BENEFITS ADVISORY COMMITTEE

MINUTES OF MEETING

SEPTEMBER 21, 2006

[In these minutes: Over 65 Retiree Medical Plans Rates, Food & Beverage RFP, Long-Term Care Benefits, MEDEX Update, Wellness Program Manager Update, Flu Shots, HealthPartners’ 10,000 Steps Program]

[These minutes reflect discussion and debate at a meeting of a committee of the University Senate; none of the comments, conclusions, or actions reported in these minutes represent the view of, nor are they binding on the Senate, the Administration, or the Board of Regents.]

PRESENT: Gavin Watt (chair), Linda Aaker, Tina Falkner, Karen Wolterstorff, Jody Ebert, Jerremy Mlenar, Melanie Shepard, Joseph Jameson, Carla Volkman-Lien, Carl Anderson, Richard McGehee, Peh Ng, Theodor Litman, Rodney Loper

REGRETS: William Roberts, Michael Marotteck, George Green, Amos Deinard, Gladys McKenzie, Joyce Carlson

ABSENT: Rhonda Jennen, Sandi Sherman, Don Cavalier, Carol Carrier, Frank Cerra, Fred Morrison, Dann Chapman, Keith Dunder

GUESTS: Leslie Bowman, director, Contract Administration and Laurie Scheich, associate vice president, Auxiliary Services

OTHERS: Ted Butler, Karen Chapin, Nancy Fulton, Shirley Kuehn, Kathy Pouliot, Curt Swenson

I). Gavin Watt called the meeting to order and welcomed those present.

II). Karen Chapin distributed copies of the final University of Minnesota Over 65 Retiree Medical Plans rate sheet. At the committee’s last meeting when this information was distributed, the Medica rates were missing. Ms. Chapin noted that the increases across all the plans were reasonable, especially given that Medicare Part D has been incorporated in all the University’s retiree medical rates and programs. The 2007 percentage rate increases over 2006 are listed below:

• Medica Group Prime Solution – 6.8%
• U of M Retiree Plan – Blue Cross Blue Shield – 4.1%
• HealthPartners’ Freedom Plan – 8.3%
• UCare for Seniors – 10.4%

III). Gavin Watt welcomed and introduced today’s guests, Associate Vice President for Auxiliary Services Laurie Scheich, and Director for Contract Administration Leslie Bowman. He noted that Ms. Scheich and Ms. Bowman were invited to provide the committee with information concerning the upcoming Food and Beverage Request For Proposal (RFP) that will be sent out early next year. Mr. Watt stated that because the Benefits Advisory Committee is committed to promoting wellness, it is particularly interested in ensuring that healthy food and beverage choices will be available to faculty, students and staff.

Ms. Scheich began by noting that over the past year and a half, Dining Services has worked to align all the University’s food and beverage contracts systemwide to have an end date of June 2008. Therefore, by design, the University as a system intends to issue a comprehensive RFP for its food and beverage requirements.

Ms. Bowman distributed a handout, which outlined the University’s food and beverage RFP process. She quickly walked members through the handout as they followed along. She noted that campus dining and vending services will continue to be outsourced on the Twin Cities campus.

Principles used to guide the RFP process include:

• Single enterprise – The University will present one institutional position to vendors. While the University intends to issue a comprehensive, consolidated RFP, it does not necessarily mean that it will only accept a single vendor in response to its RFP. By taking this approach the University is presenting itself as an institutional opportunity. The goal is to maximize the University’s financial and programmatic benefits and to align contract revenue decisions with the University’s strategic and operational objectives.
• Core competencies – The University will manage/coordinate all its food and beverage contracts under a single administrative unit. This unit will also be responsible for identifying and approving new campus food venues using viable business analysis methods. Departments and academic units on campus will not be permitted to independently open and operate new on-campus food venues.
• Improve performance and operational efficiencies – The University will maximize its labor productivity, have a commitment to customer service, food quality, variety, creativity, and ensure campus/customer value.

Next, member’s attention was turned to the food and beverage RFP timeline. Currently, the RFP is under development. The goal is to issue the RFP in February and have responses due in May. Responses will be evaluated and top vendors will be asked to present. Then, decision(s)/vendor(s) selection will be made in the fall of 2007, and final recommendation(s) will go before the Board of Regents in February 2008. New contract(s) will go into effect on July 1, 2008, and the new stadium contract(s) will go into effect in the fall of 2009.

An Executive Committee co-chaired by Vice President for University Services Kathleen O’Brien and Vice President and Chief Financial Officer Richard Pfutzenreuter has been established to determine and finalize policy issues related to the RFP and to review and approval the final RFP document. This committee will also be responsible for recommending how contract revenue will be allocated and to put forward the final recommendation for the contract award(s) to the President/Board of Regents.

An Advisory Committee has also been established. This committee is primarily responsible for the RFP oversight and development and for developing RFP evaluation criteria. Other roles and responsibilities of this committee include:

• Develop a communications plan
• Make recommendation on final RFP award(s)
• Appoint and coordinate Work Group efforts
• Ensure stakeholders/resources are utilized appropriately
• Recommend RFP Evaluation Team membership

The Advisory Committee is being co-chaired by Leslie Bowman, director, Contract Administration, and Mike Berthelsen, interim AVP, Facilities Management.

It will ultimately be the responsibility of the numerous work groups that are being formed to develop specific RFP language, requirements and benchmarks as well as to create the RFP documents. The work groups will also be called up to provide the Advisory Committee with information as requested and to assist the Evaluation Team with required analysis and follow-up. Examples of work groups that have been formed include, but are not limited to: Athletics/Rec Sports, Coordinate Campuses, Residential Dining, Retail Dining/Catering, Technology, and Vending.

Ms. Bowman suggested that consideration be given to having someone from the Benefits Advisory Committee or someone with an interest in wellness and nutrition to serve on the Residential Dining and Retail Dining/Catering work groups. She added that as part of the new contract(s), the University should consider requiring its vendor(s) to have a dietician on staff.

Throughout the RFP process, stakeholder and customer feedback, suggestions and input will be sought via forums, surveys and/or small group discussions, which will be shared with the work groups. Examples of stakeholders that have been identified thus far include but are not limited to FCC/SCC, MSA/GAPSA, Eastcliff, Teamsters, colleges and departments.

Several University departments will be called upon to be resources throughout the RFP process as well. Examples cited include Department of Environmental Health and Safety, Waste Management/Recycling, Tax Department, Residential Dining Facilities, Human Resources/Labor Relations, Purchasing, University Relations, etc.

Following this presentation, members’ comments and questions were taken:

• Will the single administrative unit in charge of approving and operating all food venues have a problem with the University’s farmer’s market? In Ms. Bowman’s opinion, the farmer’s market would not be viewed as a food venue per se, but rather a separate entity. She foresees UDS possibly playing a role in the farmer’s market, for example, by setting up the brat stand, while members of the University community peruse the market for fresh produce.
• UMM is very committed to sustainability and purchasing locally grown produce from its farmers. Whichever vendor(s) is chosen for the Morris campus must be committed to this idea of sustainability, and purchasing foods grown locally. Ms. Scheich stated Morris will be given the opportunity to identify what is important to its campus as part of the RFP process and to have these items written into the RFP. Ms. Bowman added that the Morris campus may also choose to weigh sustainability heavier as part of the evaluation criteria than the other campuses and it is free to do this as well.
• Please explain how having a dietician on a vendor’s staff would contribute to healthier food options being available on campus. Ms. Bowman stated that UDS has received a significant amount of customer feedback requesting healthier food options be made available across campus. She added that in her opinion a dietician could help the University identify these options. There are also a growing number of students in the residence halls with special dietary needs, which the University needs to be able to respond to. If a dietician were on campus this person could meet also with student and/or their families to make sure their dietary needs are being met on a daily basis.
• Will consideration be given to aligning contract revenue decisions with the University’s strategic and operational goals by having some revenue earmarked for the wellness program? Ms. Bowman stated that the Executive Committee will decide how contract revenues are dispersed. She volunteered to bring this question to the attention of the Executive Committee. Ms. Scheich stated that some of the current contracts require the University to spend a specified amount of its commission dollars in a specific way. Through the RFP process the University is hoping to take back more control of how its revenue dollars are spent.
• Members of the Executive Committee and Advisory Committee appear to have a considerable amount of business expertise, but minimal wellness knowledge. It was suggested that there be a wellness seat on the Advisory Committee. Ms. Scheich and Ms. Bowman will take this recommendation back to the Advisory Committee for consideration. In Ms. Bowman’s opinion, the actual work of drafting the requirements that will become part of the RFP will occur in the work groups and not at the level of the Advisory Committee. She foresees work group members having more input concerning RFP language and requirements than the Advisory Committee.
• Does Boynton Health Service have a dietician on staff? Is there a residence hall dietician on staff? Is there a retail dining dietician on staff? It was noted the Boynton Health Service has a full-time dietician, which UDS, on occasion, uses as a resource. In terms of whether there is a dietician for the residence halls or for retail food venues is merely coincidental; it depends on whether the dining manager that has been hired has a dietetic degree or not. Going forward this should not be coincidental, but planned stated Ms. Bowman.
• A committee member recommended that a separate wellness work group be formed. While Ms. Scheich and Ms. Bowman are open to establishing a wellness work group, in their opinion, it would be more beneficial to have a wellness representative serve on other work groups to help them draft their RFP requirements. For example, a wellness representative serving on the retail dining/catering work group. This person could help the work group draft its RFP requirements for the 23 retail venues across campus. Ms. Bowman, Ms. Chapin and the new Wellness Program Manager will meet to decide how to ensure that wellness will be given the attention it deserves throughout the RFP process.
• A member requested that there be a wellness rep on the vending work group.
• Please explain what is meant by the beverage contract and how this differs from vending. Ms. Bowman stated that the beverage contract is currently known as the Coca-Cola contract on campus. This is an exclusive vending and pouring rights contract for the Twin Cities and Crookston campuses. Ms. Bowman stated that when she uses the term vending she is referring to non-beverage vending e.g. snacks, food items, etc.
• Instead of an exclusive beverage contract, will consideration be given to offering a variety of beverage options on campus? This will be discussed within the beverage work group stated Ms. Bowman. She added that typically, from a financial perspective, the revenue return to a University is significantly higher if the contract is exclusive. The RFP can ask vendors for their proposal to the University if the contract is exclusive and their proposal if the contract is shared, and these results can be evaluated.
• Please explain what the technology work group will work on. Ms. Bowman stated that technology plays an important role within many dining services areas e.g. the declining balance program, cash registers, ordering meal plans on-line, and the University’s timekeeping system to mention a few. When the last contract was drafted, the technology aspect was written very narrowly. The next contract needs to be written with more flexibility as it relates to technology. Ms. Bowman also noted that there is a great deal of concern at the University about security; therefore, RFP language will be drafted that outlines who has access to systems, who owns systems, etc.
• The beverage, financial, human resources, and technology work groups all have a broad scope. With this said, consideration should be given to establishing a wellness work group that would have a similar broad scope.
• Is dining services a profit center for the University? Ms. Bowman stated that at the time food services decided to outsource its operations, the University was losing approximately $1.5 million per year. Currently, the University is breaking even while still being able to set aside some money in reserves to pay for capital improvements. In Ms. Bowman’s opinion, the University’s decision to outsource its food services made finance sense. She added that the Coca-Cola contract brings a lot of money to the University as well. A great deal of this money is “up front” money, and the University decides how this money will be spent. A majority of the “up front” money goes to Athletics and Student Affairs. There is also “on-going” money that the University receives in the form of vending commissions, which is earmarked for grants for student organizations. The value of the current Coca-Cola contract to the University for the 10-year life of the contract is estimated at $28 million.
• It would be beneficial to have a wellness representative involved in the drafting of the RFP and during the contract(s) implementation phase.

Mr. Watt summarized the sense of the committee by noting that the BAC is requesting that as part of the RFP process a wellness work group be established. Ms. Scheich and Ms. Bowman will work with Ms. Chapin to make sure that this request is respected.

IV). Ms. Chapin distributed a handout outlining the University’s long-term care benefit schedule for 2007. She noted that the plan features and benefits are close to being finalized. With this said, she walked members through the program benefits in a fair amount of detail, highlighting old program and new program features.

A member asked whether employees would at some point in the future be able to pay for this benefit with pre-tax dollars. It was noted that current legislation prohibits long-term care premiums being paid with pre-tax dollars. If legislation is passed to change this law and allow these premiums to be paid with pre-tax dollars, the University would be agreeable to doing so.

If an employee dies and his/her family member(s) have signed up for long-term care benefits, can the family member(s) continue their coverage, asked a member? Yes, each family member would simply continue to pay his/her own premium stated Ms. Chapin.

Will all the John Hancock rates be 10% - 30% lower than the CNA long-term care rates? Mr. Butler stated that because long-term care is age-rated and because there are several optional benefits within the program from which to choose, there is a wide spectrum of rates. He noted that, on average, the John Hancock rates will decrease 10% - 30% over new CNA rates. However, there might be individual situations that do no fall into this range.

V). Karen Chapin distributed the MEDEX Annual Program Review report covering the period from January 1, 2006 – June 30, 2006. She stated that the program is working well and briefly highlighted key points from the report.

VI). Employee Benefits’ Announcements:

a). Karen Chapin reported that a new Wellness Program Manager has been hired, Murray Harber from Hennepin County. Mr. Harber will start on October 2^nd. In his role as Wellness Program Manager, Mr. Harber will be responsible for enhancing the University’s current wellness program offerings and to build awareness around and use of the program.

b). The University will be giving flu shots again this year. Flu shots will be given at the benefits fairs and at various other venues across campus. More information concerning flu shots will be forthcoming.

c). The fall health action program will be HealthPartners’ 10,000 Steps Program. Ms. Chapin distributed posters that members should hang in their areas once the program is launched. For members who have not taken advantage of any of the health improvement programs, participation in the 10,000 Steps Program would qualify these individuals for their second $65 incentive payment.

VII). Hearing no further business, Gavin Watt adjourned the meeting.

Renee Dempsey

University Senate