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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 4/22/2008 *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 BUDGET WORKSHOP APRIL 22, 2008 1:30 P.M. PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Manuel D. Martinez, and Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet, Yvonne J. Knaack, and H. Phillip Lieberman ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City Manager; Craig Tindall, City Attorney; and Pamela Hanna, City Clerk 1. FY 2008-09 BUDGET—4TH WORKSHOP CITY STAFF PRESENTING THIS ITEM: Ms. Alma Carmicle, Human Resources Director, Mr. Jim Brown, Assistant Human Resources Director and Ms. Lupe Sierra, Deputy Resources Director presented information. Mr. Horatio Skeete, Deputy City Manager for Administrative Services; and Ms. Sherry M. Schurhammer, Management & Budget Director Mr. Ken Reedy, Deputy City Manager, presented information. This is a request for City Council to review the total compensation recommendations for FY 2008-09. The supplemental related to total compensation is on pages 5-6 of the budget workbook. This is a request for City Council to provide guidance on the recommended FY 2008-09 operating budget. This is also a request for City Council to provide guidance on the proposed FY 2009 -18 Capital Improvement Plan (CIP). This is also a request for City Council to provide guidance on the rate recommendations for the water, sewer, sanitation, and landfill enterprise funds. Staff is requesting direction on the recommended operating and capital budgets and the rate recommendations for the water, sewer, sanitation, and landfill enterprise funds. 1 Ms. Carmicle stated they will be presenting the city's total compensation package for Council's approval today. She said it was her objective to present this package as one of the most competitive benefits and salary packages in the industry. She introduced her staff and acknowledged the members of the Total Compensation Committee in the audience today. The Compensation Committee was formed in 2002 with the intended purpose to be a task force with the intention of coming together once a year to review data. However, the committee now works several times a year reviewing both benefits and compensation. The committee is comprised of 14 employees and one retiree. Ms. Carmicle said a project team was put together to review the employee benefits program. She said the city is required to review and acquire bids for both medical and dental benefits every five years. They verify the market to see if they are still competitive in those areas and still offering the best programs to employees. She explained that employee benefits are programs relied heavily upon in order to attract and retain employees. She introduced Ms. Sierra to discuss the benefit portion of the package. Ms. Sierra stated she was excited to be bringing these recommendations today because there was good news to report in this tough economic climate. She said it was always good when they could enhance and add value to programs without adding much of any cost. She discussed the assessment of the vision plan and the recommendation to retain VSP. She said VSP has a great network of retail and private practice doctors. The city was able to retain the same cost while increasing the contact lens benefit from $105.00 to $130.00, as well as adding a safety coating to the plan. As for the assessment of the life insurance plan, the recommendation is to choose the Hartford Life Insurance Company, which was rated very high. She said the city was able to negotiate substantial discounts off the current rates with a savings of 20% while adding new benefits, such as grief counseling and legal and financial advice to anyone with a claim. She also discussed the new accelerated death benefit plan. Ms. Sierra reported on the medical plan. The recommendation is to retain Blue Cross/Blue Shield. She said this was a quality medical network that could be accessed readily. She stated that Blue Cross/Blue Shield has the most comprehensive network of doctors, and specialists could be seen without referrals. In addition, Blue Cross/Blue Shield offers great discounts. She said administrative fees also were reduced. The city also added a very comprehensive wellness program for members. Councilmember Frate asked if any of the co-payments will change on any of these policies. Ms. Sierra said no co-payments or plan design changes are required. Ms. Sierra discussed the new wellness plan. This plan will teach employees how to become healthier and help them identify any health risks now before they develop into serious or catastrophic illnesses that result in costly claims. She said the health screenings would be confidential. Councilmember Goulet asked if this program will be available throughout the year or was it limited to certain times of the year. Ms. Sierra said the program started last week and will run through the middle of May and will be repeated next year at the same time. She said new employees or employees who missed the dates can visit to their own doctors for the screening. The screening data from Blue Cross/Blue Shield will help determine where they need to allocate their wellness resources to provide education where it is most needed. She also explained the incentive program for employees who participate in the health risk assessment screening; participants will save five dollars per month on their medical plan contributions. 2 Ms. Sierra summarized the dental plan. She said the city did not have to obtain any bids for the type of HMO plan currently in use. The rates will stay the same with no increase or changes in the plan. The Delta Dental Plan costs will be increasing by 6.4% but additional benefits will be offered. Vice Mayor Martinez asked if this plan went out for bids. Ms. Sierra said this plan was not required to go out for bid. . Ms. Sierra summarized the flexible spending account program. She said this plan will have a new administrator as of July 1, 2008, called ASI Flex. This administrator brings a lot of experience to the flexible spending account program, which enables employees to put aside pre-tax dollars to pay for qualified medical and childcare expenses. Ms. Sierra reviewed the cost savings. She said the negotiated discounts received from Blue Cross/Blue Shield and use of trust fund balance, if needed, resulted in minimized cost increases. She summarized the deductions for each plan per pay period. Councilmember Clark asked for clarification on the $5.00 savings if employees participated in the wellness risk assessment screening. Ms. Sierra stated that the cost to the employee portion of the coverage was scheduled to go up $5.00 per month and by participating in the health risk assessment, the $5.00 increase will be offset. Mayor Scruggs asked for more information about the health risk assessment. She did not understand why they had already started the risk screening process when this plan was just coming to Council today for a recommendation. Ms. Sierra explained that Blue Cross/Blue Shield wanted to roll out this wellness program to their larger clients as a pilot program. The city was able to obtain it before Blue Cross/Blue Shield officially launched it to their other clients later this year. Mayor Scruggs commented that employees can still receive the $5.00 discount at anytime if they go to their personal physician, receive the screening and input it online to receive the discount. Ms. Sierra said she was correct and that this information would be communicated to new employees. Ms. Sierra reported on benefit enrollment scheduled for May 1st thru the 30th. The benefit fair is scheduled for May 15, 2008 at City Hall from 10:00a.m. to 2:00 p.m. Vice Mayor Martinez commented this was very good news considering the economy and the rising cost of practically everything. He said it was extremely good to hear benefits have increased while costs have not. He thanked staff and all who participated in this process. Councilmember Knaack commented on the wellness program being a great incentive. This program will save employees a bit of money, but will also help employees' lead healthier lives. She said she appreciates staffs hard work in getting this program started. Councilmember Clark agreed with Vice Mayor Martinez's comments. She also wanted to thank staff for putting them in a position where they can provide excellent benefits and compensation. She said other cities were not so lucky. She thanked all the people who were involved in this superb undertaking that presented great results. Councilmember Goulet stated that the information brought forward was very encouraging and a nice surprise. He said it would not have surprised him to see medical costs climb 20% to 40% based on national discussions. 3 Councilmember Lieberman stated he was delighted with the Delta Dental cost plan. He thanked staff for their presentations today. Mr. Jim Brown, Assistant Human Resources Director, reported on the compensation package recommendation for the upcoming year. He said their compensation system was based on the market and a performance driven system. The market-based recommendation originated from a market study of 179 classifications, which include fire and police positions. He said a comparison of various pay ranges among the benchmark cities was conducted. The market study found recommendations for 52 classifications needing range adjustments. Councilmember Clark asked how the 179 classifications were selected. Mr. Brown stated they have recommendations for market studies from within the organization. Councilmember Clark asked if they were re-doing any classifications from last year. Ms. Carmicle stated they benchmark pretty much the same positions where they can find a match in the market place. She provided examples of typical benchmark positions. She said most were rolled over from year to year. Councilmember Clark asked how many classifications they had now. Ms. Carmicle stated they currently have 400 classifications. Councilmember Clark asked how unique positions were handled where there was no match. Ms. Carmicle stated if that comes up, they would look to internal equity. Mr. Brown provided information on performance driven merit increases. He stated that even with the slow down in the economy and potential layoffs in parts of the state, they were pleased to be able to offer salary increases this year. They were recommending a 1% one time payment increase for all non-step employees. He said when they give the one time amounts, it was their intent to come back the next year and possibly add that one percent to the base. He explained they were also recommending a 2% base salary merit increase for all non-step employees who meet and/or exceed expectations. He added that police and fire have ratified their MOU to outline any step increases. Vice Mayor Martinez asked for clarification on the budget increases as stated in their budget booklets. Ms. Carmicle stated changes had been made after the booklets were sent out. Council will be receiving the updated information. The recommendations presented here today are the revised increases based on the market component. She said staff was trying to keep in step with the market place. She discussed the changes that had occurred in 2002 in eliminating automatic pay increases built into the budget, as per Council's direction. Councilmember Clark asked for clarification on the dollar amount that will be placed into the budget with the 2% increase for employees who meet or exceed expectations. Ms. Carmicle stated the budget office calculates those figures. She asked Ms. Schurhammer to explain. Ms. Schurhammer stated it was calculated off a salary forecast based on an employee's current pay. Vice Mayor Martinez asked how it was calculated when not everyone receives the 2% raise. Ms. Carmicle stated that Vice Mayor Martinez was correct in stating not everyone receives the merit increase because it was performance driven. She said 20% to 30% of the workforce has topped out and will only receive the one time 1%. 4 Mayor Scruggs asked for clarification on the revised pages and asked Ms. Carmicle to provide corrected pages to Council. She asked if police and fire have ratified their MOU's. Ms. Carmicle responded they had and their step plan would be a certain amount whether they meet or exceed expectations. She said for police it was 4% and for fire it was 5%. Mayor Scruggs said she would like to see the pay at each step for fire and police. Mayor Scruggs stated it was her understanding that this process will stay in effect for two years. Ms. Carmicle replied that she was correct and she will be happy to provide the Council with the new schedule. Ms. Carmicle summarized the compensation package and stated they were very proud of their accomplishments this year, given the current economic situation. She reiterated they will be re-visiting the current situation at the mid-year mark to see if circumstances have changed, and if so they will make the necessary adjustments. Mr. Horatio Skeete and Ms. Sherry Schurhammer presented information on previous items which needed additional information, as well as to answer any budget questions. Mayor Scruggs commented on the two items that will be coming back in two months. Mr. Beasley stated the two items were the philosophical discussions regarding the training facility and the enterprise funds. Mayor Scruggs asked the Council if they had any further comments or questions on any items in the budget. There were none. Mayor Scruggs commented on the park maintenance issue not having enough money for up-keep. She asked if anyone would like to pursue the matter further. Vice Mayor Martinez said park maintenance was a real issue. He stated that at a recent meeting, the issue had come up about one park in particular. He would like to support adding additional funding in the budget for parks' maintenance and supports further discussions on this matter. Councilmember Knaack agreed with Vice Mayor Martinez. She said at her district meeting that issue had also come up. The citizens had wanted the parks updated, renovated and put back in good condition before new parks were built. Mayor Scruggs asked when the park's master plan will be updated. Ms. Kavanaugh said they will be starting that process in the fall. Mayor Scruggs said it probably will not be ready for next year's budget cycle. Mayor Scruggs said there had been a lot of discussion about the focus only being on the construction of new parks and not enough for funding the maintenance of existing parks. She added they were now hearing complaints from Glendale citizens. She asked if Council should hold a separate discussion on this issue. Councilmember Goulet said there were several components to this issue. He said he would like the discussion to include older parks as well as future parks. 5 Mayor Scruggs asked for a consensus from the Council to have further discussions on this issue before the master plan is started to provide additional input on feedback received from citizens. The Council was in agreement. Mayor Scruggs suggested a workshop meeting before the master plan is created to discuss priorities and feedback from the community. Councilmember Lieberman commented on older park renovations in his district. He will support these discussions; however, the parks in his district have had no real problems. He stated he has been satisfied with the leadership of the parks and recreation department. Mayor Scruggs reiterated the consensus of the Council was to move forward with discussions on this issue. Mr. Beasley asked for clarification on what the Council would like to see discussed and brought forth from staff. He asked if Council would like to provide input before the master plan is created, as well as focus on older existing park maintenance and renovations before looking to build new parks. Mayor Scruggs stated it would be more of a strategic look at the direction when considering developing the new park master plan. Mayor Scruggs asked for any other items to be discussed. Councilmember Lieberman commented on weed problems around the city. He said he would like to have a code discussion regarding the necessity to expand that department. He said at his district meeting, code enforcement receives a lot of attention. He suggests a meeting on code enforcement, as well as additional staffing to expand the department. Councilmember Clark commented that Council had approved two code inspectors in this budget cycle and it was possibly not enough; however, she believes a discussion on code enforcement should have a much broader dialogue that would involve effective use of current resources, as well as a philosophical conversation. Councilmember Frate commented he does believe there should be a discussion on code enforcement. He said it was an important issue and citizens should call in problem areas whenever possible. He stated that code has expanded and they are being very proactive in the city. Mayor Scruggs commented that the majority of City Council would like to have a discussion on code enforcement. Ms. Schurhammer reviewed the next steps in the budget adoption process. The June 10, 2008 evening meeting will include the preliminary budget for consideration with the final budget presented at the June 24, 2008 for formal adoption. She said the property tax levy adoption also will occur at the June 24 evening meeting. Mayor Scruggs asked about the property tax rates to be adopted. Ms. Schurhammer said the primary property tax will be .2432 which was 2% cents less than what it is this fiscal year. She said the secondary will remain the same at $1.35, so the total rate will be $1.5951. Mayor Scruggs said this rate reduction will be accommodated by reallocating the funding for infrastructure around the Loop 303 over a few years, as was presented at 6 the April 15, 2008, budget workshop. She said nothing will be deducted from the budget and it will stay balanced. Mr. Ken Reedy, Deputy, City Manager, presented information on utilities rates. Mayor Scruggs summarized the water and sewer increases. She said the sanitation rates will increase to $16.30 for FY 2008/09. She asked if staff was assuming that should Council approve the rate increases for this year, they will automatically be approving rates for future years as proposed. Mr. Reedy responded, no. He said their recommendation is to bring this item back annually with new water and sewer evaluations. Councilmember Clark commented she will support the rate increase, however, was not happy about it. She said she understands why these increases were necessary because of the cost of fuel, materials and equipment. She added no one was happy about the current situation. Vice Mayor Martinez agreed with Councilmember Clark. He said he also does not want to support an increase; however, with the rising cost of fuel and equipment, it was necessary. He said he sees no choice in the matter and will support the increase. Mayor Scruggs commented she does not want to go through another year like this, with no options. She said the city has a very aggressive capitol improvement plan which in turn drives these rates to a very high degree. She explained there had not been enough time to discuss any options. She was disappointed there had not been enough time to look for alternatives to these increases. She discussed how these increases could harm the residents of Glendale. She said next year they will be having a workshop to discuss the enterprise funds, as well as to focus on options for the coming years. Councilmember Frate remarked on some of his constituents commenting on the proposed rate increases. He said the increases were possibly a direct result of continued fuel increases: if fuel continues to rise, everything else will rise. He said he supports this year's increase, however, would like to see what happens next year before approving any more increases. Mayor Scruggs was skeptical that fuel prices were the main factor in determining these increases. Mr. Reedy stated that the chemicals used in the treatment plants are oil based commodities which include plastics made from oil. He said it was not only the fuel cost, but also the impact that oil has on all of their plant components. He discussed the ways fuel and oil impacts the services offered to the community. He explained there was a parallel between the cost of oil and the cost of energy in general. He added it was not the only reason for the increases; however, it was a significant portion of the equation. The changes in regulatory requirements had also been a factor, which had a significant impact, especially on the water and sewer side. Mayor Scruggs asked if there was anyway of knowing how much of the 12% increase was related to the rising fuel cost or was it due to the capitol improvement plan component. Mr. Reedy stated he was not certain, however, he was certain that the cost of fuel was significant, as well as the new regulatory requirements. He provided an example of a new regulatory requirement which had increased their cost by half a million dollars. He said the cost of everything they do continues to rise substantially. 7 Vice Mayor Martinez discussed the balance between the CIP plans for future development and rising costs. Mr. Reedy agreed with Vice Mayor Martinez. He said they did not want the citizens to pay for something not needed at the moment. Councilmember Clark commented on possibly using solar energy in the future. She asked when they perceive it to be a viable option in keeping rates down. Mr. Reedy stated they do use solar energy in a variety of pilot type installation projects. He said that currently, solar energy was not economically viable for the treatment plants. Councilmember Clark stated she would like to discuss this option further. Mr. Reedy said technology was moving forward with new knowledge everyday; however, there was no real option available at the moment to generate solar energy for a plant today and meet the demands of the public at a moments notice. Councilmember Lieberman discussed the increase in fuel at his district meeting. Councilmember Goulet commented on utility rates. He stated that having discussions on what is driving the increases was important. He discussed what was driving the cost of oil. His constituents had commented on the proposed increases in utility costs. He explained it was very important that the public was aware of what they were receiving for their money. He said perhaps they needed to do a better job of explaining what is available, as well as the value they were receiving. He noted they needed to educate the public that this increase was not just an increase for the sake of an increase, but rather an increase quite necessary at this time. He also explained the many services the city was providing for the money. ADJOURNMENT The meeting was adjourned at 3:10 p.m. 8