City Council

CITY OF POCATELLO, IDAHO CITY COUNCIL MEETING - BUDGET DEVELOPMENT MARCH 16, 2017 Council President Steve Brown called the City Council meeting for budget development to order at 12:01 p.m. Council members present were Heidi Adamson, Roger Bray, Steve Brown, Jim Johnston and Gary Moore. Mayor Brian Blad arrived at 12:59 p.m. Council member Michael L. Orr was excused. EMPLOYEE COMPENSATION - Heather Buchanan, Human Resources Director, Lynette Sampson, Human Resources Consultant; and Joyce Stroschein, Chief Financial Officer/Treasurer; gave an overview of the proposed Wage Based Hybrid Pay Plan. In response to questions from Council, Ms. Buchanan gave a definition of how an employee’s “pay for performance” is determined. She noted that there has been a lot of employee interaction regarding the proposed plan. General discussion followed regarding the pros and cons of a pay per performance plan. Concerns regarding how to determine a high performance employee and a low performance employee were shared. It was noted that the pay plan could be adopted without the pay for performance component. Ms. Buchanan explained employees will move into steps or pay for performance range based on their current total compensation (hourly rate + longevity). Steps 1 – 5: 3.25% between each step; Steps 6 - 36: .50% between each step. Ms. Buchanan clarified that percentages are based upon the defined market value. Ms. Stroschein gave an overview of the proposed plan costs. She mentioned moving to the wage based hybrid will make calculating actual wages for employees much easier because there are not multiple sources that must be researched per employee. Ms. Sampson explained how each employee’s wage was determined within the different perimeters. Ms. Buchanan gave an estimate of hybrid plan costs for years two through five. EMPLOYEE FEEDBACK - General discussion regarding employee positions and where they fall in the proposed structure followed. Some of the positions are based upon the current market although some employees feel there are inequities. It was suggested that performance evaluations be structured on a calendar year so wage information is available when developing the City’s budget in the spring of each year. HEALTH BENEFITS - It was noted that Aetna will not have benefit premium cost amounts available until the end of March 2017. Human Resource staff will update the Council with the benefit costs when they are known.  2 CITY OF POCATELLO BUDGET DEVELOPMENT MEETING MARCH 16, 2017 PAY PLAN OPTIONS CONTINUED – General discussion continued regarding benefit costs for the employee and City. Department positions and the on-going ability to fill and hire positions was discussed. Evaluating compensation of employees through a fair process was debated. It was mentioned discussion regarding pay for performance to evaluate its use should continue with an open dialogue. Mayor Blad arrived at 12:59 p.m. at which time Council President Brown turned the chair of the meeting over to Mayor Blad. In response to questions from Council, Ms. Buchanan explained if Council chooses to adopt the proposed hybrid plan Human Resource staff will endeavor to provide additional education for employees regarding the plan. A majority of the Council supported the proposed hybrid plan with a performance evaluation concept. A final decision will be voted upon at a later date. Ms. Stroschein asked for clarification regarding the use of wage information based upon the hybrid pay plan for the Fiscal Year 2018 budget. It was mentioned that costs for health benefits are needed before considering the proposed pay plan. Council does not wish to move forward until all of these costs are known. Mr. Stroschein announced that departments will not have any labor costs to include in their proposed Fiscal Year 2018 budget presentations until Council makes a decision. She gave an overview of Pay Plan Options (sorted by fund) as of March 16, 2017. SEE HYBRID PAY PLAN MARCH 16, 2017 ATTACHMENT “A” AS PART OF THESE MINUTES. BUDGET DEVELOPMENT – Joyce Stroschein, Chief Financial Officer/Treasurer gave an overview of Fiscal Year 2018 Budget items. RESERVE REVIEW – Summary of Tax Funds – Excess Reserves available for use regarding one-time capital needs: Street Fund $1,025,542.00; Cemetery Fund $93,004.00; Airport Fund $68,552.00; Library Fund $167,664.00; and Video Services Fund $109,883.00. Summary of Other Funds with Excess Reserves available for use on one-time capital needs: Liability Insurance Fund $362,770.00; Public Works Fund $32,558.00; Environmental Science Fund $119,697.00; Property Abatement Fund (for abatement issues and demolition) $78,582.00.  3 CITY OF POCATELLO BUDGET DEVELOPMENT MEETING MARCH 16, 2017 INTER-FUND FUEL RATES - Guidance for Fiscal Year 2018 Budget Build: 2017 Fuel Rates Diesel $2.50 per gallon Unleaded $2.80 per gallon 2018 Fuel Rates Diesel $2.30 Unleaded $2.60 Council supported the use of 2017 Fuel Rate estimates to create the City’s 2018 Fiscal Year budget. UTILITY RATE STUDY – Per the Raftelis Financial Consultants, Inc. rate study. The following fee increases are scheduled for Fiscal Year 2018: Sanitation Services 3%; Water Services 4%; and Water Pollution Control Services 3% Council guidance - to follow the Raftelis Financial Consultants, Inc. rate study for 4% increase to City utilities. PROPERTY TAX LEVY AND FOREGONE TAX - Initial City budget build – option to raise property tax by 3% (amount available for 2018 is $829,572.00). Foregone tax available is $1,719,683.00. Council will wait to receive City department presentations during the Budget Meetings before deciding whether to take 3% of the property tax and/or foregone tax. CONTINGENCY CAPITAL - One time capital contingency budget is $1,178,272.00 It was mentioned the funds were placed in non-departmental accounts so they can be moved wherever the Council would prefer. In response to questions from Council, Ms. Stroschein explained there are limitations regarding the 3% tax levy and foregone amount. Council could choose to take the full amounts. However, she would not advocate taking individual funds to the Levy limitation. She reminded Council it was  4 CITY OF POCATELLO BUDGET DEVELOPMENT MEETING MARCH 16, 2017 hard work to establish the point in the budget they have now obtained. Ms. Stroschein mentioned Finance staff was supposed to open the Fiscal Year 2018 budget for department entries. Since Department Heads will not have any wage information, they will only look at operating and capital expenses. As a result, current budget totals for these expenses will be maintained. Ms. Stroschein noted the next budget meeting is scheduled for April 13, 2017 immediately following the Study Session. Council will be asked to provide direction regarding wage plans so Department Heads may start developing presentations for the April 27 meeting. SEE BUDGET DEVELOPMENT MARCH 16, 2017 ATTACHMENT “B” AS PART OF THESE MINUTES. There being no further business, Mayor Blad adjourned the meeting at 1:34 p.m. APPROVED: BRIAN C. BLAD, MAYOR ATTEST: RUTH E. WHITWORTH, CMC, CITY CLERK