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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 4/4/2000 * PLEASE NOTE: Since the Glendale City Council does not take formal action at the Workshops, Workshop minutes are not approved by the City Council. MINUTES CITY OF GLENDALE CITY COUNCIL WORKSHOP April 4, 2000 1:30 p.m. PRESENT: Mayor Scruggs, Vice Mayor Eggleston, and Councilmembers Goulet, Lieberman, Martinez, McAllister, and Samaniego. ALSO PRESENT: Martin Vanacour, City Manager; Ed Beasley, Assistant City Manager; Peter Van Haren, City Attorney; and Pamela Oliveira, City Clerk. 1. WESTERN AREA EMPLOYMENT ZONE DISCUSSION CITY STAFF PRESENTING THIS ITEM: Mr. Ken Reedy, Deputy City Manager. OTHER PRESENTERS: Mr. John F. Long, developer; and Mr. James Miller, Manager of Commercial Properties for Mr. Long. The Glendale City Council has identified the Loop 101 Freeway Corridor as an area suitable for a regional employment center. Mr. John F. Long owns a large portion of property along the Loop 101 Corridor that runs through the cities of Glendale, Phoenix, Peoria, and Avondale. Mr. Long and Mr. James Miller, Manager of Commercial Properties for Mr. Long, were present to discuss their efforts to develop a complete marketing plan for the region. If the City Council is interested in this project, staff will continue to work with Mr. Long and provide an update at a future workshop session. Staff met with Mr. Long and Mr. Miller to develop a base of information related to General Plans and zoning in the entire area. Citizen participation will be included with the Western Area plan and General Plan amendment processes that are currently underway. The recommendation was to review Mr. Long's information and provide staff with direction. Vice Mayor Eggleston commented on an announcement he had seen in the newspaper regarding the proposed business park area south of Camefback Road. 1 Mr. Long explained that, when the freeway went through, it changed the whole picture. He stated that his studies indicate the need for high-tech employers in the West Valley. He noted that they had requested a change of designation from the City of Phoenix and they were now requesting rezoning. Vice Mayor Eggleston stated that the interest shown by USAA (United Services Automotive Association) was a clarion call for the West Valley. Mr. Long agreed, stating that USAA had indicated it would make a billion-dollar investment in its facility and it wanted to be sure of what would be going in around its facility. Mayor Scruggs asked Mr. Long how he foresaw his property in Phoenix being zoned. Mr. Long explained that they were not looking for retail within their development. Mr. Miller stated that they felt there were enough neighborhood shopping centers, power centers and regional malls in the area to service the residents of the West Valley. He noted that they were going to voluntarily stipulate that they would not put straight warehousing on their property. He stated that they were dedicated to having high-tech employment in the area. Vice Mayor Eggleston stated that he was glad to hear there would be no major warehouse uses in this area. Councilmember Martinez thanked Mr. Long for taking the lead in developing this area cooperatively. He asked if this would require intergovernmental agreements with the other cities involved. Mr. Reedy stated that, at this point, they had not discussed formal intergovernmental agreements with the cities of Phoenix, Peoria or Avondale. He said that each city could either take actions that fit together or create an intergovernmental agreement and stipulate what will happen in each area. He stated that it was up to the Council as to where they go from here. Councilmember Martinez noted that it would be best for all of the cities involved if it was formalized. Mr. Long agreed that there could be a written agreement between the cities and he offered to follow through and discuss it with the other cities. Mr. Miller noted that they have had preliminary discussions with the other cities. He stated that areas where intergovernmental agreements could be helpful would include uniform landscaping, no warehousing, design criteria, etc. He said that having a uniform appearance would help potential employers view the overall concept as a major employment center. Councilmember Lieberman asked how many acres they had put into the General Plan for Business Park. Mr. Miller replied by saying that their total application was over 850 acres, with only 30 acres of C-2 zoning. He explained that their property starts at Thomas, between 91St and 99th Avenues, and comes up to Campbell on 99th Avenue and Meadowbrook on 91St Avenue. He noted that the only exception was the 40-acre parcel on the northwest corner of 91St Avenue and Indian School Road, half of which is 2 PSC and half is residential. He stated that the Pendergast School District, which is located inside their property, was a big supporter of their application. He explained that the Pendergast School District sees this as a wonderful opportunity in terms of the tax base and possibilities for business partnerships. Councilmember Goulet said that continuity is key when dealing with four jurisdictions. He explained that his concern was with regard to the action of the other three jurisdictions when a big employer locates in the fourth jurisdiction. He asked how they could create a concept of cooperation that would be adhered to. He said that he supported the suggestion to approach the other communities and have a written intergovernmental agreement. Mr. Long stated that this was the reason why the working relationship between the various areas was so important. He said that they look at it from the prospective that a large employer, such as USAA, would benefit the entire West Valley, regardless of which jurisdiction it locates in. Councilmember McAllister stated that its success would depend on having a buffer plan, so that no matter where a particular employer locates, a warehouse or other inappropriate development could not locate next to it. Councilmember Samaniego thanked Mr. Long and Mr. Miller for bringing this idea forward. He said that he had held two meetings in the Yucca District with regard to the Western Area Plan and it was clear that an employment center was very important to the residents who live close to the corridor and to other property owners in the area. He expressed his opinion that Mr. Long was taking an excellent approach and stated that he would support their moving forward. He said that it would have positive impacts on the West Valley. Mayor Scruggs stated that the main question was whether the City of Glendale was interested in embarking on a joint marketing plan. She asked what they envisioned the joint marketing plan to look like. Mr. Long replied by saying that they saw an overall marketing plan that shows continuity between the cities and portrays an upgraded high- tech employment area. Mr. Miller stated that the marketing plan could take a couple of avenues. He explained that, initially, the most effective way to proceed would probably be to print a brochure which would show prospective employers that this was a major employment center. He noted that, in the past, GPEC (the Greater Phoenix Economic Council) has not been able to show major employers a significant commitment to a business park area. He said that this would give them the marketing tools to do so. Mayor Scruggs asked if there would be an equitable partnership between all four communities in the development of the marketing materials or if they would be developed under the leadership of one entity. Mr. Miller stated that, initially, the easiest way would be for them to develop printed material that all of the cities agree with and 3 pay for 1,000 to 2,000 copies for each city. He said that the cities would then be responsible for ordering additional copies. He stated that, although they would take the financial lead for the initial marketing, they would like the cooperation of the cities in developing the material. Mayor Scruggs asked if each city would have a say as to what was written in the material. Mr. Long replied by saying that they would work with the Economic Development departments in each city. Mayor Scruggs asked if the cities of Avondale and Peoria had agreed to the unified marketing approach. Mr. Miller said that Peoria had given its approval to move forward and a request to move forward would be brought to the Avondale City Council next week. He noted that the Mayor of Avondale had attended the preliminary meetings and supported the concept. Councilmember Samaniego stated that GPEC has been doing this type of marketing approach for the entire Valley. He said that he supported this approach, as it is more specific to the West Valley. Vice Mayor Eggleston stated that he believed they would be able to do a better marketing job if there was an agreement that showed the entire area was devoted to an employment base. Mayor Scruggs advised Dr. Vanacour that the Council was interested in this project. She directed him to have staff continue working with Mr. Long and provide an update at a future workshop session. 2. CIVIC CENTER FOUNTAINS CITY STAFF PRESENTING THIS ITEM: Ms. Paula Ilardo, Marketing Director OTHER PRESENTER: Mr. Duane Blossom of Todd & Associates. The purpose of this item was to receive Council input on design of fountains in the two courtyards of the Glendale Civic Center. Todd & Associates was hired to design both fountains for the Civic Center - a large one for the west courtyard, known as the Fountain Terrace, and a smaller one for the east courtyard, named the Garden Courtyard. In response to Council direction, Todd & Associates' designs were taken to the Arts Commission. The Arts Commission chose a preferred design for each courtyard from several versions which were shown to them. The fountain for the Fountain Terrace is to be a showpiece that would fit in with the elegant nature of the Civic Center and yet be large enough to be proportionate with the 13,000-square-foot courtyard space. It consists of a six-foot high wall that is four feet wide and contains three long panels of back-lit colored glass. Ms. Kathy Bradford, the same artist who did the Magic Doors at the Foothills Library, will design the glass. The 4 central wall is flanked by three graduated columns (4', 5', 6' tall) on each side of the wall that will form a semicircle. Water flows from a scupper in each column into the shallow pool below. Because the smaller Garden Courtyard is more intimate than the Fountain Terrace, it is likely to be the primary site of weddings. Since most people who book weddings want some type of gazebo, the architect was asked to also include in his fountain designs some concepts that also combined a gazebo and fountain into one unit. The preferred design for the Garden Courtyard was a concept that combined the fountain and the gazebo into one. The gazebo, which features four smooth, round, concrete columns, is an eight-foot square covered by a trellised arch. It is 12 feet to the top of the canopy. The concrete would be painted to match the colors of the sandstone on the Civic Center. A fine curtain of water falls from the backside of the gazebo into a shallow trough behind. The water re-circulates back up through one of the hollow concrete columns. The water can be turned off, depending upon the event. The water curtain would be back-lit to give it a shimmering effect and lights on the canopy are directed downward into the gazebo. If not be used for a wedding, the gazebo is large enough for a string quartet which might be used at a reception or banquet. At the September 14, 1999 workshop, staff recommended that the fountains be made a part of the construction project rather than pieces of art in order to speed up the design process. This would also allow the Arts Commission to concentrate its efforts and resources on art for the inside of the Civic Center. Council agreed with this recommendation, but instructed staff to obtain design approval for the fountains from the Arts Commission to ensure that the design fits the style of the Civic Center. Several initial designs for both the east and west courtyard fountains were presented by the architect to the Arts Commission at its October 20, 1999 meeting. Preferred designs for each courtyard were chosen at this meeting, but it was agreed that Todd & Associates would proceed on the west courtyard fountain first. Progressive designs of the preferred west courtyard fountain were shown to the Arts Commission on November 17, 1999 and again on December 15, 1999, when final approval for the west courtyard fountain was obtained from the Arts Commission. Todd & Associates then began work on refining a combination fountain/gazebo concept for the Garden Courtyard that had been preferred by the Arts Commission at its October 20, 1999 meeting. At the March 15, 2000 Arts Commission meeting, Todd & Associates presented a redesigned fountain/gazebo concept, which was approved by the Commission. After detailed design work, Todd & Associates pre-bid estimates of the cost were $83,0000 for the west courtyard fountain and $42,000 for the east courtyard gazebo/fountain. It was recommended that the funds for the fountains would come from the general fund contingency. 5 The recommendation was to review the recommended fountain concepts and provide staff with direction for the design and funding of the fountains. Councilmember Goulet asked how the water would cascade into the fountain. Mr. Blossom explained that the water would come from a spout on the inside face of the column. He said that they had calculated the distance to avoid a splash. Councilmember Goulet noted that they would have a problem with water deposits on the glass and asked if that would diminish the artwork. He also asked how they would deal with damaged or broken glass. Mr. Blossom stated that, because the courtyard is secured, vandalism would be a remote possibility and that they would discourage activities in the area. He explained that the water was being directed away from the glass so that spotting would not occur and that the glass would be inset to protect the edges. Ms. Ilardo explained that Ms. Bradford creates clear glass with color in the gloss. Councilmember Lieberman asked how thick the glass was. Mr. Blossom stated that this had not as yet been discussed with Ms. Bradford, but he was sure it would be substantial. Mayor Scruggs asked if this issue would come back to the Council when the design was completed. Mr. Ilardo stated that the final design would be brought back to the Council for approval. Mr. Blossom stated that he would get samples of the actual material for the Council's,approval. Councilmember Lieberman asked why this project was being funded by the General Fund contingency instead of the Arts Commission budget. Ms. Ilardo explained that it had been requested that this project be considered construction in order that it be completed sooner, and to allow the Arts Commission to concentrate its efforts on the interior of the Civic Center. Mayor Scruggs stated that they had directed them to go that route because they saw it as being a part of the Civic Center, opposed to it being an add-on art feature. 3. PEFORMANCE & MANAGEMENT ASSESSMENT OF THE UTILITIES DEPARTMENT: REPORT ON THE RESULTS OF THE STUDY CITY STAFF PRESENTING THIS ITEM: Mr. Ken Martin, Deputy City Manager; and Ms. Sherry Schurhammer, Acting Utilities Director. OTHER PRESENTER: Mr. Joe Myers with EMA, Incorporated This presentation to the City Council focused on the results of the performance and management assessment of the Utilities Department conducted by the consulting team of Hagler Bailly and EMA, Incorporated. The consultants have prepared a detailed report that distinguishes the Utilities Department as an efficient, well-managed 6 department that is currently implementing a variety of initiatives identified in the assessment. The report focuses on four functional areas: (1) financial performance; (2) customer service performance; (3) internal processes for plant and field operations, as well as support operations such as human resources and purchasing; and (4) innovation and learning. The consultants have developed recommendations in these areas. Utilities and Public Works Departments staff have provided the City Council with responses to each of the recommendations. In nearly every case, staff agreed with the recommendations and was either developing or currently implementing the recommended activities. On January 5, 1999, at the Public Works Enterprise Fund Workshop, the City Council directed staff to prepare a request for proposal (RFP) for a performance and management assessment of the Utilities Department (water and wastewater). An RFP was issued in February of 1999. Forty firms requested a copy of the RFP. Seven proposals were received by the March 22, 1999 due date. Interviews were conducted in early April of 1999 and a contract was awarded on April 28, 1999 to the team of EMA Services, Inc. and Hagler Bailly. The consulting team of Hagler Bailly and EMA, Inc. interviewed City Councilmembers in June and September of 1999 to solicit comments about the Council's expectations, questions, and concerns and to provide an update on the status of the assessment. The revised contract total for the assessment, as approved by City Council, is $241,630. The recommendation was to review this item and provide staff with direction. Vice Mayor Eggleston requested an explanation of the institutional cross-function capital planning process. Mr. Myers explained that many of the business processes they encounter in a municipal environment are somewhat ad hoc. He stated that the recommendation to institutionalize it means that the process will survive the individuals who participate in it and become a part of the fabric of the organization. Vice Mayor Eggleston asked if they were not presently doing that. Mr. Reedy replied by saying that they have been doing capital planning in cooperation with different staff members. He stated that EMA was recommending that a committee be established to look at it on an annual basis. He said that they would try to make it more formal, with designated positions within the organization, to ensure that they are fully involved in the planning. Dr. Vanacour noted that they will add people with specific expertise and skills, who do not work in the Utilities Department, to the planning group. 7 Councilmember Martinez asked for an explanation of the subsidizing that is going on in terms of the miscellaneous fees. Mr. Reedy stated that there are a multitude of fees that do not fully cover the associated costs. Councilmember Goulet asked how deficient the fees were. Mr. Reedy stated that it varied, depending on the fee. He noted that some only recover half, while others recover slightly more. Councilmember Samaniego said that automation could result in a decrease in fees. Mr. Reedy agreed that, in some cases, it was a possibility. He explained that automation is directed more towards frequent processing issues and miscellaneous fees are generally too specialized. Councilmember Samaniego stated that he liked how the recommendation came about from looking at how technology can decrease costs. Councilmember Martinez asked why automatic meter reading has not been done for individual homes. Mr. Reedy stated that they are continuing to look at this issue; however it is not cost effective at this time. He noted that they are experimenting with radio read meters, but they are having trouble with reliability. Councilmember Martinez asked if he was aware of any cities in the Valley that were doing it. Mr. Reedy stated that some smaller cities and private companies have done it. He explained that considerations are how the system is laid out and where the meters are located. Vice Mayor Eggleston noted that, in San Diego, the water meters were read by the electric company meter readers. Mr. Reedy said that this had been done in other areas; however, he was not familiar with how successful this had been. Mr. Myers stated that it could be done successfully, but it depends on the ability of the contracting organizations to agree on how it will be done and who pays the costs. Councilmember Lieberman stated that it would depend on whether the city owned both of the utilities. Vice Mayor Eggleston asked for an explanation of paperless customer service. Mr. Myers explained that the work management system they currently have is based on paper and that the paper has to flow between organizational units. He stated that the idea is to link the organizational units with computer systems to allow that information to pass in a paperless manner. Mr. Reedy said that they want to equip their field people with computer technology so that they are linked to the customer service office. Vice Mayor Eggleston asked if this was an expensive proposition. Mr. Reedy stated his opinion that investments in technology avoid costs in the long term. Vice Mayor Eggleston asked what the recommendation to increase the span of authority in human resources meant. Mr. Myers stated that, in the traditional case of span of control, they often find one supervisor for three or four staff members. He explained that, as they redesign work processes and apply technology, it provides an 8 opportunity to change those ratios, allowing for fewer supervisors and more staff. He noted that it changes the skill sets required for both the supervisor and the staff. Councilmember Martinez noted that staff agreed with the recommendations in every instance. He asked for an explanation of the difference between wastewater reclamation and collection. Mr. Reedy explained that wastewater reclamation is the plant operation, such as the Arrowhead Reclamation Plant and the Western Area Reclamation Plant, while wastewater collection is the maintenance of the pipes in the ground. Councilmember Martinez stated that Mr. Myers' experience and expertise was a good example of the benefit of hiring consultants. In response to Mayor Scruggs questions, Mr. Myers explained that there are cultures that grow between utility departments and technical staff and others in the municipalities that provide support. He stated that support staff often see themselves in positions of control as opposed to support. He said they have discovered that support service staff in world-class organizations apply a different paradigm and begin to think of themselves as consultants. He added that they have found technical staff can sometimes run fast and loose with respect to policies and procedures because they do not understand the genesis of those policies and procedures. He explained that they often make a standard recommendation to help people understand the two different cultures that can exist. Mayor Scruggs clarified that they were recommending support staff should consider other departments as their customers, while the other departments, even though they may be considered customers, still have to follow the policies and procedures. Vice Mayor Eggleston stated that they had requested this study because many aspects of Utilities are hidden. He noted that they only made 15 recommendations and staff agreed with all of them. Mr. Myers said that the City should feel good about its Utilities Department. Dr. Vanacour stated that they have the potential to be classified as a world-class organization. He said that he would come back to Council in six months with a progress report. 4. SEWER MAIN EXTENSION PROGRAM CITY STAFF PRESENTING THIS ITEM: Mr. Ed Beasley, Assistant City Manager; Mr. Ken Reedy, Deputy City Manager; Mr. Grant Anderson, City Engineer; and Mr. Larry Broyles, Assistant City Engineer. As a result of the bond election passage in November of 1999, the City of Glendale must develop a formal process for the request of main line sewers to serve areas within Glendale currently using septic systems. 9 The City of Glendale will construct main line sewers and the service taps up to the dedicated right-of-way at no cost to the property owner, subject to meeting the proper application requirements. The property owner will still be responsible for paying the sewer impact fee, obtaining permits, and installing the service line from the house to the new system and abandoning their septic system. The following is a summary of the evaluation criteria that has been added to the program as requested at the March 7, 2000 Council Workshop. The detailed criteria and point system can be found in the document located in Section E of the council communication - Evaluation Criteria. The highest priority will be given to those properties that show a high potential for a public safety issue, such as ground water or surface contamination. Another criteria is based on lot size, with areas with smaller average lot sizes receiving a higher priority because they would have less area to expand or replace a defective septic system. The third criteria is based on the number of people in an area that agree to hook up to the system, because the greater number of people that agree to hook up will enhance the operation of the system. The fourth criteria is based on the properties' proximity to any of the City's domestic water wells, which relates to their potential of contamination of a public water supply. This program was presented at the March 7, 2000 Council Workshop. It was requested that evaluation criteria be included in the program and that a contract requirement with the City be made a part of the program. The evaluation criteria has been added, along with the contract from the Attorney's Office. It was also requested that these changes be brought back to a future Council Workshop. This program was discussed at the City of Glendale Utilities Committee meeting held on February 22, 2000. It was favorably received by the Committee and recommended that it be presented to a full Council Workshop. When this program is approved, it will become the guiding policy for sewer extensions in these areas throughout the City. If an approval policy is adopted, staff will set up a citizens notification process for the areas that will be able to request sewer extensions. If all of the requirements are met and verified, the application will be submitted for inclusion in the Capital Improvement Program for the next fiscal year, if funding is available within the rate structure adopted by the Council. The City of Glendale Engineering Department will administer the policy when citizens apply. The recommendation was to review the attached draft policy and provide direction to staff. Mayor Scruggs stated that she agreed with all of the criteria except number 2, which she felt was subjective. She said that the percentage of people who are willing to connect should be very important to the City because the size of the lots affect the 10 number of points. She agreed that, if they get 100 points on number 1, they should be placed at the top of list,. She questioned how they could wait for the City to go through its CIP (capital improvement plan) process. Mr. Reedy explained that pumping is done frequently. Mayor Scruggs expressed concern that, if groundwater contamination has been confirmed, it could be another year and a half before there is any money to do anything about it. Mr. Reedy agreed philosophically that the number of points per size of the lots was somewhat subjective. He noted, however, that there is a relationship between the size of the lot and whether or not it is feasible to replace the septic system in the yard. He said that they look at how points are ranged and whether lot size breaks are appropriate. Mr. Anderson explained the philosophy behind the lot size criteria. He stated that, as an area is more dense, the sewer system would affect more people and they would see more issues relative to failures in the same area. Mayor Scruggs stated that lots with health problems would rise to the top priority anyway. She stated that the City was concerned that it would have high participation when spending the bond money because it is fiscally more responsible and makes the system work better. She said that high participation should be rewarded. Mr. Anderson agreed with Mayor Scruggs and suggested that they amend the criteria to have more points for participation. Mayor Scruggs stated that the City wants to encourage neighborhoods to have as much participation as possible. She said that she believed incentives would make them work harder to increase participation. Councilmember Lieberman noted that there are three factors involved when you apply for a septic permit: the percolation rate of the square foot dug, the number of bedrooms, and the number of bathrooms. Mr. Anderson stated that although Councilmember Lieberman was correct in terms of sizing the system at the beginning, they were looking at the time when the system would start to fail. Councilmember Lieberman stated that it would also apply at that time. Mr. Anderson agreed. Mr. Reedy stated that there are a large number of amenities in homes today that generate the use of more water and people are not as conscious of water conservation as they were fifty years ago. He pointed out that the majority of communities that have small lots were converted to sewer systems years ago and that most of what is left are large lots. He agreed that lot size may not realistically be as important as how many people will benefit from the project. 11 Councilmember McAllister noted that his home was on a septic system and he has had to pump three times in 32 years. He questioned if they had many 6,000 square foot lots and suggested that, if a subdivision did put in small lots, it would have to have a larger sewer line. Mr. Anderson explained that the eight-inch minimum size takes care of a regular size subdivision of regular size lots. He stated that the size for a master plan development would go up to 10 or 12 inches. Mr. Anderson confirmed for Councilmember Martinez that Granada Estates has smaller lots. Councilmember Lieberman noted that some of those lots are only 5,000 square feet. Councilmember Martinez asked if Casa Campana was also on the septic system. Mr. Anderson replied that they are all on the sewer system. Councilmember Martinez asked for a definition of the service area. Mr. Anderson explained that one block, with a minimum of ten units, is enough to come into the system at one time. Councilmember Martinez asked how it would work if people wanted the sewer system in the back of a subdivision. Mr. Reedy stated that the service area would need to be analyzed on the basis of everyone who could hook onto the system. Mayor Scruggs stated that, if they were using bond money for this program, they needed to think in terms of benefits to the City as a whole. She said that they could even give citizens extra points if their wastewater goes to one of the wastewater treatment facilities because the City then has effluent that can be used. Mr. Anderson suggested that they should remove number 2 from the list, as numbers 1, 3 and 4 cover it. Councilmember Samaniego agreed with Mr. Anderson's suggestion. Councilmember Martinez stated that he did not have a problem with eliminating number 2. He said that if, at a later date, they find significance to number 2, they could revisit that portion at that time. He noted that the City would need to remind its citizens that they would be paying sanitation fees, which they are not currently paying. Mayor Scruggs agreed. She asked if they needed to review the agreement. Mr. Beasley provided copies of the agreement to the Councilmembers. Mayor Scruggs noted that, by recording this agreement, in the event of the sale of the house, the buyer would know through the title report that there was another assessment coming. 12 Mr. Reedy questioned whether they should include a means of identifying the number of people who would be served versus the per dollar cost. Mayor Scruggs stated that this should be a factual listing which the Council could look at rather than criteria with assigned points. She explained that, if they strictly looked at it in terms of what the City would gain, they might actually get more revenue from larger lots. She said that quantitative data would also give competing communities a better understanding of why one is chosen over the other. Councilmember Martinez asked if there was a chance that they would not connect to the system if a citizen still paid the fee. Mr. Anderson explained that, in the past, the citizen has paid the sewer bill anyway. Mayor Scruggs asked how they would enforce that. Dr. Vanacour explained that they would shut off other services until it was paid. Mr. Reedy stated that he would bring this back to the Council as soon as possible. The meeting was recessed for a short break. 5. RENEWAL OF EMPLOYEE BENEFIT PLANS CITY STAFF PRESENTING THIS ITEM: Mr. Ed Beasley, Assistant City Manager; Mr. Charlie McClendon, Director of Budget and Research; and Ms. Lupe Sierra, Employee Benefits Manager. Claims utilization for the medical care plan improved significantly during the 1999-2000 plan year when compared to the previous year. Claims improved substantially in most areas of the benefit plan, except prescription drug claims, which increased by approximately 35%. Blue Cross Blue Shield requested a 3% rate increase to renew the existing plan of benefits for the employee health care plan. This rate increase is necessary to fund the anticipated claims activity of the enrollment changes from previous years and the increase in costs for the prescription drug benefit. Because of last year's large cost increase, the Employee Health Care Task Force felt that everything possible should be done to minimize or eliminate a rate increase this year. The Task Force recommended the following two plan revisions in order to reduce the rate increase and taper off considerable growth of prescription drug claims: 1. Increase the City's claims responsibility by increasing the specific stop- loss from $100,000 to $125,000. This reduces the rate increase by 0.5%, a savings in annual premiums of $49,000. 13 2. Change the prescription drug co-payments to $5/$10/$20. The co- payments would be $5 for generics, $10 for drugs on the formulary (specific brand-name drug list) and $20 for all other brand-name drugs. Currently, the co-payments are $5 for generic and brand-name on the HMO plan and $5 generic and $12 brand-name, when there is no generic equivalent or $12 plus the difference between generic and brand-name when a brand-name drug is selected and there is a generic equivalent on the PPO plan. The co-payments for the mail-order drug program would change from $10 for a 90 day supply for brand-name and generic to the $5/$10/$20 co-payment format for a 90-day supply. In addition to the changes in co-payments, an aggressive educational effort will be made to make employees aware of their prescription purchasing options and the effects they have on plan costs. The change in prescription drug co- payments results in a 2% reduction of the requested renewal rate, a savings in annual premiums of $150,000. After implementation of these two revisions to the medical plan, the 3% renewal increase requested will be reduced to a 0.5% rate increase which, if claims activity require it, will be funded from the $250,000 budgeted by the City for rate increases in the Fiscal Year 2000-2001 budget year. This will result in no rate increase for the employee medical plan for the Fiscal Year 2000-2001 plan year. Dental Benefits: A request for proposal (RFP) was conducted for the employee dental care coverage. On the basis of provider network, benefit design, rates and service references, the Employee Health Care Task Force made two recommendations which will provide a better plan of benefits and a reduction in costs: 1. Renewal of the City's HMO dental plan contract with the present HMO dental carrier, Protective Dental Care (formerly named United Dental Care). 2. Enter into a contract with United Concordia Dental Company for the PPO dental care plan. Dental Rates: The dental RFP resulted in lower rates and improved benefits on the PPO plan. Plan year 2000-2001 rates for the new PPO plan will result in a decrease of 3.1% from those of the current year. This includes increasing the annual maximum benefit on the PPO plan from $1,000 to $1,250. The HMO plan rates will remain identical to those billed to the City for the current plan year and are guaranteed for two years. There is no change in benefits for the HMO dental plan. Additionally, a composite rate derived by combining the rates of the HMO and PPO plans will no longer be used. Each plan's rates will be charged to plan participants as billed to the City. The reduction in rates for the PPO plan and elimination of the composite rate-billing format will result in lower costs for employees, retirees and the City. The savings for the City are $45,800. 14 Vision Benefits: Due to high claims utilization, renewal of the vision care plan through Vision Service Plan (VSP) will require a monthly premium increase of $2.39 for single employee and $5.33 for an employee with dependents. The rate increase includes an enhancement in the benefit for frames from $25 to $35 and a rate guaranteed for two years. This is an optional benefit. Renewal of the employee assistance program, wellness program, life insurance plan and the service agreement with Merrill Bostrom and Associates for administration of the flexible spending plan requires no change in rates. The employee assistance program, life Insurance plan and the service agreement with Merrill Bostrom and Associates for administration of the flexible spending plans required no rate increase during the 1999-2000 plan year. For Fiscal Year 1999-2000, due to high claims utilization, the medical plan rates were increased by 16.7%. Various cost-sharing mechanisms were implemented to resolve the budget shortage caused by this rate increase. These included increasing the City's specific stop-loss from $75,000 to $100,000, increasing the cost for dependent coverage and reducing a subsidy paid to employees not enrolled for dependent coverage, with the understanding that the remaining subsidy would be eliminated entirely as of 5/1/2000. The budget for the City's Wellness Program was reduced from $100,000 to $150,000. Dental care plan rates increased by 2.85%. Participants in the dental plan were charged a composite premium derived by blending the lower-cost HMO plan premiums and the higher-cost PPO-type plan premiums. On February 3, 2000, the Employee Health Care Task Force met to discuss the upcoming renewal of the employee benefits plans. Concerns were expressed by staff of the Employee Benefits Department and several Task Force members regarding the poor performance of Delta Dental based on 6-8 months of chronic problems encountered by plan participants in getting their claims paid. The Task Force agreed that it was necessary for the dental care plan to be put out to bid. A sub-committee of the Task Force was formed to review the bids. Eleven vendors, including the current carriers, Delta and Protective Dental, were sent the bid specifications and an analysis of the proposals submitted was completed. On March 3 and March 13, 2000, the dental plan committee of the Employee Health Care Task Force met to review and analyze the nine proposals submitted for the dental care plan. A recommendation of carriers was made to the full Employee Health Care Task Force on March 17, 2000. The Employee Health Care Task Force supports the recommendation. On March 17, 2000, the Employee Health Care Task Force met to discuss the proposed renewal and to voice any concerns with the plans. The Task Force members acknowledged the need to slow down the rapidly increasing claims for prescription drugs and recommend the changes to the prescription drug co-payments. They also agreed that decreasing rates by increasing the City's specific stop-loss was, based on 15 plan history, a low risk measure to save premium dollars. The City budgeted $250,000 for a possible rate increase in the Fiscal Year 2000-2001 plan year. This budgeted amount will be used to fund the 0.5% rate increase projected for the medical plan only if medical claims require it. Any funds not utilized for a rate increase will be deposited into the Employee Health Care Trust Fund. The savings to City for the dental plan is $45,800. The vision care plan is an optional plan. It requires no increase in cost to the City. There is no additional cost for the Wellness Program, Employee Assistance Program, the life insurance coverage or the administration of the Flexible Spending Account Plans. The recommendation was to review this item and provide staff with direction as outlined. Ms. Sierra presented an overview of the benefit recommendations. Mayor Scruggs asked if the patient would still have to pay the difference if the doctor did not specify a generic drug. Ms. Sierra replied by saying that, currently, if the doctor states that the patient cannot tolerate the generic drug, then the brand name drug is allowed and the patient pays $12 on the PPO plan and $5.00 on the HMO plan. Mayor Scruggs asked for confirmation that the patient would not be penalized for the doctor's reasoning of not allowing generic substitutions. Ms. Sierra explained that, under the current system, if the doctor insists on the brand name, he must indicate on the prescription that no substitutions are allowed and the patient pays $12. With the new plan, the price would be set at $10 for brand name drugs on the formulary and $20 for all other brand name drugs. Mayor Scruggs asked if the patients would have to prove why they did not get the generic drugs. Ms. Sierra explained that, under the new plan, they would get generic drugs for $5, brand name drugs on the formulary for $10, and any other name brand medications for $20. She stated that this would eliminate the need to justify the need for brand name drugs. Councilmember Martinez stated that he thought there would be a savings because there would be more use of generic drugs and the patients would pay for the difference if they wanted the brand name. Ms. Sierra stated that there will be a savings because they now pay $12.00 if there is no generic equivalent. She stated that it will encourage people to use the formulary brand name and generic drugs. Mayor Scruggs asked if herbal medicine interactions were tracked. She explained that they can cause serious problems. Ms. Sierra agreed. She noted that, to her knowledge, they were not currently being tracked. 16 6. LEGISLATIVE UPDATE CITY STAFF PRESENTING THIS ITEM: Ms. Amy Rudibaugh, Director of Intergovernmental Relations. A number of legislative bills with potential impacts on the City of Glendale have been brought before the Council. Intergovernmental Relations staff were present to discuss those bills that are still moving. Some of these bills have been amended in ways which alter their impact. Ms. Rudibaugh explained the impact of these changes and provided staff recommendations on the amended bill versions. This was the seventh legislative update of the 2000 session. Department heads were notified of proposed legislation that may affect their respective areas of City administration and were asked to provide comments, as appropriate, to the Intergovernmental Relations staff contacts. Ms. Rudibaugh highlighted those legislative proposals that could have significant financial impacts on the City of Glendale. This item was presented for information, discussions, and possible direction on legislative issues. Mayor Scruggs asked if HB 2451 was a tax issue. Ms. Rudibaugh replied that it was not. Councilmember Martinez asked if the homebuilders were in favor of this bill. Mr. Rudibaugh stated that they were. Mayor Scruggs asked Mr. Van Haren if the City's ordinance would negate this bill. Mr. Van Haren stated that it would not and that the current language takes care of any double taxation issues. Mayor Scruggs indicated the Council's support of this bill. Councilmember Martinez asked if a bill had been introduced that would provide money to cities for neighborhoods. Ms. Rudibaugh stated that she would research that question. Councilmember Martinez noted that the Governor had signed the Cesar Chavez bill for an unpaid holiday. ADJOURNMENT The meeting was adjourned at 5:30 p.m. 17