Score: +1
(1/0/0)
Ventura County Grand Jury
• 2017-2018
Oxnard Union High School District Retiree Health Benefits Trust
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 23 findings
F01
Funding of the Trust began on April 12, 2001, and continued annually through March 9, 2007, when the District last allocated funds to the Trust in the amount of $1,768,900. This amount represented the contribution for fiscal year 2005-2006. All funds sent to the Trust since March 9, 2007, have been Medicare Part D Reimbursements or funds provided by Coastal Schools Employee Benefits Organization. (Att-02)
No recommendations for this finding
F02
The Grand Jury did not find anyone with knowledge of any action taken by the Trustees regarding the suspension of funding the Trust after March 9, 2007. This includes any individual connected to the Trust, in any capacity, with knowledge or access to any documented discussions, and or decisions 2 OUHSD Retirees Health Benefit Trust suspending or demanding funding of the Trust (as defined in the
No recommendations for this finding
F03
The Grand Jury was unable to find any reference in the minutes of Trust meetings regarding the suspension of defined contributions to the Trust after March 9, 2007. Nor could any reference be found regarding a decision by the Trustees as to a course of action to take in the best interest of the beneficiaries.
No recommendations for this finding
F3
Retirees and active employees qualifying as beneficiaries of the Trust
Related Recommendations (3)
R01
The Grand Jury recommends the District work with the Federation and the Trustees in an effort to update the Trust to reflect agreements that have been made by the District and the Federation regarding future funding. In the interest of transparency, any amendments and/or changes to the Trust should be properly documented. (C-01, C-02, C-03, C-04, C-05, C-06)
R02
The Grand Jury recommends the Trustees provide all eligible beneficiaries with written communication regarding the outcome of R-01. (C-01, C-02, C-03, C-04, C-05, C-06)
R03
The Grand Jury recommends the Trustees provide on-going written communication to the beneficiaries regarding all actions that will have a material outcome on the funding of the Trust and/or the dissemination of the funds. (C-01, C-02, C-03, C-04, C-05, C-06) Responses Responses Required From: Board of Trustees, Oxnard Union High School District (C-01, C-02, C-03, C-04, C-05, C-06, R-01) Responses Requested From: Board of Trustees, Oxnard Union High School District Retiree Health Benefits Trust (C-01, C-02, C-04, C-05, C-06, R-01, R-02, R-03) Oxnard Federation of Teachers, Local 1273, Eric Montijo, President (C-01, C-02, C-03, C-04, C-06, R-01) References Ref-01. Oxnard Union High School District Retiree Health Benefits Trust website, HOME: http://ouhsdrhbt.org/index.html Accessed February 28, 2018 Ref-02. Oxnard Union High School Retiree Health Benefits Trust website, FAQ: http://ouhsdrhbt.org/faqs.html Accessed February 28, 2018 Ref-03. Oxnard Union High School District Official Site, http://www.ouhsd.k12.ca.us/wp- content/uploads/docs/hr_cert_agreement.pdf OUHSD Retirees Health Benefit Trust 7 Accessed February 28, 2018 Ref-04. Investopedia website: https://www.investopedia.com/terms/t/trustee.asp Accessed February 28, 2018 Ref-05. US Legal website: https://definitions.uslegal.com/f/fiduciary-duty/ Accessed February 28, 2018 Attachments Att-01. Revised and Amended Agreement Establishing the Oxnard Union High School District Retiree Health Benefits Trust Att-02. Oxnard Union High School District Retiree Health Benefits Trust Schedule of Contributions 2001-Current Glossary TERM DEFINITION CBA Collective Bargaining Agreement District Oxnard Union High School District FAQ Frequently Asked Questions Federation Oxnard Federation of Teachers Oxnard Union High School District Retirees Trust Health Benefits Trust Trustees Board of Directors USF Unit Share Formula 8 OUHSD Retirees Health Benefit Trust Attachment 01 Revised and Amended Agreement Establishing the Oxnard Union High School District Retiree Benefits Trust OUHSD Retirees Health Benefit Trust 9 10 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 11 12 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 13 14 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 15 16 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 17 18 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 19 20 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 21 22 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 23 24 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 25 Attachment 02 Oxnard Union High School District Retiree Health Benefits Trust Schedule of Contributions 2001-Current 26 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 27
F04
In 2003 the District and Federation agreed employees hired after July 1, 2004, would not receive lifetime health benefits upon retirement and therefore would not be eligible beneficiaries of the Trust. As of February 2018, 58% of the teachers in the District are not eligible beneficiaries of the Trust. TRUST WEBSITE
No recommendations for this finding
F4
Retirees and active employees NOT qualifying as beneficiaries of the Trust. The unintended consequence of the 2004 decision has affected the Trustees’ ability to render fair and impartial decisions on behalf of the Trust. (FA-04, FA-08, FA-09, FA-10, FA-11, FA-12, FA-16, FA-21) C-04. The Grand Jury did not find sufficient evidence to conclude the District, the Federation, and the Trustees have consistently acted in the best interests of the beneficiaries. (FA-01, FA-02, FA-03, FA-07, FA-12, FA-14, FA-15, FA-16, FA-18, FA-19, FA-20) C-05. The Grand Jury concluded the District and the Trustees have failed to properly document in their meeting minutes decisions regarding funding of the Trust after March 2007. (FA-02, FA-03, FA-06, FA-08, FA-09, FA-17) C-06. The Grand Jury concluded the District, the Federation, and the Trustees have not properly communicated their decisions to the beneficiaries. (FA- 02, FA-03, FA-05, FA-06, FA-17, FA-18, FA-19) 6 OUHSD Retirees Health Benefit Trust
Related Recommendations (3)
R01
The Grand Jury recommends the District work with the Federation and the Trustees in an effort to update the Trust to reflect agreements that have been made by the District and the Federation regarding future funding. In the interest of transparency, any amendments and/or changes to the Trust should be properly documented. (C-01, C-02, C-03, C-04, C-05, C-06)
R02
The Grand Jury recommends the Trustees provide all eligible beneficiaries with written communication regarding the outcome of R-01. (C-01, C-02, C-03, C-04, C-05, C-06)
R03
The Grand Jury recommends the Trustees provide on-going written communication to the beneficiaries regarding all actions that will have a material outcome on the funding of the Trust and/or the dissemination of the funds. (C-01, C-02, C-03, C-04, C-05, C-06) Responses Responses Required From: Board of Trustees, Oxnard Union High School District (C-01, C-02, C-03, C-04, C-05, C-06, R-01) Responses Requested From: Board of Trustees, Oxnard Union High School District Retiree Health Benefits Trust (C-01, C-02, C-04, C-05, C-06, R-01, R-02, R-03) Oxnard Federation of Teachers, Local 1273, Eric Montijo, President (C-01, C-02, C-03, C-04, C-06, R-01) References Ref-01. Oxnard Union High School District Retiree Health Benefits Trust website, HOME: http://ouhsdrhbt.org/index.html Accessed February 28, 2018 Ref-02. Oxnard Union High School Retiree Health Benefits Trust website, FAQ: http://ouhsdrhbt.org/faqs.html Accessed February 28, 2018 Ref-03. Oxnard Union High School District Official Site, http://www.ouhsd.k12.ca.us/wp- content/uploads/docs/hr_cert_agreement.pdf OUHSD Retirees Health Benefit Trust 7 Accessed February 28, 2018 Ref-04. Investopedia website: https://www.investopedia.com/terms/t/trustee.asp Accessed February 28, 2018 Ref-05. US Legal website: https://definitions.uslegal.com/f/fiduciary-duty/ Accessed February 28, 2018 Attachments Att-01. Revised and Amended Agreement Establishing the Oxnard Union High School District Retiree Health Benefits Trust Att-02. Oxnard Union High School District Retiree Health Benefits Trust Schedule of Contributions 2001-Current Glossary TERM DEFINITION CBA Collective Bargaining Agreement District Oxnard Union High School District FAQ Frequently Asked Questions Federation Oxnard Federation of Teachers Oxnard Union High School District Retirees Trust Health Benefits Trust Trustees Board of Directors USF Unit Share Formula 8 OUHSD Retirees Health Benefit Trust Attachment 01 Revised and Amended Agreement Establishing the Oxnard Union High School District Retiree Benefits Trust OUHSD Retirees Health Benefit Trust 9 10 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 11 12 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 13 14 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 15 16 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 17 18 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 19 20 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 21 22 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 23 24 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 25 Attachment 02 Oxnard Union High School District Retiree Health Benefits Trust Schedule of Contributions 2001-Current 26 OUHSD Retirees Health Benefit Trust OUHSD Retirees Health Benefit Trust 27
F05
The Trust website provides Board agendas and meeting minutes starting with 2012. The website states: “The Trustees have a fiduciary obligation to administer the Trust in accordance with its purpose and intent and with the terms of the Trust Agreement. The Trustees' fiduciary obligations include, but are not limited to: (a) administering the Trust solely for the benefit of the beneficiaries; and (b) treating the beneficiaries impartially, i.e. treating them fairly in relation to each other, both individually and by class.” (Ref- 01)
No recommendations for this finding
F06
The website provides a Frequently Asked Questions (FAQ) document dated March 16, 2012. In the FAQ document the following questions are among those addressed: 1) Question: “How is the Trust funded?” Answer: “The Trust has been funded by contributions made in accordance with the CBA(s) between the District and the Federation. Because of budget difficulties, there have been no recent unit share contributions to the Trust. However, other contributions have been made in recent years through reimbursement of Medicare Part D program costs.” 2) Question: “What was the intent of the Trust?” Answer: "The intent of the Trust, from its inception, was to build up funds to fully meet the District's unfunded obligations to pay for retiree benefits to eligible District employees and retirees and their respective dependents...the District will directly fund retiree benefits from the District's General Fund until the Trust is fully funded...This approach is consistent with the Trust's intent." (Ref-02) TRUST AGREEMENT
No recommendations for this finding
F07
Recitals Section B of the Trust states: “The Federation and the District are parties to collective bargaining agreements which may be amended to require contractual contributions by the District and District employees to the Oxnard Union High School District Retiree Health Benefits Trust OUHSD Retirees Health Benefit Trust 3 (hereafter "Trust") for the purpose of providing health and welfare benefits for eligible retired employees and their dependents.” (Att-01)
No recommendations for this finding
F08
Recitals Section C of the Trust states: “The amount of employee contributions to the Trust shall be as set forth in separate agreements between the Federation and the District, and the amount of District contributions to the Trust shall be set forth in a separate agreement between the District, the Federations, and the Trust.” (Att-01)
No recommendations for this finding
F09
Article 1.3 of the Trust states “The term ‘Collective Bargaining
No recommendations for this finding
F10
Article 1.5 of the Trust states: “The term ’Contribution Agreement’ means a multi-party agreement between the District, a Union, and the Trust providing for participation in the Trust and for contributions to the Trust by the District.” (Att-01)
No recommendations for this finding
F11
Article 1.9 of the Trust states: “The term ‘District Contributions’ means payments made or required to be made to the Trust in accordance with Collective Bargaining Agreements or Contribution Agreements.” (Att-01) The CBA references the Unit Share Formula (USF). The USF is used to determine how annual funds will be divided for any given school year. A committee is responsible for providing recommendations to the school board on distribution of funds within the guidelines of the USF. The “Unit Share” constitutes the total funds to be allocated to unit compensation which includes salaries and fringe benefits of unit members, health and welfare benefits for unit members and retirees, and retirement plans for current and past unit members. (Ref-03)
No recommendations for this finding
F12
Article 4.3 of the Trust states: “Each contribution to the Trust shall be made promptly by the date specified in the Collective Bargaining Agreement or Contribution Agreement, and if such payment is not made by the specified date, it shall be considered delinquent. The parties recognize and acknowledge that regular and prompt payment of District contributions to the Trust is essential to its maintenance and purpose..." (Att-01)
No recommendations for this finding
F13
Article 5.1 of the Trust states: “The operation and administration of the Trust shall be the joint responsibility of a Board of six Trustees, three (3) appointed by the District and three (3) appointed by the Federation, as set forth herein.” (Att-01)
No recommendations for this finding
F14
Article 5.3 of the Trust states: “The District and the Federation expressly designate the Trustees as fiduciaries, who shall have exclusive authority and discretion acting as the Board of Trustees as provided herein to control and manage the operation and administration of the Trust. Each of the Trustees expressly accepts designation as a fiduciary and as a Trustee by 4 OUHSD Retirees Health Benefit Trust the written acceptance and signature of this Agreement and assumes the duties, responsibilities and obligations of Trustee as created and established by this Agreement and under applicable law. Any Trustee named hereafter shall do likewise by signing this Agreement or a written acceptance thereof, in a form approved by and filed with the Board of Trustees.” (Att-01)
No recommendations for this finding
F15
Article 6.4 of the Trust states: “The Board of Trustees shall have power to demand and enforce the prompt payment of contributions to the Trust, as required by this Agreement, the Collective Bargaining Agreements or any other written agreement requiring contributions to the Trust,..." (Att-01)
No recommendations for this finding
F16
Article 6.22 of the Trust states: “Trustees shall be free from compromising influences and loyalties. A Trustee shall fulfill his or her responsibilities solely on behalf of the mission of the Trust. It is not intended that Trustees appointed by or paid salaries by the District or the Federation who serve school employees be prohibited by this provision from serving as Trustee.” (Att-01)
No recommendations for this finding
F17
Article 7.2 of the Trust states: “The Board of Trustees shall appoint a Secretary and additional assistance, if necessary, who shall keep minutes or records of all proceedings and acts of the Board of Trustees.” (Att-01)
No recommendations for this finding
F18
Article 7.4 of the Trust states: “The Board of Trustees shall not take any action or make any decisions on any matter coming before it or presented to it for consideration or exercise any power or right given or reserved to it or conferred upon it by this Agreement except upon the vote of each group of the Trustees at a meeting of the Board of Trustees duly and regularly called or except by the signed concurrence of all Trustees without a meeting, as provided in Article 7.7.” (Att-01)
No recommendations for this finding
F19
Article 7.7 of the Trust states: “Upon any matter that may properly come before the Board of Trustees, the Board of Trustees may act without a meeting provided such action has the written concurrence of all the Trustees.” (Att-01) DEFINITIONS
No recommendations for this finding
F20
Trustee: “A trustee is a person or firm that holds and administers property or assets for the benefit of a third party. A trustee may be appointed for a wide variety of purposes, such as in the case of bankruptcy, for a charity, for a trust fund or for certain types of retirement plans or pensions. Trustees are trusted to make decisions in the beneficiary's best interests and often have a fiduciary responsibility to the trust beneficiaries.” (Ref- 04)
No recommendations for this finding
F21
Fiduciary: “Fiduciaries owe two main duties to their clients: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their clients, rather than in their own interest. Thus, fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest. The duty of care requires that OUHSD Retirees Health Benefit Trust 5 fiduciaries perform their functions with a high level of competence and thoroughness, in accordance with industry standards.” (Ref-05) Conclusions C-01. The Trustees have a fiduciary responsibility to its members which includes a duty of loyalty, a duty of prudence and care in the interest of its beneficiaries. The Grand Jury concluded that the Trustees failed to properly document and communicate changes in funding of the Trust as decided by the District and the Federation. (FA-02, FA-03, FA-13, FA-14, FA-16, FA- 18, FA-20, FA-21) C-02. The actions of the District, the Federation, and the Trustees, have lacked transparency. This has contributed to the beneficiaries’ loss of confidence in the management of the Trust. (FA-01, FA-02, FA-03, FA-06, FA-08, FA- 17, FA-18, FA-20) C-03. The Grand Jury concluded changes made regarding Trust eligibility in 2004 resulted in four distinct groups with conflicting priorities as to the future funding of the Trust and/or distribution of its assets. 1) District 2) Federation 3) Retirees and active employees qualifying as beneficiaries of the Trust 4) Retirees and active employees NOT qualifying as beneficiaries of the Trust. The unintended consequence of the 2004 decision has affected the Trustees’ ability to render fair and impartial decisions on behalf of the Trust. (FA-04, FA-08, FA-09, FA-10, FA-11, FA-12, FA-16, FA-21) C-04. The Grand Jury did not find sufficient evidence to conclude the District, the Federation, and the Trustees have consistently acted in the best interests of the beneficiaries. (FA-01, FA-02, FA-03, FA-07, FA-12, FA-14, FA-15,
No recommendations for this finding
Conclusions 2
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CL1 Page 8Retirees and active employees qualifying as beneficiaries of the Trust
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CL2 Page 8Retirees and active employees NOT qualifying as beneficiaries of the Trust. The unintended consequence of the 2004 decision has affected the Trustees’ ability to render fair and impartial decisions on behalf of the Trust. (FA-04, FA-08, FA-09, FA-10, FA-11, FA-12, FA-16, FA-21) C-04. The Grand Jury did not find sufficient evidence to conclude the District, the Federation, and the Trustees have consistently acted in the best interests of the beneficiaries. (FA-01, FA-02, FA-03, FA-07, FA-12, FA-14, FA-15, FA-16, FA-18, FA-19, FA-20) C-05. The Grand Jury concluded the District and the Trustees have failed to properly document in their meeting minutes decisions regarding funding of the Trust after March 2007. (FA-02, FA-03, FA-06, FA-08, FA-09, FA-17) C-06. The Grand Jury concluded the District, the Federation, and the Trustees have not properly communicated their decisions to the beneficiaries. (FA- 02, FA-03, FA-05, FA-06, FA-17, FA-18, FA-19) 6 OUHSD Retirees Health Benefit Trust
Agency Responses 1
Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.
No Responses Found 2
Government entities assigned to respond to this report. No response documents have been linked in our database.
Oxnard Elementary School District
School District
Oxnard Union High School District
School District