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HomeMy WebLinkAbout2002-10-21 Council Minutes - Work SessionKENAI CITY COUNCIL WORK SESSION OCTOBER 21, 2002 CITY COUNCIL CHAMBERS 7:00 P.M. MAYOR JOHN J. WILLIAMS, PRESIDING Council present: Williams, Bookey, Moore, Jackman, Bannock, and Porter Council absent: Swarner Staff present: Snow, Graves, Freas, Walden, Craig, Semmens, The work session began at approximately 7:00 p.m. Finance Director Semmens reviewed handouts provided to the council which included a General Fund budget projection; reserve levels from FY92-estimated FY03; General Fund deficit/ surplus; General Fund budget revenue projections, 2000-2008; salaries and benefits; and insurance history. Other information provided included notes of the October 14, 2002 work session; AML Salary Survey, wages and benefits comparison and a Schedule of COLA vs. CPI. Revenues & Expenditures ITEM 1: General Fund Overview/Status Report Semmens reviewed the handouts with the council and noted the projections were very early; it is known the property tax will be $380,000,000; and he felt the sales tax projection would be within $100,000 of the projection. Semmens also noted Revenue sharing and Safe Communities funds were known; he cut the interest by $50,000 (based on four percent earnings); and the sale of Inlet Woods properties brought the "other" balance up. ITEM 2: General Fund Balance Minimum Bookey noted he had a long discussion with Semmens during the day which helped him in determining what he would like to have as a minimum balance. He noted, there is $4.3 in unencumbered balance in the General Fund as well as other areas of funds within the budget. He would like to have approximately $7 million as a budget reserve, which is already there, plus the equipment reserve fund. Bookey stated he would like to explore setting up a roads replacement/repair fund and a building maintenance repair fund and still maintain the cash reserve. The subsequent discussion brought forward the following comments: � $5 million would be a good balance for the undesignated reserve. • A balance of more than one-half a year's budget should be in the balance with which to work. • There were no objections to setting up a road replacement/repair or building maintenance reserve funds at this point. KENAI CITY COUNCIL WORK SESSION OCTOBER 21, 2002 PAGE 2 Because Administration reported they were already investigating a ten-year maintenance formula, further discussion on setting up the funds would be held where the items are currently listed on the topics of discussion Consensus of council was to try for having $5 million in the unreserved balance with $4.75 as the bottom. City Manager Snow noted that was where the balance is currently and means no appropriations can be made or cuts would have to be made from somewhere else in the budget. Semmens also noted a one -mill increase was planned for the 2003-04 budget; sales tax is projected to be up two percent; the interest rate probably won't as projected at 2004; the fish tax is an unknown and the expenditures include a three percent increase over the prior year. ITEM 3: Employee Wages & Benefits Employee Health Insurance: Discussion followed regarding health insurance. The following comments were noted: • The city is now funding 100% of the employees' health insurance. • It was suggested council give direction on the level of insurance costs employees will have to pay. • A COLA increase will need to be reviewed. • Health insurance costs will be a significant effect on the budget. Council held a brief discussion on health insurance wherein Bannock suggested a cafeteria plan should be reviewed as he felt everyone is equal and it would allow a better standard. City Attorney Graves reported an employee committee was already reviewing the health care issue and because it is an extremely touchy subject, he suggested council may want to wait for recommendations from the committee before determining a funding level. Consensus of council was to wait until after a recommendation is received from the employee committee before making any funding determinations for employee health insurance. Wages: Council reviewed the AML survey of wages and benefits comparison included with the handout information. Comments included: • The social security option was capped at $36,000. Today there is no cap and employees and City of Kenai employees have lost ground. Some feel the city should pay into the supplemental benefit program to make up for the difference and some don't feel the city is obligated to do so. • It should be factored in that a COLA is taxable and benefits are not. • The insurance committee has also been discussing this topic and feel it matters more to get a COLA. KENAI CITY COUNCIL WORK SESSION OCTOBER 21, 2002 PAGE 3 Consensus was for administration to track the committee's discussions/findings in regard to insurance and wage concerns. ITEM 4: Revenue: Mill Rate/Sales Tax/ Rates, Fees, Charges/ Grants, Loans, Bonds It was noted the projection included a raise of one mill ($350,000) and user fees and rental rates are being discussed and proposed. Because the raise of one mill was discussed last year and noted it would take place this year, Bookey felt it wouldn't be a problem to make the raise, however he didn't want to raise it more than one mill. Williams stated he thought a one -mill raise would work and Bannock stated he wasn't sure a mill increase would be needed. He suggested, in order to sell a tax increase, the city should say what it is that will be done with the raise. Williams noted, a mill increase had been programmed and he could see no way in which the city could continue in the direction it is going, and take care of the employees, without raising the mill rate. Other comments included: • A one -percent COLA increase would equal $50,000. Though concern was noted that a COLA would use up most of a one -mill increase, Porter and Williams agreed they could not continue ignoring the employees year after year. Bannock noted there are a lot of factors going into an employee, i.e. on -time paychecks, insurance, etc. and felt it was not fair to say the employees had been ignored. Williams noted, the employees had been skipped over for the last four of six years. • Referring to the chart included in the information distributed, it was noted approximately 80% of the employees took a step increase within the last two years and less than 20% of the employees had capped out. Within a two-year period, 80% of the employees received a bigger paycheck. • Step increases are included in the pay scale for loyalty, reward, and longevity. • Employees need to understand there would only be so much revenue received and there are other city expenses that will need to be addressed than just a COLA. • 1A request was made to find out from Public Works by Wednesday why the water is so dirty at his end of town. • No complaints have been reported from the recent increase of fees. Council will discuss bonding and low interest loans when they talk more about capital improvements, etc. at one of the later work sessions. It was noted, current financial conditions are prime for taking on debt and the amount of support the borough's propositions for bonding received may indicate support for the city bonding for � project(s). KENAI CITY COUNCIL WORK SESSION OCTOBER 21, 2002 PAGE 4 Council requested the following information be made available for the November 4 work session: • Building maintenance schedule. • Assessed value/opinion of value on the old library/jail building (discuss whether to sell or whether to give them to the non -profits that are now leasing the buildings) . • Minutes of the last several Harbor Commission meetings. • Invite Harbor Commission members to attend the work session. • Personal property tax -- will be discussed further. Snow also noted there was no actual letter from DOT regarding road maintenance through Kenai; it was his letter to him and their phone call back to him. Snow recapped council's discussions and direction to administration: • Include information on deferred maintenance • Stay within $4.7 million as a fund balance amount. • Continuing working with employees regarding health insurance and wages; bring whatever decision is available. • Include a one mill increase for the upcoming budget. Snow noted, what council has discussed and offered direction on has been very informative. The work session ended at approximately 9:14 p.m. Notes prepared by: At4v_6 ayl, ts, Carol L. Freas, City Clerk