Regular Finance Committee Meeting
Mon, Apr 7, 2025 · Finance Committee
https://santafeminutes.space/meeting/280

== Executive Summary ==
The Finance Committee approved several key items, including a contract for a new e-procurement system and a significant health benefits administration contract. The committee voted to approve a contract with Verdosoft LLC for OpenGov e-procurement solutions, which aims to streamline the city's purchasing processes, despite concerns about its integration with existing Tyler systems. A major decision involved approving a four-year, over $92 million contract with Blue Cross and Blue Shield of New Mexico for health benefits, replacing the previous provider. This change is projected to save the city approximately $2.4 million annually and will include a one-paycheck premium holiday for employees this year. The committee also approved funding for various one-time initiatives for the Arts and Culture Department and an entrepreneurship support program with UNM Anderson School.

Throughout the meeting, councilors emphasized the need for clear communication and robust training for city staff regarding the new OpenGov system and the transition to Blue Cross Blue Shield. Concerns were raised about potential disruption for employees due to changes in health insurance networks, particularly for those with out-of-network providers. Staff were tasked with providing more detailed breakdowns of funding allocations and program outcomes for future accountability. The committee also recognized David Haram for his contributions to the city's fleet management.

== Key Decisions ==
- Approved the contract with Verdosoft LLC for OpenGov e-procurement solutions.
- Approved a four-year administrative services contract with Blue Cross and Blue Shield of New Mexico for health benefits, totaling over $92 million.
- Approved a budget amendment resolution allocating $794,164 from the lodgers tax fund balance to the Arts and Culture Department for FY25, pending a more detailed breakdown of expenditures.
- Approved a $300,000, two-year contract with the University of New Mexico Anderson School Center for Responsible Entrepreneurship for an accelerator program.

== Motions & Votes ==
- Motion to approve the meeting agenda — Passed.
- Motion to approve the consent agenda, as amended (with items B, M, R, and S pulled) — Passed.
- Motion to approve the OpenGov item — Passed (Councilor Cassid: Yes, Councilor Faulkner: Yes, Chair Merworth: Yes).
- Motion to approve the funding for one-time initiatives — Passed (Councilors Cassid: Yes, Lindell: Yes, Lee Garcia: Yes, Chair Romero: Yes).
- Motion to take Item S (Entrepreneurship Support Program) before Item R (Health Benefits Administration Services) — Passed unanimously.
- Motion to approve the contract with UNM Anderson School for the Entrepreneurship Support Program — Passed (Councilors Cassid: Yes, Lindell: Yes, Faulkner: Yes, Lee Garcia: Yes, Chair Romero Worth: Yes).
- Motion to approve the item (presumably the contract with Blue Cross Blue Shield) — Made and seconded.

== Public Comment ==
Councilor Lindell praised David Haram's kindness and leadership. Councilor Lee Garcia congratulated David Haram, recalling his positive demeanor and acknowledging the challenges of his role. Councilor Cassid expressed strong concerns about the lack of integration between OpenGov and Munis and emphasized the critical need for robust staff training. Councilor Lindell requested detailed breakdowns of funding for one-time initiatives and pressed for more data and success metrics for the UNM accelerator program. Alvin Valdez (Benefits and Wellness Manager) provided an overview of the health benefits contract. Professor Rob Delcampo (UNM) explained the unique "responsible business" focus of their accelerator program. Councilor Lindell expressed significant concern about employees facing unexpected costs with out-of-network health providers. Councilor Cassett expressed excitement about the change to Blue Cross Blue Shield, citing previous issues with Sigma and highlighting the need for overcommunication to alleviate employee anxiety. Councilor Lee Garcia questioned how the new health plan would compare to other employers' offerings and its role as a recruitment tool. Committee members expressed surprise and interest in the projected cost decrease for health benefits, seeking clarification on how such savings were achieved and their potential longevity.

== Topics ==
- Employee Health Insurance
- Procurement System Improvement
- Best Value Procurement
- Fleet Management Software
- Employee Recognition
- Budget Hearings
- Tyler Systems Integration

== Full Transcript ==
We are live. Okay, everyone, we're all together. So, at 5:04, I'm calling to order the Finance Committee for today. What is today? April 7th. If we could get a roll call, please.

Absolutely. Councilor Cassid. Here. Councilor Lindell. Councilor Faulkner. Here. Councilor Lee Garcia. Here. Chair Romero Worth. I am here. Madam Chair, you have a quorum.

Terrific. Do we have changes to the agenda tonight?

Madam Chair, no changes from staff.

Okay. Changes from the committee? And if not, is there a motion to approve?

Second.

We have a motion and a second to approve the agenda for tonight. All those in favor? Aye. Anybody oppose? That motion passes. We do have a number of items pulled from consent. Some, I think, got resolved. So maybe you can give me the latest and greatest, Director Oster.

Certainly, Madam Chair. The items that I have that were pulled for discussion are Item B, as in boy, Item M, as in man, and Item R, and Item S, as in Sam.

All right. B, M, R, and S. Anything else the committee is interested in? And if not, is there a motion?

As amended.

We have a motion and a second to approve the consent agenda as amended. All those in favor? Aye. Anybody oppose? That motion passes. We are from here going to presentations. We do have a staff recognition tonight, and I will turn that over to you, Director Oster.

Thank you, Madam Chair and members of the committee. I am delighted tonight to recognize David Haram, who is here with his family. Welcome, David. We're so glad to have you. David is a dedicated husband and father. He's also a talented stand-up comedian, a musician, and a magician. He also served as Don Diego de Vargas in 2017 and is a member of the Caballeros. David has worked with the City of Santa Fe since 2013 and began in Fleet as an equipment service worker. He has advanced into several different positions. He spent a brief period of time with the Fire Department as a heavy equipment mechanic and then returned to the Fleet Management Division in 2022 as the Fleet Section Manager.

David is passionate about all the aspects of fleet management, which includes stakeholder satisfaction, accountability, internal and external transparency, intentional positive culture, risk management, including time, money, safety, and assets, and constant growth. David is currently enrolled in a fleet-focused management certification program and financial classes. David's goal is to do his best to come up to industry standards and learn how to further leverage vehicle data to maximize the city's investments, collaborate with training facilities to keep our techs up to date and safe, which we have, all in the ultimate effort of bringing the title of industry leader to the City of Santa Fe.

I have a couple of other things I want to share about David. David has been a champion of change management and improvement in our Fleet Division. He's in the process of leading the implementation citywide of a new fleet management software called RTA. That's going to be a real improvement in terms of our fleet management citywide. So, we're very proud of David taking a leadership role in that area. I also want to recognize that David is an excellent manager and a great leader to his team. He's dealt with some big challenges recently, and he's handled them with grace and dignity and compassion for his team. So, I really want to recognize David both for his technical skills and also as a great leader and a manager within the Finance Department. So, Dave, I'd love to welcome you up, and we're so glad to have your family here to help us celebrate you. I'd love to welcome you up so I can present you with your certificate. And this is little Dave. Little Davey.

Little Dave. Oh, I just, I really love my job, and I just appreciate everybody. So, thank you. Thank you.

Thank you for all the work you do. Councilor Lindell.

Thank you, Chair. I know that Mr. Haram brings amazing skills to us. He's also a wonderful leader, but what I personally know about him is that he has amazing kindness, and he treats people with kindness and deep respect. I personally have seen it, and I am so happy that you are on the City of Santa Fe team. It means a lot to me. Thank you. And I am just dying to know what your son is eating. It looks very tasty. He's gobbling it right up. Councilor Lee Garcia, sorry.

Thank you, Madam Chair. Dave, congratulations. I just, you know, you're doing a great job in the city, and I first met you back when you used to work for a private business, Pisano's. And I remember that you'd go into the store, and nothing but smiles. So, when you have somebody like that that brings joy and positivity to any crew, I think that is something that's very positive. And there's always going to be obstacles and things to overcome. One of the things that I remember, and I hope you don't, they used to call you the Panda. So, I was like, "Who's that Panda? It's that big dude over there at Pisano's." So, anyways, I just wanted to show my gratitude also for your contribution to the city and what you're doing in this field. Obviously, the field of fleet maintenance and auto mechanics is very intriguing. It's interesting, and it's very challenging. And so, well deserved. Kudos.

Well, thank you for being here tonight. Thank you for all the work. Really, really appreciate it. And it's always great to see your smiling face in these chambers. So, thanks for coming on over for this. Appreciate it. Thank you, councilors. With that, it is my pleasure to present David with this certificate of appreciation and thanks for his performance, service, and dedication to the City of Santa Fe, New Mexico. Congratulations, Dave. And thank you so much. Thank you to your family also. Yes. Well deserved.

Thank you, Madam Chair, and thank you, members of the committee.

Thank you so much, Dave, and family for joining us this evening. And Chair, I think we're ready to continue on our agenda.

Okay. So, we are moving now to the consent agenda. The first item that was pulled is Item B, Request for approval of General Services Contract for Verdosoft LLC for the purchase of Open Government, or OpenGov, sorry, e-procurement solutions and implementation services in the total amount of $550,236.73 plus New Mexico gross receipts tax for a five-year term. We have our Purchasing Officer, Travis Dutton Leaden, with us, and Councilor Cassid, I believe you pulled this item.

I did. Thank you so much. Thank you for being here. I apologize. I meant to send you an email ahead of time so you'd be prepared for questions. So, if there's anything that you need to get back to us on, I understand that was my fault. I really would like some more information on how this will improve procurement. We hear a lot about the challenges around procurement, that it causes a lot of delays, and I understand that, from what you and I have discussed, that there are a lot of steps, there's a lot of complications, and moving pieces, which can sometimes slow things down. So, I am interested in why you feel this change is going to be an improvement, what that improvement is going to look like. And then, I guess the second part of the question will be, we've been moving towards Tyler systems throughout the city, and there's been a lot of conversation about continuity and trying to get on Tyler everywhere we can, and yet here we are moving away. And so, I'm a little concerned about how that communication between these two systems is going to work, and how we are going to address them. So, two-part question: Why is this better? And two, what do we have to look out for that is not part of Tyler?

Yeah, the green light. Is the green light on? And you're reasonably tall. So, if you want to put it on the side, then you don't have to scrunch over. There you go. You think? There you go.

Madam Chair, Councilor Cassid, thank you so much for having me tonight, and thank you for the questions. So, how is this better? We've spent two years, so I've been here for two years now, and I've been searching for a solution to help us. We implemented the bid module in Tyler on December 23rd of 2023, and we have struggled with that module weekly. So, we're constantly calling it, trying to have them help us. Today, for instance, the bid module went offline. So, we had an RFP due, proposals were due today at 3:00. Vendors were trying to submit their proposals, and it was offline. With OpenGov, we'll have, they have a first line of defense for customer service. So, we'll be able to call them and tell them, "Hey, a vendor's trying to upload a bid or proposal," and then they'll help them directly with the bid module. My staff and I have had to devote a lot of our time to help vendors register and submit their bids and proposals. So, OpenGov is, I'd say, best in class. And I'm not just saying that about the vendor, but their solutions. So, when I was at the state, I was on an e-procurement committee. I was on an RFP committee, a nationwide committee, and we evaluated many different e-procurement solutions. And during my tenure here, Alexis really wanted me to look at other solutions, and I did. I looked at many, and with other solutions, I would say, "Hey, do you have this feature?" And they would say, "No, but we will someday." With OpenGov, I would say, "Hey, do you have this feature?" They'd say, "Yes, and we have all these things," and then kind of demoed more than I requested every time I asked them if it had a certain one of my requirements. Procurement is difficult, I'd say. And I think this solution is going to help us streamline a lot of things. They have a pretty big vendor network currently, so we'll be able to get more competition.

Well, and can you, I think getting some information on what that streamlines, it sounds like, first of all, that there's going to be some freeing up of city staff time because of that customer service component. Is that an accurate assessment?

Definitely. Yes, Madam Chair, Councilor Cassid. Definitely.

And then in terms of some of the features that were important to you with procurement and how that will impact, I mean, again, what I'm, what I really am thinking about is both from the city perspective, when I hear from departments about, "I have this thing that we want to get done, and it's caught up in procurement," that hopefully that, you know, I'm hoping that timeline will maybe not be as long. I understand we have to have things open for a certain amount of time, but then afterwards, there's a lot of processes that, from my understanding, get, you know, a lot of things kind of get, you know, clogged up in the system, and hopefully we'd be able to get projects moving faster. Is that something that we hopefully will get with OpenGov?

Yes, I think from the very, from the soups to nuts. So, while even departments are trying to figure out how to write something, so they have a request module that has thousands and thousands of scopes of work that have been written by government entities around the nation. And they have this AI feature. So, a user could say, "Hey, I need, I need to process a procurement for trash trucks." And then it will develop a baseline scope of work for the user so they're not having to do research or try to figure out what they need, and it takes them off the front line for less time. So, because the staff are trying to, are often doing double duties, they'll be able to come off the street, do, submit the request, and when we, when we get the requests in purchasing, they'll be a lot more full and almost ready to go.

So, not as much of the back and forth that we frequently hear about in terms of finalizing an RFP or whatever it is before we go out. Yes. And then from the vendor side, I've heard a lot of challenges on dealing with our RFP process. Sounds like going offline is apparently something that occurred today, but just other challenges in being able to fill things out and feeling like there's a lot of repetitive questions, that it is not the most friendly process for individuals that want to do business with the city. Do we see improvements there as well? Yes. Yes. So with OpenGov, we can create what are called templates. We can create as many templates as we need to. So we'll be able to put all of the required language into a certain section, so it'll be there for reference. But then we'll be able to spotlight the nitty-gritty, the items that we actually are requesting. So it'll be a lot more clear. We can target or we can specify. We have more flexibility in how the RFP is written based on whatever the request is. Is that exactly understood?

Well, that is good. In terms of concerns around it not communicating with Tyler, because we heard so much about that as we were moving over to the Munis system of, "Well, this will help us because then we have continuity throughout departments and everything's, you know, we'll be talking to each other." Now we're moving to something that is not potentially going to be talking to what is the majority of our systems. What are the concerns there and how are we going to address them?

So that's a valid concern. The model or the standard in many different government entities is the procurement module separate, and then so it's basically a system to use to catch fish, basically. And then once you catch your fish, then you put it in your system of record. So we'll use the procurement module to fish, and then the information we need, we will put that in Munis. And they have, I guess it told me that if a vendor wants to connect to Munis, Munis has to build out that API, not the vendor. Anyway, so we'll have to buy something from Munis to have Munis integrate with OpenGov. So if we want that integration, otherwise it's going to be, it sounds like right now it'll be a manual process that your team will do of, "You've gone fishing to process your fish."

Yeah, it'll be a manual setting process in cooperation with the departments too, of course.

Okay. Last, training on a new system. We will hear this a lot from staff: "You just gave us another new system. There's been no training, and now we're taking a bunch of time trying to figure this out." I'm not sure if this is for who would be in charge of this. Sounds like we have HR in the room. You guys do a lot of training, or I'm not sure if it's finance. But that is something I do want to make my priority very clear, that we heard a lot about this when the first transition over to Tyler, that, you know, we transitioned and then people didn't feel that the onboarding for the new system was as robust as they would have liked it to be in order to feel confident with that system, and that there were some challenges, delays, mistakes made because of that. So, it sounds like there's a lot more intuition with this, which is wonderful. However, I imagine that that intuition is going to be much stronger for you who deals with these systems every day as opposed to somebody, if you gave it to me, and I would, I never deal with these systems. So, I'm guessing the staff is somewhere in between there. So if you guys can just really make sure that when you are rolling this out, that that training does happen so that, you know, we at least take that time on the front end and not have it be a learning process as people are really trying to get procurements out there and having to take the time and dealing with mistakes then, because I know that that can lead to a lot of frustration from staff and then resistance to that change. So I just wanted to make that request very clear.

I agree. Madam Chair, Councilor Cassid, so we're often told that we educate by rejection. So we have actually, with the instructions from Director Oster, we are currently changing something in purchasing now, and we have a full-fledged approach to selling the new process, which actually happened. We started this morning with senior staff to kind of explain the high level. And then we've created videos, desk manuals, and then we'll do Zoom trainings. And then with OpenGov, they'll assist us with those trainings. And then, you know, being a different process that we'll implement, but they'll help us with the trainings. And then they have videos for every process. So I totally agree to view those as they're doing things.

Wonderful. Well, thank you. I'm glad to hear that and glad that you guys are already aware that, Director, did you have? Sorry, it's your job.

Director Oster, thank you. I just wanted to add just a little bit more in relation to your questions because I think they're very important. So in relation to using Tyler and using Munis, the procurement team has really taken the lead during my time here at the city in terms of implementing new functionality in Munis. As Travis mentioned, we did implement this e-procurement bid module in Munis, and we really tried to make it work to the point that Travis has actually been enlisted by Tyler to sit on a panel to try to improve the product. So in this case, you know, I think we do agree that Munis is our first choice always, and we've tried, and unfortunately the Tyler Munis functionality is just not meeting our needs at this time. So that's what led us to look into other systems in the context of the feedback that it sounds like you all have received and we've received as well about how the procurement process can be challenging. So I wanted to really acknowledge the procurement team and Travis specifically for having both the bravery and the willingness to try new systems and to face the challenges that can come with implementing change. Because certainly, I think, I mean, we all would have preferred that the Munis module meet our needs and we would just stay with that, you know. So, we're not moving away from that lightly.

And as far as the training piece, I think, you know, Travis mentioned this morning, his group was at the senior staff meeting providing a high-level overview to directors about how to use a new tracking tool that we were implementing in SharePoint that Travis and his team and the IT teams have been working together on. So, you know, procurement is, in terms of the finance department, always willing to try to make things better, and I really appreciate that. I think that's something that can be hard, and it can be scary to move away from what we know. Even if we don't like it, it can be hard to try something new. So I think that Travis and his team have really been leaders within the finance department in terms of saying, "We need to try something new. Let's come up with a solution, and let's give it a shot." And in terms of the training and the communication, we've really leaned into that, and we're working in terms of this SharePoint tool that we're implementing for tracking procurements. We're working very hard, Travis's team is working very hard to make sure that people that are going to be using that system have the tools they need to be successful, and the folks around them in the organization understand the change as well so that they can provide good support. So, absolutely, providing a lot of training and resources is key to successful implementation of any change, whether it's technology or anything else. So, I just wanted to chime in and say that we're committed to making sure that with this change and with all of our changes, that we're providing users with training and tools so that they can be successful and so that we can make the procurement process less painful for everyone, including the procurement team.

And really the last thing I wanted to say is just this is something that's come up from city leadership in multiple iterations. You know, when John Blair was the city manager, procurement was a focus, and there was a project that was done with Creative Santa Fe where procurement was a focus. We have an internal audit going on right now where Moss Adams is looking at procurement. And then the current team with the new city manager and the special advisor to the mayor, there's a lot of focus on procurement, and I wanted to thank Travis and his team for taking that as an opportunity because there's been a lot of scrutiny of procurement and a lot of efforts, a lot of cooks in the kitchen trying to make it better. And together, I think that we are, I think we still have opportunities to improve, but I do think, you know, this is something that's very much in the forefront right now, and I'm really pleased that Travis is willing to put this forward as an option for a way that we can improve.

Wonderful. Thank you. And I really appreciate you providing that background and how many people you've been speaking with and how many groups have been focusing in. I know that's not always easy when it's your department and you're getting a lot of suggestions of where there are opportunities for improvement. So, I thank you so much for that. Last question. So we are signing a contract now with OpenGov. We have a contract with Munis. Does our dollar amount for Munis change if we throw away some of the modules that we're using, or is that we have just kind of a base pay with Munis?

Madam Chair and Councilor Cassid, I think we'll have to follow up with you on that one. The IT group manages the Munis contract, and I know that we own the bid module, but I'm not sure if we're paying like a licensing fee or anything. So we'll follow up with IT on that and get back to you.

Okay. Wonderful. Thank you. I appreciate that. No further questions. I have one, seeing anybody else. What's the timeline for implementation, and how long is it going to take to be able to start to see this in play?

Madam Chair, Councilor Romero Worth, the timeline is three to six months starting from when it gets final approval from the governing body. Yes.

And is this on, I haven't looked, is it on Wednesday night? So if it's approved Wednesday night, then we're looking three to six months. Yes.

Okay, great. Thank you. Any other questions from the committee? And if not, is there a motion?

Second.

We have a motion and a second to approve this item. Do we need a roll call? I guess we do.

Yeah. Thank you, Madam Chair. Councilor Cassid.

Yes.

Councilor Lindell. Councilor Faulkner.

Yes.

Councilor Lee Garcia. Chair Merworth.

Yes.

Thank you. Thank you for being here tonight. Really appreciate it. Okay. We are on to item M as in money. Request for approval of a budget amendment resolution to allocate $794,164 from lodgers tax fund balance to the Arts and Culture Department FY25 budget for ongoing arts and culture initiatives and Career Garson Theater feasibility study. We have our Arts and Culture Director Chelsea Johnson here tonight. Welcome. And I believe Councilor Lindell, you pulled this item. Thank you. Thank you for being here. So, we've got $800,000, but this computer isn't really loading. And I see like a whole bucket of programs that this is directed for funding.

What I'd like to know, what I'd like to see is a more complete breakdown of the funding rather than just one big bucket of money, and we're going to do all these things. I'd like to see a budgetary distribution of what it is to each one of those. Do we have that yet?

I can certainly pull that together for you.

That would be terrific if you could do that by council or as soon as you can do that and get it off to the Finance Committee. Are you speaking to the sponsorship expense, other consulting advertising lines specifically, or the art CIP, or the just capital transfer of lodgers tax funds? Any particular one you have questions about?

The one I, let me get back into the little meat and potato part of this. My computer isn't loading. I can make, do you want me to help here?

Go ahead.

So, I think in the background, in summary, maybe it lists a number of different one-time initiatives that it looks like will benefit from this money, including the feasibility of Garson Theater, sponsorship of popular and cultural meaningful Santa Fe events, extensive inventory processing and proper disposition of thousands of items of film, photography, music equipment at Garson Studios, public programming, and additional advertising for the 20th anniversary of Santa Fe's prestigious UNESCO Creative Cities designation. I think, Councilor, you're asking for a breakdown of how the dollars will be distributed across all those different initiatives. Is that what you were?

Correct. And also the sponsorship of the events.

Yep. Pull that together quick.

Great. That's what I'd like to see. Just a little bit more complete breakout instead of just a big bucket of money and a whole list of projects. I'd like to see how much money is going to each project. Thank you. That's all I have.

Chair: Okay. Other questions from the committee? If not, is there a motion?

We have a motion and a second to approve this item. If we could get a roll call.

Certainly, Madam Chair. Councilor Cassid.

Yes.

Councilor Lindell.

Yes.

Councilor Faulkner stepped out. We'll skip her for, she'll be excused till she returns. Thank you. Councilor Lee Garcia.

Yes.

Chair Romero.

Yes.

Motion passes. Thank you, counselors. Thank you. I am going to, with the committee's okay, I'd like to take item S before we go to R because I think R is going to take some time. And that way the folks that are here for S can get on their way. Is there any objection? Do you want a motion?

Move to go to item S and then return to item R.

Is there a second?

We have a motion and a second. All those in favor?

Aye.

Anybody opposed? That motion passes. Okay. So we are going to take item S, request for approval of a general services contract with the University of New Mexico Anderson School Center for Responsible Entrepreneurship for Entrepreneurship Support Training and Administering an Accelerator Program in the total amount of $300,000 for a two-year term. And we have a number of guests here tonight. Johanna Nelson with the Office of Economic Development and Eric Rens Whitmore, Economic Development Specialist. And let's see, Councilor Lindell, you pulled this item. Do you want them to give you any kind of overview of this or you want to dive right into questions?

Whatever you want. Just go into questions because we...

Okay, Councilor Lindell. So my questions are on this. Has this been implemented in other municipalities?

Madam Chair, Councilor Lindell, accelerator programs have been run in many, many municipal areas. Yes.

But has this one by this group, and do we have any data of the results of this group with, do we have a similar contract that we can compare what we're asking for and what another group got from that contract?

Yes, thanks for the question. Madam Chair, Councilor Lindell, we have previous contracts that were run for accelerator type programs, not from UNM's Center for Responsible Entrepreneurship. We could altogether the information about what was paid for these previous programs. Let's see. Professor Rob Delcampo is joining us online. He could give some information about the success of the program that they've been running so far, which is what we'd like to invest in and continue. But Madam Chair and Councilor Lindell, thank you so much for the question. We do, one, one recent accelerator program was BISM, if you recall. Sure. That's a specific accelerator program that the office invested in. And then I'm not sure if Rob wants to mention, there's a couple of other examples in the state. If you want to highlight those, Rob.

Sure. Yeah, I'll jump in. Madam Chair, Councilor Lindell, there are a number of other accelerator programs that run throughout the state. You may be familiar with some of the things that New Mexico State's Arrowhead Center runs. They're running some things across different areas and virtually. We do have a sort of a unique approach with ours being for responsible business, right? Where we're talking about sustainability, we're talking about environmental issues, we're talking about community related issues as well. We've run this program for two years. We've touched almost 42 different businesses in Santa Fe and Northern New Mexico. And we've launched 24 new businesses. And I believe the contract from my understanding is for us to continue this work for a couple more years. And we've funded it through the university and some generous donors for the past couple of years. In our research, typically these types of accelerators are very expensive to run. Our costs, you know, I'm not just here just to tell you that you're getting a good deal, but we are only asking for the costs that we incur for this program. There's no sort of margin or anything. As a university and the flagship university in the state, we are just requesting funds so that we can operate. And it's only a portion of the operational funds for the next two years. Our actual costs are closer to, including salaries and such, about $700,000 for a two-year period of running this.

Okay. It would be, it would be really helpful if we could in a packet like this have more detailed information of what the, what the outcomes have been, how many people have been touched, what the businesses are that have been, you know, these, I think you said there were 24 new businesses. Is that right?

That is correct.

Well, what are they? I mean, let's, let's really put the, somebody's got that data and that information, because that's what sustains this type of, of program and, and grant making. So, I think that we need a much more detailed explanation of what we're doing. Or I do, let's put it that way. So that's what I would like to have, see come to us because I know that information exists. And, you know, is this, is this program run by grad students? Is it, I mean, who, who runs the program?

Madam, Madam Chair, Councilor Lindell, it's run by a number of faculty members that we have, as well as supplemented by some business leaders in the Santa Fe area as well. So myself as the lead faculty member at the university, I am the one who administers the majority of the program. We have other faculty that come in and we also have folks from the business community who've been very successful and very generous to come in and share their, their input.

Just, I, I appreciate that and I'm not saying that it isn't a great idea, but you need to share your successes with us and so that we know what it is that we're really supporting. So that's what I have. I, I need a more detailed picture of what it is we're trying to support. Who are those business people in Santa Fe that are generously giving of their time and knowledge and spirit of entrepreneurship? I, I think that it, it needs to be a clearer picture. That's all I have.

Chair: Councilor Falconer, I have to concur. I think one of the things that we've struggled with as a city is we don't really share with the public our successes and so we tend to just focus on the challenges, but I think there's, the city does do some good things and we're smart in some places and so I, I, I agree. I personally like to see more detail in everything that we have to decide, but that's just, anyway, anybody? All right. So, do we have, is it possible to get a little bit more information on this? Okay. Do we have a motion?

Motion to approve.

Second.

We have a motion and a second to approve this item. If we could get a roll call, please.

Absolutely. Councilor Cassid, yes. Councilor Lindell, Councilor Faulkner, yes. Councilor Lee Garcia, yes. Chair Romero Worth, yes. Motion passes. Thank you.

Thank you for being here tonight.

Okay. The last item that was pulled off of consent is item R, request for approval of an administrative services contract with Blue Cross and Blue Shield of New Mexico for health benefits administration services in the amount of $23,54,885 for the first year excluding New Mexico gross receipts tax and a total amount of $92,219,540 including New Mexico gross receipts tax for the term of the four-year contract based on available budget and services provided. We have a number of people in the room and at the podium is our Benefits and Wellness Manager, Alvin Valdez, but we also do have our Human Resources Director, Bernadette Salazar. I believe we also have other consultants and contractors here with us as well. A plethora of knowledge to answer the committee's questions as we dive into this. Councilor Lindell, you did pull this item. I do kind of feel like we need a presentation on this one. Is that all right? Okay. So, I'll turn it over to you.

Excellent. Good evening. Like they said, my name is Alvin Valdez. I'm the Wellness and Benefits Manager for the City of Santa Fe. So this evening, we're here to respectfully request the approval of an administrative service contract with Blue Cross Blue Shield of New Mexico for FY26 and beyond. Yeah, we'll be talking about contracts, documents, and policies, but at the heart of this, it's about something much bigger. It's about taking care of the people who take care of our city by providing them with a health plan that delivers broad coverage, high quality of care, and the best value for both employees and the city, the city itself. So, we'll start off with a quick synopsis of our current City of Santa Fe health benefits. So, as many know, the City of Santa Fe is a self-funded plan. This means that the city and the employees both pitch in to pay the claims on a weekly basis. This allows us flexibility in plan design and greater cost savings. It also means that we use a third-party administrator to administer our plan. So our current renewal is about to conclude our current contract and it concludes on June 30th of 2025. This is what prompted the RFP for this year and for FY26 and onward. So part of doing an RFP is according to Resolution 200502, the city appoints a Benefits Advisory Committee with members from the union leaders of ASME, Police, Fire, and the non-union sectors for, for the whole proposal evaluation itself. This year was quite unique because we used a new procurement technique called the Best Value Approach. This approach is focused on metrics and data and it's done via a blind election to find the best offerers. After the evaluation occurred this year and it was completed, Blue Cross Blue Shield New Mexico emerged as the top vendor and they therefore they were awarded the tentative award on this administrative contract. So, Blue Cross Blue Shield has demonstrated expertise in administering comprehensive health benefits that are anticipated to enhance our member experience and generate cost efficiencies.

I think it's really important to realize here is this is a smart and stable plan. This plan design remains unchanged. It's 100% the same that we have now with our current incumbent Sigma Health provider. And what's going to happen with Blue Cross Blue Shield, there's a 3% savings that's going to be implemented via a benefits deduction holiday during a December pay period where no employee deductions for medical will be taken. So, there is a slight typo there. It'll only be medical and not dental and vision. All right, I want to point that out.

And then this allows for greater savings than a 3% premium deduction over the 26 pay periods. Currently, we have 1,390 employees, and of those employees, 1,146 employees carry that medical coverage. That means that 83% of our employee base will see a holiday savings. There's going to be minimal disruption where the provider network matches. The rates were pretty high. We had a 97.05% overall, 97.79 for medical providers, and 96.24 for our ancillary services. And finally, there was a 94.5% for medical facilities. We are guaranteed a 98.3% in-network utilization for all medical claims.

Finally, for our open enrollment strategies, I think it's important to know for open enrollment, all the employees will utilize their employee self-service account to elect their benefits. This means that all employees will have access and the ability to elect their benefits 24 hours, 7 days a week for that 21-day period of open enrollment. To enhance this, we're going to provide educational trainings via Teams and Zooms. We'll offer 10 unique locations with one-on-one sessions with live in-person assistance by Blue Cross Blue Shield and their affiliates. So, we're going to try to make this as accessible as possible to every single employee.

On that note, I'm going to go ahead and turn it over to our AON health benefits professional consultant who will give us a deeper dive, a more in-depth look at our health benefits performance, at our upcoming predictions, cost scenarios, and saving comparisons. Thank you.

Good afternoon, Madam Chair and committee members. My name is Trey Sarsfield. I am an actuary with AON Consulting. As Mr. Valdez mentioned, we are the employee benefits consultant for the City of Santa Fe. If my name and face are not familiar to you, I will refer your memories to Mr. Todd Burley, who gave presentations like this in years past. I have taken over the majority of his financial duties for the city. Thank you again for your time.

What we will attempt to illustrate here tonight is not just the self-funded nature of an employee benefits program, but also how much will that cost and how will that be paid for, split between the city and your employees. So, first we would like to present a five-year history around the most recent increases for both the city and for the employees. As we see, this is not a consistent number. The nature of self-funding means that some costs are variable. We do, of course, know that stop-loss premiums and administrative fees, and in fact, the dollar amounts that you quote to your employees as their responsibility, are fixed per head costs over the course of the contract. But not only the other component, but the considerably larger component, would be the actual claims that come in. And under a self-funded arrangement, you will be responsible for the actual claims that come in, whether that is above, at, or below expectation.

For the past five years, what we have seen are increases of 11%, 9%, again 11%, 18%, and then the last couple years have been a half percent increase to the overall rates and just shy of 7%. The other item that we would make sure that we point out is that especially during the uncertainty of COVID and lockdown, no increases to the employee rates were enacted for fiscal 21 and 22. And then there was an attempt to right-size those. And in fact, even in fiscal 24, there was a bit of a makeup there for the 7% increase to employee rates. Some of that was the 0.5% that was expected for that year. 6.5% of that 7% was actually making up for a contribution deficit from the past.

Another item to discuss the upcoming costs would be to look at the current costs and the current budgets. What we are showing on this slide would be the overall month-by-month costs that come in versus the overall plan funding. So where we are on both the full year 23-24, which is the bottom half of this, and in fact for the first seven months as of January 25 for the existing fiscal year, is roughly a 99% loss ratio. I'm certain that you are familiar with the term loss ratio, but for the sake of the public record, if you have $1 budgeted and your total costs are 95, that is a 95% loss ratio. If your actual costs were $105, that is 105% loss ratio. And as we are showing here, the city's budget and actual have come in very, very close to one another, to approximately 99% each of the prior full year and so far year to date.

What that means for budget setting purposes is that we certainly know that costs and inflation exist, and cost increases exist on healthcare just as it does every sector of the economy. So if you are precisely at budget and the increase trend percentage is 7%, you will expect to see a 7% increase to your budget for your next year's estimate. If you are well below, if you are currently well below budget, then you can obviously make up some piece of that and not have to have a 7% increase. If you are considerably above, then you will have to make up for the difference this year plus the expected cost of trend. But as we've stated, the experience has run very, very similar to the overall budgets. So we will not have to worry much about a deficit or a surplus moving into the coming fiscal year.

We want to now illustrate some of the totals and some of the splits for fiscal 26. The existing budget for the current plan year ending June 30th this year is $23.3 million based on the enrollment that was provided to the RFP respondents. The enrollment of 1,134 gives you that $23.3 million. The city's portion is $17.84 million, and the other $5.46 million is coming from your employee contributions.

If we were to look at the prevailing market and determine a completely status quo renewal for the upcoming fiscal year, we at AON, being underwriters and actuaries, believe that there would be approximately a 5% increase. This would increase the total $1.16 million, bringing that up to about $24.5 million. However, one of the main reasons for the RFP that was sent out was to ensure that you are working with the highest quality providers and also those with the best network discounts and thus the most efficient affordability as far as your healthcare costs go. The most attractive, most competitive proposal that was received showed fixed costs, the quoted pieces that we do know of, $2.65 million and estimated claims of about $19.5 million for a total projected cost of roughly $22.15 million, or about 3.7% below the existing budget number.

One thing that Mr. Valdez did point out, but I want to make sure and state again, is that this does not require any plan design changes. This does not require any cost shifting to your employees by virtue of their deductibles, co-insurance, or co-pays. This is maintaining exactly the three plans that are in existence today with all the features that they do currently have. AON's underwriting projections for the next year came out very, very close to that which we received from Blue Cross as a bidder. What we believe, however, is that basically our comfort goes to as far as a 3% decrease to overall budgets and rates versus the very close but a little more aggressive 3.7% that you saw on the previous slide.

However, there is another way to go about this to make sure that your employees and their families receive the full benefit that was projected by your winning bidder, by your bidder, and yet keep the plan very much safe and secure even in the event of claims going a bit above their projections. So with the aggressive scenario that we show, this is a 3% decrease to employee budgets, sorry, to employee rates and to the city rates, thus the city budgets. This would make the overall city cost $17.3 million, the employee cost $5.3 million, and the total budget $22.6 million.

However, as Mr. Valdez mentioned, we have landed on a more attractive scenario to your employees and for the overall health of the budgets and of the fund such that there would be no change to the city budgets. Those would maintain exactly where you are for the current. But with one premium, with one paycheck deduction being absolved, that would turn out to be a little bit higher a decrease on an annual basis for your employees. The overall city costs would remain at the current $17.8 million. The employee costs, assuming the premium holiday is enacted, would go down to $5.25 million. The total budget would be $23.1 million. And just for the purposes of going back to something on the agenda, this $23.1 million is actually reflective of the $23,054,885 that was part of segment R of today's agenda.

What we would like to show here is just what the overall city costs and employee costs would look like on a bi-weekly basis if the overall 3% more aggressive scenario were enacted. I will not go ahead and read every number here, but just for the sake of examples, when we look at the premium plan on the ASPEA non-union side, the employee is, sorry, for employee-only coverage, the city is currently paying $356.58. The employee is paying $111.38 for a total of $473.96. If the 3% reduction were to be in case, then the city contribution would move down to $351.53. The employees would be just below $108. The total would be $459.52 for differences of $11.50 on the city budget, $3.39 per bi-weekly period for the employee, and a total of $14.44. This is going to be true on the 3% basis for all the plans and for both the ASPEA non-union plans and for the fire union plans as well. A 3% across the board, no differential anywhere according to plan or tier or your employee status. We do believe, we do intend that this same decrease would be enacted on both of the core and the HR plans as well. But for the purposes of this slide, we know that more than 90% of employees are currently in the premium plan. And thus this is showing this piece representative of the entirety.

I'd like to make one final statement related to overall contribution comparisons, and this would be looking at the individuals that are on your plans, and by that I mean all of the individuals that are on your plans. Every employee, regardless of plan that they choose or tier that they are in, regardless of whether they are union or not, basically we want to show the impact of a 3% reduction as we had said, and we want to show the impact of the premium holiday as well and show you how, show you that that is actually a larger number. So, to again to just pick one specific one, we will go to the core plan fire union. If the 3% reduction were in place, then over the course of the year, the employee who covers himself or herself and the entire family, so the bottom employee plus family row there, the 3% reduction would save $218.14.

However, the premium holiday would save $280.78, an additional savings of $62.64 over the course of the year. As we said on the prior slide, this is true for every employee. This is true for all plans, for all tiers, regardless of employee status. So with that, we believe that we have shown you the rationale behind the $23.05 million, and we believe that it is very responsible from the city's budgeting perspectives, but also as generous and as kind as possible to your employees as well. So with that, I certainly again want to reiterate my thanking you for your time, but would welcome any questions at this point. Thanks again.

Thank you. Can we get these presentations sent to us via email? They're in our packets, but to get to the page is, you know, well deep into the, there's like, what is it, over a hundred pages, I think, and these are at the end. So, if we could just get the two presentations that were given tonight emailed to the governing body, it would be great.

Mayor: Madame Chair, I will definitely get those to you. I'll send them out tomorrow morning to the whole governing board.

Okay. Thank you. I appreciate that.

Yeah. And Councilor Faulkner would like me to remind you to do an OCR.

Okay. Assuming you know what that means, Madam Chair.

Councilor Faulkner, we did speak about it, and it will get sent that way. Yes, ma'am.

Okay. Terrific. Councilor Lindell, you pulled this. I think probably lots of people have questions, but we'll start off with you. Just a couple of quick questions on this. How do we make a determination of service versus cost? And I will at this time cede the floor to Madame Chair.

Councilor Lindell, thank you for the question. As Elvin Valdez mentioned, we used a new approach for this RFP called the best value approach. So there's voting involved with our benefits advisory committee, and I think in discussing with that group, which meets every quarter, the most important thing for employees and the members are representative of each of our departments and union memberships. The most important thing to them was maintaining our plan design. So we went into the RFP knowing that we wanted to keep the plan design the same to the extent possible. So that was the goal from the beginning, and to do that in the way that would have the least impact to employees, but the best cost value.

So what do you think the biggest change, not dollars, what's the biggest change that employees will see in us switching over to Blue Cross Blue Shield rather than United Healthcare Sigma? Sorry, aren't they a part of?

Madame Chair, Councilor Lindell, I would say that, and I know Blue Cross Blue Shield representatives are here, I would say that there could be some disruption with providers, minimal disruption, and Alvin started to explain some of the strategies that we have in place to minimize any type of disruption that would happen for employees. But being that we're recommending with this new contract that our plan design stay the same as it is now and our bi-weekly premium stay the same, there won't be a lot of differences. So people still have the same opportunities and abilities to see all of the same health providers that they've been seeing now and have the same expectations of covered drug costs, all of those kinds of things.

Madame Chair, Councilor Lindell, those are some of the things that could change, being that it's a new provider. And I don't know if anyone from Blue Cross Blue Shield would like to talk about how, in a more detailed way, how we would mitigate some of those potential challenges, but we have a plan in place. And again, with our benefits advisory committee, we talked at length about the potential disruptions that some employees may see, and they also felt comfortable with the strategies that were discussed with the vendors through this process to minimize those impacts. But I will turn it over to our Blue Cross Blue Shield rep, and she can take a deeper dive into that.

So just before you go, Miss Salazar, what's the actual dollar difference that we're talking about doing this program as opposed to Sigma?

Madam Chair and Commissioner Lindell, I am again, this is Trace Arsfield with AON. The difference between the proposed bids that came in was approximately $2.4 million. We stated as one of our status quo projections early on a 5% increase to overall costs from existing, that would be a Sigma projection versus the 3 to 3.7% decrease that we are seeing under the Blue Cross Blue Shield network of doctors and hospitals.

So $2.4 million annually?

That is an annual figure. Yes, ma'am.

So in the, and we're talking about a four-year contract.

Yes, Madam Chair and Commissioner, we are discussing a, so $9.2 million over the course of four years. I would, we would agree with that. Yes, ma'am.

My cowboy math, right? Four times 2.4, 9.6.

Six, I believe. 9.6.

Six over the course of, if it is the same $2.4 million for four years, that would be 9.6. Okay, that's a lot of money. So now I want to hear how people can continue to receive the care that they're used to receiving from their care providers.

Indeed. And with that, I will turn the floor. Can you do me a favor and just introduce yourself? I don't know you, but thank you for being here.

No, thank you. Sorry. Good evening, everyone, and Madame Chair and all of the members of the council. It is my pleasure to introduce myself. My name is Marlene Baca, and I am with Blue Cross Blue Shield of New Mexico. I am part of the executive team, and I am the Vice President of Account Management. So, thank you very much for having me. Our commitment to the City of Santa Fe, as Miss Salazar, Mr. Valdez already talked about, we want to make sure, being a local company for over 85 years and making sure that we serve all of our New Mexicans appropriately, we are working with the City of Santa Fe on making sure that not only we as Blue Cross Blue Shield of New Mexico will be part of all of the open enrollment meetings, we will also have other providers available during open enrollment. In addition, we will be providing some educational videos that will be shared amongst the employees and of course their dependents.

When I think specifically about what does this mean to the employees and family members, the disruption that will be taking place is going to be around the Presbyterian system. But what I would like to do is kind of walk you through the state of New Mexico. So, as we all are well aware, we have 33 counties, and 29 counties out of the 33, if you reside in any of those, you will be able to continue to receive services from any of the Presbyterian facilities, whether it's in rural New Mexico, Santa Fe, or in the Albuquerque area. The four counties that remain, there will be some special circumstances. So for the four counties, which include Bernalillo, Sandoval, Valencia, and Torrance, you are able to see Press Now, which is urgent care and emergency services. And of course, for all members, they're able to go to the nearest emergency room. It doesn't matter what facility, what the system may be for the four counties. Other services that our members are able to receive is behavioral health. They're able to get MRIs at the Presbyterian MRI Center, as well as receiving any type of surgical services at the Presbyterian Rust Medical Center, which is of course in Rio Rancho, part of Sandoval. We then also work with Presbyterian for transplants, neurology, and neurosurgery. And then we provide all services for quite a bit of specialties for any pediatrician patient. So those would include endocrinology, heart surgery, neurology, pulmonology, ear, nose, and throat, gastro, as well as cancer services. In addition, neonatal services are available. So any premature baby would be able to receive services at Presbyterian, and it doesn't matter where they live.

When we really think about the network of providers that we have, Blue Cross Blue Shield is very proud because we are a nationwide provider. So when you really think about all of the US hospitals, we contract with approximately 97% of hospitals across the US. In addition, we contract with approximately 83% of providers within the US. Here locally, we contract with 22,000 providers and quite a bit of hospitals, clinics, and other facilities, and it's around 4,200. When we take it just here into Santa Fe, we have about 2,500 providers. So once again, we do have a robust network. In addition, as Miss Salazar and Mr. Valdez talked about, benefits aren't going to change. So, you are accustomed to seeing what is called a PPO plan. So, that gives you the ability of going in network as well as out of network. So, a person that wants to see a non-contracted provider, and we talked about all of those numbers, but just in case you're wanting to see a non-contracted provider, you can do so. You are going to be paying just a little bit more for that out of network service. But that plan design that you are accustomed to, the employees are accustomed to, they will continue to see that available. So, I know I talked a lot. I'm going to pause now and see if there are any additional questions regarding the network.

Yeah. So, you just said, if someone sees someone out of network, they're going to pay a little bit more. What's a little bit more?

Sure. Madame Chair and Councilor Lindell, if you just give me a few minutes, I do have that answer for you. With apologies, I did not flag my page. If you don't mind, I'm going to be asking my staff member.

Sure.

Okay. So, sorry. So, Madame Chair and members of the council, in network, the deductible is zero, but if you do go out of network, the deductible is $300. We also have variance out of pocket. So if you receive your in network services for an individual, that out-of-pocket is $2,500, but if you do go out of network, it's $5,000. I do want to explain that out of pocket means what you pay in total before your plan starts paying 100%. For in network primary care physician, using that as an example, you would pay $25 in network. If you go out of network, there will be a deductible, and then you will be paying 50% coinsurance. What coinsurance is, is we look at the allowed amount. So we take that amount, and the percentage is then applied. And again, I do want to reiterate what Miss Salazar as well as Mr. Valdez has indicated. All of the benefits are the same. Blue Cross Blue Shield does not create the benefit plan design. This is something that we look at, and as our customer is telling us, we want you to administer these benefits. That's how we administer it.

Okay. I'm not sure I'm exactly clear about what that means to the person that walks into a doctor that they've been seeing for five years and that's out of network. How do they have a deductible that they have to meet? And then once they meet that deductible, they, so you said, for example, in our current plan, if you go in and you see any doctor, your payment is how much?

So I just use primary care physician as an example, $25 for in network.

Okay.

Out of network, you would be paying the $300 deductible and then 50% out of pocket. There are some exceptions, Madame Chair and Councilor Lindell. So, we will be looking at transition of care. So, as you started your statement with, if I've been seeing this provider, am I going to have to pay something different? It really depends on the scenario. So, we are working very closely with AON and the HR team in identifying some information that we do need to get from your existing carrier today.

But as an example, a pregnant woman that may be in her last trimester, we're not going to want to disrupt that care that she has established with her provider. So, we will receive that. We'll work very closely with that individual and make sure that she knows that that coverage will continue as part of the transition to care. And again, I'm just using that as an example.

I think that I need to think through this, and I probably have some other questions. If someone goes to see their primary care doctor and they're used to paying $25 or whatever, and then it's, "Well, you're going to, you got a $300 deductible that you got to take care of before you get really into the plan." I think people are going to be very, very disappointed about that.

Madam Chair and Councilor Lindell, we are going to be holding all of the employees that are going to see a disruption. So, not only will we have our staff members, we are planning on having Lovelace as well as UNM be with us in areas where we know that there may be a higher density of population that may have a little bit more of a disruption. So, we will do our very best. We will also work with the HR team, anything else that we need to do, just to make sure that people feel comfortable.

I don't really know what that means. I'm not trying to be difficult, but I don't know what that means, "we will work with." I mean, I'm concerned about someone getting a bill that they're ill-prepared for. They've been seeing this doctor for a long, long time, and they're used to paying a copay of whether it's $40. I don't want them to have to pay through $300, and then even on the other end, their copay is greater.

Madam Chair, Councilor Lindell, we totally understand your concern, and I think the goal is to have these sessions to educate employees and even take a look at if someone is at one of the sessions and says, "Can you take a look and see if my medical provider is on the list?" then we would look at that. And if it's not, then we know that that would be one employee that we'd be working with from the onset. But the goal is to educate employees to explain what it'll look like if their providers are not in network.

I'm really concerned about this. So, I can yield the floor, but I'm not comfortable at this point with this. Thank you, Chair.

Okay. I think the whole committee has questions, but while we're on this topic, can you speak to the percentage of employees that you think will be disrupted? It's mostly around the four counties that have different rules because of Presbyterian. Correct. And so most employees, because the plan hasn't changed, and because of your coverage, because of your contract, because of the contracts you have with providers, most people won't see a change. Can you speak maybe to the percentage of people and how, and I think it's mostly probably in Bernalillo County, correct, where we have employees? And maybe you can help us understand the nature of that.

Thank you, Chairwoman Romero and committee members. My name is Don Montano, and I work with AON. As part of the RFP process, I'm going to answer your question twofold. We had provided all the vendors who responded to the RFP a listing of all the doctors and facilities that your members had accessed care in for the past 18 months. And we asked them to run that up against their network and tell us how they aligned, how much would be considered in network, and how much would fall out of network. When Blue Cross Blue Shield did that analysis, 97.7% of all the providers that your employees and their covered dependents used were in their network. So, we're talking a very small percentage that is out of network.

Now, where that out of network is probably coming from is what you just asked, is tied to the employees who live likely in Sandoval and Bernalillo counties. We did look at the census, and there are roughly 190 employees who live in those counties. We don't, at this time, we are working to pull the information to be able to tell how many covered dependents they have. So, we, that is something we're looking to get that number, but you roughly have 190 employees who live in Bernalillo and Sandoval County. So, those are the employees who possibly are accessing doctors that make up that very small percentage that would fall out of network. Unfortunately, with the way data is stored, we cannot get that level of data from Sigma to identify exactly who would be using a doctor that falls out of network today.

You're welcome.

Thank you. Okay. I'm going to go to Councilor Faulkner.

Okay. Councilor Cassett.

Thank you so much, Madam Chair. I will be brief because we did have a robust conversation at Quality of Life, and this was one of the main areas of conversation. I have more comments, I believe, than questions at this point. I know that changing insurance providers is hard, and that this happens at a lot of organizations. However, I am quite excited about this change because there have been some issues with our current provider rejecting claims and not being able to provide the services that they said they would.

I brought up at Quality of Life that, for instance, our alternative care package, which is very robust and actually one of the areas where we really are very competitive in providing chiro, acupuncture, massage, that Sigma partners out with a third party, which means that they are not paying providers, and we are very quickly losing individuals out of that network, or they are making us pay cash because they won't be reimbursed enough. So, we had this conversation at Blue Cross about whether or not they are contracting that out, which has been a problem nationwide. And that is something that I have heard from alternative care providers that Blue Cross would still be something that would provide our employees with a robust network in that arena.

I also know there's been just other areas where there have been claim rejections, and Blue Cross has had a better reputation in that regard. So, I will say that I understand the concern of many of our employees who potentially are accessing individuals out of network. My hope is that even if it does mean changing doctors, the level of care that they will be able to receive will be equal to or better than what they've been currently accessing.

My number one concern, and I was had the opportunity to talk with City Manager Scott about this, is after Quality of Life, I heard from some employees who were shocked that this was occurring. And so their concern had more to do with the fact that they didn't realize that we were changing providers, that they didn't feel that that communication had gone out. And so it did create a level of anxiety that potentially, but you know, it sounds like from what we've been discussing, probably not much will change for them. They'll have to, you know, we talked about how they will have to do a re-enrollment period. And that communication will need to be important. But that, I think, is going to be both something I want to address now, obviously the word's getting out now that we're having conversations in public about it. But also, when we talk about some of the employees that we're going to need to work with, how can we really overcommunicate so that, to Councilor Lindell's point, somebody doesn't show up at their doctor's office, have their appointment, and then all of a sudden owe a lot more money than they were expecting?

Madam Chair, Councilor Cassett, if I may, I understand your concern. We do abide by the Resolution 2005-02 that requires the meeting of the Benefits Advisory Committee, which is primarily made up of union leadership personnel from the Finance Department, HR, and the legal team. The three members, the three leaders from the three unions sat on the RFP process and were voting members. The complicated part with the RFP process is we're technically not allowed to discuss the details of the RFP until it's approved. And I know that's a little challenging because it's part of a public record once we attach it to the agenda. However, that is one of the requirements for this process.

I believe that everyone should have received an email last week from Erica Montano to save the date for the open enrollment period. And as Elvin has described, the robust training schedule that we'll have for employees. We've been also working very closely with the three union leaders to schedule times, individual times for specific groups of employees, especially those who are field employees and don't always have access to computers during the day, to make sure that we're going at the hours that are convenient for them, either before their shift, whether it be 6:00 in the morning, 4:00 in the morning, or midnight, working with them to make sure that they have all the tools that they need and the assistance in signing up for open enrollment. So, we plan on doing a huge, it's almost like a training rollout for this, but we're really focusing and we're really thankful that Blue Cross Blue Shield has made the commitment to assist us with those sessions with employees as well.

Wonderful. Thank you for that, both clarification on challenges beforehand. I know we often run into this with the RFP process. I mean, this is not just with internally, but externally, we tend to have this issue. So, who knows, maybe our procurement changes will find a way to help that as well. So, thank you, and I appreciate that, and I do appreciate the robust outreach and training that is going to occur, because people get very nervous about this, and I think any information and assistance definitely will assist them in feeling better about this, and hopefully even excited as I do, although I don't think most people are health system nerds, but maybe we can get them there with this. So, thank you.

Councilor Lee Garcia. Thank you, Madam Chair. Thank you all for being here. And I guess, you know, a lot of my questions actually are resolved by the communication that has just happened in the discussion. I think that from a cost perspective, I mean, you know, it's great. We always want to be looking at things like that, and how do we move to our expenses, and are we evaluating those, and are we being good stewards of not just the taxpayer dollars, but our employees, because they contribute to the concerns of those that say, "Well, okay, I have a doctor, and now will I have to change out of that doctor?" And I think for some people that are in really, going to really specialized individuals, that that could be difficult. And so I'm glad to hear that there'll be help for that.

You know, some of the comments that I hear from many people is that, "Oh, the city has really good insurance," and it's really a recruiting tool and an asset for the City of Santa Fe. Will that be, and I guess we'll ask Blue Cross Blue Shield, how, you know, we want to make sure that we are changing, and that yes, we're looking at cost saving, but are we going to be able to say, "We're the City of Santa Fe, we have really good insurance, and now it's Blue Cross," because we've had Sigma for how long has it been?

Madam Chair, Councilor Lee Garcia, it'll be 10 years in June.

Do you recall what kind of provider we had before that?

It was United Healthcare, United Health. Okay, I'm going to put you on the spot. Representative from Blue Cross Blue Shield, how do we use this as a recruiting tool for people that are going to come to the city and say, "Hey, you know what? We really have good insurance." And how do we compare to others in the area? The public schools offer a plan. The state of New Mexico offers a plan. And how will we be different?

So, Madame Chair and Councilor Garcia, when I think about Blue Cross Blue Shield, as I indicated, I'm a native New Mexican and I'm very proud to represent Blue Cross Blue Shield. Not only are we a local company, we do have our enterprise. We don't like to refer to them as being our corporate, but they are committed and we are in five different states. And what is great about our organization is that we are customer-owned. So what that means is that we're not writing checks. We're not reporting any of our financials to investors or anything like that. It is to our customers that we owe it back. So our reputation is strong. We're financially stable. And those are very important when you read about healthcare news on the ups and downs. In addition, when a person carries a Blue Cross Blue Shield card, as I mentioned earlier, when you really think about being able to receive care anywhere in the nation, that means that if you have a dependent that lives in a different state, on a college, whatever the reason may be, or you may have Santa Fe employees on business trips, they are still able to receive care anywhere in the nation. So when I really take into account what we have to offer, I do believe that you still have a great way of recruiting employees. And again, it's not the benefits because your own HR department identifies what those benefits are going to be. We administer that program and we will make sure that everything that was set in the scope of work part of the agreement that we are going to meet or we're going to exceed on all of those expectations.

Thank you. And I guess the question would then go to Director Salazar in regards to how this, I guess, does compete with other agencies in the area that people would work for, such as the public schools, such as the state of New Mexico, as other areas.

Madame Chair, Councilor Lee Garcia, thank you for that question. I think as I mentioned earlier, the most important goal for the Benefits Advisory Committee was maintaining our plan design. That's what's important to our employees and the union leaders represent basically all of our employees with the exception of non-union, and that was, we heard that loud and clear. So we wanted to find a way to get the best value and maintain our level of service, and we were able to do that through this process. And as the union leaders will attest to, they have been invited and will be attending on Wednesday night, that it is a recruitment tool. So as far as how we compare with the state and the public schools, since as Marlene mentioned earlier, we don't currently have co-insurance with our premium plan and no deductibles. The state's plan does have that and their cost sharing is less attractive for employees. I believe that the state is on a tiered system and so the employees have to contribute more bi-weekly than we do. And for what the employees contribute here, they get more for their money because of the way our plan is designed. So I think that because we're maintaining that, that will still be a key recruitment tool across the board for our recruitment efforts.

Thank you. And so my next question, I guess, is going towards collaboration with our union representatives. What was their, I mean, they have given input on this.

Madame Chair, Councilor Lee Garcia, yes, all three of them were on the RFP, not only on the Benefits Advisory Committee, but also on the RFP committee to vote for a new carrier. So they all had the opportunity to vote and weigh in any comments that they had. The concerns that you all raised tonight as far as disruption of employees and their medical providers or maybe even medications is something that we talked with the group at length with, and at the end they felt comfortable with this decision and Blue Cross Blue Shield was the selected vendor through our RFP process.

Thank you. I think discussions and collaboration with those that are going to receive this benefit. And so I guess those would be my concerns. I know that change is not always easy, especially something of this magnitude. One last thing I'd like to learn a little bit more about in regards to typically with our public safety division of the city and firefighter, police. I know that they've prided themselves on having premium. I don't know if it would be you or AON that would, because I know we've had presentations on that in the past. But they will still be receiving the same level of insurance that they currently are, that they have now.

Madame Chair, Councilor Lee Garcia, yes, their plan will stay exactly, their plan design will stay exactly the same as it is now.

Thank you. No further questions, Madam Chair.

Thank you. All right. So, a couple things. Best value procurement, something new at the city, keeps popping up. I know we don't have our procurement officer here anymore. Is there anybody who can speak to kind of the philosophy and how that works and why that was an appropriate methodology for evaluating this RFP?

Madam Chair, I can speak to that. So the best value approach is a procurement methodology that's been around for decades. It's pretty well established in government. And what it does is it moves away from very specific, detailed specifications and instead adopts a methodology that allows vendors to propose solutions to a problem. So the procurement focuses on describing the need and then the offerors describe how they would address that need. So that's a high-level explanation of what the methodology of best value procurement is all about. The goal of it is to solve the problem or address the need, the overarching theme. And sometimes, not necessarily in this particular case, but sometimes there are things available in the market that we may not be aware of here as city staff in Santa Fe. There might be things happening, although certainly, I mean, I would not know all of the detailed offerings that are available for a health plan administrator. Blue Cross Blue Shield or Sigma are going to be much better positioned to describe their services and how they would serve our population. So the best value approach allows the flexibility for the vendor to provide us the best services they can offer. And then also the other goal of best value procurement is to streamline the evaluation process and make it so that we can move faster with requests for proposals.

Okay, I think that's helpful. The concept came up several times. I know that we are using this approach. It is fairly new. And so I think it's just important that we be familiar with it, especially as the Finance Committee. Yes, Director, you had something else to add.

Yes, please. Thank you, Madam Chair. It is new to the city of Santa Fe, but as a procurement methodology, it's been around government for a number of years.

Yeah, that's a good distinction. It's, when I mean around here, I mean in City Hall. I guess the other thing I want to understand is why it is that this contractor is going to save us money in an area where we have only seen increases and would expect to see increases. That's pretty extraordinary, I think.

Madam Chair, members of the committee, this is Trey Sarsfield again with AON. I would like to point out that there are three different components of this, three different financial components of this offer. First is the overall fixed costs. So the idea of administrative fees and stop-loss premiums. Blue Cross Blue Shield quoted approximately $230,000 below this year's existing fixed costs, which is certainly, which $230,000 is certainly a savings. If we were to compare that to some others, those in some cases were not just at but above this year's fixed cost. So they were able, first of all, to quote the lowest fixed cost. They were able to quote a fixed cost savings. Secondly, is the overall network discount. So the amount that they pay versus for the same covered services that other vendors do, and in that, their overall claims were projected to be roughly a million dollars below. And finally, there is a component called RX rebates. So these are rebates that the administrators have in place with the manufacturers and with the drug companies. And the nature of the quote that you received is that you will receive, I don't want to say the wrong word, but pass-through or something like that. In essence, you will also receive better rebates than the competitors would. So yes, it is definitely, this is a sector of the economy that has only been going up and been going up faster than most other sectors. However, in a competitive landscape, you can certainly find efficiencies and better contracts during an RFP like this. And that, that is how we feel very comfortable with the projections that we saw. We feel comfortable that Blue Cross Blue Shield is offering a lower but realistic lower cost than your current association or what might be, what some other vendors might have thrown in into their RFPs.

Okay. And I mean, how long, I mean, I don't know if this is a crystal ball question. Do we anticipate seeing this like, okay. So, we're talking about a holiday. Let me get to that page again. For the decrease in what it will cost in premiums for this year, I guess, I mean, are we anticipating that that's going to be more than one year or how, I don't know. Is that a crystal ball question?

Madam Chair, what I can state is that the projections for this current year are solid with the premium holiday. We do not in any way guarantee a premium holiday in future years. We do not know that, we cannot control nor predict if uncertain circumstances do come about such that healthcare as a whole increases more or less than we are currently projecting. We do feel very comfortable with the projections we've made for this year. We certainly believe that any impacts that happen to the Blue Cross Blue Shield provider network or total costs, we feel that anything that happens there is going to happen to a very similar degree across the industry. And so it is not a, it is not a risk of going with an unknown by going with Blue Cross Blue Shield.

Director Salazar, did you want to add to that?

Madam Chair, thank you for that question. I think what we can feel comfortable with is for this upcoming fiscal year and the duration of this contract, the fixed costs will remain the same. What will be similar to every other year since we've been self-insured, since as long as I can remember, we would continue to make a presentation to the Finance Committee and the Governing Body, if requested, on a quarterly basis to let you all know how the plan is doing. And then that kind of lets us know where we're headed as we go through the fiscal year. So we're doing this update as Trey presented on the health of the plan, and then we'll do it again probably in August to wrap up where the plan ended for the fiscal, for this current fiscal year, just to keep the Finance Committee and Governing Body apprised of how the fund is performing.

Yeah, and I find those presentations helpful, and I'm glad that we do them. I think it's really important that we keep our eye on that. It's just interesting to me that again, there is, we're seeing a decrease, not an increase. Is that due to the size of Blue Cross Blue Shield, that kind of an economies of scale sort of thing that allows them to be able to provide this decrease to us? It's just, it's just to me really interesting because this is an area where we just continue to see increases and anticipate that. So this is sort of, it's a little bit shocking to see that that's not what's happening here.

Madam Chair, absolutely, you are correct. It's the economy of scale. As I mentioned, we are in five different states. Here in New Mexico, we do employ 2,000 employees, but in other states, we also employ, and we're able to share those resources. So, on the fixed cost, absolutely. On the claims, it does mean that we're able to negotiate better rates on behalf of our customers.

And how often do you negotiate rates on behalf of your co- like, where are you in that cycle? Is that something you've just done or you're about to do?

So, Madam Chair, we will always be working on renewals. So, automatically all of our contracts will renew. There are some contracts, especially the bigger facilities such as Loveless, Christa, St. Vincent's, UNM. But what we normally do with those larger facilities and physician groups is that we normally have 4 to 10 years that we will negotiate. Now, please keep in mind that we also have to make sure that the providers are getting inflators year after year, but we really do try to negotiate, and it is based on the 770,000 members that we do have.

All right. And so those longer-term contracts, is it possible to characterize where you are in their life cycles? It's probably an unfair question because there's probably more than you might be familiar with off the top of your head. So I completely understand if that's not something you can pull out of your hat tonight.

Madam Chair, I try to have a great memory, but on this one, I would hate to provide incorrect information.

Understand. Okay. Just, just kind of curious, the nature of, you know, what's actually a really great thing, which is lower costs, but in an area again where you don't typically see them. So just trying to understand the nature of how that's possible and how long it might be the case. So appreciate it. Thank you, Madam Chair and Councilman.

Okay. Councilor Faulkner, I think, is ready to make a motion. Oh, we got one more question. Councilor Lee Garcia.

Thank you, Madam Chair. My apologies. I just, I did recall, this is just the healthcare portion of this, correct? Our dental and the vision, is that will still be under Sigma, or can you just clarify for me?

Madam Chair, Councilor Lee Garcia, this includes vision and dental as well. All under the Blue Cross Blue Shield umbrella.

Yes.

Okay. Thank you.

Motion to approve.

Second.

We have a motion and a second to approve this item. Can we get a roll call, please?

Certainly, Madam Chair. Councilor Cassid, yes. Councilor Lindell, excused. Councilor Faulkner, yes. Councilor Lee Garcia, yes. Chair Romero, yes. Motion passes.

Thank you. Thank you, everybody, for being here tonight. Really appreciate the conversation. Okay, that's the last item we had on consent. We'll go from, we don't have any action items on the discussion agenda. Matters from staff.

None at this time, Madam Chair.

Matters from the committee. Matters from the chair. Our next meeting is Monday, April 28th, but of course, you are all aware that we will begin budget hearings starting Thursday, April 24th, if I have the date and time right. So this committee will be very active in the next couple of weeks and really appreciate all the work tonight. Thank you. We're adjourned.