Loading...
HomeMy WebLinkAbout2008-11-17 Finance Committee Minutes FINANCE COMMITTEE November 17, 2008 Minutes Councilor Attendance: Stone, Blanchette, Bronson, Nealley, Gratwick, Wheeler Staff Attendance: Cyr, Hupp, Barrett, Farrar, Wardwell Others: Jim Higgins and Fred Brewer 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda. a. Workout Agreement – Makridis – 93 Center Street 2. Bids/Purchasing a. Building 457 Insulation – BIA – Standard Waterproofing - $64,500 Cyr said bids were issued for Building 457 which is the old repair station hangar which is next to the terminal. It currently has no insulation. These improvements along with others are being made in exchange for a lease extension with Sargent Corporation, which is on the upcoming TIC agenda. The budgeted balance is $158,000 which is for renovations of Building 457 in total. It is not just for the insulation piece. A passenger entry door and some upgraded security measures will also be done as well as some new windows and replacement of the bifold hangar door replacement. For a return on investment analysis, Cyr said there was an estimated $194,000 to be put into the building and the costs would be recovered over the next 4.77 years if the lease amendment is approved at the TIC committee meeting. Three bids were received and the recommendation is to award it to Standard Waterproofing of Waterville, Maine, the low bidder, at $64,500. Responding to Bronson, Hupp said the term of the extension of the lease is for two years. Nealley asked about the upgraded security improvements and asked if it might attract federal funds or grant monies. Hupp said that security projects and upgrades are eligible for federal funds but not in this particular case as this is a leased hangar. The security measures in this case are changing out locks. Responding to Gratwick, Hupp said that if Sargent vacated the premises during the agreement that it would not necessarily mean that another tenant would step in. She did note that Sargent is comparing this option with another option. Stone asked if a bond is required. Cyr said there is a performance bond on all of the City’s construction in large dollar items contracts. Bronson said he assumed the work would not be done on Building 457 until Sargent has indicated they will stay at BIA. Hupp said they have agreed to a two year lease option providing that the City completes the improvements. Blanchette noted that the airport needs to build up its rental income in light of the aviation industry’s economic future. Responding to Blanchette, Cyr stated that the item coming before TIC is to approve the lease extension agreement. The bifold doors haven’t yet been bid out at this point. Unique pieces are usually bid separately because there are different vendors who would bid on waterproofing versus bifold doors, as an example. An overall construction project would be bid at one time. Barrett said the amount for this project was included in the Airport’s annual operating budget and reviewed and approved by full Council in the budget process. Blanchette stated that the City has recently gone through a bid process for doors for the Fire Department. She asked if the City is combining its bidding power with doors. Cyr said these are hangar doors versus just the overhead doors. Due to maintenance issues, the Fire Department could not wait to bid doors for Central Fire at the same time it would bid for the new Station 6 doors. Hupp notes that the lease extension will go to full Council for final approval. A motion was made and seconded to approve staff recommendation. Pursuant to a question by Blanchette, Councilor Gratwick was appointed by Committee Chair Stone as an alternate voting member for this meeting. b. Request to Waive Bid Process – Guardrails – Public Works – C.A. Newcomb & Sons - $13,150 Cyr noted that Kenduskeag Avenue from Griffin Road in-town bound has been fully repaved. Some guardrails need to be replaced. The two vendors who perform this type of work were contacted. C.A. Newcomb was the only one willing to do the work due to the lateness in the season. The work needs to be done prior to the snow season. Wardwell said that the price is in line with what was paid out for Ohio Street and other projects. Per lineal foot, the price is comparable to past projects. Gratwick commended staff for various streets widening. A motion was made and seconded to waive bid requirements and award the bid to C.A. Newcomb and Sons. c. Electricity Supply – Police Station – Fixed Rate Multi-Year Supply Rate – Information will be provided at meeting As noted on the agenda, Cyr provided information at the beginning of the meeting. By way of background, the City is a member of MainePower Options, which is an energy purchasing consortium that is available to local governments and non-profits. Until 2000, electricity rates were fully regulated by the Maine PUC and at that time the rates became deregulated or restructured. It allows customers to find their own supplier of electricity and the ability to find a good price. The City is currently under contract with MainePower Options for its medium service electrical accounts through December of 2009 at a rate of 9.72 cents per kilowatt hour. The large service electrical accounts are good through December 2011 at 8.75 cents per kilowatt hour. The current standard rate for medium and large accounts only goes through February 2009 because the new rates are to be set in March. The old Police Department building was part of the City’s contract for medium service accounts but the new Police Station is not and one building cannot be replaced with another. The City had to return to MainePower Options to ask for a supply rate for the new station. Bids were sought and MainePower Options can supply electricity to the new Police Station for 8.65 cents per kilowatt hour for one year; 8.96 cents for two years; and 9.14 cents for three years. Historically, the City has locked in prices for three to five years. Staff recommended that a three year contract be authorized with MainePower Options to supply electricity to the Police Station at 9.14 cents per kilowatt hour. Responding to Nealley, Cyr said the rationale for recommending the three year contract is that electric bills do not decrease over time. She referred to it as minimizing the downside. Barrett said there is a benefit to knowing the price for a locked in period of time. Responding to Gratwick, Farrar said that PERC does sell power at 10 or 11 cents per kilowatt hour. When the power purchase contract with Bangor Hydro ends, if PERC is interested at that time in selling it to Bangor Hydro and they wish to buy it, the City would be willing sell it to them at essentially the market rate in the 3-5 cent range. Although not pleased with deregulation and rising prices, Blanchette agreed with staff’s recommendation. Stone asked if consumption needs to be locked in. Cyr said no. A motion was made and recommended to approve staff’s recommendation. 3. Update from CIGNA Healthcare Representatives Farrar introduced Jim Higgins and Fred Brewer from CIGNA. In July 2007, the City’s then group health care providers, Anthem Blue Cross Blue Shield of Maine, came to the City with a 49% health insurance increase. Proposals were sought, five responses were received, and CIGNA was selected as the preferred provider. After almost a full year of service, Councilor Stone felt it was appropriate to ask CIGNA to provide a brief update. The City’s total health care bill including retirees is approximately $5.5M annually. Employees contribute toward that amount as well. Farrar said he has been very pleased with CIGNA’s first year of performance. Stone asked Councilors in attendance to state what information they are looking to be provided. Gratwick asked about the wellness program. Nealley asked about the percentage of the cost of the health program to retirees, breakdown between the school system and City employees, etc. Stone suggested that Farrar prepare this information and bring it back to either the Committee or for review during the budget process. Nealley agreed. Bronson asked about the City’s experience ratio and where the City is trending in the area of health insurance. Blanchette praised wellness programs and asked for detailed information about CIGNA’s. Stone asked about the balancing act between those employees who do not take care of themselves versus those who do take care of themselves. Brewer provided handout materials. CIGNA started out 2008 knowing that wellness was very important to the City. They have met with the Health Insurance Advisory Committee as well as the Wellness Committee throughout the year. The baseline for the wellness strategy was doing health risk assessments with the employees. The assessment is an important way to determine who may be at risk for developing a particular condition/disease. CIGNA representatives went to each City employee location, walked employees through the assessment process, explained the benefit of the assessment, etc. There was a 30% participation rate for the assessments, which is very good, for the first time. Next year, CIGNA would like to double the participation rate. The assessment allows CIGNA to reach individuals that may be at risk for developing chronic conditions. These individuals will be provided an opportunity to enroll in a wellness program. He noted that the City has 362 disease management enrollees. For 2009, Brewer said he would like to see the assessment completion rate raised. In working with the Wellness Committee, he feels it is achievable. CIGNA is going to increase their City of Bangor wellness funds. Currently in 2008, it is $25,000 and in 2009 it will be increased to $45,000. Gratwick asked how the money will be spent. Brewer said it is primarily spent on getting nurses to do onsite biometric screenings and assisting folks to put that information into the health assessment online. Higgins said that every clinical program that CIGNA offers is frontloaded into the medical benefit program. All of the costs associated with the disease management programs, life style, stress programs, etc., is already built into the premium rate structure. The wellness fund is above and beyond in bringing additional resources, communication materials to push wellness at the City of Bangor. Brewer spoke about the analysis of the City employee’s health assessment results noting that the two top risk areas were weight and blood pressure. Responding to Stone, Farrar said for the first run through with the assessment it was offered to employees only and not spouses/family. Responding to Nealley, Brewer said the top five or six risk factors are seen nationally. The order of the factors from group to group may be different. Weight is always in the top five or six. Gratwick praised the wellness program approach. He asked about a follow up procedure. Brewer said that every individual is looked at uniquely and follow up is tracked throughout the year. Farrar said there are approximately 500 full-time employees, responding to Gratwick. Brewer said that outreach calls are made throughout the year as well as mailings. Higgins spoke further about the Gaps and Care Program. Blanchette again praised the wellness program in which she is currently involved. She questioned the assessment results indicating that 40% of City employees are not using seatbelts. She felt it is totally unacceptable. Brewer said the assessment question asked “do you wear a seatbelt 100% of the time.” The answers are by percentages. For example, some employees may wear a seatbelt the vast majority of the time but not a 100%. 60% of the City employees do use seatbelts 100%. Farrar noted the there is a Citywide policy that requires all employees to use seatbelts when on City business. The City cannot control employees when they are on their own time. Responding to Wheeler, Brewer said the percentages listed as it relates to the risk factors of 120 employees who took the assessment. For example, 50% of the 120 employees have a weight related risk factor. Stone said the point is that every number is relative to the next one. Higgins said that the assessment results point out risky behavior in the populations. Bronson asked how CIGNA plans to reach a higher number of employees. Farrar said it is a question that is being wrestled with at the Health Insurance Advisory Committee level and with CIGNA. There needs to be an incentive. The first incentive was to provide anyone who took the assessment survey with 50 safety certificate points. To gain a significantly higher participate rate, a greater incentive needs to be in place. Staff and CIGNA will continue to work on creative ways. Brewer provided information about case management. 12 employees have worked closely with a case manager. The ratio of contact with the individuals, which is good, ranging from 15-16 interventions. There is a 24/7 help information line has received almost 20 calls from City employees. Again, it is good to have higher numbers. Higgins spoke about the health risk assessment’s importance in helping individuals from going into catastrophic health situations. To increase participation, one of the challenges is to build a plan to incent people to participate. CIGNA has incentives in place to pay employees to participate. They have found it helps to change behavior. The City could build its own incentive approach specific to its employees. Higgins said the City’s plan with CIGNA is running as projected. Quarterly reviews have been provided. Annual trends are 11-12 1/2%. The City came in slightly below trend at 9.7%, which Higgins cited as a major success. Higgins praised the City staff and members of the Health Insurance Advisory Committee and the Wellness Committee. Stone asked how to obtain perspective employees to take the wellness test to screen them out before the hiring process. Farrar said there are organizations that put employees through pre-employment physicals and the City does that for many departments. Farrar said that Stone’s question goes much deeper in the process and he did not have an answer. Higgins said there is a smoker’s and non-smoker’s rate which is allowed by the government. Blanchette asked if CIGNA has gone the route of providing some clients with some health equipment at home; i.e. blood pressure unit. Brewer said that the City plans have a durable medical plan benefit. In some instances, a formal request needs to be made by the member’s physician. Nealley asked if there could be two levels of cost sharing – one when an employee submits to health risk assessments and one for those who do not. Farrar said it could be investigated and with ten unions it would become a subject of bargaining. He mentioned credits towards physical programs and wondered if some of the $45,000 was in part due to get individuals to participate or to help offset credits toward gym fees, as an example. Gratwick said the whole issue of screening employees prior to employment is very complex legally speaking. He does think that Bangor should be on the cutting edge in this area, however. He noted that the $45,000 for wellness is less than 1% of the City’s premiums. He suggested the amount should be increased over time. Barrett indicated that the $5.5M is not all paid by the City but it is a combination of City and enrollee payments. The City’s retirees pay the full cost of the insurance. The City’s share would be close to $3.8M. Secondly, a lot of ideas have been discussed today, some of which staff has been discussing, and the issues of dealing with many employee groups. He also said that Farrar would provide answer to questions raised by Council members this evening. Unless significant cost issues are dealt with in health insurance arenas, it will continue to lead in cutting back on benefits through long negotiating processes or maintaining the current system and having to look elsewhere in the City budget to make reductions. It is an issue that has a lot of ramifications. Barrett totally agreed with the wellness program. Stone thanked the CIGNA representatives for their attendance. A motion was made and seconded to adjourn at 6:25 pm.