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3. Review of Draft 2011 Budget and 2011-2015 Capital Improvement Program ��: - ��) .,.�.-` <,�� �)F / 'r `"`� r . �� \\� a' /�'� �\ � .\�' v'�...♦ •�'�. � / tJ `�� ��.�9���T�'�. Memo � To: City Council Members From: Anne Hurlburt,City Administrator Date: August 25,2010 Re: 2011 Draft Budget and 2011-2015 Capital Improvement Plan Additional Information for August 30,2010 Meeting Attached are several items prepared in response to questions raised at the August 23, 2010 work session on the 2011 Draft budget: 1. Worksheet showing city employee FTEs(full time equivalents) This worksheet shows all positions by type and department as included in the 2011 draft budget, with FTEs as well as the total number of employees. For some positions,it was necessary to make estimates of FTEs because the employees are paid a flat amount for the day they work(such as the Community Center Cleaner and Attendant)or compensation is paid in more than one form. For example,firefighters are paid by the hour(at varying rates) and officers receive monthly sripends that are not tied to the number of hours worked. In the case of the fire department,the total budget for wages was divided by$12.00 per hour to estimate the FTEs(1 FTE equals 2,080 hours per year.) 2. Estimate of Replacement Cost, 1997 Ford Dump Truck with Plow Replacement The next replacement of a plow truck is currently scheduled for 2012. There is some concern that the useful life of this truck may be shorter than the 15 years(until the replacement cycle was lengthened 2 years ago, a 12-year life cycle had been assumed.) Please see the attached memo about our update of the cost estimate for the plow truck replacement. 3. Budget Impacts of Zavoral Mining and Reclamation Project EIS(Environmental Impact Statement) Staffwas asked to calculate the impact of the EIS project on the city's 2010 and 2011 budgets. A worksheet is attached comparing the 2010&2011 budgets with those of the previous years,with and without the EIS. It is important to note that the city is reimbursed by the proposer for all out-of- pocket costs, as well as staff time, for this project. 4. Health Insurance Premium Increase We have received the renewal rate for health insurance benefits. The 2011 premium increase for the current plan will be 20%(compared to 18%assumed in the draft budget.) Staffwill provide some additional information on this topic at the August 30 meeting. 1 City of Scandia, 2011 Draft Budget Personal Services Employee FTEs (Full Time Equivalents) Excluding City Council 1 FTE = 2,080 hours Department 41000 51410 41910 42200 43000 45000 45180 Admin 8� Planning/ Fire 8 Public Comm. Total Number of Position Finance Elections Bldg Rescue Works Parks Ctr FTEs Employees Regular Employees, FT City Administrator/Clerk+ 1.000 1.000 1 Building Official/Maintenance Supervisor+ 1.000 1.000 1 Maintenance Worker, FT 2.000 2.000 2 Subtotal 1.000 0.000 1.000 0.000 2.000 0.000 0.000 4.000 4 Regular Employees, PT Deputy Clerk 0.750 0.750 1 Treasurer 0.330 0.330 1 O�ce Assistant 0.300 0.300 1 Maintenance Worker, PT 0.250 0.200 0.250 0.700 1 Recreation Coordinator 0.096 0.096 1 Community Center Cleaner' 0.060 0.060 1 Community Center Attendant* 0.034 0.034 1 Subtotal 1.380 0.000 0.000 0.000 0.250 0.296 0.344 2.271 7 Paid-on-Call Firefighters'* 3.926 3.926 27 Seasonal/Temporary Employees Election Judges""" 0.000 0 Skating Supervisor 0.048 0.048 1 Ice Rink Maintenance 0.096 0.096 2 Ice Rink Attendant 0.288 0.288 5 Recreation Program Instructor 0.010 0.010 1 Maintenance, On-Call 0.053 0.053 2 Subtotal 0.000 0.000 0.000 0.000 0.053 0.442 0.000 0.496 11 All Employees 2.380 1.000 3.926 2.303 0.738 0.344 10.693 49 + salaried employee ' paid per day;FTE based on$14 per hr "" all wages(hourly+officer stipends)/$12 per hr *"" non-election year Rr�ai�n�n _� • � , w _ `1 C, � � ��t. �"�� �`` R �, �%_-~ �` � ,, �r .����' ._...> � .�^; ��J���� Memo � To: City Council Members From: Anne Hurlburt,City Administrator Date: August 25,2010 Re: Estimate of Replacement Cost, 1997 Ford Dump Truck with Plow Replacement The City's"fleet"of equipment for snow removal consists of two dump trucks with plows,two pick-up trucks with plows,and a small tractor equipped with a snow blower. With 90 miles of roads to plow,plus parking lots and sidewalks, all of this equipment must be in service in order to remove a typical snowfall within a reasonable time period. The two plow trucks are currently scheduled in the CIP to be replaced in 2012 (a 1997 Ford) and 2014(a 2002 Sterling.) Originally,the Ford had been scheduled for replacement in 2009(a 12-year life cycle)but that was lengthened to 15 years. (The Sterling is still listed with a 12-year service life.) The replacement cost estimate($140,000 for each truck) is several years old. Staff obtained an updated cost estimate based on state contract pricing. The total cost(fully equipped and excluding sales tax)in 2011 is expected to be approximately$194,000 for a tandem-�le truck, and about $174,000 for a single axle truck. Sales tax would bring the cost up to about$207,800 and$186,400, respectively. Dealers will take trade-ins,the value of which may be around$15,000. The current plow trucks are both single a�cle trucks. When the replacement schedule was initially created, the then-Maintenance Supervisor recommended against a tandem truck due to a concern about turning in narrow streets and cul-de-sacs. However,our plowing practices have evolved to using two pick-ups with plows in tighter turning situations. The current staff now believes that replacing one of the two single-axle vehicles with a tandem truck would be advantageous. It would carry almost double the load of sand and gavel,which would be useful in both the winter and summer months and sa�e stafftime in the long run. If the replacement of the plow truck is moved from 2012 to 2011,it could be financed without new debt by increasing contributions to the Equipment Replacement Fund and possibly supplementing it with cash in the Capital Improvement Fund. 1 Budget Impacts Zavoral Mining and Reclamation Project EIS 2009 2010 2010 2011 2011 Adopted Adopted Adopted Proposed Proposed Plannin & Buildin (41910) Budget With EIS No EIS With EIS No EIS Expense Budget $ 200,327 $ 401,929 $ 165,681 $ 273,122 $ 133,122 Change from Previous Year 100.64% -17.29% -32.05% -66.88% 2009 2010 2010 2011 2011 Adopted Adopted Adopted Proposed Proposed General Fund Budget, all Depts. Budget With EIS No EIS With EIS No EIS Expense Budget $1,776,632 $1,951,805 $1,728,006 $1,883,546 $1,743,546 Change from Previous Year 9.86% -2.74% -3.50% -10.67% \\SERVER\SharedDocs\Departments\Finance\Budget\Worksheetslmisc worksheets anne 8/25/2010 August 23, 2010 A special meeting of the Scandia City Council was held on the above date. Mayor Dennis Seefeldt called the meeting to order at 6:36 p.m. Council members present: Pete Crum, Connie Amos, Dolores Peterson and Mayor Dennis Seefeldt. Council member absent: John Lindell. Staff present: Administrator Anne Hurlburt and Treasurer Colleen Firkus. Guests present were council candidates: Mike Harnetty, Tom Krinke, Jim Schneider, Randy Simonson and Sally Swanson. The purpose of the meeting was to discuss the draft budget for 2411. Hurlburt presented an overview of the budget process and timeline pointing out that the city must adopt a maximum levy by September 15. The levy information then goes on the property tax statements. The final budget can be adopted at a later date,but the levy amount cannot be increased. The final levy is then certified at the last council meeting in December. Hurlburt explained the levy limit to which the city is subject, and went over the levy history and how much is used for operations. How the city categorizes funds and departments was looked at next,with Contractual Services being the largest expense category at 49% and Personal Services being next at 24%. Harnetty asked how many full-time employees were on staff. Hurlburt said she would prepare a worksheet for the next meeting that would reflect all employees and the total Full Time Equivalents (FTEs). The Expense assumptions were covered on page 6 that showed no increase in salaries or wages, except for the City Council which has an ordinance based increase based on the CPI as reported in November. Any action to change the increase must take place prior to the election in November. Other expense assumptions included the increase in health insurance, PERA, property and liability insurance, worker's compensation, fuel and utilities. Assumptions for Revenue and Capital Projects were also outlined. Staff also proposed to add one part-time (.7 FTE) position to replace the part-time seasonal position in the 2010 Parks budget. The new position would be split between 3 departments: Public Works (.25 FTE), Community Center(.25 FTE), and Parks (.2 FTE). A staff of two full- time maintenance positions is not adequate to maintain the city's infrastructure, buildings and parks, especially during peak mowing and plowing months. The average work week on an annual basis would be 28 hours, to avoid the additional cost of health insurance benefits. Pages 11, 12 and 13 contain a summary of expenses and revenues by fund and departments and a history of expenses. Section 2 with the individual deparhnent expenses will be covered at the next budget meeting. Section 3 —Capital Improvement Plan (CIP) was reviewed next. Hurlburt gave an explanation of a CIP and how it is required by law to have capital expenditures planned and budgeted in order to make those purchases. The CIP is updated each year at budget time. There are two changes to the CIP that affect spending in 2010. August 23, 2010 City Council Budget Page 2 Harnetty asked about the pickup truck that was replaced two years ago. The city ended up keeping the 1995 GMC pickup to plow snow in parking lots, cul-de-sacs and other small areas. This truck is now falling apart and needs to be replaced. It is more efficient to have two plow pickup trucks clearing snow and keeping the big plow trucks on the main roads. Hurlburt explained that the state contract allows us to buy trucks at the lowest price. The Street Maintenance Program is also part of the CIP. To fully fund the pavement management study's recommendation would require $600,000. The Capital Improvement Committee recommended that the budget for contractual road maintenance and repairs be increased to $300,000 in 2011, from $200,000 in 2010. Another major recommendation of the CIP is to fund an Equipment Replacement Fund with transfers from departments that will require equipment purchases. The budgets for?U08 and 2009 were $40,000 each, and the budgets for 2010 and 2011 are$80,000 each. Even so, the fund will be at a deficit and require the city to borrow some of the cost of some major equipment purchases. The appendix contains the detail of the CIP sorted by departments and funding sources with additional detail on each project. Section 4 contains the Pavement Management Plan. Section 5 contains information on the Statewide Volunteer Firefighter Retirement Plan, which will be discussed at the next meeting. The last part of contains tax rate information. The next meeting is scheduled for Monday,August 30, at 6:30 p.m. A motion to adjourn was made by Peterson and seconded by Amos. The meeting adjourned at 8:20 p.m. Respectfully submitted, ��t ; Colleen Firkus Treasurer �: ,�n:_. ,������,; y�nX.�i.: � �� City of Scandia Blue Cross/ Blue Shield Health Insurance Plan Southwest Service Cooperative 2007 Monthly Rates Single Family($741.40) City Share City Share Employee Monthly Premium $231.50(100%) $593.20(80%) $14830(20%) HSA Contribution $91.70 $100.00 Total $323.20 $69320 $148.30 Annual Deductible: $1,375 $2,750 2008 Monthly Rates ��' Single Family($872.00) City Share City Share Employee Monthly Premium $272.00(100%) $697.60(80%) $174.40(20%) HSA Contribution $100.00 $100.00 Total $372.00 $797.60 $174.40 Annual Deductible: $1,450 $2,825 2009 Monthly Rates Single Family($948.50) City Share City Share Employee Monthly Premium $296.00(100%) $758.80(80%) $189.70(20%) HSA Contribution $105.00 $105.00 Total $401.00 $863.80 $189.70 Annual Deductible: $1,450 $2,900 2010 Monthly Rates Single Family($1,124.00) ��� City Share City Share Employee _- Monthly Premium $351.00(100%) $899.20(80%) $224.80(20%) HSA Contribution $105.00 $140.00 Total $456.00 $1,03920 $224.80 Annual Deductible: $1,450 $2,900 2011 Proposed Monthly Rates Single Family($1,349.00) City Share City Share Employee Monthly Premium $421.00(100%) $1,079.20(80%) $269.80(20%) HSAContribution $105.00 $140.00 Total $526.00 $1,219.20 $269.80 Annual Deductible: $1,600 $3,200 08/3U/10 �� Bluetross BlueShield Cit of Scandia ►.� � of Minnesota y • � M�����-����^� Health Savings Account Deductible Health Plan $1,600 Effective Date: 1/1/2011 w.4`h quarter deductible carryover THIS IS ONLY A SUMMARY AND IS SUBJECT TO THE TERMS OF THE CONTRACT** IN-NETWORK PROVIDERS OUT-OF-NETWORK PROVIDERS . . � -. . . .•. . -� : � � � . � �_� f _ $1,600 Single $3,200 Family . _�� a ' ' �' ' "' Medicaf and Prescriotion Medical and Prescription " � • • • ' $1,600 Single $3,200 Family $6,400 Single $12,000 Family . .�. . . -� . . ,- � � . �- - � . . _. : . �� � :E. . - . . ,��.; - � Deductible then 100°/a coinsurance. Deductible then 80%coinsurance. If non-participating provider services are Payment for Participating Network covered, you are responsible for the Providers as described. Most payments difference between the billed charges and are based on allowed amount. allowed amount. Most payments are based on allowed amount. �- '- Unlimited. � - .- .- . :.- . . . .. . . - � .. COVERED CHARGES Preventive Care - . . . :�- 100°/a Deductible then 80°/a coinsurance. '. ..- � . �- t .- - •- • 100% Deductible then 80%coinsurance. �. _ . : . . � . . Ph sician Services � � . 'f . �: : � � _ Deductible then 100%coinsurance. Deductible then 80°/a coinsurance. .. :. : : - � � ` k � Deductible then 100%coinsurance. Deductible then 80%coinsurance. .- - -� � �- = :� : � Deductible then 10Q%coinsurance. Deductible then 80%coinsurance. - � � : . .- Deductible then 100%coinsurance. Deductible then 80%coinsurance. Other Professional Services Deductible then 100%coinsurance.with Deductible then 80%coinsurance.with t� Blue Select provider extended network providers. No coverage with non artici atin roviders. . - -_ , Deductible then 100%coinsurance. Deductible then 80%coinsurance. _. r e. . "� `� "� Deductible then 100%coinsurance. No Coverage IN -NETWORK PROVIDERS OUT-OF-NETWORK PROVIDERS . . . ,. . -.` . - Deductible then 100%coinsurance. Deductible then 80%coinsurance. ..- � .. Out atient Hos ital Services � .. . - �. . . . Deductibie then 100%coinsurance. Deductible then 80%coinsurance. .. _ � � .� � �.. . . .� �. �. � � �- '` Deductible then 100%coinsurance. Deductible then 80%coinsurance. . - � . -� -. � �. ._ . - .- - -. .- . � - F_ -� Deductible then 100%coinsurance. Deductible then 80%coinsurance. Erner enc Care - �: -.. Deductible then 100%coinsurance. � . . � �- Deductible then 100%coinsurance. Deductible then 100%coinsurance � ' � Deductible then 100%coinsurance. :. - ,. . - - - _� _ �F - Deductible then 100%coinsurance. Behavioral Health Care Mental Health and Chemical De endenc Care .. - Deductible then 100%coinsurance. Deductible then 80%coinsurance. � .. - Deductible then 100%coinsurance. Deductible then 80%coinsurance. - • - . . Deductible then 100%coinsurance. Deductible then 80%coinsurance. Prescri tion Dru s .. Deductible then 100%coinsurance. Patient will pay difference if brand name is selected when a generic is available. No covera e for dru s outside formula list. •�._ � :i e. Deductible then 100%coinsurance. - : . -: �- � �- = No coverage for drugs outside formufary list. "'This is only an outline of plan benefits. The contract and certificate include complete details of what is and isn't covered.Services not covered include items primarily used for non-medical purposes, over-the-counter drugs/nutritional supplements, services that are complementary,experimental, not medically necessary,or covered by workers'compensation or no-fault auto insurance. We feature a large network of health care providers. Each provider is an independent contractor and is not our agent. Nonparticipating providers do not have contracts with Blue Cross and Blue Shield of Minnesota. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association. 06/28/2010