HomeMy WebLinkAbout08-19-2002 CITY OF AUBURN
FINANCE COMMITTEE
August 19, 2002
MINUTES
I. CALL TO ORDER
Chair Poe called the meeting to order at 6:30 PM in Conference Room 1
located on the first floor of Auburn City Hall, 25 West Main Street, Auburn.
Members present included: Chair Fred Poe, Vice Chair Trish Borden, and
Member Gene Cerino. Others present during the meeting included:
Finance Director Shelley Coleman, Planning and Community
Development Director Paul Krauss, City Attorney Daniel B. Held, Human
Resources Director Brenda Heineman, Guest Terry Wood from
Lehman/Wood & Associates, Inc., and Deputy City Clerk Cathy
Richardson.
II. APPROVAL OF MINUTES
A. Minutes of the Au.qust 5, 2002 Finance Committee meetin.q.
Vice Chair Borden moved and Member Cerino seconded to
approve the August 5, 2002 minutes.
MOTION CARRIED UNANIMOUSLY. 3-0.
III. CONSENT ITEMS
A. Vouchers
1. Claims
F4.9.5
Claims check numbers 313251 through 313642 in the
amount of $2,316,623.46 and a wire transfer in the amount
of $321,161.16 and dated August 19, 2002.
2. Payroll
F4.9.2
Payroll check numbers 501160 to 501355 in the amount of
$568,033.12 and electronic deposit transmissions in the
amount of $796,660.93 for a grand total of $1,364,694.05 for
the pay period covering July 26, 2002 to August 13, 2002.
Finance Committee Minutes
for August 19, 2002
Page 2
B. Surplus Property
F4.6.1
1. Auburn Municipal Airport
City Council to authorize the surplus and disposal of the
following property:
1 Ansul fire extinguisher
2. Finance Department
City Council to authorize the surplus and disposal of the
following property:
Description/Equipment COA Asset #
Champion Paddy Wagon (padding station)
Foster 16-tray Drying Rack
NU-Arc Darkroom Sink
Collator 001-1400010
1650 AM Press 001-1400039
XL Labeler 001-1400069
Bin Sorter Multigraphics (1 tower only) 001-1400082
Platemaker 2500 w/auto 001-1400177
Prefector Press 001-1400302
Fallex Right Angle Unit
12 Metal Shelving Units
Qb/2 Half High Bookcases
Table
Steel Case Desk
Five-Drawer Lateral File
Vice Chair Borden moved and Member Cerino seconded to
approve the consent items.
MOTION CARRIED UNANIMOUSLY. 3-0.
IV. ORDINANCES AND RESOLUTIONS
A. Ordinance No. 5686
A5.2.3
An Ordinance of the City Council of the City of Auburn, Washington
amending Chapter 1.12 of the Auburn City Code, regarding the City
Seal and Logo.
I
Finance Committee Minutes
for August 19, 2002
Page 3
Vice Chair Borden moved and Member Cerino seconded to
approve Ordinance No. 5686
MOTION CARRIED UNANIMOUSLY. 3-0.
B. Ordinance No. 5687
A3.6.1
An Ordinance of the City council of the City of Auburn, Washington,
amending Section 2.06.100 of the Auburn City Code relating to
Council meetings and Order of Business.
Member Cerino moved and Vice Chair Borden seconded to
approve Ordinance No. 5687.
MOTION CARRIED UNANIMOUSLY. 3-0.
V. DISCUSSION ITEMS
A. Long Term Care Insurance
Human Resources Director Heineman reported that several years
ago Council elected to purchase long term care insurance for
LEOFF I employees. The insurance buffers the financial impact to
the City should an employee require long term care, such as full
time nursing home care. Director Heineman introduced Mr. Terry
Wood from Lehman/Wood Associates, Inc., who attended this
evening to introduce the UNUM Plan, a long-term care insurance
plan, for Committee consideration. Director Heineman explained
that the City could offer this basic long-term care insurance to
employees, with options for employees to purchase additional
benefits if they so desire. The insurance would initially be offered
to unaffiliated employees only. There are approximately 163
unaffiliated employees.
Mr. Wood distributed folders on the UNUM Plan. Mr. Wood
explained that 40% of the employees requiring long-term care are
still working and long-term care insurance is not covered under
medical insurance. Mr. Wood reviewed policy rates for nursing
home care, assisted living, or professional home care. Under an
indemnity benefit policy, the claimant does not have to produce
receipts. Employees must only show that the care is required to
receive benefits. The employee would receive a benefit of $1,000
per month under the employer paid portion of the policy. The
Finance Committee Minutes
for August 19, 2002
Page 4
employee may purchase additional benefits up to $4,000 per month
on a guaranteed issue basis. The basic plan has a three-year
benefit period and offers up to $36,000 in coverage. Mr. Wood
reviewed rates for additional benefits. In the event the employee
terminates employment, the employee has the right to "port" the
coverage, so they can carry the coverage for an indefinite period of
time. The employee would be required to pay the employer portion
in addition to any guaranteed issue portion of the premium. The
premium rate does not increase with age. Mr. Wood reviewed
sample benefit packages.
Director Heineman pointed out that employees could also purchase
long term care insurance for spouses, children, and other extended
family members.
In response to questions from Vice Chair Borden regarding options
for personal care, long term service, Mr. Wood stated that if a
policy holder has to have assistance with two of six activities of
daily living (ADL's), such as bathing, eating, toiletting, or taking
medicine, or is cognitively impaired, the person is qualified for long
term care and has options on the type of care received. All
facilities and providers must be properly licensed. If selected by
the employee, a family member or other individual may also serve
as caregiver. Mr. Wood reviewed group rates versus individual
rates and gave various examples of benefits and costs of the
UNUM Plan.
Director Heineman stated that adding the UNUM Plan to the benefit
package would aid in recruitment, provide employee security, and
enable employees to insure family members at reasonable rates.
Vice Chair Borden requested survey information with regard to
employee interest in long term care insurance coverage.
Director Heineman stated that many employees have shown
interest in establishing long term care insurance. Director
Heineman pointed out that this type of coverage compliments the
VEBA Plan now in place for certain employees, which is a pre-tax,
medical savings plan. Long term care insurance premiums are
acceptable expenditures from the VEBA Plan. Director Heineman
reviewed some of the benefits offered through the VEBA Plan.
Finance Committee Minutes
for August 19, 2002
Page 5
Director Heineman stated that she would collect the survey and
VEBA Plan information requested by Vice Chair Borden. Director
Heineman added that the majority of the unaffiliated employees
opted not to join the VEBA Plan, as the City was not contributing,
Options for employee/employer contributions for unaffiliated
employees are being discussed and the City hopes to have a
VEBA plan in place for unaffiliated employees by the end of 2002.
B. Yakima County Jail Contract Revisions
Director Heineman reported that Yakima County Jail wants to
amend the contract with the City of Auburn to establish a $10 per
day, per inmate fee. The revenue from the $10 fee will go into a
fund that will subsidize medical care costs.
Director Krauss added that the addendum includes the ability to
periodically renegotiate the fee if there is a change in medical
costs. There is also a minor modification regarding video and
phone access between public defenders and inmates and Yakima
County wants the ability to be able to refuse inmates. Director
Krauss stated that there is language in the addendum citing
specific criteria limiting County ability to refuse inmates.
Director Heineman pointed out that savings in costs formerly paid
to King County for jail services are approximately $255,000 for
current year. Figures were calculated through the end of June
2002.
C. Cost of Livin,q Adiustment
Director Heineman distributed a report reviewing cost of living
increases of the Mayor's salary/executive payroll from 1999
through 2002. Former Mayor Booth did not receive cost of living
increases from ~1998 forward. Director Heineman suggested the
Mayor's salary should be adjusted to reflect cost of living increases
for prior years.
Director Coleman added that City code states that the Mayor's
salary is adjusted annually through the budget process.
Committee Members concurred. 3-0.
Finance Committee Minutes
for August 19, 2002
Page 6
D. Utility Tax
Finance Director Coleman reported that, last year, State and
County representatives were seeking ways to enhance State and
County revenues. One consideration to enhance County revenues
was to levy the maximum allowable utility tax on electric, gas, and
phone utilities upon those cities that do not currently charge the
maximum amount allowed.
Director Coleman stated that preliminary review of City of Auburn
estimated revenue for years 2002 and 2003 indicates that current
year revenues will be within 1% of budget, but due to recent tax
cuts, 2003 revenues will be approximately 9.5% less than revenues
received in 2001, approximately $3.5 million.
Director Coleman distributed a handout showing potential revenue
if utility taxes were increased. The City of Auburn currently charges
4.5% for all utilities, except refuse which is 2%. State statute limits
taxes to 6% for electric, gas, and phone utilities. There are no
state statutes with regard to limits for water, sewer, storm, or refuse
utilities. Most jurisdictions levy the 6% maximum tax for all utilities.
If the City of Auburn increased utility taxes to 6% for all utilities, the
additional tax revenue would be approximately $1.7 million. This
would keep the tax revenue within the City should the County opt to
implement raising utility taxes to the maximum amount allowed.
In response to questions from Vice Chair Borden, City Attorney
Heid stated that a change in state law would be required to allow
the County to increase city taxes for county revenue. The County
might request from the State, that where a city within a county is
not utilizing all the taxing potential available under law, a county
could utilize that.
Director Coleman stated that there has been pressure from the
State to cut back on state funded and other revenues, especially to
those cities that have not maximized their taxing authority. These
issues have been debated in legislative sessions for some time.
Attorney Held reported that the State Legislature has been
periodically unsympathetic to assist jurisdictions that have not
utilized all of their taxing potential.
Finance Committee Minutes
for August 19, 2002
Page 7
Director Coleman added that the City is limited to a 1% increase on
property tax, and salaries and benefits rise approximately 4% to
5% each year. Cities must consider alternatives for increasing
revenues in order to offset tax cuts.
Vice Chair Borden requested comparisons to surrounding
suburban cities with regard to utility tax rates.
Director Coleman stated that she would present a current study at
the next Committee meeting. Director Coleman stated that the City
of Tukwila recently conducted a study as they are considering
levying a utility tax for electric, gas, and phone for the first time.
In response to questions from Chair Poe, Director Coleman stated
that cities are anticipating that counties will lobby the Legislature for
the authority to levy the maximum utility tax. Attorney Held
concurred.
Chair Poe suggested a Council study session to discuss
alternatives with regard to utility taxes.
Vice Chair Borden expressed concern regarding the City's future
ability to fund the many services that the City now provides. Taxes
collected in Auburn should remain City revenue. Member Cerino
concurred.
Committee Members reviewed the Preliminary Budget schedule.
Director Coleman reported that staff will give a revenue
presentation in September, a Council workshop will be held for
Council review, and the Preliminary Budget will be published in late
October. The Preliminary Budget is generally adopted the first
Council meeting in December.
To determine the severity of current revenue issues, Chair Poe
requested additional information with regard to revenue projections
and trends, and departmental budget changes. Director Coleman
stated that she would present additional information and
preliminary comparisons at the next Committee meeting.
(This item was discussed prior to Item V.A above.)
Finance Committee Minutes
for August 19, 2002
Page 8
VI. ADJOURNMENT
There being no further business to come before the Finance Committee,
the meeting adjourned at 7:26 PM.
APPROVED THIS ~?~ DAY OF SEPTEMBER, 2002.
Cathy Ricl{~rdson, Deputy City Clerk
f:\clerk/finance\fca~O02 fcm08-19