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HomeMy WebLinkAbout2002-12-12 Council Minutes - Work Session - PoliciesCOUNCIL POLICY WORK SESSION DECEMBER 12, 2002 CITY COUNCIL CHAMBERS 7:00 P.M. ITEM 1: EMPLOYEE INSURANCE BENEFITS ITEM 2. SCHEDULE ADDITIONAL WORK SESSIONS TO DISCUSS REMAINING TOPICS a. Maintenance of roads b. Water/ sewer rates C. Donations d. Legislative issues Other Information Included: 11/18/02 Work Session Notes COUNCIL POLICY WORK SESSION DECEMBER 12, 2002 CITY COUNCIL CHAMBERS 7:00 P.M. MAYOR JOHN J. WILLIAMS, PRESIDING Council present: Moore, Bookey, Porter, Swarner, Williams, Jackman and Bannock Staff present: Freas, Snow, Graves, Kornelis, La Shot, Craig, Wichman, Semmens, Feltman, Kebschull, Springer, Kornfield, Howard, Walden, Coon, Anderson, McNair, Cole, Carter, Padilla, Wilcox, Wanamaker, Carver, Dye Others: S. Wilcox Williams opened the work session at approximately 7:01 p.m. and noted, during a drive from Anchorage to Kenai, rock was being loaded and dumped in the river to restore areas washed out by the recent flood. He read in the newspaper there is a national repair permit that allows work to be done without permits and requested Attorney Graves to investigate what permit allows repair and reconstruction after a disaster. After his investigation, Williams requested Graves to prepare a disaster declaration to be submitted to the Governor and then to the federal government. Council also reviewed the draft policy statement prepared by administration. City Manager Snow explained Item 5 to mean the budget would be prepared to fit the level of funding council sets. There were no objections to the statement. ITEM 1: EMPLOYEE INSURANCE BENEFITS Snow reviewed the memorandum included in the work session packet which outlined the task forwarded to the Health Insurance Review Committee (composed of representatives from each city department) and their systematic review of information, discussion of several different health coverage options (cafeteria, self-insurance, joining the Borough, AML or other insurance pool, etc.) . She also noted, she and Finance Director Semmens investigated other municipalities in regard to insurance programs and found in most places, the employee makes at some level of contribution. Snow reported the tasks of the committee were to identify and examine various alternatives to reduce the cost of health insurance premiums to the City; survey and examine various premium payment plans; and identify a premium contribution plan that presents the least objectionable methodology to city employees. The committee also took the information back to their departments and discussed the issues with their co-workers. Snow, Semmens and the committee found they didn't want the majority of the employees to loose ground with their wages through contributions, though it probably will happen to some employees. Through this discussion, they also discussed COLA versus CPI and a general discussion of scenarios that could be structured to balance a COLA with some level of health insurance payment participation by employees. Snow noted, toward the end of the meetings, a lot of feedback was received from employees who were reluctant to pay a contribution toward health insurance without looking at COUNCIL WORK SESSION DECEMBER 12, 2002 PAGE 2 the whole benefit package. Comments from the employees were reviewed more in- depth in Snow's memorandum. Options for employee participation were prepared (included in the packet) and ballots were distributed to all employees. The employees voted on which of two main options for health insurance participation they preferred. They were: 1. All covered employees pay the same contribution amount. 2. The city pays the entire premium for the employee and employees who want dependent care coverage will pay a portion of the premium for dependent coverage. The amount paid would depend upon the level of dependent coverage that is wanted. OR 3. Do not want to participate in choosing the method of employee contribution to health insurance. Snow reported more employees liked Option 2 and quite a number of employees didn't vote. She added, the committee's recommendation was a COLA be budgeted in an amount that will be no less than would bring the wages equal to the CPI and that employees contribute no more than 50% of this year's increased cost of health insurance premiums. To equal the CPI, a COLA would have to be at least seven percent. An employee contribution of no more than 50% of the increased cost from this year would reduce the expected increase in health insurance costs to the city by about $50.,000. Semmens reviewed the options for Employee Participation Information he prepared and included in the packet, i.e. various contribution rates. It was noted, a seven percent COLA increase equaled approximately $350,000. Porter asked if an increase in the deductible was discussed and Semmens noted the committee did discuss it, but felt the direction of the council was the employees are to contribute to the plan via a premium contribution. Snow added, the deductible had been raised several years ago and she and Snow felt raising it again should be held in reserve as it may need to be done again in the future. Porter asked, in reviewing other plans, if the deductible was asked in order to average deductibles and Snow answered yes. Different options from other plans were reviewed with the council. Council reviewed a Schedule of COLA vs. CPI distributed during the meeting. It was noted, the city step increases were not included in the table. Bannock asked if it was accurate to state the table did not assume any step increases and Semmens stated it was. Williams stated he didn't feel wages and COLA could be mixed. Snow noted, it was important to remember step increases only go to 10.5 years of employment and there are a lot of long -tenured employees. Porter disagreed COUNCIL WORK SESSION DECEMBER 12, 2002 PAGE 3 with Bannock's comment and explained, if that was the case, then no city employee should ever get a COLA increase and that should not be the attitude. Semmens noted, the employees' proposal (employee pays half of this year's increase) would save approximately $50,000. He added, the estimate for insurance would be approximately $405,000 without including PERS, etc. Bookey asked if there are alternatives in regard to the issue. Semmens answered, in his opinion, council would not have enough information at this time to decide on the insurance issue as he had not yet calculated the revenue picture, the departments' draft budgets had not yet been received and until that process is completed, there is no way to make a determination. Williams suggested verbiage for Item No. 6 of the draft policy statement was to add the committee's consensus for purposes of developing the budget (including a seven percent COLA and insurance as outlined) . Semmens noted, he would include in the draft budget a 14% increase in insurance coverage ($116,000), though that number would not be certain. Snow suggested having parameters in the language to develop a plan, i.e. if that will be the highest council would be willing to go. Bookey noted, after ten years of working with the city budget, he did not feel there was any place in the budget in which to take that money without a reduction in employees. Semmens stated administration needed to continue the budget process as it is normally done, looking at everything, and develop the best plan and bring it to council for review. He added, it is helpful if council gives administration direction as to whether to include a COLA increase and factor in a contribution to health insurance. Semmens stated he would like to know if at least four council members want administration to prepare a budget to include a COLA. Bookey stated he was interested in including a COLA but not at a seven percent level. He stated he would want administration to bring what is possible with a COLA. Williams stated he wanted the budget to include a larger COLA as he felt it would be better to increase it as much as possible instead of playing "catch-up." Council discussed a mill rate increase and suggested the city mill rate be increased to match the decreases the borough's mill rate had taken over the last several years. Bannock noted, if the General Fund spending stays the same, the mill rate is raised .5, and a bond proposition passes (for capital projects discussed previously), it would double the taxes. Semmens stated, there could be a large negative number and still stay within the council's allowable deficit, but it will be challenging to have a "balanced budget." Swarner asked if there had been any discussion about incentives for employees who develop ideas to save money. Semmens stated he likes those types of programs, but COUNCIL WORK SESSION DECEMBER 12, 2002 PAGE 4 wasn't sure the public would as they may believe the employees should be careful with the funds anyway. Swarner asked administration to investigate such a program. Snow noted, though it would be council's decision, she would like a consensus of council to go forward with that issue. There was no consensus. BREAK TAKEN: 8:20 P.M. BACK TO ORDER: 8:30 P.M. ITEM 2: SCHEDULE ADDITIONAL WORK SESSIONS TO DISCUSS REMAINING TOPICS Tenn ntinn e- Council reviewed the donations they make through their Legislative budget and decided the following: • Youth Court -- Administration was requested to contact them and ask if they will be hurt if the city's donation would be cut down or cut out. • United Way -- A letter will be included in the employee's paychecks for the upcoming drive. • ALPAR and flags should be continued and probably shouldn't be considered a donation as there is value received through the programs. Water f sewer rates: Semmens noted a rate study is in progress and it probably wouldn't be useful to discuss a change in the rates until the study is completed and received. Williams stated the discussion would then be held until last. Legislative Issues: Council requested Clerk Freas to notify council as soon as suitable dates are received from the Legislators in order for council to meet with them in a work session prior to their leaving for Juneau. Snow reported Public Works Manager Kornelis had already forwarded the capital improvement project list. Bookey stated his concern to continue the city's membership with AML. He suggested the city either participate in it more or reconsider the membership. Williams stated his concern that since the city does not have a lobbyist, it is important to continue with the League for the contact through the Legislature. Council was asked if they had any legislative issues of concern: • Bannock suggested the city take positions on some statewide issues (school formula, AHFC rate differential if building out of a city limit, etc.) . Williams suggested Bannock become a member of the AML Legislative Committee. • Arctic Winter Games -- will they support it? • Capital Improvements -- probably not worthwhile to discuss with the legislators as there probably will not be any funding available for large projects. COUNCIL WORK SESSION DECEMBER 12, 2002 PAGE 5 Williams requested council to forward issues to Clerk Freas for the work session with the area legislators. nfh Pr TtPm c - • Williams noted the names being considered as the replacement to Governor Murkowski as the State's U.S. Senator. He asked council if they had objection to him writing a letter on behalf of the council supporting Meade Treadwell and council suggested the letter be from him personally. • Williams reported on his trip to Louisiana through the National Guard. • Williams requested Attorney Graves to develop a resolution for employers' support of Guard and Reserve. The resolution would be signed during a ceremony at a Chamber luncheon in February or March, with members of the Soldotna City Council, members of the Guard and Reserve, etc. • Williams reported Mike Malchalsky is the new chair for the employers' support of the Guard and Reserve in the State of Alaska, as well as the new appointee for statewide airport security. Malchalsky would like to have a meeting with the Airport Manager, Airport Commission and visit the area in the near future. Maintenance of Roads: Council noted funding will not allow any changes in the status quo of maintenance of roads. Williams reminded administration to notify the council when the water/ sewer study is completed in order for council to meet again and discuss the possibility of raising the monthly water/sewer charges. The work session ended at approximately 9:07 p.m. Notes prepared by: 4AAO� z7Y 11� Carol L. Freas, City Clerk �IPpR�11ED �Y CC�U1�C�. �. CITY CLERK