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3. Staff Report-2014 Budget Adjustments �� ` , � � .� �� , � ..�: �� SCANDIA � Staff Report Date of Meeting: October 22, 2013 To: City Council From: Kristina Handt, City Administrator Re: 2014 Budget Adjustments Background: At previous budget meetings the Council asked staff to get quotes on tree trimming for next year. Also, the Mayor was to review the AV needs at the fire department. Lastly, as the original report mentioned, auditing and health insurance costs should be reviewed prior to final adoption as yuotes were still being sought. More information on each of these as well as codification (a goal from the Administrator's first review) are detailed below. When the Council set the preliminary levy in September, it was noted that $1,000 would need to be cut from the general fund in order to offset the $1,000 budgeted for the EDA. Issue: What changes should be made to the draft budget before it goes to public hearing? Proposal Details: Tree Trimming/New Staff' The Public Works Director solicited bids for tree trimming along 3 miles of road (6 ditch miles) in the area of the City that is to be seal coated next year. Two bids (copies in your packet)were received: Hugo Tree Service-$37,500 and Helke Tree Service-$27,000. The estimated cost of a full time maintenance worker is $67,585 (wages and benefits). In addition to being able to bring tree trimming in house, the extra staff person will also work on sewers (EcoCheck contract would be reduced to a couple thousand dollars in 2015, currently $19,123). Two thirds of the cost of a new staff inember would be recouped in these two services alone. In addition, another staff inember will help with snow removal, patching, ditching, building maintenance, and eyuipment repairs. Please see Director Kieffer's memo from August l3, 2013 for more details on these tasks. Staffpreviously shared with the Council information on staffing levels from other communities. Scandia staff was expected to maintain many more miles of road per employee than other cities. The closest city in number of miles was Columbus at 18.3/employee compared to Scandia's 30.2. In order to get to the same level as Columbus, Scandia would have to add two new full time maintenance staff. If the additional sewer work was factored in three new employees would be necessary. If comparing Scandia to Forest Lake, Hugo or North Branch at least four additional maintenance staff would be necessary to have the miles/per employee be comparable. Adding just one new full time maintenance staff to the team next year, does not bring Scandia in line with comparable cities but it is a step in that direction. Staffing needs should continue to be evaluated in future years. Fire Department: The Mayor reviewed the AV needs for the training room at the fire hall. The same projector currently used in the Council chambers should be purchased for the fire department along with some other miscellaneous supplies. The Mayor recommends lowering the budget to $2,000. Auditin�C� As mentioned at the last Council meeting, significant savings will be realized by switching auditors. Staff would recommend lowering auditing costs in the 2014 budget to $16,300. Health Insurance: We recently received a quote from Health Partners for coverage beginning December 1, 2013. The plan is an open access, high deductible HSA ($1,500 single/$3,000 family), similar to our current plan with Blue Cross Blue Shield. However, since it is not a co-op plan each employee's premium is different based on age and number of dependents. The monthly premiums are $100 to $500 less depending on the employee under the Health Partners Plan. The Health Partners' total monthly premium would be $3,496.10 (three singles and two family coverages) compared to the current premium of$4,896.50. The group was rated at a .75. Under Obamacare all groups will be a 1. However, per Val Sutherland at Health Insurance Mart if we renew in December,the Obamacare rate changes won't impact our group until December 2014. The Council could continue with no change in the contribution levels from the City and realize over a $16,000 savings. The resolution under the next agenda item should be passed to change carriers and continue the City contribution levels, if the Council takes this recommendation. Codi acation: As we discussed last fall, the City's non-development ordinances have not been codified. Codification would allow the non-development ordinances to be organized by subject matter, indexed, numbered in a logical order and allow updates to occur easier. Having the current ordinances codified would also make it easier for the public to search on the website. Currently, it is very cumbersome to search through a long list of ordinances that appear in the order they were adopted rather than by subject matter and then have to trace through the list to find any changes to those ordinances in order to know what is currently in place. I've received a proposal from American Legal Publishing,the corporation that partners with the League of Minnesota Cities to offer codification services. Their quote is good through January 2014 so I'd like check with a couple other codification companies before making a final recommendation to proceed. Including $9,000 in the Administration Department budget would be ample to cover codification of the current ordinances, excluding the development code. If the Council would like to include the development code $15,000 should be budgeted. Fiscal Impact: Below is a summary of the fiscal impact of the changes proposed above: Line Item Current Proposed Chan�e 101-41000-131 Health Ins $15,012 $9,510 ($5,502) 101-41000-303 Auditing Services $22,500 $16,300 ($6,200) 101-41000-319 Other Services $1,000 $10,000 $9,000 101-42200-570 Office Equipment $8,000 $2,000 ($6,000) 101-43000-131 Health Ins $60,570 $49,568 ($11,002) After taking into account the $1,000 needed to make up for the EDA budget,there remains $18,704 that could be allocated without increasing the levy. Staff would recommend the allocation for the transfers to the Equipment Replacement Fund be increased by this amount and apportioned between the Fire Dept and Public Works Dept budgets. 101-42200-720 Operating Transfer $42,938 $51,043 $8,105 1O1-43000-720 Operating Transfer $57,062 $67,661 $10,599 Options: 1) Direct Staff to Make Changes Described Above to Budget for Public Hearing 2) Direct Staff to Make Some but Not All Changes Described Above to Budget 3) Direct Staffto Make Different Changes to the Budget for Public Hearing 4) Direct Staff to Make No Changes to the Budget for Public Hearing Recommendation: Option 1. Staff would also suggest that the $18,704 could be added to the Local Road Improvement Fund or Capital Improvement Fund, rather than the increase in the Equipment Replacement Fund, if the Council wishes. �. v.: �. , _ _ PRO P U SAL �651,429�'°5 __ � HUGO TREE (651)429-3810 fax - Not an Invoice 14728 Irish Ave.N. P/ � � Hugo,Minnesota 55038 ' www.hugotree.com r PROPOSALSUB E T , �� PHONE(H) � �� PHONE(W) DATE [` STREEf EMAIL GTY,STATE AND ZIP CODE �OB N�� ,( VV � CR0555TREETS � �� ' Removal Tdmming � � � a J m � O � � a"'_c w € � � �� 3 � o > o �3 � ° $ � � z TREE DESCRIPTION ¢ a �g � j � � � � � COST ,, s z. s 3. 5 DESCRIPTION(5: ADD APPLICABLE SALESTAXTO ALL PRICES ,;�%,^r^c l ��e �� 5�� , � _ ��d, o o � � r � to 115 �- tUeW� �e � pr �{��T�, _ 1� r o Mat��v'�`c� �a �16� 0 � � � �3 nPys , �-� �.�� - �;�.� t'"+�. �C� /ll`o Y'�l� S �JJ e o a � .�. ,S o�a. rj y � � � I �- � � � � � �oo, �o � -� f � � �d �..C�aG�,�,?►" 5 l a r r� �iF/�C�C� �LY/e� � All work to be campleted in a workmaalike mannu acrnrdiag u � standard proctites.An addiHonal S�0-5750 may be added if Mdden � haurds such as nails orconcrete an encountered.All agreements ��u� � rantingent upan delays berond our coMrol.For your protect{on,rre � '"`b°""""""' wrryfulllWbilhyinsuranceandWorkersCompensatlan.lnsunnce SI ure ��.+«� sert'rficatesarailableuponrcquest. ►�e:ThhproposalwillbevrithdrawnbyusHnotacceptedwlthinirear,providenothangeinandi6ons All unpaid irnoices are sent to collectiorss with an additional fee of 33%. 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