County Accused of Improperly Using $2 Million

Ventura County officials took $2 million in employees’ medical insurance contributions to help balance the county’s budget, union leaders charged Wednesday.

“If I were a private insurance agency and I took trust money and put it to my own use--no matter how noble that use may be--I would lose my license and go to jail,” said Barry Hammitt, director of Service Employees International Union Local 998.

County officials acknowledged Wednesday that money from the county’s medical insurance reserve fund was used to help balance the 1996-97 fiscal year budget last summer--the first time that had ever been done.

But Supervisor Frank Schillo said the money did not come directly from employee insurance contributions, but from a small fee charged to workers who choose not to participate in any health-care option offered by the county. That money, he said, is used to help pay the cost of administering these programs for all employees and therefore belongs to the county.

“That money should have been in the county General Fund to start with,” Schillo said.

However, Hammitt, whose union represents about 4,000 of the county’s 7,000 workers, said the money still is collected from employees and therefore should be used exclusively for their benefit. For example, he said, the money could be used to help reduce workers’ insurance premiums.

“I can sympathize with [county officials] saying that the money was used to cut down the deficit and to keep from laying off workers,” Hammitt said. “That’s a very noble thing to do, but don’t do it with money that ain’t yours.”

Hammitt said union officials became aware of the money transaction when a county report was released last week regarding insurance rates and contracts with health providers.

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But Chief Administrative Officer Lin Koester, whose office recommended that the reserve money be used to help balance the budget, said the information was clearly outlined in his county budget report last summer.

“It was right there in the budget plan,” he said. “Everyone knew that we were looking at every trust fund to reduce the budget imbalance. It’s unfortunate that they are now claiming surprise.”

Moreover, county personnel chief Ron Komers said the county has contributed money to the medical reserve fund in the past to ensure its financial stability.

“When the fund has gone broke, the county has been there to back it up,” he said. “So it depends on how you look at it as to whose money this is. That’s a legal question.”

Hammitt said representatives from all county unions will meet later this month to decide what action they will take. A lawsuit against the county is one option that could be considered, he said.

“When you entrust money to somebody, they have a fiduciary responsibility, and you can’t let them violate that,” he said.

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In a separate matter, Sgt. David Williams, president of the 750-member Ventura County Deputy Sheriff’s Assn., accused county officials of pressuring workers to join the county’s health-care plan.

As part of mandatory pre-enrollment meetings, Williams said county representatives are allowed to promote the benefits of the county’s health plan while private insurance carrier Aetna is not given the same opportunity.

Williams said county employees are told at these meetings that the “county hospital would better survive if it had a viable health care plan.”

“What does an employee think if he doesn’t join the plan?” Williams said. “Is he not considered a team player? Does it mean that there may be no promotion or job transfer or raise?”

As a result of these tactics, Williams said, more employees have shifted out of the Aetna health care plan to the county’s, a move that he said will probably result in higher premiums charged by the private insurance carrier.

In fact, county officials said, they are negotiating an agreement with Aetna to use $500,000 from the medical insurance reserve fund to offset premium increases.

Even so, they said, more employees are moving to the county’s health plan because it provides quality care at a significantly lower cost than Aetna.

Schillo said it is up to Aetna officials to promote their own plan and that if Aetna cannot provide competitive rates, perhaps another private insurance provider can.

Schillo also suggested that the Deputy Sheriff’s Assn. is interested in offering its own health care plan, and that is why it is so critical of the county program.

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Williams said his union is not actively pursuing its own health plan but that if the county cannot provide all the services demanded by employees, the union “would be interested in looking at other options.”

“The union feels that it could better manage their own plan,” he said. “The union has the best interest of the employees in mind. The county is only interested in what is best for the county.”