City Council

CITY OF POCATELLO, IDAHO CITY COUNCIL MEETING- BUDGET DEVELOPMENT JUNE 7, 2012 Mayor Brian Blad called the City Council meeting for budget development to order at 9:02 a.m. Council members present were Roger Bray, Steve Brown and Gary Moore. Council member Eva Johnson Nye arrived at 9:03 a.m. Council member Jim Johnston arrived at 9:04 a.m. Council member Craig Cooper was excused. David Swindell, Chief Financial Officer, overviewed the schedule for the meeting. He reminded the Council of the decisions that were made at the previous meeting for budget development. Medical Insurance Coverage Options for City employees were reviewed. Kim Smith, Human Resource Director, reviewed the Health Insurance policy that is currently built in the City’s draft budget for Fiscal Year 2013. Ms. Smith felt she could not recommend continued budgeting of the current policy due to climbing costs and proposed other options for medical coverage. The medical two way retention plan and fully insured plans were reviewed. The two way retention was profitable when first implemented, but has become very costly for the City to implement and staff feels it needs to be reconsidered. Mike Duersch, Benefit Coordinator, reviewed the risk difference between plans and recommended that the City become fully insured so the risk mostly falls on Blue Cross. He noted that the last few years have resulted in very high claims and it is unclear if this trend will change. Mrs. Smith feels insurance claims will increase and continue to be more costly for the City. Mr. Swindell reviewed the history of the insurance costs for the City and noted that almost $2 million have been spent on medical costs. He acknowledged there is a steady increase in medical coverage costs and the City needs to find a more cost efficient way to provide this benefit for employees. In response to questions from Council, Ms. Smith explained that Human Resource staff is monitoring pending health care mandates. The mandates are taken into consideration while making steps toward changes in the City’s health benefits. CITY COUNCIL MEETING 2 BUDGET DEVELOPMENT JUNE 7, 2012 Mr. Duersch commented on the proposed Health Care Reform. It is his understanding that medical insurance carriers will not be allowed to charge premiums in excess of 15% of the cost of claims to cover administrative costs. Mr. Brown mentioned he receives a lot of phone calls at his place of employment regarding health care issues. Therefore, if Health Care Reform passes, he feels that moving toward full coverage medical benefits will be in the City’s best interest. Discussion of how to manage the transition of becoming fully insured continued. It was recommended that costs of the increase be shared between the employees and the City. Mr. Moore shared that he is leaning toward the City picking up the extra medical costs. He would like the VEBA amount to stay the same because he feels this helps consumers think more carefully about their medical costs. Council discussion of employee benefits; medical insurance options; COLA and VEBA changes based upon past history; and prediction of future medical claims continued. Mr. Swindell announced the Decision Spread sheet would be utilized at this time and Council direction for changes to the spread sheet would be considered. General discussion was held on the option that was selected for health insurance coverage. Cost of Living Allowance (COLA) was discussed. It was the consensus of the Council to consider a 2% COLA for City employees to help with the increased cost of medical premiums. Mr. Johnston stated he is not sure if he agrees with a 2% increase but feels the amount of the insurance should be covered. General discussion was held and Ms. Smith stated she would research what other cities are giving to their employees across the State of Idaho. Council continued to discuss various items on the Decision Spreadsheet. Mr. Swindell provided additional information to the Council on one-time revenue and property taxes. It was the consensus of the Council to take $995,575.00 in new construction revenue. This will help balance the Council’s intent from the Fiscal Year 2012 budget to reduce the levy. It was noted that adjustments were necessary as CITY COUNCIL MEETING 3 BUDGET DEVELOPMENT JUNE 7, 2012 a result of changes made by the Bannock County Property Assessor after the 2012 budget was passed. Mayor Blad called a recess at 10:47 a.m. Mayor Blad reconvened the meeting at 11:08 a.m. Council continued to discuss items on the Decision Spreadsheet. Some suggestions included eliminating funds for completed improvements for that do not need additional funding in the Fiscal Year 2013 budget or will not be implemented until a later date. Mr. Swindell suggested the Council consider auctioning a survey annex building that he feels is no longer needed. He mentioned that other under-utilized buildings could also be considered for auction to create revenue for the Fiscal Year 2013 budget. Mike Irwin, Fire Chief, discussed the Fire Department’s apparatus savings fund to purchase equipment and other expenses as outlined on the Decision Spreadsheet. Mike Stayner, Interim Police Chief, and Jim Peterson, Police Captain, reviewed the breakdown of expenses for the Police Department as noted on the Decision Spreadsheet. Mr. Stayner stated if the Council will provide an amount to decrease their budget, his department would prefer to make determinations of where to make those reductions. Mayor Blad called a recess at 12:05 p.m. Mayor Blad reconvened the meeting at 12:51 p.m. Council continued to discuss items on the Decision Spreadsheet. The Council studied various scenarios to balance the budget through decreasing operating costs for each department and allowing the department to decide how to apply those decreases. Council was reminded that funds received from the State of Idaho have decreased over the years. Alan Green, Parks Supervisor, stated that their department has allocated $15,000.00 to resurface the tennis courts at Raymond Park. He suggested that resurfacing the courts could extend the use of the courts by 5 years until a more permanent decision can be made. In response to questions from the Council, staff provided additional information on various items on the Decision Spreadsheet. CITY COUNCIL MEETING 4 BUDGET DEVELOPMENT JUNE 7, 2012 Mr. Swindell reminded the Council that other governmental entities have made decisions that decreased property tax revenue and other revenues for the City. He suggested that the property tax levy be increased to 2.93% to compensate for the decreases in revenue. Council did not wish to decide on the property tax levy rate until possible decreases to other expenses could be considered. It was noted that the next meeting to continue budget discussion would be held on June 14, 2012 immediately following the Study Session. The Decision Spreadsheet showing the consensus of the Council is attached as a permanent part of the minutes (see Attachment “A”). Mayor Blad adjourned the meeting for budget development at 2:01 PM. APPROVED: BRIAN C. BLAD, MAYOR ATTEST: RUTH E. WHITWORTH, CMC, CITY CLERK