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2004-08-30 CC Minutes Workshop . . . City of Albertville Minutes August 30, 2004 Albertville City Hall 7:00 PM PRESENT: Mayor Don Peterson, Council members LeRoy Berning, Tom Fay, Ron Klecker, Dorothy Rich, City Administrator Larry Kruse and Finance Director Tina Lannes. Absent: None Mayor Peterson called the Council workshop meeting of the City of Albertville to order at 7:00 p.m. City Administrator Kruse and Finance Director Lannes reviewed the proposed budget amendments to the 2004 budget adjusting them for comments received at the August 26th workshop as follows: City Council: Legal publishing increase $11,000 Council attendance at the LMC Conference in October $0. City Administrator Wages and benefits increase of$8,239.00 Conference and Travel increase of $5, 1 00 Operating of$1630 City Clerk Annual Audit increase of$12,000 Recommendation to purchase scanning equipment and amend the clerk equipment budget by $16,000. Codification $1,630. Finance Department Amend the 2004 budget to include $58,750 for the new department and the balance in 2005. City Engineering Reduce the Engineer fees by $60,000 due to allocation of developer fees to capital project accounts. City Hall Increase the budget for computer upgrades and accounting software to implement Banyon Software modules relating to Fund Accounting, Fixed Assets, GASB 34 items and Point of Sale System $20,000. . . . Building Department Increase the budget by $4,000 to account for contracting with Inspectron. Fire Department Amend the Administrative fee to $13,078 and Pension Contribution to $37,315 Summarizing, Finance Director Lanes stated that increases offset decreases in the amended budget. It is the consensus of the Council to adopt these budget amendments at the Tuesday, September ih council meeting. 2005 BUDGET REVIEW City Finance Director Lannes first reviewed summary information of revenues and expenses for the General Fund, Water Fund, Sewer Fund and Stormwater Fund. The General Fund projected a $135,326 increase in revenues equating to a 5.9% increase. General Fund expense similarly reflected a $151.326 increase equating to a 5.9% increase. Staff presented a proposed levy of $1.522.960 and a debt service levy of$354.813. Briefly, major increases proposed include: $58,000 for expanded law enforcement $50,000 for a share fire chief $168,000 for the lease payment for the new public works facility $66,000 to go from $1,300 to $1,500 per year of service for the fire relief fund. $14,000 for additional operating expenses for the public works facility $130,000 for a new plow truck $30,000 for a new 4 x 4 pickup plow truck $15,000 for pickup As per the request from the last council meeting the following items have been adjusted in the proposed budget. 1) Shift the proposed fire chief amount to fire relief pensions. 2) Schedule the 4 x 4 pickup for 2006 3) Schedule the pickup for 2007 4) Increase the City Hall building budget from $100,000 to $150,000 5) Reduce the tractor/loader budget from $28,000 to $10,000 shifting the difference to the purchase of the $130,000 snowplow truck. 6) Meet with Otsego and St. Michael on Fire Contract Staff researched and made several changes to the Capital Carryover Worksheet. The $64,412.80 in the Street Machinery category purchased in 2003 was coded improperly and was corrected by moving it into the Street overlay. The historical repayments made on the . . . fire truck purchase were research and as of 2004 there was a negative balance of 84,907. In regards to fire inspections staff presented council with information regarding Jon Sutherland being trained for fire inspections and looked for direction on what to pursue. The Council reviewed the revised fire department budget. City Administrator Kruse presented the Health Care and Market Wage Study commissioned by the City Council earlier this year. HEAL TH CARE Greg Roth with the Roth Insurance Agency, long time representative of the City of Albertville sought proposals from Blue Cross Blue Shield, Health Partners and Medica. In an initial analysis of these proposals, it was very evident that BCBS and Medica (our current carrier) was not competitive and as the search for healthcare alternatives progressed, Health Partners was determined to be a responsible provider that would provide significantly reduced rates. Historically, Albertville has been paying a higher than average amount toward the health care insurance, while most wages have tended to be below other comparable positions. Employees with Albertville's family coverage currently contribute $14 per pay period or $378 per year. In evaluating Albertville's future policy regarding the City's contribution toward health insurance, staff proposes three options. First the City continues to pay 100% of a premium policy maintaining the current co-pay of $378 per year. In this instance, by changing health insurance providers it is estimated that the City would save $33,328 annually over what was budgeted in 2004. The second option would be if the City maintained the same premium health care policy and paid 100% ofthe employee and 50% of the remaining family along with an option that the the employee could enroll in a lower cost healthcare policy with a deductable and the City would continue to pay for it's share of the premium policy. Under this scenario, the employee would assume more risks with a deductable and pay a smaller co-pay. Further, the City can initiate a 125 Cafateria Plan whereby the employee can set aside some money to pretax some of their co-pay if the employee so chooses. Under this option the City could realize a $73,000 annual savings over what was budgeted in 2004. The third options would be to allocate say $750 per employee, thus allowing the employee to choose a premium policy or one with a deductable and allow any remaining unused dollars to be deposited in a deferred compensation plan to fund health insurance transitioning into retirement. It would be suggested that this plan be indexed to overall inflation which has been running 2-3% in recent years compared to double diget inflation in the medical premium area. Or the city could annual adjust it contribution. It is estimated that selecting this option would save the city $36,738 compared to what was budgeted in 2004. . MARKET RATE SALARY SURVEY Cities selected for comparison where selected for their geographic proximity to the City of Albertville, or in similar proximity to the metropolitan area. Cities were further selected on the basis of significant growth and similar activities. Cities included in the study include the Cities of Buffalo, Dayton, Elk River, Forest Lake, Hugo, Lino Lakes, Monticello, Roger, Sartell and St. Michael. In an effort to remove some of the subjectivity of an internal salary review, the decision was made to only use published data, rather than seeking additional phone or written surveys. Published date was taken from the League of Minnesota Cities Annual Salary Survey and the Metropolitan Area Salary Survey. City Administrator Kruse explained the pay step schedule and stated the City of Albertville is fortunate to be able to offset the increased wages with reductions in health care premiums. If the City selects Health Partners city employees will be able to select a premium plan or choose to assume some additional deductible risk to reduce the amount of their co-pay. At the conclusion of the meeting the City Council stated they were satisfied with the current budget and recommended it be presented at the next meeting. ADJOURNMENT MOTION BY Council member Berning, seconded by Council member Rich to adjourn the . meeting at 10:00 p.m. Motion carried unanimously. __:;--4 ~//~ Don Peterson, Mayor .