e e uh meeting for City North St Paul for November 1st uh J if take the role council member Thorson's absent council member Peterson here council member Wong here council member Cole here mayor Furlong here corm is present a motion to adopt your agenda so mooved your honor move by council member Peterson second by council member Cole any discussion if not all those in favor signify by saying I I oppos motion carries and we do have some topics tonight but I just want to uh say that uh we did have an incident today in the city uh prayers go out to the you know family and to all the people who had to deal with the situation today I know it's a active investigation so we really don't know much information right now but uh we are not going to have the police chief here tonight uh I recommended from uh the city manager that uh he's dealing with a lot of things tonight so uh our support goes out to to all of them and we'll just table all the items that uh he was going to deal with uh tonight uh in the regular council meeting we'll ALS also have uh an adjustment to the uh to the schedule so I'll turn over to city manager frandle thank you mayor um so the first two topics will be pulled which is the police department Staffing update and uh the unmanned aerial vehicle for the drones so move on to topic C which is employee health insurance update um we'll turn that over to Mr Winnick our finance director so Mr winck I'm gonna tell you you have an hour and a half to get through all this so talk very slow use lots of diagrams uh need an eil and Post-it notes or anything I mean we got I think we can run out and get those here in the first five if you have a dog and pony show go ahead and well if if you remember I think last Workshop I somehow filled an hour and 25 minutes but uh yeah so we'll see if we can do that again today no no I was actually thinking uh going into today that you know with you know Phil having a couple of items that that would have had enough discussion on there I have been left with about 20 25 minutes right so yeah we're going to have jokes and everything else later on no I'm just kidding so uh but uh no May again we're getting towards the end of budget budget cycle so yeah so uh mayor council members the first item that kind of want to discuss and is really uh an update on the employee um health insurance um if you remember um in the last uh Workshop that we um brought to your attention that we had received a letter on September 30th from our insurance provider um that was telling us that our rates for health insurance were going up 50% um immediately we engaged Gallagher um Consultants um who's an Insurance Consultant um to do an RFP and um the results were finalized on the 26th of October unfortunately um things didn't come out much better um for there is a an attachment here that um so I think it's on page seven of uh the 50 58 pages and I can see if I can the chart of all the of all the different insurances and and trying to get as close to the deductibles that we currently have underneath um the peep program um they ranged from like a they average right around 58 to 60% increase versus the 50% that peep was giving to us they also gave us some options where if we were to increase deductibles we could drop um down um the increase but even at that the increases were still um I think we had one that was a if we increased the deductible significantly we were at like a 36 and a half% increase one gave us a 40% increase a 43% increase let me let me ask you so just reading this it sounded like the rates are high because of the amount of claims that we had and insurance companies look at how many claims you have and increase your rates so does that mean next year if we don't have any claims they'll go down potentially or but potentially yes and that's I'll kind of get to that what our philosophy is going to be moving forward into to next year right now um gagher basically has told us that the one that we currently have with peep at 50% is our best option um you know looking at all of the deductibles that are in there and so they've kind of recommended that we stay with um peep um again that final decision is is totally up to city council here but um that's the direction that they've kind of led us to and that's kind of um interesting to just kind of put a little bit of perspective onto that is that they receive no money for what they've done unless they were to actually have gotten us a different insurance company um so it definitely wasn't in their best interest you know to turn around and say Hey you know continue with where your your current provider um so I think that that speak volumes of their integrity um and the process that they ran and the recommendation is you know where you're at is is really you know kind of the best that you can possibly be at um underneath the circumstances and there was uh we had a call with them and they kind of went over all of the information there was really two factors one you've hit on and that is they do look at the claims and I always look at it it's it's like a it's like a pay as you go um and that's where the peep program how it was designed before was to eliminate that pay as you go type of piece and kind of give you a kind of the whole entire group to kind of give you a level increase from year to year and that's where in the past 12 years prior to this year or prior to 2023 that they were averaging a 3.8% annual increase um obviously things have changed um and it's it's forced them to do more of what the market is is doing the other part to it is is that um they even came out and told us our premiums that we were paying in the market were very very low so we're playing a catchup on as we look at the market we're playing a catchup um of our current rate and then on top of it in the past two years the 24 months we've had higher saying our rates are low because didn't have any claims probably previous well not that's not necessary that's not how the PE program had run in the past and the PE program did not look just as one entity by itself it looked at all of the entities together and kind of did an overall average their underwriting has changed in this for this upcoming year and now they're looking at us as an individual and part of that was is driven that they lost a number of um entities that were a part of peep that were really good performers in other words low claims um were paying more in premiums and when they went away obviously we can speculate that there's probably some Financial hurting that's going on um so this has kind of created hey you've got to change your underwriting model and it's more representative of to what the market does so our philosophy moving forward forward now is going to be that um if we go with peep that'll be um 2023 will be year two of twoyear contract with peep obviously as we've informed you that this 50% um increase allowed us to get out after this year one um if we choose to stay in we'll be in for year number two in June of next year we will engage Gallagher again and have them go out for an RFP um hopefully the claims and and some of the data I think I'll pull it up here um some of the data showed that our past year wasn't as bad as the year previous to that um so on this page here it'll it'll show you that our our loss the loss ratio in other words premiums versus claims in the past 12 months our premiums were about $536,000 our claims were $62,000 about 112% obviously if we're going up 50% um we're moving ourselves ahead of where our claim history has been even for the last 24 months where um you know it's been a 27 % you know loss ratio so if we continue our trend of of having less claims will be more attractive to the market and hopefully it it it'll it'll prove that Peep's actual insurance will go down for us too moving into 2024 that's kind of what we're thinking but if we get out with Gallagher in June then we'll have all the rfps back we'll know where we're at we'll see what peep offers us and then we can actually do a very good comparative piece and choose what is the best for the city and and meaning you know really best for our employees and at at the most reasonable cost for the city itself too were these claims uh out of our control in regards to you know were they people who are uh either laid off or took something that uh we had to pay out I guess I'm I don't know if I'm wording it right but is it something that we had no control contr over well technically we these claims are they medical claims then or yes yeah so technically we have no you know control no control over it um you know there's nothing that we could do forecast or anything no no I'm just thinking we lost you know some key employees the last few years that has nothing to do with it it's more no unless those employees were making a lot of claims in the past and then they're no longer part of our pool and then the claims go down but well let me ask you this was it uh just a couple individuals or was it a pool of and we were not given that specific information a lot of is protected by Hippa regulations so yeah um and and matter of fact we we were given information on a monthly basis um which we will not share because we certainly don't we actually have a small pool I think we have 25 individuals that are on single coverage 22 that are on family coverage um and we certainly don't want um an employee going oh I knew that you had a surgery such and such or something and then hey you're the one who's driving my premiums up and we don't want any of that and so we definitely kept even that component out of of this presentation tonight and it's really um you know the essence of it is is that we went out RFP you know I I think they originally sent this out to I think like eight insurance agencies a number of them just declined and some of the comments that they were saying we just can't compete um and so I had done with what we have can't compete with what we have with the new change right the the 50% increase yeah and because I asked that as a clarifying question I said so the information that you provided for to them in the RFP were they given what were going to be going to at that 50% increase and they can't compete to that and they said yeah and that's where yeah the market is just saying no and so bottom line is there's that one factors yeah our rates were in many ways held artificially low um Peep and which was a great program and now for a various number of reasons they've had to change their philos phos ophy and now it's causing us to to drive up and so then we actually went out to the market and the Market's saying the exact same thing that that peep so in other words peep isn't out of line um with their new uh new change and how they're doing the underwriting um so that that's not the best news in the world however this is a 50% increase and yes it's an increase for the city it's also an increase for all of our employees um we're in year one of a three-year contract the contract spells out that for um for single that the city picks up 90% of the premiums um and for family the city picks up 80% of the premiums um the impact that that that'll have um on an annual basis for our employees is that um I believe for um single that would end up being um roughly a well from an increased part to it um I think I had that in my last presentation it was like about a $290 increase on an annual basis um I did kind of a quick calculation with what our cost of living that we had agreed to with the unions for the three years that I think for single it would it would take the first like $99,000 that they make with that 3% increase to cover the increase of cost for the single coverage with the family coverage increasing significantly again for the 50% but we're covering they their uh employees are picking up 20% of it it took something like the first $54,000 that they make at that 3% increase covers the increase in in health insurance last Thursday we had um they've we've now reconvened the insurance committee which is made up of representatives from each one of our departments here in the in the city and so I um presented the information that city council received last Workshop um they did not see this information um I promis them that after or after tonight tomorrow I'll I'll disseminate this information and we'll meet with that insurance committee again on Thursday but I asked them two questions after I did the presentation and I really kind of wanted to get their sense and and feel of where they're at and first of all I I have a it was h a quite enjoyable meeting from the standpoint we had a couple of members who were on the prior Insurance committee and they have a vast amount of knowledge and know how things had worked and how we ended up getting to the peep and so it was it was a really it was a very enjoyable um meeting but I asked two questions and one one was and I asked there's outside of myself and I'm not really a member I'm more just there as an advisory role but I I kind of asked them the question of what's your initial reaction to a 50% increase and you know I got you know they were shocked uh they'd like to see the the deductions uh lower deductions at some point in time again if we lower deductions we're going to end up raising our rates even further um uh committee like the idea to work to work together um and trying to come up with some options moving into the future um again they realize that we're in a very tight time frame for this year because we have to make our decision if we were to go away from peep we have to have our decision and notification to peep by December 1 um we've got open enrollment that we've actually pushed off that we won't be starting until probably just before Thanksgiving um um they were just saying it's bad timing um especially with the inflation and the cost of living um they're uh they were very surprised that the market could do couldn't do any better um than this 50% increase probably the the biggest one that kind of hit to me was there was an individual who's on this committee who is a new employe for the city and their comment was that even though their current their past um place of employment had higher insurance premiums one of the reasons why they decided that really helped push them to come to the city of North St Paul was because of our lower premiums or lower insurance and they were really kind of shocked that if you know all a sudden I've taken the job and now you're going to tell me coming first of the year my premiums are going to increase 50% from where we're at I think I've talked about it in the time that I've been here as the finance director that you know one of the big pushes that my past employer that we were looking at um was um attraction and retention and those are the buzzword that you hear in many Industries but if we look back in the past 10 years um we've seen where the benefits that government offered to employees have changed drastically um they more they mirror the private sector in many many ways um some aren't as good as some of the private companies can can offer when I started in in government insurance insurance was was a whole different game um matter of fact I'll speak for my for myself I've locked in my health insurance for the rest of my life um that all of that was was phased out through the years um so my insurance is actually with my past employer and um I have a very comprehensive insurance um and very low um very very low deductibles and a very low um premium that I pay for for my coverage that's gone away we are now competing more than we ever have in government against the private sector and that's where my encouragement to this insurance committee is that we're not going to be able to solve it this year but that's where they need to look collectively as a group get do surveys find out what other local governments are doing what other businesses are doing find out what those contributions are that the that the employers is giving and we need to have those dialogues and workshops with the city council to see are we actually providing the best that we possibly can for our employees um employees our employees are are what makes us tick it's really what makes us extraordinary um and again you've heard me say it from day number one I've never seen customer service to the level that this city provides um we listen to every resident um we respond as quickly as we possibly can with all of that it really did hit me some of their comments so I asked one more question I asked them I said because part of our dialogue that we were having is that you know um and and there's one individual who's on the committee who's very knowledgeable and said yeah you know insurances have been going up somewhere in the range of 8 to 10% on the market on an annual basis yeah they're they're right in that ballpark so my question that I asked was that what would you with with inflation with the information that um insurance has been going up on an 8 8 to 10% on an annual basis what would you have felt comfortable and seeing as an increase and so asked all of the eight um individuals on the committee and it ranged from 10 to 20% of an increase averaged out at 15% so I'm my mind just started going through and and trying to come up with some options for city council to consider um and so I wanted to say okay what would that what would that be if the city were to you know entertain the thought of doing anou for only 2023 something that's not we're not going to set uh necessarily a little precedent does get set but not to you know look at it for 2024 what if the city were to contribute a little bit more than the the you know the 90 and the 80% so I ran some scenarios just to kind of um uh for your um you know viewing to look at so you had an idea of what that impact would be if you remember this 50% increase is going to cost the city at the 90 and 80 $197,000 total um there's about 139,000 that comes from our general fund uh 51,000 from our uh Enterprise funds and then collectively about $7,000 that come from H in in the Eda um I'm going to pass out the information I've actually kind of run it from on the bottom you'll see that it's the 50% and then their 5% increments all getting all the way to the 15% that the the committee had said is is kind of the tolerable range that that they could could be in and the in the farthest right hand column where it says overall change to the city is that incremental difference so the city's already going to have an overall impact of 197,000 this is what that incremental difference would be so every 5% that we would contribute or in other words to to offset for the employees would cost the city approximately you know $5,200 um so if we were to say hey the city will contribute a little bit more um than the 90 and the 80% that you know and to bring it down to that it would only have a 15% impact on the employees both on the single coverage and the family coverage it would cost the city an additional approximately $37,000 say that again so if the city were to contribute more than what's actually in the union contracts at this point in time so M us would have to be in agreed to by all the unions but first the city council would have to be in agreement to it if we were to say that the impact from what employees are currently paying for their premium were to only see a 15% increase in other words the city absorbing the employees additional 35 % that would be approximately a $37,000 additional $37,000 impact to the city could we afford it yes um if you if you recall you know we put in the general fund the general fund would be impacted by a total of 165,000 we put 198 that we really intention was to go to the street funds um but um I think this is something to seriously consider from the standpoint of Attraction and retention of our employees I think it also speaks volumes for this city as an organization to say hey we do realize the pain of our employees um and we want to try to help out um as best that we possibly can and I keep hearing that that new employee in the back of my head saying you know that I kind of accepted this job and here's the pre premiums and then all of a sudden unfortunately there will be here a total of about I think less than 4 months and we'll be increasing the premiums in their in their significantly um and so to me the question is is this something that the city wants to you know city council wants to entertain maybe it's not the 15 that's why I ran in in 5% increments um and something that we would think about I'm going to open it up for questions um and and not expecting all on board right away um but if there if there is interest in doing that um then there would eventually be a uh a formal adoption um not tonight um but there would be a formal adoption to to make that so and again we would end up having to have M us with all the the um unions for that too um the insurance committee knows nothing about this um this was just came out of that I came up with some options um spoke with um our city manager Brian um and we decided you know to kind of just have this dialogue and discussion especially with what's changing in the um you know the insurance market and kind of where we're at and and and kind of just your own reaction that it was pretty shocking to see a 50% increase come and and face the city some questions Council Peterson Dan is this just this one this next year that would be the intention to do it would just be we would craft up language with the the help of um the City attorney but it would just be for the 2023 um we would not have the language in for 2024 um and you know frankly we're hoping that F first it allows time for the insurance committee to get together and start to do some research and to kind of give some Alternatives see where other um uh you know private and public sectors are at with uh insurance and contributions from their employers and you know and um and make recommendations I don't want to commit us to moving beyond it's not going to be per language change um to me that's something that um really comes up at when the union contracts themselves um are up for negotiation which you know won't occur for another you know two years after yeah so it would be the language would be year specific for 2023 in light of this 50% increase that that occurred so for me you know trying to wrap my head around an increase of 50% we were getting a good deal you know last couple years or last year uh we have no no control over the market what's going on out there inflation you know is out of control uh everybody is hit hard by it uh I believe every country right now is being hit hard by it uh the policy that we have in place right now you know 80% 90% I don't know what that looks like with other cities you know where we sit with other cities uh I think that's a good uh form of uh what do you call it uh something to look at and how how do we compare with with the other cities uh the private sector is all over the board for me the private sector this is a really good de because for me I don't even come close to what what this is in my own personal line of work uh but I don't know what it's like out there with you know who are we comparing it to what uh uh what companies what private sector companies we're comparing to is it uh you know just a general broad I don't I don't know what that what that looks like uh so to me when we're Rea reacting to the market that we have no control over but I also understand the piece of us trying to keep the employees that we do have and the incentives that we have for the new employees coming in I do get that I do understand that we're in a very competitive market right now to get good employees uh I don't know if this is this might be one piece of the answers because I know insurance and probably time off are probably the two biggest things that employees are looking for uh to attract you know good employees but I don't know if uh us reacting to the market this policy that's you know 80% 90% I think that's a good incentive the way it is right now and how we react to the market I don't know if that's a good thing or Not by giving them by trying to uh keep up with the market you know with inflation uh that's something that I don't know how other government entities are doing it I don't know how private sector is doing it but I know it's a cost to all of us and we're all bearing those costs right now so those are kind of my thoughts right now just hearing this first time but I also understand you know that we're also compet comptitive and trying to get you know good employees but I also feel that this Council and you know what we've done in the past we've always been receptive to to our employees I believe that this is one piece of the puzzle but I think there's other pieces that we offer to uh our employees to make them stay here so no I I have uh mayor I absolutely agree with all of your comments and and and again there's a lot of information that you know the insurance committee is going to have to gather um and again this was just a thought um to throw it and kind of get some reactions onto it um so I thank you very much for your comments um and and it does we there's a lot of work that they have to do to so we know where things are at um council member Cole so I'll preface my statements before I make them recognizing that um I'm I am wandering into this Venture uh first really kind of first time hearing it very open-minded and I have not drawn a conclusion to to any direction I also recognize that there are those in this room whose my comments directly impact so please don't jump to conclusions when I when I ask a few qualifying questions sure um you had referenced um so the three-year contract that we have as a binding Union contract as far as the percentages are concerned um and I tried to take notes Dan as you were talking you said that the increase has an annual impact for a single person of about a $290 increase totally annually for what ballpark for what they currently pay I I believe that's did you give a dollar amount for the family piece if you did I didn't catch it um I should have I had it the last presentation um so let me it's what no um and council member Cole thank you for making that comment because my comments also I would agree you know no you're just mean well no no I I I would agree because you know it's something that we're hearing firsthand right now this is a workshop and we're just in dialogue right now and those are just comments that jumped into my head when I was making those and I you know I'm not 100% firm on them but uh but I think it's good discussion that we that we do have uh in regards to because this is a big increase MH so do you happen to have it or could we can we can move on I just no I just pulled up the PowerPoint that was for last uh Workshop so single it would have an impact of $291 annually um and for family would be $1,547 annually yeah I like your math all right um so thank you that's that's good that's good information for for me to take a look at um a lot of my comments probably mirror that of um mayor Furlong and in it's working between the public sector and the private sector I can tell you in the private sector low 70s as a percent that the insurance that that the employer is covering is good so we're a long way apart from what we're offering here to what the private sector currently offers in my multiple years of of being out there uh so first question back is 90 and 80% is that standard for the public sector I mean is that I I think I think 90 and 80 is pretty standard across the board the part that that uh enters into this dialogue isn't just insurance it's total compensation understand and his so there's been a lot of research that has been done and they'll talk about that government kind of mirrors this kind of if you look at lower classifications in government that in other words that have um lower minimum qualifications will make more than you will see in the private sector as you get into middle to lower management it'll start to equalize once you get into upper management um in more technical type of fields that government usually is lower than the private sector in those areas so part of that whole equation um that needs to be looked at is is insurance is a component that needs to be equated to what is that total compensation and how do we compare in in in aggregate especially if we start to compare ourselves to the private sector how recent is that data that's it's pretty pretty pretty recent I mean I'll give you just kind of a a a quick example um a city manager a county manager that would really be considered like a CEO of a company um obviously you're not paying anywhere near what a CEO of a company would end up getting just that's just kind of a you know quick type of piece but it has been that way and and you know I mean government has always kind of been behind a little bit you know as far as um and and rightfully so as far as compensation is concerned I think the biggest change that we've seen through the years has been Once Upon a Time government was fantastic because they did have absolutely excellent benefit packages which has has changed over time and primarily just because of the total cost um that we've seen I'm just looking at Bri is going God I'm a CEO oh boy yeah talk here so do do we know what percentage other cities are paying or do we know is that public information is that I mean is is our Union we're talking about it here so it's is our Union contract public information and can we find that information from other cities absolutely okay um that'd be one of the first things I would want to take a look at is are we are we aligned yep with with what the other cities are paying are we is it a good thing are we a bad thing we in the middle that would be that would be something I would have a question about y um and if you know just quick back of the envelope math uh9 $291 is $24 a month I would hope that an employee retention wouldn't leave for $24 a month I I hope I hope not either um it gets a little steeper on the family it's $128 a month right you feel that one a little bit more but um you know again you know I I would hope that we offer a whole lot more than they would jump for $128 a month from a benefit standpoint so I I I appreciate the the direction you come um you know we we all get hit with it um you know I think I I firmly believe we have a strong comp package because I've heard others come on board here that said one of the reasons they came here was base pay from a police standpoint was higher than that of that of other commity unities um so there's other other reasons are coming um and so we've got 47 people on an insurance program how many total staff are qualified or are Insurance eligible I think we have a a total insurance uh I think 64 I think we have 17 that are in the opt out and and am I of the recollection that we pay them to be opt out correct and what's that rate uh4 $4,800 on an annual basis 4,800 annually yes why do we do that I don't know the historic reason for that I was actually always been that way that covers your increase right there I actually don't know how that actually I to be honest with you when I came here um I was shocked at that um yeah until I had actually my employment agreement I did not even real it wasn't something that I ever asked for because I never heard about it before not only did you lock into a great rate we pay you not to take it I tell I told you way too much thanks for being transparent Dan I appreciate it is that a is that a union negotiated item I am not 100% sure I don't believe that it is in the Union contract I think that's a city um policy now if you stop and you look at it it does save it potentially can save the city money if they're all to opt in for if they all opted out at $4,800 a month I think the total the total cost for like a single coverage would end up being I think like $5,300 for the city to cover so you're saving about $500 per employee obviously in the family you're saving up a lot so if an individual Ops out you're actually saving money versus them joining your insurance program do we know why folks are opting out is it because they're getting better Insurance on their Partners plans or what have you yes yes that that is the the majority um of those 17 um um did ask a number of people and that was the reason um and um one of the individuals who sits on the on the committee um yeah um goes um on their spouse's uh plan and it has better deductibles has lower deductibles than this plan and this has been um you know something that and I you know wish the circumstances were were a little bit different from what transpired today but um our police chief um uh Phil um is is definitely sees this as an issue um with the retention and attraction for police force um the insurance benefits that are that are given um unfortunately he came from the same employer that I did um and so he knows what the insurance there was um and and in that circum an even though even though I I think it's pretty similar that I think the 9080 split is pretty much similar to what my past employer had except for the premiums are much higher and I think that's a different discussion in regards to the police department because of the uh the atmosphere the you know the the uh what's going on in the police force right now with so many people taking other jobs outside of the the police force uh uh I think Phil you know our police chief you know to get retention I think it's different than your typical employee within the city here because of the type of work that is being done within the police force kind of what I what I see yeah and I hear it all over all the cities ESP Minneapolis St Paul where I think there's I think there's so many factors I think there's just so many factors out there right now with any employment and but I mean when we're talking specifically on on police policing I I think there's so many other factors that are out there that are working against it and many of them aren't even benefits it it has to do with just kind of yeah um but um I'm not going to I I look at it is is from a a more of a risk standpoint and um our police officers are in a risky position um our fire in a risky position I still I would argue that our Public Works and our electric are in in Risky positions too for the jobs that they do so when I stop and look at that and all of a sudden now I'm looking at well I just think I've covered probably about probably more than 80% of of uh staff that's in the city um and so there was a comment and and the individual was on the police force um which kind of led me which kind of they kind of talked about their job and and um the high deductibles in case there's you know injuries outside of work or that kind of you know so forth um and um it kind of led me to to it's my own conclusion that I kind of came from it I I kind of wondered that if if I worry about what I potentially may end up having to pay out of my own pocket as a high deductible does it impact the way I perform my job that's what kind of in my mind I kind of thought about and so that's where I kind of looked at the jobs that are performed in the city I may get a paper cut you know I I mean but I don't have to put a lot of other you know I I I'm not putting myself necessarily at harm um where I think the majority there's the joke for the day I've seen your office yeah that could that could it is a dangerous office a hug but uh uh espe of those scissors that Carrie has for Red Ribbon cutting you're all using those in the city boy but that's what kind of let kind of led me to to looking at the staff here and seeing you know who who has more kind of a riskier positions than than not and where I could see that Health um Insurance the deductible side to it would have would play a more important role um than in some other types of positions I could just get add before we get too far away from that as far as the city paying out um I think the idea behind that came was well for one you have to be able to get insurance you can't just not have insurance and then get that so the idea is then clearly they have a spouse or you know that they get the insurance under so if we pay them $4,800 a year to do that um that's cheaper than having to pay $12,000 800 a year for them to be on our family coverage I think that was if I recollect properly of why they decided to pay out for that as opposed to uh not it because it was a way to save money in a roundabout way but do other cities have that and I'm not sure about that I just right and that and that is that again there's a lot of information that's that needs to be gathered and and we will try to get as much as we can yeah so so I look at I mean what's here there's not a lot we can change um I've learned a lot of things about our three-year health insurance contract through the union um from a private sector person it's incredibly lucrative but Dan I heard you loud and clear and completely understand you know what we're up against so my ask is let's figure out what the other cities are but we can't fix that that's we none of us may be here in well you but those of us those elected of us may not be here in three years to to worry about the next Union contract but it's just something to keep in mind because the the other piece too is um for multiple employers that I've been with if your spouse has insurance they won't cover you your your your partner is covered under their home policy as opposed to being allowed to come on board with with where you're at as well so that would be another question that I would have of other cities um and would that you know you're you know still stay 90 still stay 9080 um where Whoever has the best insurance would take the kids take the dependence um but that but that other partner then would be on their own insurance um you're the math guy I didn't go to math school so you'd you'd be the one that would have to run the spreadsheets to find out if there's a savings to the city of doing something like of looking at something like that as well sure so um but I went way deep on WE time I I went way deep with a bunch of questions that we can't impact until the next union negotiation but it was an interesting information so thank you for for humoring me with my questions council member W yeah um I'm also just wondering what the um contract is around um changes in wages are they on par with you know um is the ratio similar of increase in annual wages to the cost of insurance do to to the cost of insurance or how much people are people getting higher wages and then thus they can pay more or less or differently for their healthare does that make sense that makes sense and I don't have all of that information um most of the cities around our area um came in pretty close some came a little bit higher as far as cost of livings um than what was agreed to in in our contracts um and obviously there's some that are a little bit lower um but we do need to find a lot of information on what the city what other municipalities are are are providing as far as their contribution towards the insurance not necessarily just looking at it from a percentile standpoint not necessarily just a 90 and 80 but what is the dollar value that they're contributing to it um and so we'll try to gather some of that information um and you know definitely could bring it back maybe you know still this year um just for some sort of consideration um again I plan on uh disseminating the information that's in the packet to the city uh the city's Insurance committee tomorrow and then having just kind of a quick discussion and I'm just going to tell them you need to start reaching out and getting some information um and that we can kind of go back and have a conversation with the the city council but if I if I hear that we're not you know really interested in entertaining that this year if we want to wait for a union negotiation please that that's you know the message that I definitely will send too um but and and and I understand y I think part of it you know we were getting a good deal you know last year and now we're catching up how do we compare out to the other cities right are other cities paying the same amount that we are or are they all getting a good deal it sounds like we're catching up with what we should have been paying and and that is what we've got you know from Gallagher was definitely kind of saying that same type of piece and then just you know from from my own knowledge on different insurances yeah this premium here was very very low right um but again I looked at it from the just from the pure standpoint of you know I have to I have to play kind of a dual role of looking at from an employees perspective and then also looking at from the city's perspective and so I'll I'll throw out options I'm not going to make I I'm not going to sit on one that you absolutely have to do this or not but I'll I'll try to come up with an option to to solve this to me this this was an opportunity to at least raise it to make all of you aware especially after that you know um last Workshop that you know we inform you that there's a 50% increase and there's a significant cost you know that that's going to hit the city but it also hits our employees um and I I really enjoyed the conversation um that the insurance committee um had last Thursday and I thought ah you know we'll throw something out there and see where city council is at um you know I always look it doesn't hurt to ask so okay any other questions in regards to the insurance rean uh you got any questions in regards to the insurance now you know your dad pays a lot of money for you to stay healthy and the whole work so okay good stay quiet back there uh I know when my certain Sun turned was it 26 when they fall off that was his first comment when they started taking Insurance out of his paycheck was what wow thank you that's a lot of money well it it is a big deal now I mean you know insurance has gone up so much and the cost of health is you know it's astronomical so uh city manager frandle next up pepic item D is third quarter statement of Revenue expenditures and changes in fund balance for the Enterprise funds I'll turn that back over to Mr Winnick welcome Dan well well thank thank you very much he did pretty good on that first item 55 minutes I think I'm going to make it and I you know and I I'll be honest with you you know it's great discussion you know it we need to hear this and time goes by fast so and I and I I I have to I have to share I have to share a little bit of some of the dialogue that Brian and I had whether we would you know discuss this or even bring this up and one of the things that we both had said is that this council is very receptive and that we can have an open dialogue and get you know Direction and so Kudos because that doesn't always exist in a um you know in a government um so yeah so I mean yeah it was it was very good so I thank you very much for for listening to that and gave some very good insight into information that we need and and to look at that um getting back onto the budget um next um on November 15th um we'll be looking at uh potential rting change rate changes it'll be we'll be looking at the City's fees and rates um tonight we're going to be looking at the Enterprise they're the last um of the budgets that we actually um prepare for and uh just like we were looking at the internal service fund and some of the other budgets uh last Workshop the first thing they did is to kind of look at where we're standing um through the third quarter so through September 30th um on our uh six Enterprise funds electric water waste water surface water Solid Waste in fiber optics um and the electric fund um is uh you know through 3ars of the year um is uh projected to um to do better than we had budgeted um the budget was U looking at that we would actually use fund balance um right now at this point in time snapshot again things can change we're looking at being $125,000 to the positive so that's from from a budgetary talking Wastewater no electric electric okay okay yeah I thought I heard Wastewater at night I was just reading out the different funds that we had had we're in the electric fund okay so the electric fund has performed better um by approximately right now it looks like through the year about a a half a million dollars um on the better side to it uh the Water fund um um again um is performing better than from a budgetary standpoint um to the tune of about $244,000 um better um so again um we're we're looking very good from a budgetary standpoint net fund uh Wastewater um is about $103,000 less than what we had projected so but still um you know showing a positive projection for the year um but just not as strong as we were from a budgetary standpoint and then surface water is performing better um than from a budgetary standpoint to about $134,000 so we're actually doing pretty good on our on our Enterprise funds so the actual fund balance then would be that projected 1231 yes that that would be the that would be the change in the fund balance okay yeah and so you're seeing that so far all of them are positive yeah so we're we're seeing increases in the fund balance um Solid Waste um and that you know is just a little bit positive which still is good um you know means that you know we're not dipping into the fund balance to provide um the solid waste fund and that's one that you'll see when we do the financial plans not looking at making any rate changes um but we are absorbing a 3% annual increase per the contract um and we're still looking good um we've got I think two more years to that contract with uh tennis and then fiber optics obviously we're showing a positive but if you remember that has a very big negative fund balance so it'll probably take about another 25 years 30 years before that becomes a positive uh we have a a plan on that yet or are we still just yeah 25 to 30 year plan I mean is it something that uh I mean I've been dealing with it since I've been on the council and uh mayor and it just what do you do and that's exactly it I mean the plan is it's it's a long term long range plan to to to get it sorry you guys yeah we got to deal with it so are there any questions on the third quarter projections for the Enterprise funds so you're just thinking the uh the only increase we're looking at is for which one rate increases or oh I will I will get I will get to that okay yeah got it I'll get to that uh so this was was the item that was the third quarter statement of revenues expenditures and changes in fund balance um and I'll take any questions on that before we move on any questions for Dan if I could give one caveat on that is that some of these things that on a normal year we would have received these items that we had ordered it is a whole different ball game with the supply chain issues that we have right now um for example a a Transformer can be as far as two years out that you order which makes it really difficult when you're trying to develop in cities and need to give them a transformer for whatever they may be building Warehouse or an apartment complex or what have you um so clearly we have stock for something like that but we're not the only Department that's seeing it whether or not it's water did you say we do have a stockpile of Transformers or no we do we do um but you know these are issues that things that might be ordered that would have maybe normally fell under this year's budget might fall into next year or potentially even the year after so let me ask you I mean Transformers is a big deal that's a really big deal uh Exel I know has sent out a memo in regards to they are very low on Transformers and potentially some projects that are in the pipeline I think can they have them right now but anything beyond that it like you say it might be hard to get so some of these projects may not be able to happen do we have enough you're saying we do have enough train Transformers right now to car us if we have any projects to Lily building and you know any big projects that we have so that's a good example um so they won't even know what their load cations tell anybody that we like we're like we have them because yeah the uh so we won't get our load calculation from them and their Engineers until next year and that's one that tells us what size uh Transformer they need um so we take one from stock that might be oversized that you really normally wouldn't put there but hopefully it gets you by until you can order one and get one in but we have not seen this situation since I've worked here in 20 some years um we've had it to where we had uh steel issues one time when China was buying up a lot of the steel and Transformers were as far as a year out but we've never seen it like this this is unprecedented so just an update for that okay all right next item up is uh the 2023 Enterprise fund budgets turn that back over to Dan welcome Dan well thank you very much uh thank you mayor uh City Council Members um yeah so we'll go through and look at those six um budgets um you know we have uh the Water fund the water fund accounts for activities um of the city's water distribution operations we have the Wastewater fund again the activities of the city's Wastewater um processing operations the electric fund electric distrib distribution operations surface water for activities of the city surface water management operations Solid Waste which is basically Solid Waste collections operations so which we contract out um and then the fiber optics uh the Water fund um we're uh projecting and have a budget of revenues of about 2.1 million um budget of about 1.5 um should increase the fund B balance um about a half a million dollars uh significant changes changes for the services increased production of $329,000 as compared to 2022 um U the 22 budget um I think the estimate was was too low in comparison to what we're actually seeing from historically from past usages and utilizing the current rates uh the waste water fund um we're projecting revenues of about 2.4 million budget of 2.7 um that will have a decrease um in the uh fund balance um and a significant change in the budgetary side is um Capital expenditures per the capital Improvement plan so this may be a fund then when we look at the financial plans that may be looking at having a rate increase um coming into 2023 um the electric fund um has revenues projected at 11.8 million um budget of approximately 11.4 increase of fund balance of about $300,000 um significant changes that uh charges for services in the mmpa power adjustment charges have increased significant significantly the last half of 2022 um so what that does is that really shows that uh the rate is uh much higher um there's a certain comp component part of that power adjustment that's included in our rate and everything above that is then passed on to our our customers and in this past half of the year we've seen significant um charges coming out of the mmpa for that power adjustment I could add to that that is these are all fuel costs these are pass through costs of what it cost to fuel generation to get the power here um everybody's seen that it doesn't matter are rates comparable to EXL they are or uh residential they are and there's they have significant increases over the next couple of years that they've just put into the Public Utilities Commission for us or for no they don't we're not under the Pu that's uh investor owns um so for them well that's one of the you know biggest things I hear is that our rates are so much higher than XL when in fact I don't think they are but a little bit for the residential um not extensively um and we're going to see that Gap close Gap is CLO the Gap is closing okay uh surface water fund uh revenues of just under a million dollars um budget of about $836,000 we should see an increase of about $130,000 in the fund balance significant changes from 2022 is charges and services again um I think the 2022 um utilizing current rates and looking at what the usage is is a little bit lower um so we've been able to increase the estimated Revenue um on a capital or on the expenditure side we've seen increase in the capital expenditures per the capital Improvement plan of $121,000 is it because of the amount of new housing that we have we're estimating too low last year or I know I just think it it's just the the yeah the overall usage that was used um from a historical basis going into a budgetary piece I've relooked at everything um and you can see the trend has been the usage is more than what it what it was last yeah that we used in our projection yep and then the solid waste fund you can see is um you know pretty close but we should have a a you know use of fund balance of about from a budgetary standpoint of about $54,000 again the significant change to there is that the vendor charges will be increasing 3% per contract but there's no intent of raising that rate um you know that's part of you know it's accumulated fund balance um for the solid waste and that we utilize that fund balance for that prior to it so from a and then the whole um then the fiber optic again you know it's on a 25 to 30e plan to to make itself healthy um it'll have a increase in fund balance of about $100,000 there really is no significant changes whatsoever to the budget it's we've got a pretty set group of users um and our costs are pretty pretty pretty close to what they are they get a little annual increase um but and so then there's actually line items that I have attached for for for all of you to look at if you have any questions with any of the Enterprise funds um I will take those now and then we're going to kind of look at which kind of prepares us for next um City council's meeting when we're actually going to be you know potentially having a discussion on what are the proposed rate and fee changes um um that'll be coming into the city the financial plan kind of gives us an indication of where we should are or should be looking hard at increasing and changing um and I introduced that financial plan that 10-year financial plan back early on in the budget process um both for the general fund and for Enterprise funds and so we'll take a look um next if there's no other questions of where the um Enterprise funds are looking um I did make one adjustment and it's highlighted on on the pages that I took the projected year end fund balance changes and inserted them into the financial plans um because it's a living document um that's going to change all the time so and again it'll get adjusted um when we do end up closing out the books um for the year um and so when first I'll take any questions on the actual Enterprise budgets if there's something that specifically that you want to talk about or discuss on the budgets before we go into the financial plans the question I have is the uh uh Solid Waste are we negotiate renegotiating with uh our haulers soon or is that uh yeah yeah I think yeah my qualifying question is what year of we are on what number of your contracts with them I can't remember I believe 2023 will be year four of the contract so we have I think one more year okay thank you that was my question okay so we are to expect 3% and 3% yeah that's the their yeah that's what's in the contract they've already asked for it for 20123 and they gave their rates I I checked them and and there three exactly 3% increases yeah any other questions okay you see on the electric fund it's like um there it talks about contractual Services um what kind of services do we don't so we don't do any of those inhouse they're all good question because it's for the contractual services for the electric fund is that for like Home Depot or uh excuse me who we contract out for to do any work for us it would have to be uh a contractor that might come in and bore in conduit for us or a contractor that would come in and do some substation work otherwise we do all of our other work as far as contract work goes so the contractual services for the electri fund really significantly the majority of the dollars are really for um for the purchase of the power itself yeah oh sorry yeah okay okay thank you for that clarification that's why there's a $1.2 million increase that's why there's a 1.2 all right yeah any other questions not uh move on all right last item up is uh Enterprise funds Financial plans and I'll turn it back to Mr a different jacket Danner or something I think I'm going to take the tie off yeah so I I I think back on August 23rd um and in on September 7th I had presented Financial plans um kind of giving giving us an idea and again um used a a model that the city had contracted for a number of years back um and uh kind of CH uh changed the assumptions a little bit um I think they were being a little bit too aggressive um and having too big of a fund balance and I told you my my changes that I had made onto that so really I'm we're taking another look at that and really the significant change here that happens in there is is what's highlighted in the change of of net position which just came from those projections for year end so if we look at the water fund um even though it's perform ing very very well um to to maintain a um you know a to hit the the minimum Target of working capital um which is on the very bottom of the spreadsheet highlighted in blue and there's an over and under targeting obviously we're in a great position right now but it's one of those that if you don't start making some sort of changes then you're going to have horrendous increases somewhere down the road um so so for 2023 my suggestion is we don't have a rate increase for the water fund but beginning in 2024 we start to have small incremental increases so we don't have to have a big huge huge jump um and again these are subject to change I know council member Thon had brought up you know we we do we do a budget on an annual basis um but there's nothing wrong with projecting outwards to see where we're going to be and again just like this highlighted section in here the as the year goes by and when a year completes we're going to update those numbers um with how we actually performed so right now I'm not anticipating it nor will I be making a recommendation that we do change the the water fund for U rate for 2023 um Wastewater um as you saw that you know we're not performing all that well uh the budget is actually showing the use of fund balance um and so that one really is in line for a rate increase and trying to have kind of more of a a stagnant or a constant increase Through The Years my recommendation for 2023 would be to have a 2.75% rate increase um for um the waste water for the electric fund um where we stand right now and um and uh city manager um frandle if you want to jump in on the the electric side we haven't received yet um what their um energy cost changes could will be um but um um the city manager and myself have had some discussions um just because of where we're at with our Levy increase um we will have some proposed rate increases on some of our Enterprise funds or maybe some other rates that'll that'll be changed um department heads are looking at them currently um to get those prepared that um no matter unless there's a significant significant increase um if it's only in the 2 to 3% range we would just not recommend an increase in 2023 but then we would have to look at increases coming up in the future years no increase electric fund at this time at this time yeah well that doesn't um cancel that out there's potential so can out they yeah when they when you get closer to the end of the year and they have a better idea of final numbers um you can get it kind of closer but uh probably in July they had brought up about a 5% um that has come down a little bit so we're hoping that it's going to be more in the 34 and then but what we potentially looking at and that we've talked about is maybe doing a one or two% increase even if it is that but we don't have set numbers yet we don't have to set those until the end of the year yeah we'll we'll um we'll have a discussion next workshop and then obviously there has to be a public hearing that goes with that and last year we did it at the same time that we approved the overall budget um and so they go into effect um the first of the year so yeah we still have some time to be able to and last year um we found out the electric numbers pretty much at towards I think middle half to later part of November I mean do we do we hedge do we go up a point and a half in anticipation we can always roll it back the following year or we can always roll it back if rates don't come in but from a planning standpoint we certainly can do that I mean I love the zero but is the zero realistic I've been listening to you it sounds like there's something coming we just don't know what it is right and to look at what impact it will be and kind of make our judgment from there but either way it'd probably be small uh 1 to 2% Maybe maybe we can absorb we can fully absorb that then without having to pass anything if we don't plan for it well I'm saying uh one to possibly 2% increase if that's a 4% increase from wholesale um we could get by with that um if we had to so we're narrowing those numbers down and the probably next council meeting or after that we'll we'll have those numbers for you but clearly you don't want to do nothing and then turn around to a 510 that's what I'm saying for sure you just plan in a small percentage now indeed it's a strategy for the surface water um we're looking very good um that in 2023 we would not have to have a rate increase and then we would look at just small 1% increases uh the years after and again you know based upon how we actually perform you know those can change but we'll be looking at those from the information we have right now and then Solid Waste um so basically through the remainder of the contract we would uh not do a rate increase you know and then after that there will be a rate increase but so much of it depends on what the contract looks like at that point in time so I think we just wait till um you know we're in 2024 and we're actually negotiating that contract you know whether it's an RFP or whatever it is um for services and then there's nothing that we'll do with that fiber optics fund we keep the rates the same well a lot of a lot of agreements we have are are very long-term um agreements so yeah there's not a lot that we can we can do with them so actually for the Enterprise funds with you know cost of in you know uh you know inflation and everything they're actually performing very well um and they're doing a very good job and so if we do see some some rate increases um you know we're really looking at um you know the electric uh to some you know maybe a percent percent and a half um you know Wastewater is probably going to be the biggest one you know with about a two and a two and 3/4% increase does make a big difference I mean with people's budgets absolutely so yeah and uh so yeah so we're actually those are performing and looking pretty good right now this never ceases to a maze as it cost more money to get the water out than it does to get the water [Laughter] in I'm not [Laughter] commenting so I think I have approximately three more minutes and we have to wrap this up up so I'll take any other questions any question for Dan in regards to the the funds I think I hit my quota thank you yeah I do like the uh projections really helps with the planning yeah and I mean I I just look at it as trying to keep the if there's going to be increases to keep them as low as possible and kind of you know on an annual basis versus waiting and having some huge increase and if we perform better they may end up going away the next year if they're a lower part of increase but if you don't get them early then you're forcing yourself to Big increases later on harder to it's harder to get caught up all right any other questions for Dan city manager frandle nothing further okay any other comments Dan or you're good just a pleasure once again to to present in front of this group and I really do enjoy the dialogue and the questions um because it gives me different Insight um all the time so I thank you very much for for your time and and the open dialogue thank you motion to adjourn so moved move by council member Wong second second by council member Cole any discussion not all those in fav favor signify by saying I I we are adjourned for a few minutes e e e e e e e e e for