PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6c 
ACTION ITEM 
Date of Meeting    November 19, 2013 
DATE:    November 13, 2013 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Gary Schmitt, Labor Relations Manager 
SUBJECT:  First reading of Resolution No. 3687, Association of Washington Cities Employee
Benefit Trust Health Care Program Interlocal Agreement 

ACTION REQUESTED 
Request first reading of Resolution No. 3687: A resolution of the Port Commission of the Port of
Seattle adopting the Association of Washington Cities (AWC) Employee Benefit Trust Health
Care Program Interlocal Agreement. 
SYNOPSIS 
Members of the International Association of Fire Fighters (IAFF) Local 1257, including 69
active and approximately 34 retired fire fighters from the Port of Seattle Fire Department, have
for many years had health insurance coverage through the Association of Washington Cities
Employee Benefit Trust.
The current collective bargaining agreement between the Port and IAFF Local 1257 provides
medical insurance coverage for employees, their spouse/partner and eligible dependents on the
Association of Washington Cities HealthFirst Plan and dental insurance coverage on the AWC
Plan F. The request for first reading of a resolution adopting the AWC Employee Benefit Trust
Health Care Program Interlocal Agreement is prompted by the Trust voting in July 2013 to move
from a fully insured benefit program to a self-insured model, effective January 1, 2014.
Without adoption of the Interlocal Agreement, the fire fighters bargaining unit will not be able to
participate in 2014 in the AWC's self-insured plans.  To conduct business as a self-insured
program, the AWC is now required to comply with RCW 48.62 and WAC 200-110, and the 
AWC has given the Port a deadline of no later than the end of the year to execute an Interlocal
Agreement.  This deadline arises out of WAC 200-110-030, which requires every local
government entity participating in a joint self-insurance health and welfare benefit program to
adopt such program by resolution. 
A resolution adopting the Interlocal Agreement will keep costs of health insurance benefits from
rising in 2014, allow seamless coverage for IAFF Local 1257 members during 2014, and avoid

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 13, 2013 
Page 2 of 4 
premature elimination of AWC plans as an option for consideration during negotiations on a
collective bargaining agreement to succeed the one that will expire on December 31, 2013. 
BACKGROUND 
On July 25, 2013, the Association of Washington Cities ("AWC") Employee Benefit Trust
Board of Trustees voted to move from a fully insured benefit program to a self-insured model,
effective January 1, 2014. The Trust was formed in 1970 by the Association of Washington
Cities to offer affordable coverage for its cities and towns with participants in Law Enforcement
Officers and Fire Fighters Pension Plan 1 (LEOFF 1). The Trust serves 275 participating entities
across the state and insures approximately 36,000 employees and family members. The Trust
currently offers medical, dental, vision, employee assistance programs, life insurance, long-term
disability insurance and long-term care insurance. 
Self-insurance allows the Trust to eliminate several taxes mandatory for fully insured plans
including a 2% state tax and a 2% 3% new 2014 federal insurer tax. These changes reduce the
plan cost and therefore reduce cost growth for the Port in the near term. Because of this change,
the contributions required of participants are not changed from 2013 to 2014. 
According to the AWC Employee Benefit Trust Manager, Port of Seattle Fire Department
employees represented by IAFF Local 1257 have participated in the AWC's medical plans since
the mid-1980s when the AWC's Board of Trustees adopted them as members in accordance with
non-city entity participation criteria that existed at that time. Article 24 of the current collective
bargaining agreement (CBA) between the Port of Seattle and IAFF Local 1257 addresses
insurance for LEOFF I and LEOFF II employees and their dependents. Section 24.1 provides
medical insurance coverage for employees, their spouse/partner and eligible dependents on the
Association of Washington Cities HealthFirst Plan. Section 24.2 provides dental insurance
coverage on the AWC Plan F.
Because the AWC is moving to a self-insured benefit program, if the Port wishes to have IAFF
Local 1257 represented employees remain on the AWC's medical and dental plans, the AWC is
requiring that the Port Commission adopt, by resolution, an Interlocal Agreement authorizing the
Port to participate in the AWC's self-insurance program.
While the current CBA between the Port and IAFF Local 1257 expires December 31, 2013, if the
Port Commission does not adopt, by resolution, the Interlocal Agreement to create a joint selfinsured
health and welfare benefit program, the Firefighters bargaining unit will not be able to
participate in the AWC's self-insured plans effective 2014. To conduct business as a selfinsured
program, the AWC is now required to comply with RCW 48.62 and WAC 200-110.
AWC has given the Port a deadline of no later than the end of the year to execute the Interlocal
Agreement.  This deadline arises out of WAC 200-110-030 which requires every local
government entity participating in a joint self-insurance health and welfare benefit program to
adopt such program by resolution.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 13, 2013 
Page 3 of 4 
A resolution adopting the Interlocal Agreement will allow coverage under the AWC's selfinsured
plans which, according to the AWC Employee Benefit Trust, means a zero (0) percent
increase for 2014 for those covered by the Trust's Regence/Asuris medical, Group Health
Medical, WDS Dental and VSP Vision plans. Continued participation in AWC plans will avoid
the need to rapidly transition the Firefighters bargaining unit to the Port's self-insured plans or
immediately decide on alternative plans while allowing the Port and IAFF Local 1257 to
consider alternate insurance plans. Section 24.6 of the current CBA gives the Port the unilateral
right to select the carrier unless it is mutually agreed otherwise but it also states that the Port will
discuss and consider in good faith any alternate insurance plans the union may submit to the
Port. 
With regard to the Port's right to terminate participation in the AWC's plans, the AWC 
Employee Benefit Trust Manager indicated by email dated October 10, 2013, that the
termination provision in the Interlocal Agreement would prevail. Section 13.4 of the Interlocal
Agreement states that a participating employer may only withdraw its participation at the end of
the calendar year with written notice at least 31 days in advance of December 31. Adoption of
the resolution commits the Port of Seattle to participation in AWC plans until the end of 2014.
The AWC Employee Benefit Trust Manager clarified that the Port will not be subject to some of
the requirements that apply to other participants because it is being given grandfathered status; as
long as the Port executes and returns the Interlocal Agreement before the end of the year and
remits premiums on a timely basis it will be considered a member in good standing. The AWC
also indicated that the Port of Seattle's HIPAA Privacy and Security Policy is acceptable to the
Trust.
Negotiations over wages, benefits and terms of employment will occur in late 2013 and early
2014. It is unknown if the Port will maintain participation in AWC's plans for years to come, but
a resolution adopting the Interlocal Agreement will preserve the ability to participate in AWC's
plans as an option.
PROJECT JUSTIFICATION AND DETAILS 
This requested resolution provides the mechanism for continued participation in the AWC
Employee Benefit Trust Plan for 2014. Participation in this plan provides an industry standard,
continuity for plan participants, and zero cost increase to the Port. 
This request provides the necessary flexibility and time to address the Port's strategic goals
related to health and welfare for represented employees. Additionally the Port and IAFF Local
1257 have begun negotiations for a collective bargaining agreement that would succeed the one
that will expire on December 31, 2013. 
FINANCIAL IMPLICATIONS 
The total cost of providing benefits remains unchanged from 2013 to 2014. In 2014, with 69
employees, the annual cost of health and welfare  benefits would be approximately

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 13, 2013 
Page 4 of 4 
$1,400,000. The total includes coverage for medical, dental, vision, and life coverage, and is net
of employee share. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Do nothing. This alternative would mean that the Port will not be able to
participate in the AWC's self-insured plans and the Firefighters bargaining unit/IAFF Local 1257
members will not have seamless medical insurance coverage during contract negotiations.
Unless the Commission adopts, by resolution, the AWC Employee Benefit Trust Health Care
Program Interlocal Agreement, the AWC plans may be prematurely eliminated as an option
available for IAFF and the Port to consider during collective bargaining agreement negotiations
in the event that choice of carrier becomes part of the mix of terms negotiated. This is not the
recommended alternative. 
Alternative 2)  Proceed with first reading of the resolution to adopt the Association of
Washington Cities ("AWC") Employee Benefit Trust Health Care Program Interlocal Agreement
(the "Interlocal Agreement"). This alternative provides seamless coverage for IAFF Local 1257
members during 2014 and avoids premature elimination of AWC plans as an option for IAFF
and the Port to consider during collective bargaining agreement negotiations. This is the
recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Port of Seattle Resolution No. 3687 
Association of Washington Cities Employee Benefit Trust Health Care Program
Interlocal Agreement 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None.