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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