Upfront CITY HALL
Audit finds errors in Palo Alto’s health care expenditures Critical report urges stronger oversight, better record-keeping alo Alto’s process for administering health benefits to city workers and retirees is riddled with errors and suffers from insufficient monitoring, according to a critical report from the Office of the City Auditor. City Auditor Jim Pelletier found, among other things, that the city’s retiree reimbursements were not accurately calculated; that the billing from the California Public Employees’ Retirement System (CalPERS) was not adequately monitored; and that the city has not effectively administered its contract with a consultant charged with verifying the city’s health expenditures. The report concluded that the city’s Human Resources Department needs to improve its internal controls over health benefits to ensure that health premiums, administrative fees and retiree re-
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imbursements are calculated and paid accurately. The audit focused on health payments made by the city between September 2011 and October 2012 and found that the city has been overpaying for retiree reimbursement. In reviewing CalPERS bills in October 2012, the audit found that the city made overpayments totaling $12,585 and underpayments totaling $3,434, resulting in a net overpayment to retirees of $8,151. The report also notes that 64 retirees were either overpaid or underpaid by $10 or more. The report notes that the Human Resources Department “did not have a clear, documented methodology to determine the reimbursement amount.” The sheer complexity of tallying the reimbursement amounts appears to be a major factor in many
by Gennady Sheyner of the errors uncovered by the audit. The city’s program covers 855 active employees and their 1,526 dependents in addition to 871 retirees and their 627 dependents. Each of the city’s labor groups is governed by its own health care contract, with varying tiers based on seniority. The fact that the system is administered by a colossal entity based in Sacramento and that CalPERS routinely makes errors and revisions to its billing further muddies the process, the report states. The report cites the Human Resources Department’s (HRD) view that “there are so many billing errors and subsequent corrections made by CalPERS that they would not be able to review the entire billing and keep track of all deductions made for each retiree.” “For this reason, there were cas-
es where HRD was aware that the retiree was receiving overpayment but no actions were taken because they assumed the overpayment was due to a CalPERS error and the error would be corrected by CalPERS in the future,” the audit states. “These discrepancies were neither documented nor tracked.” It didn’t help that the city’s eligibility criteria for retiree health benefits was “not clearly defined and documented,” according to the audit. The city has a document called Tier Matrix, which defines retiree health tiers for each employee group and each tier within the group. The audit’s review of the Tier Matrix found that the document “was inaccurate and incomplete.” While there was no evidence to conclude that the inaccuracy resulted in a “material difference,” the audit states: “Ad-
equate documentation and clear communication of eligibility criteria would help to prevent any inaccuracies in future actuarial valuations.” The audit recommends making the Tier Matrix available to all stakeholders and enhancing current procedures to ensure that the document is “maintained accurately, completely and in an organized manner.” The audit also found that CalPERS used “inconsistent and inaccurate” methodology to calculate the employer share of health care costs for retirees. Auditors reviewed 832 records and found that the employer share was different from expected amount in 55 of these records, resulting in $5,513 in overbilling. Much of this was related to retirees from two em(continued on page 11)
HOLIDAY FUND
A helping hand for kids With tutoring, field trips and birthday parties, Opportunity Services Center helps kids have a ‘normal childhood’
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hen Nina first wound up in a homeless shelter six years ago, escaping an abusive relationship, her main concern was immediate: finding a place to give birth to the baby who would be coming in one week. After that, the picture kept getting broader. Where would they live? How would she keep her son safe and healthy? How would she afford a winter jacket or deal with problems at school? For the last six years, Nina (not her real name) has depended on the people at Opportunity Services Center in Palo Alto to help her answer these questions. She and her son live in an apartment upstairs at the center, but a roof over her head wasn’t all she needed. With the help of staff and volunteers from InnVision Shel-
ter Network, which provides many services at the center, Nina has been finishing college, planning for nursing school and learning how to be a mother. Staff have also been helping her navigate the court system while she’s dealt with “a difficult dynamic” with her son’s father, she said. “It was a blessing,” she said. “I didn’t know anything about babies. They would literally hold him for me while I was writing papers.” When her son had a problem at his kindergarten, staff helped him change schools. Buses take him to and from school, and after school he
can play, read and do other activities in the center’s Bredt Family Center. As Nina spoke to a reporter in the family area, she looked over and smiled at her son, who was sitting at a table with several other children. They were surrounded by shelves of books and toys, math flashcards, board games and a small computer lab. They looked happy. At another table, high school volunteers helped other kids with their homework. A staff member served up snacks in the kitchen. “It’s like they’re helping raise him,” Nina said. She got choked up for a minute. “It gives me chills.” This year, the InnVision Shelter Network programs at the Bredt Family Center are also getting a little help from their friends: a $7,500 grant from the Weekly Holiday
Veronica Weber
by Rebecca Wallace
Palo Alto High School junior Taha Rafeeqi, center, volunteers as a tutor at the Family Services Center at the Opportunity Services Center in Palo Alto. He helps Ebony Earley, right, with her math while Walleska Garcia works on other homework. Fund, which collects donations to profit aiding the homeless, earlier aid local nonprofits that serve chil- this year.) While InnVision Shelter dren, families and individuals. Network provides social services at The Opportunity Services Cen- the center, Charities Housing is the ter, located on Encina Way in Palo landlord for the 88 apartments. Alto, opened in 2006, organized At the center, many services are by the Community Working Group available for families and individutogether with InnVision and the als, both those living in the center’s Housing Authority of the County of apartments and those who drop in. Santa Clara. (InnVision merged with (continued on page 7) Shelter Network, another area non-
HOLIDAY FUND
Palo Alto family issues $100,000 challenge Gift will match others’ donations to the Weekly Holiday Fund
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local family has made a $100,000 donation to the Palo Alto Weekly Holiday Fund for the second year in a row, in hopes of inspiring other donors to join them in supporting local programs for kids and families. The gift is from a family who wishes to remain anonymous and who made a similar gift at the end of last year’s holiday campaign. As a result of that donation, the Holi-
day Fund set a record and was able to make grants totaling $340,000. This year’s repeat donation will be used to match, dollar for dollar, the contributions of other donors. “This generous Palo Alto family believes strongly in the mission of the Holiday Fund and the efficiency with which we are able to assist many local nonprofits,” Palo Alto Weekly publisher Bill Johnson said.
Since the Weekly and its partner, the Silicon Valley Community Foundation, absorb all the costs of the program, every dollar that is donated is distributed without any administrative expenses deducted. In a statement accompanying the donation, the donors emphasized their desire to support local causes. “We grew up in Palo Alto and have always appreciated the extraordinary services provided by the city,
the schools and the many community-based organizations. We want to support these efforts and the Holiday Fund is a superb way to do that.” Over the last 19 years, the Holiday Fund has raised and distributed more than $4 million to local nonprofits. The Holiday Fund program has enjoyed ongoing support from the Packard and Hewlett foundations, the Peery and Arrillaga founda-
tions and several other family foundations. Proceeds from the annual Palo Alto Weekly Moonlight Run, which has grown to become one of Palo Alto’s largest community events, benefit the Holiday Fund. N Contributions to this year’s campaign can be made online at www.paloaltoonline.com/holidayfund or through the Holiday Fund donation form on page 22. N — Palo Alto Weekly staff
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