OPENING Mayor Hellar called the special workshop of the city council to order on Wednesday, February 25, 2009 at 5:00 p.m. in the council chambers at City Hall, 1123 Lake.
ROLL CALL Council members Boge, Newton, Logan and Reuter were present. Council members Hawkins and Snedden were absent.
EMPLOYEE BENEFITS
Councilwoman Newton submitted two different insurance proposals where everyone would pay the same percentage against their premium. She provided a proposal of 15% based on that the current highest percentage paid is 14.16% by an employee with two or more children and no spouse. She referred to the employee survey with a suggestion that the city look at what others are doing and where 29% of the employees stated that city council shouldn’t be receiving insurance benefits. She said she talked with the payroll clerk in Post Falls where elected official receive insurance benefits. She said the City of Post Falls employees pay $25 per month for single employees and couples and those who have more dependents pay $35 per month. She said their deductible is $1,500 per person or $3,000 per family per year. She noted they are on the VEBA program with the city paying $200 to $300 per month into the employee VEBA accounts with an approximate annual cost of $39,000 per month. She stated that the City of Ponderay has nine employees and that their city council members’ insurance is paid by the City. She said the elected officials in Priest River are eligible for the same benefits but that the City doesn’t pay for the premiums. She suggested looking at an equitable basis based on the percentage. She said she listened to the President’s speech last night, which would provide citizens with a tax break of $7.00 to $15 per week. She said with her proposal, those tax savings would almost pay for the difference for each one currently covered on insurance.
City Treasurer Shannon Syth stated that a proposal was brought forward to city council during the budget process last year that would reduce the City’s premium of 5% to 10% as well as six other options. She said the city council wanted this matter to be open for discussion with employees before picking a plan. She noted that the employee survey results demonstrated that 38 employees felt that the amount of employee contributions should be based on the number of family members covered and that 27 employees would accept a higher deductible to keep the premium as low as possible. She noted that 21 employees were willing to pay a higher premium and keep the same out of pocket deductible. She also said that employees didn’t want to participate on their own contribution but were willing for dependents. She noted that she would have new rates next week that could help select a plan that could offer savings and would be amenable to what employees wanted.
City of Sandpoint employee Chris Wood responded that the City of Moscow doesn’t provide health care to city council members. He stressed that the health care costs should be fair and equitable and noted Councilwoman Newton’s proposal was not fair for 90% of the work force. He stated that based on the information in the public works department, out of 19 employees, 63% would see the largest increase for those who have employee/spouse coverage and 10.5% would see a reduction based on 12%. Councilwoman Newton noted there are 18 employees receiving insurance coverage as a single employee including elected officials and with 15% there would an annual savings of $7,834.32 to the City. She said this would provide flexibility in the general fund.
City of Sandpoint employee Aaron Seck asked why the city council was only looking at employee wages and benefits when making cuts in the budget. He asked what certain amount the city council wanted to save. Shannon Syth explained council wanted to look at different plans to see ways of reducing premiums by 5% or 10% and decided they wanted to wait to survey employees. She stated just because there is a balanced budget doesn’t mean the City will receive the sales tax revenue or the resort city tax as budgeted. She said we have to watch where expenditures go and a new insurance plan would be effective June 1st but only if city council acts upon it. Mayor Hellar explained that elected officials will also look at what capital projects will be cut or reduced. She told the employees they were welcome to attend budget workshops. Aaron Seck raised concern that it would not be justified to take a federal tax break away from employees when they hadn’t received it yet. He stated that it wasn’t appropriate to base the federal tax break to be spent on employee insurance premiums. Councilwoman Logan noted that during last year’s budget process, city council decided to look at employee benefits and decided not to look at an increase in costs to employee. She said the reason for the delay was to review during this year’s budget process for better information and a plan that everyone would agree upon. Councilman Reuter noted there was a concern that health care costs would increase 3% per year. He said if health care costs increase, they have to have a plan in place and should not be a recession triggered process as the City’s tax base is fairly stable. He felt there needed to be a better system related with health care costs that was predictable and reliable. He said there should be consideration as to what part of the benefits are important and least damaging for everyone. He said the only way to cut health care costs was to reduce them.
City of Sandpoint employee Pam Mulligan stated that if city council agreed, she felt that it would best to schedule budget workshops in the evening so that the employees would have an opportunity to attend. She requested looking at all employee benefits during the budget workshops and felt it premature looking at insurance benefits until the proposals were brought forward. Chris Wood stated the 60 day rule went into effect when the Councilwoman Newton’s proposal was brought forward at the December 4, 2008 city council workshop. He said the employees had concern that when a proposal was brought forward increasing vacation leave, another proposal was brought forward to eliminate personal leave days. Councilwoman Newton noted that the vacation requested was increased and granted. Councilman Reuter noted that a majority of council approved holding off on altering employee benefits until there was an opportunity to discuss all employee benefits between city council and employees with Councilwoman Newton absent from that meeting.
City of Sandpoint employee Jason Wiley stated that the employees weren’t against the employee survey but looked at the survey as an actionary tool for city council. Councilwoman Newton pointed out that when there was review of employee benefits, she was the only one who provided a proposal. Chris Wood noted that the insurance policy expires in June with the need to wait to review the proposals before considering Councilwoman Newton’s proposal. Pam Mulligan stressed the need to wait to review Taylor Insurance’s proposals and to look at the deductibles. She said that there needed to be more equity.
Shannon Syth pointed out that there are only two employees who have employee with three children coverage. Councilman Boge suggested taking into account that the more people added to a department, the more financial impact it will be to the department. He suggested structuring each job in order to make each department efficient. Councilwoman Newton stated that she was no longer considering her prior proposal to base insurance premium percentages on employee incomes.
City of Sandpoint employee Christine Parsley approved Councilwoman Newton’s proposal based on a percentage of the premium. She said she could add another dependent to her insurance coverage and wouldn’t cost her more but would cost the city more. She said if the City chooses to keep the budget the same, then figure what percentage the employees would pay. She stressed the current system is not equitable.
Shannon Syth pointed out that the city has low premiums compared with other entities. She said the wage analysis survey in 2006, demonstrated the average premiums for employees from the other entities was $309 per month, with our premium at $197 per month. She said, according to the survey, the average family premium was $709 per month with the city’s premium at $488. She noted that everyone’s insurance had increased but that the city has managed their insurance program quite well. Councilwoman Newton said there was a need to accommodate more employees so that they can attend the budget workshops. She explained that savings in the public works department doesn’t affect the general fund because those funds can’t intermingle. Shannon Syth explained there are restrictive revenues based on Idaho Statute. She reminded everyone that if a city council member chooses to add a dependent, they pay the premium out of their pocket. Councilwoman Newton didn’t suggest that her proposal be on the March 18, 2009 city council meeting if there was no consensus. She clarified she would bring her proposal for discussion to the budget process. She said she wouldn’t withdraw her proposal, and would probably discuss the matter during the budget process. She noted she was the only council member who brought ideas to the table.
Shannon Syth explained that the city would have an additional liability of $16,000 to the financial statement if leave benefits were consolidated. She said there would have to be a determination as to what’s paid when an employee leaves. Councilwoman Logan stated that she was in favor of eliminating emergency leave. She was interested with incorporating personal leave days with vacation leave so the employees could use three of their vacation days as personal leave days. Councilman Boge suggested eliminating or restricting emergency leave days. He responded that he had no feeling about personal leave days. Mayor Hellar stated she was not in favor of eliminating personal leave days. Councilman Reuter stated he was against eliminating personal leave days. He said new employees could utilize personal leave days so that they wouldn’t abuse sick leave.
Councilwoman Newton suggested eliminating emergency leave, and the need to look at sick leave. She stated there is no maximum on sick leave and would like to see a cap such as at the 15 year mark. She referred to the fire department that has a cap on their sick leave that if they use a day of sick leave, the next month they earn it back and can stay at the cap. She suggested not having personal leave days for anyone hired after January 1st retroactively and to phase out personal leave days in exchange with additional vacation time already given over a five or ten year period. She proposed that the first employment would be allowed to have 96 vacation hours, not 48 hours, as it was necessary for recruitment. She said a two week minimum should be offered to new employees. Shannon Syth noted there is a huge liability for department heads when an employee is gone on sick leave for a substantial amount of time. She noted that a Bonner County employee was gone for eight months because of an automobile accident and because a governmental entity has a strict budget, they couldn’t employ someone else. Joan Bramblee suggested that if a cap is implemented, to redirect those hours into the sick leave bank.
Chris Wood noted Councilwoman Newton’s proposal taking away the personal leave days in lieu of vacation days that three days of vacation would be taken away from the employees who have worked one to five years. He noted one of the ways that recruited him to work for the City of Sandpoint, was the benefit package. Shannon Syth noted that there is no financial impact to the City with personal leave days. She stated the personal leave days are a planned event which allows each department head to be prepared when the employee is gone.
Mayor Hellar said the four day a week schedule wouldn’t apply to public safety or those departments who had to be in operation seven days a week. Councilwoman Logan said she would be interested in looking at it if a cost savings could be projected. She questioned how it would impact productivity on a four day a week schedule. Councilman Boge said he was open to the idea but suggested looking at the best day for City Hall to be closed, the benefits, and the cost savings. Mayor Hellar favored the idea because it would be more convenient for citizens but to consider the start up and shut down time involved. Councilman Reuter opposed the idea as there would be a loss in productivity. Councilwoman Newton stated that she spoke with the City of Ponderay who has a four day a week schedule with the employees not liking the new schedule, did not see a cost savings and that they received complaints from businesses.
City Clerk Maree Peck read a memo reflecting the research she conducted on the consideration of City Hall open four days a week. She stated the City of Ponderay had no calculations as to what savings they had since they implemented a four day a week schedule last fall. She reviewed the report on the State of Utah that implemented a four day a week schedule last summer with the public warming to the idea. She said the City of Birmingham, Alabama adopted a rotating four day work week but experienced challenges with no energy savings. She said that the City of Blackfoot, Idaho went to a four day a week schedule January 1, 2009 and was not sure of what the savings will be but didn’t anticipate a large savings. She said the Cities of Plummer, Lapwai, and Moscow have been considering a four day a week schedule but hadn’t made a decision to date. Councilman Boge stated that the closing time could change to a later time to accommodate citizens.
Shannon Syth reported that the State of Utah received the most complaints on this particular issue. Councilwoman Logan said she would like to have estimates from Avista on utility savings for the City. Joan Bramblee preferred that City Hall be open five days a week because she has a long commute back and forth to work especially during the winter months. She said she was employed with Kootenai County who had a four day a work week schedule for employees but had a rotating schedule so that the office would be open five days a week. She said they weren’t open for the public during later hours which allowed more work productivity. She said they handled holidays by having a reduced schedule during that week. She said the reason Kootenai County went with a four day a week schedule was to increase work productivity. The city clerk was instructed to distribute her report to the city council and department heads. The public works department employees stated they work four day work week during the summer only but that there is still a five day a week operation.
Shannon Syth stated that in 2006, the City contracted with BDPA to create a new wage plan for the City and that administrative guidelines were provided to department heads on how to administer the new wage grid. She said annually BDPA surveys the same entities for the market adjustment to keep the city’s wages compatible. She said the entire pay grid adjusts to the market adjustment with the adjustment raised to 2.5% last October. She said a performance evaluation is conducted annually for each employee that explains the expectations. She said their performance pay increases based on whether they meet specific expectations of their job requirements. She said the employees are evaluated at performance levels such as exceptional performance, outstanding performance, fully acceptable performance, needs improvement, and fails to meet expectations. She said if an employee is fully competent and falls into the Steps A-E, the employee would receive a market adjustment plus a step increase. If an employee is fully competent and is at market, they would only receive a market adjustment. She said if an employee is fully competent within the open range, they would receive a percentage less than the market adjustment as they were already at market. She noted it takes an employee five to six years from the beginning to reach market which means they become fully competent and would stay at market unless they were outstanding or exceptional employee.
Councilman Reuter opposed cutting positions or decreasing salaries as it was not an option. He said he wouldn’t cut the budget last year in terms of the property tax revenue. Councilman Boge concurred but suggested looking at cutting costs elsewhere. Shannon Syth explained that the old wage plan took an employee to 13 steps that was the maximum wage an employee could receive. She said that BDPA included several entities in the survey as well as the private industry but noted that not all of the entities responded to the survey. She noted that if the City utilized a Cost of Living Increase (COLA) it would have been 4.5% last fall. Councilwoman Newton referred to the employee survey with a suggestion to freeze the merit increases but not freeze the market adjustment. Shannon Syth said this could be implemented but that the market adjustment would still occur. Councilwoman Newton asked Shannon Syth to provide the calculations that would show those figures reflecting the freeze for pay for performance wages but still allowing the market adjustment.
Mayor Hellar raised concern with the overreaction from the employees with the budget as the city’s budget has a huge difference with the private industry. She said the demand for City services were not going to drop and would be destructive to have a reduction in staff or cut employee wages. Councilwoman Newton noted that the City has never cut employee wages. Councilman Boge said that he had no faith in department heads when evaluating employees as it was a political game for them. He noted that employees have bad moral with the benefits they currently have and that department heads weren’t realistic with employees on their job performance. He noted that in years past, 95% of the employees received a wage increase. He said there should be incentives to those employees who were performing their expectations. He stressed that there needed to be more education on department heads properly
implementing employee evaluations or the mayor needed to be involved.
City of Sandpoint employee Kami Omodt stated that the new performance evaluation program raised the bar for employees. Pam Mulligan explained that during the performance evaluation, the employees have to do a self evaluation and need to meet the goals from last year. She said not trusting the department heads to conduct the performance evaluations was undermining the authority given to department heads. Councilman Boge commented that the previous plan didn’t work. Shannon Syth said the performance evaluation was detailed and challenged council to come to her office to review the procedure. Chris Wood commented that it was difficult to move up the grid based on the expectations of your job performance. Jason Wiley commented there was extensive work done by department heads to make sure the job descriptions specifically reflected job expectations for all employees. Shannon Syth commented that each employee has specific duties and that the City has good employees with high expectations of them.
City of Sandpoint employee Stephen Drinkard said his only concern with the pay for performance criteria was by which employees are judged. He believed there could be a better job of creating a valuable tool. He felt the system could be improved. Shannon Syth explained a criteria was set on a value of each employee such as on their customer service both internally and externally. She said the department heads are required to define other criteria for the evaluations for each specific job. She noted that the current wage program is much better than the previous wage plan. Jason Wiley stated the employees did have input with the criteria for the pay for performance evaluations.
Mayor Hellar stated communication is very important. She repeated that during these economic times, the City would have to provide the services more compassionately because it’s what the citizens need. Shannon Syth stated that she forwarded information to city council on the financial crisis situation. Councilman Reuter added that other council members have communicated to him with remarks that were notable of what employees have done.
ADJOURNMENT The special workshop adjourned at 7:10 p.m.
Gretchen A. Hellar, Mayor
ATTEST:
Maree Peck, City Clerk
