July 14, 2021 Special Commission Meeting Minutes
GOODLAND CITY COMMISSION
Special Commission Meeting
July 14, 2021 5:00 P.M.
Mayor John Garcia called the meeting to order with Vice-Mayor Jay Dee Brumbaugh, Commissioner J. J. Howard and Commissioner Gary Farris responding to roll call. Commissioner Aaron Thompson was reported absent.
Also present from the City were Dustin Bedore – Director of Electric Utilities, Frank Hayes – Police Chief, Neal Thornburg – Director of Water and Wastewater, Mary Volk – City Clerk and Cherise Tieben – Interim City Manager.
Mayor Garcia led Pledge of Allegiance
- Approval of Staff Direction for FY 2022 Budget – Cherise stated, I have provided the Commission documentation of questions I have been asked about budget. The way governmental accounting works and the State budget report, it is tough because it does not reflect cash balance. The 2022 budget has $982,254 budgeted for health insurance. This is budgeted, it does not mean you are spending it. This is a difficult number to project with employee changes from vacancies and plan changes. There is also the fact the policy renews March 1 so have two years of premiums to take into effect. The Commission has premium information for each policy and the number of employees for each policy. We budgeted an 8% increase in benefit. Commissioner Thompson suggested the police vehicle be moved to MERF which we have done and ask for maintenance documentation on vehicles. By moving to MERF he will not lose money at the end of year. I recommend and believe you need to replace the vehicle. I was asked to put a list of pros and cons for RNR legislation. I do not think one governmental entity should tell another governmental entity how to work. The legislature believes that any growth in valuation results in less taxes and that transparency needs to be improved. This year notices are not mailed to citizens home, only require publication of hearing in paper. My list of cons involve risks the City is taking if comply with RNR. Eventually services would need to be eliminated. I speculate this law will affect rate for your GO bonds, because of reliance on ad-valorem. One commission issues bonds and the next has to live with RNR and may not be able to fund. The cash basis law comes into effect and you are binding future commissions. The State will probably disagree because they set the law. That is why cities have cash basis law. I understand sometimes need to do because politically it would be right thing to do. There are concerns what the economic development money is used for; Julica will be at meeting Monday. The Building Inspector position is a result of fire merger and the City loses the certified official when fire merger goes into effect. I would like to find someone for 30 hours a week but not confident will happen. Vice-Mayor Brumbaugh asked, is there enough work for a full time employee? If not, can they help out in another department? Cherise stated, your Code Enforcement officer offered to help in other departments to help budgets. Both positions are year around services. They spend a lot of time training to keep updated on codes. Your building demolition is defined in Building Inspection budget professional services. Since you do not have a plan for funds and they are subject to budget law, we are checking to see if they can be moved to reserve for home rehabilitation projects. If possible it would be excellent program to build reserves. Vice-Mayor Brumbaugh asked, with the RNR and cash basis laws, if we comply and decide in future years cannot meet rate, is the City bound? Cherise stated, yes unless commission opts out of RNR. If opt out in future years, each parcel will get letter with notice of change. The law paints future commissions in a corner and have to go through process if cannot meet RNR. The impact builds up over years and it becomes incredibly difficult. The political side of law looks good but practicality to manage is difficult. Puts future commissions in a difficult position. Year to year you do not have to comply. Commissioner Howard stated, every year we will have to vote whether or not to comply. Vice-Mayor Brumbaugh asked, what is process in year two or three if need to increase taxes? Cherise stated, you notify county that you are not complying and they send out letter to each parcel. You are a growing community and valuation will go up. Legislation considered homes in existence, not future growth with increased costs for infrastructure. These increased costs have to be assessed to tax payer. That is reason some municipalities increased mill a few years ago. Vice-Mayor Brumbaugh asked, are there unknowns out there with law with this being first year? Cherise stated, the unknown is valuation amount. May decide to comply with RNR, but I still recommend conduct RNR hearing in event there is change to final valuation. If you stick with recommendation to keep mill flat, you will do RNR hearing. With only two no votes on law, the State will not change law because it does not affect them. This was a political move. If the Commission decides to comply will have to reduce budget $42,389, but the county, state and other municipalities are saying to conduct RNR hearing to be protected. If commission decides to reduce budget, I have provided following options for consideration:
a) Cut 1% from the 8% budget increase in health insurance premium, but direct staff to reduce plan costs to 5%. This will leave gap for opportunities to offer incentives for employees like HSA with an amended plan. That is how Dodge City made change to give employees assistance with increased deductibles. This provides wiggle room to amend plan.
b) Move salary survey to 2021 and pay from vacancies.
c) Remove the parktruck reserve. In Dodge City we had utility funds that had additional money to purchase equipment, then move the older vehicle to park department.
d) Remove cemetery land purchase and plan for it down the road. Look for an opportunity to include purchase in a bond project and finance.
e) For remaining, either reduce health insurance an additional ¼% or reduce donations to amount needed.
These changes will get you to RNR. I do not recommend cutting the police vehicle. Either way I recommend you have the RNR hearing. I talked to Colby, their intent is to comply but they have a decline in valuation. Scott City is not complying because of circumstances they cannot control. They are raising the mill levy. Staff needs directions to be ready for meeting Monday as have to let County know by Tuesday. Vice-Mayor Brumbaugh stated, I went away from Monday’s meeting hung up on RNR and trying to wrap mind around it. I keep coming back to idea we are so close in the scheme of things to get to RNR. We had to assess fees with weather event so feel need to comply first year. I feel we are able to fund everything else and benefits are staying same. Cherise stated, no benefits are reduced 3%. You will have to change your plan to comply with budget because you are not funding option you have now. The 8% is the current plan. By reducing to 5%, the plan will have to change. Vice-Mayor Brumbaugh asked, what about money in self-funding account? Cherise stated, it’s used for self-funding. Vice-Mayor Brumbaugh stated, we do not have the numbers so it is a guess since cannot approve budget and renew insurance at same time. If we keep insurance down the road and it is not funded, it will have to come from payroll deductions. Cherise stated, that is why I highly recommend the benefit committee and see what options they can come up with, it gives you flexibility. That way the commission does not get into the plan design. You give staff a number not to exceed. It keeps the policy more stable. Mayor Garcia asked, are you recommending 5%? Cherise stated, that is what Dodge City did, but it is commissions policy. If that is what you choose, no matter what you do, you are dropping to the 5% to use the 1 to 2% to establish the HSA’s. Our commission chose to do it three years in a row, this budget is a one time commitment. You are dropping the employee benefit, but providing benefit of HSA. Mayor Garcia asked, did employees match amount? Cherise stated, yes but only employees that took high deductible option got HSA benefit. It is confusing but you are getting to where you want to get reduction in benefit and making first year less painful with donation to HSA. Right now you need to decide what number you want staff to work within. Vice-Mayor Brumbaugh stated, all my questions are answered. I needed to understand RNR but not thrilled with Building Inspection situation. Cherise stated, I do not recommend the police salary proposal be in effect right away. You need to leave the money in the budget but do not implement until salary survey is done. The survey will include employee benefits. Mayor Garcia stated, I feel we have good staff that deal with the budget in place. What happens if survey says an employee is paid too much? Are you going to tell them you are paying them less? Commissioner Howard stated, no. Mayor Garcia stated, we compensate them for what they are worth. Cherise stated, we had that in some positions compared to other areas. The employee wage sat at that rate until the schedule got caught up. They may get a cost of living adjustment, but that is all. Vice-Mayor Brumbaugh stated, I want the City Manager to get employees we need, sometimes it is outside scale. Cherise stated, we saw that with police and fire; you will have the same with utilities. We revamped pay, classes and job description while committing to establish a number in COLA index. You have to continue to change COLA index. You need to commit to a survey every three to five years to maintain an updated plan. I highly recommend you do not put a ten year gap between surveys. Mayor Garcia asked, who will be doing survey? Cherise stated, it will be an RFP. Mayor Garcia stated, I recommend you stay on to see RFP through for employees as a consultant. Cherise stated, I will complete process. Vice-Mayor Brumbaugh stated, I feel for first year we need to comply with RNR process to see how it works out and go through the meeting process to ensure we are covered. Mayor Garcia stated, the Commission has the challenge to stabilize everything for the employees and citizens. It is a juggling act. I talked to neighboring communities and the League of Kansas Municipalities. The League of Kansas Municipalities recommend we have the RNR hearing because of estimated valuation and not knowing final valuation until October. I support never cutting staff or services but recommend Commission watch equipment purchases. Cherise stated, so I understand you want to comply with RNR and have RNR hearing. Vice-Mayor Brumbaugh stated, yes for protection with final valuation. Commissioner Howard stated, I am not in favor of complying, it has been recommended to remain flat and I am not in favor of cuts. We will also need hearing with flat rate. Cherise stated, if you are complying, you need to decide what you are cutting from proposed budget. ON A MOTION by Vice-Mayor Brumbaugh to direct staff to prepare 2022 budget document to comply with RNR, resulting in a $42,389 reduction in expenses and proceed with RNR hearing to cover final valuation numbers. I recommend cuts previously presented in items a – e, with remaining cut in e from reduction in donations. Seconded by Commissioner Farris. MOTION carried on a VOTE of 3-1, with Commissioner Howard casting the dissenting vote.
ADJOURNMENT WAS HAD ON A MOTION Commissioner Farris seconded by Vice-Mayor Brumbaugh. Motion carried by unanimous VOTE, meeting Adjourned at 6:12 p.m.
ATTEST: John Garcia, Mayor
Mary P. Volk, City Clerk