to Cigna.
Greensboro City Manager Jim Westmoreland went over the AON report, didn’t think that they had properly considered all the costs of switching from UHC, which has handled the city’s health insurance for years, and made the recommendation that the city stay with UHC.
This is not the kind of discussion that the City Council usually gets involved in or should get involved in. In fact, decisions like this are the reason the city councilmembers, who are supposed to be part-time employees, have a highly paid full-time manager and staff to run the city.
It appears that at least two city councilmembers, Jamal Fox and Sharon Hightower, neither of whom have full-time jobs, would prefer to be city staff members rather than city councilmembers.
The motion was immediately made to accept Westmoreland’s recommendation and award the contract to UHC.
Fox came right back with a substitute motion to award the contract to Cigna. He said that the city hadn’t followed the policy.
In fact, the city had followed the policy. The policy was for the consultant to make a recommendation to the city manager and for the manager to review that recommendation and make a recommendation to the City Council. It is what a city manager is supposed to do.
Fox spoke as if not agreeing with the consultant involved some great conspiracy. If Fox had more experience with consultants he would know that it is not uncommon to disagree with the final recommendation of a consultant.
Westmoreland, in his report to the council, said that he didn’t believe AON had properly considered all the costs of transition.
My experience is that it always takes more time, is more complicated and costs more than you were led to believe to switch your health insurance company. The new company always claims it will be seamless and it never is.
So Westmoreland did his job, reviewed the information, decided that all the costs of switching from a company the city has had a long relationship with to a new one had not been taken into account and made his recommendation. Unfortunately, Westmoreland was not at the meeting on Tuesday to defend his decision.
According to the figures AON used, it was estimated that the city would save $1 million by going with Cigna. But those are estimates. Since this is a service contract and not a construction contract, the city is under no requirement to go with the lowest bid. In fact, the city didn’t have to put this contract out for RFPs at all and could have simply renewed the contract or gone with a new contractor.
Most of the City Council understood this, but Hightower did not and said the city had to go with the lowest responsible bidder. (Hightower talks more than any other city councilmember at meetings and spends a good bit of time complaining about not getting to speak more.) It was not a pretty discussion.
Councilmember Justin Outling, who is an attorney and was wearing his attorney hat at the meeting, told both Mayor Nancy Vaughan and Councilmember Mike Barber, who is also an attorney, what they could and could not consider in making their decision.
Vaughan at one point asked City Attorney Tom Carruthers if she was allowed to use “common sense” in making her decision. Carruthers said yes, but Outling disagreed.
Outling also told Barber he could not consider information he found on the internet in making his decision. Barber said he had every right to explain his thought process, whatever it was.
The voting on this was more confusing than the discussion. First, Fox’s motion to award the contract to Cigna was voted down 6 to 3 with Councilmembers Fox, Hightower and Yvonne Johnson voting in favor.
After a long discussion, with the motion to award the contract to UHC still on the table, Outling made a substitute motion to throw out all the bids, extend the contract with UHC for another year and start the RFP process all over again with better criteria.
Outling was concerned because councilmembers had discussed the fact that UHC was a Greensboro corporation with over 3,500 employees in the area. He said this could not be considered in making a decision because it wasn’t part of the RFP process.
Outling’s motion to start over failed on a 5-to-4 vote, with Mayor Vaughan and Councilmembers Outling, Johnson and Nancy Hoffmann voting in favor.
Then the motion to award the contract to UHC failed on a 5-to-4 vote with Councilmembers Barber, Hoffmann, Tony Wilkins and Marikay Abuzuaiter voting in favor.
At that point, Barber made a motion to reconsider Outling’s motion to start over. Since Barber had voted against the motion and was on the prevailing side, he could make the motion.
Fox then tried to make a motion to reconsider the Cigna vote, but since he had voted on the losing side of that motion he could not.
Barber’s motion to reconsider passed with only Fox voting against it.
Then Outling’s motion to start over passed with only Fox voting against that one also.
So the 7,000 people covered by the city’s health insurance will have at least another year with UHC.
Officials from Cigna threatened to not participate in the RFP process if the city started over, and when the process starts back up the city will find out if that was an empty threat.
