City Council Minutes 11-25-2013 Special budgetMINUTES
SPECIAL MEETING — MONTICELLO CITY COUNCIL
Monday, November 25, 2013 — 4:30 p.m.
Mississippi Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Absent: None
Others: Tracy Ergen, Wayne Oberg, Jeff O'Neill, Tony Velishek (Foster -White Agency)
1. Call to Order
Mayor Herbst called the special meeting to order at 4:35 p.m.
2. Purpose of Meeting: Discussion of (3) 2014 health insurance benefit options and
(4) 2014 levy and budget
Tracy Ergen explained the purpose of the meeting is to discuss health insurance benefits
and the 2014 budget.
3. Consideration of proposed 2014 health insurance benefit options
Tracy Ergen stated that the city is facing a 29% increase in health care benefits for the
current plan. By adjusting some of the deductible levels, they were able to reduce that
amount to a 15% increase in premiums. In some research that Tracy Ergen did, she
found that the city pays slightly more for health insurance benefits compared to other
cities. On the other hand, city employee pay scale is about 5% less than average for
comparable cities. Tracy Ergen discussed some of the options that the city has been
considering, which included combinations of health insurance coverage and COLA and
step increases. Tracy Ergen had sent out a survey to employees a few weeks ago and
asked for input on preferences among 3 options. Most employees preferred the 3rd option
which calls for step increases and the city covering the 15% increase in health insurance
premiums.
Glen Posusta asked about the cause for the increase. Approx 4% is due to the Affordable
Care Act and the remaining 25% was due to high (catastrophic) claims. The city paid out
more in claims than was collected in premiums. Brian Stumpf suggested that it might be
best for the city to absorb the premium increase along with the step increases but no
COLA increases. Glen Posusta felt that the employees should pay a portion of the
increase as he thinks this will help for future adjustments that may be needed.
Brian Stumpf suggested that it would be helpful to receive this information sooner in the
year. Tony Velishek explained that their company starts looking at trends and rates in
June or July and the renewal statement comes in September.
Wayne Oberg gave some comparisons in amounts that could be expected for employees
on family insurance and single insurance. Lloyd Hilgart pointed out the value of the
health insurance to employees with family coverage is $18,000 per year. Tom Perrault
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said he is okay with covering the health insurance increase but would prefer COLA rather
than step increases. Tracy Ergen mentioned that employees prefer step increases (listen
to tape). Roger Hoglund asked about what has happened to the budgets for positions that
have been cut. Jeff O'Neill pointed out that consultants and other staff have taken on
most of that work so the budget will be allocated accordingly.
Jeff O'Neill summarized by pointing out that the city has had a very good insurance plan
and invests quite a bit into the plan. Due to the large increase, the council will be asked
to snake a hard decision on how to allocate the premium increase.
4. Review of 2014 levy and budget proposal
Wayne Oberg gave an overview of the levy process and noted that council will be asked
to detennine the final levy on Dec 9th He compared tax capacity values and rates over
the years. (ask for slides) Wayne Oberg pointed out that the tax capacity for the city has
dropped due to changes in valuation for Xcel Energy. Wayne Oberg showed the
breakdown of the total levy with the city receiving 38.4 %, county at 37% and school
district at 24 %. Wayne Oberg discussed the amounts of the tax levy going into the
general fund, MCC operations, and debt service. Most of the proposed 3.16% tax levy
increase will go toward debt service.
Wayne Oberg talked briefly about reallocating some of the expense categories in the
general fund into other funds of the city. Some of the categories include IT, printing,
telephone and internet. The reallocation will not increase the overall budget.
Wayne Oberg pointed out that Council approved a reduction in the law enforcement
hours which reduced the budget. There are other items in the budget that could utilize
those funds such as a fire truck and street repairs. If the law enforcement hours were
reinstated from 48 to 52 hours, an additional $90,000 would need to be found in the
budget. Wayne Oberg reviewed some of the law enforcement statistics which show that
there is not a lot of variation in service calls and crimes over the past years.
Wayne Oberg quickly went through the list of proposed capital equipment items for 2014
of which most will be financed through bonds.
5. Adjournment
TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 5:37 P.M.
LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Catherine M. Shuman
Approved: December 9, 2013
Attest:
dministrator
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