HomeMy Public PortalAbout2015_tcwsmin0323 Council Work Session March 23, 2015
Council Chambers, 25 West Market Street, 7:30 p.m. Mayor Kristen C. Umstattd
presiding.
Council Members Present: Kelly Burk, David Butler, Thomas Dunn, II, Suzanne D.
Fox, Katie Sheldon Hammler, Marty Martinez and Mayor Umstattd.
Council Members Absent: Council Member Dunn arrived at 8:01 p.m.
Staff Present: Town Manager Kaj Dentler, Town Attorney Barbara Notar, Deputy
Town Manager Keith Markel, Director of Parks and Recreation Richard Williams,
Interim Information Technology Manager John Callahan, Library Manager
Alexandra Gressitt, Director of Economic Development Marantha Edwards, Airport
Manager Scott Coffman, Research and Communications Manager Betsy Fields,
Captain Carl Maupin, Captain Vanessa Grigsby, Chief Joseph Price, Interim Human
Resources Manager Annie Carlson, Director of Public Works Tom Mason, Assistant
Town Manager Scott Parker, Human Resources Analyst Mark Hauer, Director of
Planning and Zoning Susan Berry Hill, Director of Plan Review Bill Ackman, Deputy
Director of Capital Projects Tom Brandon, Director of Capital Projects Renee
Lafollette, Senior Management Analyst Jason Cournoyer, Senior Management
Analyst Lisa Haley, Director of Finance and Administrative Services Clark Case, and
Clerk of Council Lee Ann Green.
AGENDA ITEMS
1. Work Session Items for Discussion
a. Budget Work Session
1. Self Insurance Fund/Employee Health Care Benefits
Greg Snow, Wells Fargo Insurance, gave a presentation on the Town's
employee health care benefits.
Key Points:
• Self-insurance fund was set up last year.
• Claims experience over the past 12 months is good, so it is a good time
to self-fund.
• Historical health care costs have been between 6-7% increases.
• Recommendation last year was to build to the maximum liability using
Anthem's maximum liability rates.
• Changes in the out-of-pocket mandate as part of the Affordable Care
Act will require medical and pharmacy out-of-pocket limits.
• Anthem recommended increasing the out-of-pocket maximums by
$1000 to accommodate the fact that the drug and medical out-of-
pockets were combined.
• Change in pharmacy tiers to add a fourth tier for specialty drugs.
• Anthem's re-insurance fees are competitive.
• Autism spectrum disorders will be treated as any other medical/surgical
benefits.
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Council Work Session March 23, 2015
• Dental is bundled with medical and had a favorable renewal of
approximately 5.5% with no proposed changes.
• Vision is carried through EyeMed and is also bundled with a
guaranteed rate through June 2019 with no proposed changes.
• Budgeting for the maximum liability builds some reserve.
• Continuing to build the reserve is critically important for future years if
there are higher than expected claims during a plan year.
• Reserves can be used for health care initiatives.
• Purpose of reserve is to cover large, unexpected claims or increases in
rates.
• Employee and town split the rate increase in the same percentage as
they split the rate.
Council Comments/Questions:
• Why are the mail order prescription copays higher?
Consultant answer: Because they are larger.
• Do you foresee the town ever reverting back to 100%Anthem
coverage?
Consultant answer: It would depend on changes in the marketplace;
however, funding dynamics would not change. A new carrier would
need to enter the marketplace that accepts the additional risk.
• What will happen if certain portions of the Affordable Care Act(ACA)
are repealed?
Consultant answer: It would depend on what changes are made. Some
may have very little effect, others might have a major effect. Currently,
there is nothing proposed that would dramatically affect the plan.
• What page of the budget is the health care reserve shown?
Staff answer: Reserves are not budgeted. They are what is held in the
fund at the end of the year.
• How does Council track whether enough money is in the reserve if it is
not recorded in the budget?
Staff answer: Staff reports it at the end of the year when the renewal is
reported. It is in the self-insurance fund which is tracked separately
from the General Fund, similar to OPEB.
• What is the cost for Council to be covered by health care?
Staff answer: Amount is based on the actual election of coverage by
Council members who chose coverage.
• Have you done an analysis of what would happen if we increase the
deductible?
Consultant answer: We had increases in the out-of-pocket, so we did
not look at that as an option. The plan is competitive in Northern
Virginia and utilizes copays rather than deductibles.
• Have we looked at the major claims—are they accidents or chronic
illness?
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Council Work Session March 23, 2015
Staff answer: Claims are tracked. The largest one was an admission for
"ill defined" reason.
• Is staff comfortable with this plan?
Staff answer: Yes.
• Is the plan and its premiums competitive with other plans in the area?
Consultant answer: Yes.
2. Completion of Council Review and Questions.
Council Comments/Questions:
• Given the new revenue source for emergency medical services transport
reimbursement program, will that impact Fire/Rescue budgets and
ultimate justification for what they are requesting from the Town?
Would appreciate an answer from both the Fire company and the
Rescue squad.
• With regards to enhancements, would like detail on these items.
• Based on feedback from citizens that may not be able to hear Council
deliberations around the work session table, would recommend
returning work sessions to the dais rather than spend money on
improving the work session table microphones.
• Answers that have been provided to questions about the skate park
include:
o Land value of the current location of the skate park- $3 million
o 45% more to build skate park in a new location
There is value to have active recreation choices for youth in one
location, such as Ida Lee Park; however, current location offers active
recreation choice for a different sector of town.
• Do estimates for potential capital projects include all possible costs?
Staff answer: Yes.
3. Long Term/Budget Sustainability Plan
Clark Case gave a brief presentation regarding the long term budget
sustainability.
Key Points:
• Budget sustainability program was cited as a key reason for AAA rating
from bond agencies.
• Chart shows that adoption of the equalized rate this year will result in
increased pressure on the tax rate in further out years.
• Recommended 18.3 cent rate keeps the amount of increase over years
lower.
Council Comments/Questions:
• Is staff being overly pessimistic about home values and revenues in the
near future?
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Council Work Session March 23, 2015
Staff answer: Revenue increases are predicted at 2% for all sources.
• What kinds of things might happen to change the numbers?
Staff answer: Property values could soar or collapse, which would
increase/decrease revenues, but they have been stable since 2007.
• How did the town get into a precarious situation with the debt service?
Staff answer: Debt was restructured in 2011 in order to keep the tax
rate equalized.
• What is the percentage of tax bill that is related to debt?
Staff answer: The percentage is 14.9% of general fund expenditures.
Fiscal policy allows 15%.
• TMDLs should be paid for by the county.
• Residential tax rate goes to pay debt service between FY 2017 and
2023.
• Keeping the tax rate artificially low has put the town in a position to be
struggling with high debt service payments in future years.
• What happens if a project comes up that has to be done—do these
numbers take into account the need for additional debt?
Staff answer: At this, we do not have the ability to go to market again
and stay within our fiscal policy. There is a possibility that the town
could find other ways to pay for a project—pay for it from current
revenue, raise taxes, or take the funding from other projects.
• We have a separate obligation for TMDLs under state law, so the
county cannot fund the town's TMDL projects.
• Bond rating agencies do not like to see the tax rate raised because they
figure at some point the public will fight back and cause political
instability, which the bond rating agencies do not like to see.
• Higher tax rate does not equate to a better bond rating.
• Budget is tight because too much money was spent on unnecessary
capital projects in the past.
• Projects that cost a lot of money were ones that citizens needed to
manage flood control.
• The town's budget is not in bad shape—when the model was originally
developed five years ago, the tax rate increases were estimated to be
much higher. Now, the needed increases are more modest.
• Budget on a year by year basis doesn't look bad, but we keep pushing
things into the future.
• This budget makes it impossible to consider new projects.
• Cutting the General Fund budget adversely affects future years because
it reduces the debt ceiling for future years, and reduces the equalized
tax rate in future years.
• Average tax bills are lower than they were three years ago. Continual
cutting of the average tax bill and not letting it increase with the rate of
inflation has left the town with no capacity for additional projects.
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Council Work Session March 23, 2015
• Look at services that the county should be providing, which would
allow some wiggle room in the budget. Must seek outside funding for
things that have been designated as priorities.
• So focused on the tax rate that Council cannot look into the future.
• Concerned that future maintenance of the new roads and other projects
is not included into the cost.
• If Council decisions are made on the basis of politics, real progress will
not be made.
• Current system limits Council's ability to share information with staff.
• Would like to consider re-thinking the Tuscarora Creek Flood
Mitigation Project as $2.9 million is significantly over what was
originally budgeted.
• Would like to add a crosswalk at Battlefield Parkway and the bypass.
• Would like to add an interactive fountain at Mervin Jackson Park to
facilitate in bringing people downtown.
• Would like to readvertise a higher tax rate to give us extra money for
this fiscal year and change the baseline for next fiscal year.
2. Additions to Future Council Meetings
Council Member Fox stated she has questions about enforcement of the sound
ordinance. She questioned how a decibel based sound ordinance would be enforced
and what costs would be associated with it. Another demonstration on decibel levels
was requested.
Council Member Hammier asked that an invocation policy be documented
and discussed as a council. There was consensus to add this item to a future work
session.
Council Member Butler requested a discussion over fire and rescue funding.
There was consensus to add this item to a work session in June/July. Council agreed
to forward questions regarding Fire and Rescue to the Deputy Town Manager who
would communicate them to Fire and Rescue officials. He also requested
information on TMDL project costs and who will be paying for mitigation.
He stated his intention that the zoning ordinance amendment for office and
industrial uses be sent to a work session after the public hearing.
3. Adjournment
On a motion by Council Member Martinez, seconded by Council Member Butler, the
meeting was mourned at 9:44 p.m.
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