[1. Call to Order]
[00:00:05]
CALL THE ORDER.I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA.
AND TO THE REPUBLIC FOR WHICH IT STANDS.
ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE.
LORD, WATCH OVER AND GUIDE US IN OVER DELIBERATIONS THIS EVENING.
AND, UH, LOOK OUT AFTER OVER DECISIONS.
I WAS GONNA SAY WE'RE GOING TO THE ELK SPEECH.
UM, PRESENTATIONS, NOT AT THIS TIME.
FILE, RECEIVE AND FILE REPORTS.
MINUTES, CORRESPONDENCE TO THE FOLLOWING.
THERE ARE NONE REPORTS OF COUNCIL AS A WHOLE COMMITTEE.
KATIE STEWART FOR THE CITY OF MARTINSBURG.
[13. New Business]
13.A PRESENTATION, DISCUSSION AND ACTION REGARDING WATER AND SEWER RATES AND BUDGET.
I'M GONNA PASS THAT ON TO ANNIE, KATHY.
UM, TONIGHT, UH, WE NEED TO, UH, HAVE A DISCUSSION IN PRESENTATION BY CATHERINE SULLIVAN FROM COX HOLIDAY, WHO IS OUR THIRD PARTY ACCOUNTANT ABOUT THE NEED TO, UH, LOOK AND ADJUST OUR WATER AND SEWER RATES.
UM, THIS HAS NOW BEEN GOING ON FOR THE LAST, UH, COUPLE MONTHS, AND I THINK THAT WE'VE INFORMED COUNSEL OVER THE LAST COUPLE YEARS THAT WATER AND SEWER RATES NEED TO BE LOOKED AT.
THERE'S A MEMO IN YOUR PACKET THAT EXPLAINS WHY, BUT TONIGHT I'M GONNA TURN IT OVER TO CATHERINE TO GO OVER SOME OF THE NUMBERS.
UM, OUR UTILITY DIRECTOR, MR. MCKINLEY, HAS COME UP WITH A CIP LIST, UM, OF NEEDED MAINTENANCE ITEMS THAT ARE ESSENTIAL TO, UH, REMAIN COMPLIANT WITH OUR MPDS PERMITS WITH REGARD TO WASTEWATER AND WATER.
AND THIS ALSO, UH, TAKES INTO CONSIDERATION JUST INCREASED OPERATIONAL COSTS, INCLUDING INCREASED UTILITY COSTS, INCREASED LABOR COSTS, INCREASE BENEFIT COST, INCREASED CHEMICAL COST.
YOUR LAST INCREASE WAS 2020 AT 33%.
UM, SINCE 2020, WE'VE PROBABLY GONE THROUGH SOME OF THE HIGHEST INFLATIONARY PERIOD IN RECENT HISTORY AT ABOUT 23%.
THE CITY HAS NOT INCREASED ITS RATES SINCE 2020.
WE HAVE TRIED TO HOLD OFF AS LONG AS WE POSSIBLY CAN, AND NOW IT'S TIME TO LOOK AT THIS.
AND WITH THAT, I'LL LET CATHERINE, UH, START.
THANK YOU FOR LETTING ME, UM, BE HERE TO SEATED.
IF WE COULD, CAN WE GO TO THE WATERWORTH PRESENTATION ON EXPENSES VERSUS REVENUES? FIFTH OR SIXTH PAGE? I THINK IT'S THE SIXTH PAGE NOW.
OBJECT TO TOTAL EXPENSES AND REVENUE REQUIREMENTS.
UM, SO IF YOU CAN SEE, AS MR. BLAKE SAID, YOUR LAST RATE INCREASE WAS IN 2020.
AND SINCE THEN YOUR EXPENSES HAVE JUST CONTINUED TO CLIMB.
UM, INFLATION BEING A BIG PART OF IT, ABOUT 23%, UM, THAT WE'VE EXPERIENCED OVER THE LAST FIVE YEARS, YOU KNOW, ACROSS THE BOARD IN ALL PARTS OF OUR LIVES.
UM, ALSO THE CITY HAS TRADITIONALLY OPERATED, UM, YOU KNOW, AT LEAST IN THE WATER AND SEWER DEPARTMENT KIND OF UNDERSTAFFED.
AND I KNOW THAT'S A GROUP OF CHALLENGES FROM, YOU KNOW, FINDING AND RETAINING QUALIFIED PEOPLE TO MEETING THE BUDGET AND A WHOLE LOT OF OTHER FACTORS.
BUT BETWEEN THAT AND THE CONTINUED COST INCREASE IN COST, YOU CAN SEE WHERE IN 2020 YOUR OPERATING COSTS WERE PROBABLY ABOUT 6 MILLION.
AND THAT'S THE DARK BLUE THERE, THE FIRST BLUE COLOR.
[00:05:01]
YOU START 2020 AND WE PROCEED FROM THE LEFT AND WE PROCEED TO THE RIGHT OF THE GRAB, YOU'LL JUST SEE IT'S JUST BEEN ON A CONTINUOUS UPTICK.AND FOR A LITTLE BIT YOUR REVENUE'S HELD.
AND EVEN THOUGH THEY INCREASE A LOT, I MEAN, I APOLOGIZE A LITTLE BIT, YOUR CONSUMPTION INCREASES A LITTLE BIT FROM YEAR TO YEAR, OR SOMETIMES YOU HAVE SOME MISCELLANEOUS INCOME.
YOU DON'T HAVE LARGE, UH, NEW REVENUE STREAMS, IF THAT MAKES SENSE.
SO THE ONLY WAY TO REALLY INCREASE YOUR REVENUES IS TO INCREASE YOUR RATES 'CAUSE YOU'RE NOT INCREASING A LOT OF CONSUMPTION.
UM, SO THAT'S WHERE WE'RE TRACKING HERE WITH THE PROJECTED REVENUES TO STAY AHEAD OF THE PROJECTED EXPENSES.
UH, JUST TO GIVE YOU A BACKGROUND, IF WE GO TO THE NEXT SLIDE, HERE'S THE CONCERN, AND THAT SHOULD BE THE CURRENT CASH POSITION.
I AM SORRY, THERE MIGHT BE A COUPLE UP CASH POSITION.
SO WHAT'S BEEN HAPPENING IS WHEN WE INITIALLY RAISED RATES IN 2020, YOU WERE IN REALLY GOOD SHAPE AND IT GAVE YOU THE NECESSARY CUSHION TO BE ABLE TO SAVE FOR YOUR DEPRECIATION FUNDS TO SET ASIDE FOR MAINTENANCE, TO KEEP THINGS CURRENT.
BUT OVER TIME INFLATION AND INCREASED COST OF EATING THAT AWAY.
AND SO EACH YEAR RIGHT NOW, YOU ARE HAVING TO BALANCE YOUR WATER AND SEWER BUDGET WITH, UM, KIND OF RETAINED EARNINGS OR CARRY OVER FROM THE PRIOR YEAR.
BUT YOUR CASH BALANCE IS GOING DOWN.
AND FOR THE PSC, YOU HAVE CERTAIN REQUIREMENTS THAT YOU HAVE TO MAINTAIN, UM, THAT YOU CAN'T SPEND 'EM DOWN, YOU HAVE TO REPLACE IT EVERY YEAR.
BUT IF YOU CONTINUE WITH THE SAME RATES AND INCREASING COSTS, YOU SEE SOMEWHERE BETWEEN 2026 AND 2027, YOU'RE ACTUALLY GONNA GO BELOW YOUR CASH REQUIREMENTS.
UM, SO YOU NEED TO EITHER HAVE NEW CUSTOMERS, WHICH YOU'RE CONFINED TO A CITY, SO YOU'RE LIMITED ON THAT, OR YOU HAVE TO RAISE THE RATES SO THAT YOU CAN CONTINUE TO MEET THE RISE IN COSTS.
UM, SO THE PROJECTION OF, SORRY, WHICH SLIDE IS HERE? THE SOLUTION.
WE SHOULD BE ABOUT TWO SLIDES.
UM, THE SOLUTION IS TO INCREASE THE RATES ENOUGH, BASICALLY KEEP PACE WITH THE INCREASE IN COSTS TO FUND SOME MAINTENANCE, UM, THAT MR. MCKENLEY PROBABLY SPEAK OF HERE, UH, THAT IS IN DESPERATE NEED AT THE MOMENT.
AND TO BE ABLE TO CONTINUE TO MEET YOUR REQUIRED DEPRECIATION RESERVE FUNDS AND YOURS, UM, SB 2 34 FUNDS, UM, WHILE MAINTAINING YOUR SYSTEM.
SO THE ESTIMATED COST OF DOING THAT OVER THE NEXT THREE YEARS ARE 10% INCREASES.
TO BALANCE THAT OUT, I KNOW THAT'S A LOT.
UM, AS MR. BLAKE REFERRED TO A FEW MONTHS AGO, THE INCREASE IN 2020 WAS 33%.
THIS WOULD EQUAL 30% OVER THREE YEARS.
SO IT LESSENS THE IMMEDIATE IMPACT, BUT IT DOES HELP GET THE SYSTEM BACK IN THE RIGHT FOOTING.
UM, THAT STAS OFF A LATER ON INCREASE OF HAVING TO DO AN IMMEDIATE 40 OR 50 INCREASE WHEN YOU'RE UPSIDE DOWN AND YOU DON'T HAVE THE APPROPRIATE CASH TO BE ABLE TO FUND, UH, THE REPAIRS AND THE MAINTENANCE THAT YOU NEED.
UM, PART OF THAT TOO IS GOING FORWARD IN LOOKING OUT IN THE FUTURE YEARS SO YOU DON'T HAVE TO KEEP DOING LARGE INCREASES WOULD BE TO CONSIDER IN THE FUTURE, YOU KNOW, UH, A MINIMAL YEAR TO YEAR.
THERE'S BEEN NO INCREASE SINCE 2020 DESPITE THE INFLATION.
SO IT'S JUST BEEN REALLY, IT'S ACTUALLY BEEN IMPOSSIBLE FOR YOUR RATES TO KEEP UP WITH THE COSTS BECAUSE THEY'VE RISEN WITHOUT ANY, UM, ANY LARGE INCREASE IN YOUR CONSUMPTION OR ANY ADDITIONAL REVENUE.
QUESTIONS ON, DID ANYONE HAVE ANY QUESTIONS? I DO.
SO IS THE PLANNING FOR THE INCREASE, IS THIS TO MAKE UP FOR DEFICITS IN THE PAST OR DOES IT PUT INTO THE FUTURE, UM, A LITTLE DEPOSIT EACH MONTH TO HAVE, UM, A MORE OF A FUND THERE SO THAT WE CAN RESTORE EQUIPMENT OR, UM, SURE.
SO NUMBER ONE, IF, UM, WITH A, UM, GREG, WE LOOKED AT A MOMENT AGO.
WE SPOKE ABOUT, YOU KNOW, SOMEWHERE AROUND 2027, YOUR CASH, YOU WERE GONNA RUN OUT OF THE CASH THAT YOU HAVE
[00:10:01]
AND YOUR DEPRECIATION FUNDS PER PSC REQUIREMENTS.EACH MONTH YOU HAVE TO PUT ASIDE TWO AND HALF PERCENT OF YOUR REVENUES, THE SYSTEM REVENUES.
AND THAT IS MEANT TO FUND REPAIRS AND THINGS THAT COME, YOU KNOW, A PUMP BREAKS OR ANOTHER WATERLINE BREAK, UM, JUST TO DO THE NECESSARY MAINTENANCE TO KEEP YOUR SYSTEM IN GOOD ORDER.
UH, NOW FOR A WHILE WHEN THE RATES WERE ADJUSTED IN 2020, YOU WERE ABLE TO KEEP UP WITH MAINTENANCE.
YOU WERE ABLE TO KEEP UP WITH THE OPERATIONS COSTS, AND YOU HAD GOOD CASH RESERVES.
THE LAST COUPLE OF YEARS YOU'VE NEEDED TO MAKE UP SOME LARGE INVESTMENTS IN CAPITAL.
THERE WAS SOME FENCING JUST IN THE PAST YEAR THAT WAS A PRETTY LARGE, UH, EXPENDITURE.
UM, I BELIEVE THERE'S SOME BUILDING MAINTENANCE AND THAT HAS TAKEN THE CASH FROM YOUR RESERVES, WHICH IS WHY IT'S THERE.
BUT TO, BUT TO ANSWER YOUR QUESTION, IT'S NOT JUST FOR THE MONIES.
YOU NEED TO OPERATE THE SYSTEM, BUT YOU HAVE TO BE ABLE TO CONTINUE TO BUILD UP THOSE RESERVES SO THAT WHEN YOU DO HAVE THESE LARGER, YOU KNOW, PROJECTS, IF YOU WILL, OR YOU DO HAVE AN UNEXPECTED REALLY LARGE MAINTENANCE BILL, YOU HAVE THE CASH ON HAND TO BE ABLE TO TAKE CARE OF THAT.
AND THAT'S THE PURPOSE OF, UM, THE DEPRECIATION OR THE R AND R, THE RESERVE ACCOUNTS THAT YOU HAVE TO FUND.
WERE THERE ANY OTHER QUESTIONS? I GOT A QUESTION.
SO YOU'RE SAYING 10% THIS YEAR AND 10 NEXT YEAR AND 10% THE FOLLOWING YEAR? YES SIR.
WHAT IF WE DID 20% THIS YEAR? BUT I, I KNOW IF WE RAISE FACTS ARE GREAT THIS YEAR AND THEN DO IT AGAIN NEXT YEAR, PEOPLE ARE GONNA COMPLAIN AND SAY, WE JUST RAISED THE TAX LAST YEAR.
WELL, AND I KNOW THAT'S A TOUGH JOB FOR YOU AS THE COUNCIL.
I KNOW PEOPLE DON'T LIKE RATE INCREASES.
UM, I'M NOT SURE HOW THEY WOULD, I MEAN, I'M SURE SOME PEOPLE UNDERSTAND IT AND EMBRACE IT AND I'M SURE SOME PEOPLE, UM, IT'S A STRUGGLE ALREADY.
AND SO EVEN THE 10%, UM, I GUESS O OVER THE COURSE OF THREE YEARS, ABOUT 30% IS WHAT WE ARE FORECASTING THAT YOU WOULD NEED TO STAY THERE.
BUT IF WE, IF WE WENT 20% THIS YEAR MM-HMM
THAT WOULD GIVE US, YES, IT WOULD GIVE YOU ALMOST ENOUGH.
ONE OF THE WAYS OF DOING THE 10, 10 10 IS YOU DO ACTUALLY GET AN OVERLAP SO THAT WHEN YOU DO 10, IF YOU DID 10 THIS YEAR AND YOU DO 10 NEXT YEAR, YOU WOULD ALSO GET THE 10% INCREASE ON THIS YEAR.
SO IT DOES ADD UP TO A LITTLE BIT MORE THAN 30 TO DO 10, 10 10.
UM, AND YOU WOULD GET A LITTLE BIT OUT OF THAT FOR A 2010, BUT JUST NOT QUITE AS MUCH.
YOU WANNA GET IT MUCH, YOU, YOU WOULD GET A LITTLE BIT LESS THAN 10.
WELL, CURRENTLY, IF I'M RIGHT ON WHAT I'M SAYING, THAT JAY'S HERE CURRENTLY WE ARE NOT, WE ARE BEHIND 25% ON OUR SEWER, UH, BILLS.
UH, VERSUS THE WATER WATER'S BEEN CARRYING SEWER FOR THE LAST COUPLE YEARS.
SO WE'RE, WE'RE PLAYING CATCH UP HERE.
SO 20% IS NOT ALL THE QUESTION, BUT, UH, THAT'S, THAT'S THE REASON FOR PART OF THE RATES WE'RE WE'RE FALLING BEHIND AND WE DON'T WANNA FALL BEHIND ANYMORE.
MAY I SAY SOMETHING TO MOST OF THE PEOPLE THAT COMPLAINED TO ME THE LAST TIME WE HAD TO RAISE RATES WAS, OH, IT'S TOO MUCH TOO FAST.
CAN YOU GUYS JUST DO THIS INCREMENTALLY? SO KIND OF THE OPPOSITE OF WHAT YOU WERE SAYING, COUNCILMAN ETHERINGTON, UM, AT LEAST THAT WAS THEIR COMMENTS TO ME.
SO CHIEF, SORRY, DID YOU WANNA SPEAK ABOUT C YEAH, I GUESS, UH, YEAH, ABSOLUTELY.
SO WHAT I'D LIKE TO SAY ABOUT THE CIP BELIEFS, THIS IS, IT'S A COMBINATION OF THINGS THAT WE NEED TO FIX RIGHT NOW AND THINGS I THINK WE'RE GONNA HAVE TO FIX IN THE FUTURE.
AND TO EXPAND ON YOUR QUESTION A LITTLE BIT, THE FIRST COUPLE YEARS IS JUST A LIST OF LIKE, WELL, I NEED TO REPLACE SOME OTHERS.
I NEED REPLACE VEHICLE
AND I THINK IF YOU LOOK AT THE LIST THAT LAST YEAR, WE'RE JUST PUTTING A MILLION DOLLARS EACH IN WATER AND SEWER IN A BUCKET TO MAKE THOSE FUTURE REPAIRS.
AND ONE OF THE THINGS WE WANT TO DO EARLY ON IS ACTUALLY LOOK THE SYSTEM START MAPPING SYSTEMS, START PUTS AND CAMERAS.
SO THEN FIND THOSE LINES THAT NEED REPAIR.
WE NEED TO GO BACK TO THAT FIRST BASIC STEP, FINISH OUR MAPPING OUR SYSTEMS. THAT'S GONNA HELP US BUILD THAT CIP LIST MOVING FORWARD IN THE OUTER YEARS.
AND I'D LIKE TO ADD, SINCE YOUR 2020 INCREASE, UH, THE UTILITY
[00:15:01]
HAS MADE SOME SUBSTANTIAL, UH, INVESTMENTS IN, YOU SPENT $2.3 MILLION IN, UH, RENOVATING ALL OF YOUR WATER TANKS.YOU HAVE UPGRADED THE IT AND THE ENTIRE SCADA SYSTEM, WHICH IS BASICALLY THE BRAINS BEHIND THE WATER AND THE WASTEWATER PLANTS.
UM, BACK WHEN THE, UM, CHEMICAL RELEASE HAPPENED BACK IN 19 2019, WE HAD A LOT OF THE AGENCIES COME IN AND THEY, UH, AUDITED AND, UH, TOOK A LOOK AT EVERY FACILITY THAT WE HAD.
AND A LOT OF THE EXPENDITURES THAT WERE A RESULT OF THAT WERE FROM, UM, UM, BASICALLY, UH, CORRECTIVE ACTION ORDERS THAT, UH, THE DEP AND THE UM, EPA TOOK.
SO THERE'S BEEN A LOT OF INVESTMENTS IN THE SYSTEM SINCE, UH, 2020.
BUT WHAT'S REALLY HURTING THIS AND WHAT WE'VE BEEN SAYING FOR THE LAST COUPLE YEARS IS JUST REALLY THE INCREASED OPERATION COST.
BECAUSE UNLIKE YOUR REGULAR BUDGET, THAT HAS A LITTLE BIT OF INCREASE BECAUSE IT'S REALLY TIED TO CONSUMPTION TAXES, YOU KNOW, B AND O AND SALES TAX, WHICH HAS A BASICALLY A NATURAL INFLATIONARY ADJUSTMENT BECAUSE WHEN THE PRICE OF SOMETHING INCREASES, YOUR TAX INCREASES WHEN YOU HAVE A GARBAGE OR A WATER OR SEWER RATE AND YOU SET A STATIC RATE IN 2020 A DOLLAR, UH, A DOLLAR, I THINK, I THINK A DOLLAR 24 TODAY IS WORTH, OR A DOLLAR.
YEAH, A DOLLAR 24 IS WORTH A DOLLAR IN 2020.
AND THAT WAS REFLECTED IN THIS, THIS IS JUST A PROPOSED CIP AND WHAT WE'VE HAD IN THE PAST, AS ANDY MENTIONED IN 2223, WE MADE SOME BIG INVESTMENTS IN THE SYSTEM.
UH, BUT YOU KNOW, THE PAST COUPLE YEARS WE HAVE, THAT'S BECAUSE OF THE, THE WINING RESERVES.
AND THE BIG JUMP MOVING FORWARD IS US CATCHING, CATCHING BACK UP AGAIN.
SO I'M ASKING THE COUNCIL RESPECTIVELY TO AUTHORIZE A FIRST AND SECOND READING OF AN ORDINANCE IN JUNE AND A THIRD AND FINAL RATING IN A PUBLIC HEARING IN JULY, WHICH WITH AN EFFECTIVE RATE, DEPENDING ON WHETHER COUNSEL ADOPTS IT, OF SEPTEMBER 1ST, 2025.
DO I, DO I NEED A MOTION FOR THAT RIGHT NOW? YES, I GET A MOTION MOVE TO AUTHORIZE.
I THINK WE'VE HAD ALL THE QUESTIONS.
FIRST AND SECOND READING OF ORDINANCE 2025 DASH OH FOUR AMENDING THE CITY OF MARTINSBURG FIRE CIVIL SERVICE COMMISSION RULES AND REGULATION.
DO YOU NEED A MOTION? SO MOVED BY TITLE ONLY.
ORDINANCE 2025 DASH ZERO FOUR AMENDING THE CITY OF MARTIN FOR FIRE CIVIL SERVICE COMMISSION.
ORDINANCE 2025 DASH ZERO FOUR AMENDING THE CITY OF MARTIN FOR FIVE CIVIL SERVICE COMMISSION RULE.
OPPOSED? THE OPPOSED DISCUSSION AND ACTION REGARDING POTENTIAL PO TO DISTRICT IN DOWNTOWN ORANGEBURG.
THIS ANOTHER INITIATIVE THAT WE'VE TALKED ABOUT BEFORE.
AND, UM, THIS IS TO GET COUNSEL'S INTEREST IN MOVING FORWARD TO AN ORDINANCE.
UM, THERE'S A MEMO IN THE PACKET THAT EXPLAINS WHAT A PRIVATE OUTDOOR DESIGNATED AREA IS.
MORGANTOWN CHARLESTON, OUR NEIGHBOR OF CHARLESTOWN, HAS, UM, HAS ALREADY, UH, AUTHORIZED THIS.
THIS IS ESSENTIALLY WHERE YOU CREATE A DISTRICT AND YOU ALLOW OPEN CONSUMPTION OF ALCOHOL IN THAT DISTRICT DURING DESIGNATED HOURS AND DAYS THAT THE COUNCIL, UM, AUTHORIZES.
THERE ARE DOWNTOWN DRINKING ESTABLISHMENT.
THEY GO TO STONEY'S AND THEY BUY A DRINK.
AND LET'S SAY WESTWOOD CHARM PARTICIPATES IN THE PODA DISTRICT AND IT'S TOTALLY VOLUNTARY.
AND THE CUSTOMER CAN TAKE THAT CUP AND THEY GO TO WESTWOOD CHARM INSIDE WESTWOOD CHARM AND SHOP OR DO WHATEVER THEY WANT.
UM, WHATEVER PARTAKE IN WHATEVER, UM, UH, YOU DO IN WESTWOOD CHARM OR ANY RETAIL ESTABLISHMENT.
SO I'VE TRIED TO TAKE A FIRST, UH, UH, DRAFT OF PERHAPS WHAT A POTTED DISTRICT MAP WOULD LOOK LIKE THAT REALLY FOCUSES ON KING IN QUEEN, THE ROUNDHOUSE, THE FUTURE DISTILLERY UP ON, UM, MAPLE.
AND, UM, USUALLY MOST OF THE CITIES HAVE DONE THIS, HAVE AUTHORIZED THE PODA BETWEEN FOUR AND 10 ON WEEKDAYS AND THEN ON WEEKENDS.
SO THE COUNCIL CAN DESIGNATE THE TIMES THAT THEY WANT IT AND THEY CAN ACTUALLY DESIGNATE THE DISTRICT.
[00:20:01]
UM, THIS IS THEN APPROVED BY THE A, BC COMMISSION.WE'LL PUT, WE'LL HAVE TO PUT UP SIGNS THAT SAY, YOU KNOW, WELCOME TO THE PODA DISTRICT.
AND THEN, YOU KNOW, YOU CAN'T TAKE YOUR DRINK OUTSIDE OF A PODA.
THE CITY'S AUTHORIZED TO HAVE MORE THAN ONE PODA, BUT AT THIS POINT, I DON'T THINK THAT YOU DON'T HAVE THE CONCENTRATION OF ESTABLISHMENTS THAT WOULD JUSTIFY ANOTHER PODA.
THIS IS REALLY KIND OF IN A HISTORIC DOWNTOWN DISTRICT.
MAIN STREET HAS DONE A SURVEY AT OUR REQUEST AND THERE ARE MANY OF YOUR MERCHANTS THAT WOULD PARTAKE IN, PARTICIPATE IN A PODA.
UM, LIKE I SAID, WE'RE NOT ACTUALLY THE PIONEER ON THIS AT THIS POINT.
WE'RE KIND OF LAGGING SOME OF, SOME OF THE OTHER OTHER CITIES, UH, IN ORDER TO DO THIS.
OBVIOUSLY IT'S AN ORDINANCE PROCESS AND WE'VE BEEN TALKING ABOUT THIS FOR A WHILE.
AND THE LEGISLATURE, JUST THE LAST SESSION, THEY, THEY PASSED SOME AMENDMENTS TO THE POTA DISTRICT THAT MAKES IT A LITTLE BIT MORE FAVORABLE TO LIKE MAIN STREETS, FAIRS AND FESTIVALS.
SO IF YOU HAVE ANY QUESTIONS, I'M WILLING TO TAKE THEM.
COUNCIL WANTS TO DO THIS, THEN WE AUTHORIZE IT TO GO TO, TO ORDINANCE.
IF THE COUNCIL DOESN'T WANNA DO SOMETHING LIKE THAT, THAT'S FINE.
YOU'RE NOT REQUIRED TO DO THIS AT ALL.
BUT THIS IS SOMETHING THAT OTHER, UM, MERCHANTS AND OTHER, UH, DRINKING ESTABLISHMENTS IN OTHER PARTS OF THE STATE HAVE ACTUALLY ASKED AND LOBBIED THEIR, UH, CITIES TO DO BECAUSE IT INCREASES SALES.
I CAN TELL YOU THE MAYOR, GINA AND I, UH, WE WENT TO THE MUNICIPAL LEAGUE IN HUNTINGTON LAST YEAR AND WE WENT TO, UH, ONE OF THEIR SEMINARS ON PODA.
AND I CAN'T REMEMBER WHAT PERCENTAGE OF SALE THE ONE GENTLEMAN SAID THIS PERCENTAGE OF SALES INCREASED.
WHAT WAS IT? 30%? I BELIEVE THAT'S ACCURATE.
AND, AND WE'VE SEEN MARGINS ARE SO TIGHT IN FOR RESTAURANT BUSINESS.
WE'VE SEEN, UH, WE'VE SEEN IT IN ACTION OR I'VE SEEN IT IN ACTION AND TALKED TO OTHER MAYORS, NOT ONLY IN HUNTINGTON, BUT UH, WHEELINGS ALSO DOING THIS IN OTHER, OTHER, UH, CITIES ARE DOING IT AND THEY'RE SEEING A LOT OF GOOD SUCCESS.
THEY'RE NOT SEEING PROBLEMS. I KNOW THAT THERE COULD BE PROBLEMS WITH THAT.
THAT'S A DESIGNATED AREA AND IT'S A DESIGNATED CUP.
UM, CAN THE CITY MANAGER GO OVER THE ADVANTAGES OF IT? OR MAY I READ THE PARAGRAPH OF THE ADVANTAGES? SURE.
UM, IT SAYS, PODA HAS THE POTENTIAL TO INCREASE VISITORS TO RESTAURANTS AND ESTABLISHMENTS, INCREASE TIME VISITORS SPEND IN THE DOWNTOWN AREA, INCREASE RETAIL SALES.
UM, ADD TO THE UNIQUE VISITOR EXPERIENCE, ADDITIONAL BENEFITS COULD INCLUDE ENCOURAGING PEOPLE TO MOVE ABOUT THE AREA, UM, RATHER THAN SITTING INSIDE A BUSINESS, PEOPLE STROLL THE BUSINESS DISTRICT, THE HISTORIC DISTRICT.
AND IT ADDS A SENSE OF A MORE VIBRANT COMMUNITY.
UM, IT ALSO AFFORDS THE OPPORTUNITY TO EXPLORE OTHER BUSINESSES AS THEY OPT IN, AS I UNDERSTAND IT, AND LENDS ITSELF TO PLANNED EVENTS.
SO MY THOUGHT WAS, IS THERE EVER A PROBLEM WITH EXCESSIVE DRINKING? AND THE POLICE SOUNDS LIKE A GOOD THING TO ME, BUT I DEFINITELY WANT, WANT TO ASK THAT QUESTION.
SO I'VE BEEN IN CONVERSATIONS DURING THIS PROCESS WITH THE CHIEF OF POLICE WHO COULDN'T BE HERE TONIGHT, AND HE'S WELL AWARE OF THIS.
HE'S ALSO AWARE OF WHAT'S GOING ON IN THE, UM, OTHER PARTS OF THE STATE.
AND PART OF THE REGULATIONS THE STATE HAS APPROVED IS THAT YOU HAVE TO HAVE, YOU KNOW, A, A APPROVED POLICING PLAN FOR THIS, WHICH INCLUDES THE WALKING PATROL, THE BICYCLE PATROL, THE REGULAR PATROL WE HAVE IN, IN THE DISTRICT.
AND THE CHIEF AND I HAVE, HAVE HAD SEVERAL CONVERSATIONS WITH THIS.
AND HE, UH, HAS NOT EXPRESSED ANY, UH, OBJECTION TO THIS.
AND HE, UM, HAS SEEN THIS MAP AND HE HAS SEEN THE PROPOSED ORDINANCE.
I DON'T WANNA SPEAK FOR HIM 'CAUSE HE'S NOT HERE, BUT HE HAS NOT THROWN UP ANY RED FLAGS TO, TO ME.
AND HE SAYS THAT HE'LL WORK WITH THE COUNCIL AS ALWAYS, IF IT'S THE COUNCIL'S DESIRE TO DO SOMETHING LIKE THIS.
UM, FIRST OF ALL, I'D LIKE TO THANK, UM, CITY MANAGER FOR PUTTING TOGETHER THIS AND OTHER MEMOS FOR TONIGHT.
UM, I HAD A QUESTION ON NUM ITEM NUMBER 11, SECURITY MEASURES.
IT SAID THAT BUSINESSES OPERATING WITHIN THE PODA MUST HAVE AN APPROVED SECURITY PLAN.
SO I JUST WONDERED WHAT KIND OF PLAN AND WHO APPROVES IT.
WELL, THEY ALREADY HAVE TO HAVE A PLAN IN ORDER TO GET THEIR A, B, C LICENSES ANYWAY.
SO IT, SO IF THEY HAVE A, SO IN OTHER WORDS, THE ALCOHOL SELLING BUSINESSES.
THE ALCOHOL SELLING BUSINESSES.
I HAVE NOTHING AGAINST THIS, BUT I DON'T THINK IT'S A GOOD IDEA TO INCLUDE THE, THE WALKING TRAIL.
[00:25:01]
I THINK THAT WAS THE QUESTION MARK.I DON'T THINK I I HAVE, GO AHEAD.
WE'RE GONNA START TALKING ABOUT THAT.
CAN YOU PULL THAT UP? JUST TALK A LITTLE BIT.
AND I KNOW THAT, THAT WHERE THE ROUNDHOUSE IS, IS YOU JUST BASICALLY INCLUDED THE ENTIRE PROPERTY OF THE ROUNDHOUSE.
SO I HAVE SOME ISSUES 'CAUSE THAT GOES OUT ON LIBERTY STREET AND I BELIEVE THAT, THAT IT SHOULD BE WHY YOU, THAT THIS DISTRICT SHOULD BE VERY CLEARLY, UM, THAT THE RAILROAD SHOULD BE TAKEN COMPLETELY OUT.
I'M FINE, I'M FINE WITH THE ROUNDHOUSE ITSELF BEING IN, BUT I DO NOT THINK THAT WE SHOULD HAVE A DISTRICT WHERE PEOPLE CAN DRINK ALCOHOL TECHNICALLY ON THE RAILROAD.
UM, I JUST, I, I LOOK, AND I KNOW THAT SEEMS SILLY AND MINOR, BUT I DO THINK THAT THAT SHOULD NOT, THAT THE RAILROAD SHOULD BE COMPLETELY LIKE A 20 FOOT BARRIER.
AND I ALSO, I DON'T KNOW HOW COMPLICATED THIS IS, BUT I DO NOT THINK THE ENTIRE PROPERTY OF THE ROUNDHOUSE SHOULD BE INCLUDED BECAUSE I DO NOT THINK THEY SHOULD BE ABLE TO COME OUT ONTO THE RESIDENTIAL METER.
YEAH, THE LINE CAN BE FAIR POINTS.
THE LINE CAN BE PUT WHEREVER WE JUST NEED TO DELINEATE BY SIGN WHERE IT IS.
I MEAN, IT'S NOT LIKE AN ELECTRIC FENCE.
IF SOMEONE GOES OVER, THEY AREN'T GONNA GET ZAPPED.
BUT WE ALSO NEED TO MAKE SURE THAT WE DELINEATE IT SO YOU KNOW, OUR COLLEAGUES CAN, CAN ENFORCE IT.
I JUST, IT JUST, EVEN IF IT WAS LIKE A HUNDRED FOOT CIRCLE AROUND THE ROUNDHOUSE.
BUT WE COULD STICK TO THE BUILDINGS.
YOU PULL OUT STICK GOING OUTSIDE.
SO THERE'S SOME DISTANCE FROM THE OUTSIDE.
MY ISSUE IS, MY ISSUE WITH TWO ISSUES ARE JUST THE RAILROAD AND I DO NOT THINK THEY SHOULD COME OUT ON DELIVERY STRIP TO THE POINT.
ANY, ANY OTHER QUESTIONS? IS THIS SOMETHING, OH, GO AHEAD.
IS THIS SOMETHING THAT WE WANT TO, WHAT ABOUT THE TRAIL WITH THAT? YEAH, WE'RE NOT GONNA DO THE TRAIL.
SO THE, THE TRAIL THAT GOES DOWN SOUTH, WE WON'T DO THAT.
NOW I WILL SAY WHETHER IT'S A RAISE GRANT OR A TA GRANT OR WHATEVER, ONE OF THE REASONS WHY THE, THE NORTHERN SECTION WHERE THE FUTURE BREWERY IS, IT JUST HAPPENS.
THAT'S WHERE THE TRAIL GOES AND THAT'S THE WAY YOU'RE GONNA WALK TO.
SO YOU WANT TO, I WOULD, I'D RECOMMEND THAT YOU INCLUDE THAT.
I, I THINK IT'S A LITTLE BIT OF COMMON SENSE, YOU KNOW.
I WOULD INCLUDE THE REST OF IT.
DESIGNATED SOME ACT BUT NOT START TO FINISH.
I THINK WHAT WE SEE HERE, AND, AND I TAKE JASON'S POINT AS FAR AS THE, THE ROUNDHOUSE, WE CAN, WE CAN ADJUST THOSE GUIDELINES BASED ON WHAT YOU'RE SEEING HERE TONIGHT WITH THE ADJUSTMENT OF THE ROUNDHOUSE.
DO, DOES COUNSEL WANT TO MOVE FORWARD WITH THIS? YES.
DO WE NEED TO HAVE A MOTION FOR THIS? YES.
JUST TO AUTHORIZE AN ORDINANCE.
I NEED A, I NEED A MOTION TO AUTHORIZE AN ORDINANCE.
I MAKE A MOTION TO AUTHORIZE AN ORDINANCE TO ESTABLISH A PODA.
WE'VE HAD THE QUESTIONS AND ANSWERS.
ALRIGHT, WE'RE GONNA MOVE ON TO THIS LAST ITEM.
AND BEFORE WE, BEFORE I READ THIS, I JUST WANT COUNSEL TO KNOW THAT, UH, ANDY AND STEVE THAT HAVE WORKED DILIGENTLY ON ALL THIS INSURANCE STUFF THAT WE'RE ABOUT TO HEAR HERE TONIGHT.
AND THEY'VE, THEY'VE GONE ABOVE AND BEYOND, UH, WHAT THE CALL OF DUTY IS, NOT ONLY FOR THEMSELVES, BUT FOR THE CITY OF ORANGEBURG AND OUR EMPLOYEES.
SO I WANNA MAKE SURE WE'RE NOTED OF THAT SO THAT IF, IF AND WHEN WE MOVE FORWARD WITH THIS, THAT I HAVE TOTAL CONFIDENCE IN THE WORK THAT THEY'RE DOING AND THE DIRECTION THAT THEY'RE GOING DISCUSS AND TAKE ACTION TO APPROVE CON CONTRARIAN HOLDING LLC SUBSCRIPTION DOCUMENTS AND AUTHORIZE THE CITY MANAGER TO TAKE ALL NECESSARY ACTION TO ENTER INTO AGREEMENTS WITH PERIAL HEALTH.
ONE DIGITAL AND WELLNESS NET FOR THE PURPOSE PURPOSES OF PROVIDING AND FUNDING HEALTH INSURANCE AND THE ANCILLARY INSURANCE PRODUCTS.
AND TO CREATE FUND 5 0 9 TO HANDLE ALL THE ASSOCIATE EXPENSES.
I'M REALLY GONNA TRY TO KEEP IT THE 30,000 FOOT LEVEL ON THIS 'CAUSE THIS GETS REALLY DETAILED AND HE'S HEARD ALL OF IT.
REMEMBER WHAT WE PRACTICED, FIRST OF ALL, THIS IS A VERY LARGE PROJECT.
I ACTUALLY WANNA ST THANK STEVE A LOT FOR HELPING ME.
WE WENT TO COLORADO LAST WEEK TO LEARN ABOUT THIS.
AND I'M GONNA SAY THIS TONIGHT WITH A CAVEAT OF, IT'S A BIG PROJECT WITH A LOT OF DETAILS WHERE I LIKE TO HAVE SOME AUTHORIZATION TO MOVE FORWARD.
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BUT IF THERE'S CERTAIN DETAILS OR SOMETHING THAT FALLS THROUGH IN, IN ORDER TO DO THIS, THAT WE CALL AN AUDIBLE IN JUNE, WHICH WE HAVE TIME TO DO THAT.I WANTED TO PUT THIS ONE EARLY.
THIS IS ONE OF THE REASONS I WANNA HAVE THIS MEETING TONIGHT TO GO OVER THIS.
'CAUSE I DON'T WANT TO CREATE ANY MORE WORK UNLESS THERE'S INTERESTED IN DOING THIS.
'CAUSE WE PUT IN A LOT OF WORK ALREADY.
AND THEN IF SOMETHING, IF THERE'S A CERTAIN DETAIL OR SOMETHING THAT, THAT JUST ISN'T RIGHT, THEN WE CAN ALWAYS COME BACK IN JUNE AND CALL AN AUDIBLE WITH THE STATUS QUO.
SO WHEN I WAS, UM, WHEN I DID THE BUDGET THIS YEAR, I LEARNED A LOT, WHICH IS GOOD.
AND ONE OF THE THINGS THAT I'M CONCERNED ABOUT IS THE TRAJECTORY OF OUR INSURANCE.
AND YOU SAW THE MEMO ABOUT THE INTRODUCTION ABOUT WHAT THE INITIAL, UM, WHAT THE INITIAL, UM, OFFER WAS, WHICH WOULD'VE BEEN ABOUT $900,000 TO THE CITY OF MARTINSBURG, WHICH FORCED US TO LOOK AT ALTERNATIVE SOLUTIONS.
WE BELIEVE THAT WE HAVE FOUND A VIABLE SOLUTION.
THERE ARE SOME ADDITIONAL DETAILS THAT WE NEED TO MAKE SURE AND HAMMER OUT BEFORE WE GET TO THAT POINT, BUT IT'S MAY AND OUR PLAN IS AUGUST.
AND I WANT TO MAKE SURE THAT WE HAVE ENOUGH RUNWAY IN CASE SOMETHING WOULD FALL THROUGH TO, UM, TO COME BACK IN JUNE AND SAY, OKAY, WE NEED TO GO BACK TO THE STATUS QUO.
SO I'M TRYING TO EXPLAIN THIS IN A 30,000 FOOT LEVEL, WE CURRENTLY ARE FULLY INSURED AND LAST YEAR WE DID A HRA HEALTH INSURANCE, HEALTH REIMBURSEMENT ACCOUNT.
OUR EXPOSURE ON THE HEALTH REIMBURSEMENT ACCOUNT, THAT'S WHERE WE PAY A CERTAIN AMOUNT OF THE DEDUCTIBLE.
BUT WE KEPT THE DEDUCTIBLES THE SAME FOR EMPLOYEES.
SO THEY DON'T, THEY DID NOT SEE THIS.
THAT IS AVERAGING ABOUT $375,000 RIGHT NOW ON AN ANNUALIZED BASIS BEFORE WE PAY PREMIUM.
SO WE'RE ALREADY IN THE SELF-INSURED BUSINESS TO A CERTAIN EXTENT.
THIS PROPOSAL IS GOING TO MORE FROM THE, LEMME MAKE THIS CLEAR, LEMME STEP BACK.
I WOULD NOT BE PRESENTING THIS IF I DID NOT, IF, IF I THOUGHT THIS WAS GOING TO HURT THE EMPLOYEE WHATSOEVER.
FIRST OF ALL, I'M AN EMPLOYEE.
SECOND OF ALL, AS YOU KNOW, EVEN THOUGH SHE'S NOT ON MY PLAN, I'VE GONE THROUGH A LOT OF MEDICAL ISSUES AND A LOT OF BILLS OVER THE LAST YEAR AND A HALF.
AND I'VE USED A PERSONAL CASE AS A CASE SCENARIO FROM THE EMPLOYEE'S PERSPECTIVE.
THE ONLY THING THAT WOULD CHANGE IS THE, FROM THE HIGHMARK NETWORK TO THE CIGNA NETWORK, WHICH IS ONE OF THE MAJOR NETWORKS IN THE COUNTRY, WHICH EVERY PROVIDER HERE LOCALLY IS IN THE CIGNA NETWORK.
SO FROM THE EMPLOYEE'S PERSPECTIVE, I FEEL COMFORTABLE WE WOULD ADOPT THE EXACT SAME PLAN THAT WE HAVE NOW.
WE PROBABLY WOULD ACTUALLY REDUCE THEIR OUT OF COST POCKET EXPENSES, PRELIMINARILY FROM 7,900 DOWN TO 4,000.
AND WHAT I'M REALLY TRYING TO DO UNDER THIS PLAN IS NOT INCREASE EMPLOYEE RATES AT ALL THIS YEAR.
SO THAT WE'RE FOCUSING ON THE PLAN AND NOT ON WHY ARE YOU INCREASING MY RATES? SO LET'S GET THE EMPLOYEE STUFF OUTTA THE WAY.
'CAUSE THROUGHOUT THIS ENTIRE THING, IF IT'S NOT GOOD FOR THE EMPLOYEE, THEN I DIDN'T WANNA BRING IT.
THIS IS REALLY HOW WE'RE CHANGING THE WAY WE FINANCE OUR HEALTH INSURANCE.
CURRENTLY, YOU'RE FULLY INSURED.
IF YOU HAVE A GOOD YEAR OR A TYPICAL CLAIM YEAR, YOU'RE FULLY INSURED.
YOU PAY THE INSURANCE COMPANY A FULL PREMIUM.
THEY KEEP, THEY KEEP THE LEFTOVER UNDER THIS, IT'S CALLED A CAPTIVE.
IF YOU HAVE A TYPICAL YEAR OR A GOOD YEAR, YOU GET TO REINVEST IT BACK INTO A FUND.
WE GET TO REINVEST IT INTO OUR EMPLOYEES, WE GET TO REINVEST IT IN BENEFITS, WE GET TO REINVEST IT IN OLAS, ET CETERA.
THE WAY WE CURRENTLY ARE IS WE PAY A PREMIUM AND WE'RE DONE.
EXCEPT WHEN WE WENT TO THE HRA THIS YEAR, THEY GOT, THEY, WE PUT OUR TOE INTO THE SELF-INSURED BUSINESS.
AND THAT SELF-INSURED IT, IT'S RIGHT NOW FACTORING IN ABOUT THREE 50 TO 3 75, BUT IT COULD BE AS MUCH AS 900,000.
IT'S NOT GONNA GET TO 900,000.
'CAUSE EVERYONE WOULD'VE TO HAVE A CATASTROPHIC INCIDENT.
BUT IT'S VERY, IT COULD GET TO 400, 4 50 PRETTY EASY.
SO THIS IS AN ATAL, THIS IS BASICALLY, INSTEAD OF INVESTING IN A HEALTH INSURANCE COMPANY, YOU'RE GIVING AN OPPORTUNITY TO INVEST IN OURSELVES.
AND STEVE AND I WENT TO COLORADO LAST WEEK TO MEET WITH THE CEO AND THE CHIEF EXECUTIVE OFFICER AND THE UNDERWRITERS OF THIS, AND MEMBERS FROM ALL OVER THE COUNTRY THAT ARE DOING THIS.
NOW, I UNDERSTAND THAT WE PROBABLY WENT TO A PLACE THAT HAVE ALREADY DRANK THE KOOL-AID, BUT IT WAS VERY POSITIVE.
I MEAN, IT WAS VERY POSITIVE RESPONSE.
HERE AGAIN, WE'RE A LITTLE BIT UNIQUE IN THE CITY AND WE HAVE A LITTLE BIT DIFFERENT CIRCUMSTANCES REGARD TO OUR EMPLOYEE GROUPS.
BUT THE WAY WE WOULD DO THIS, AND AGAIN, WE WOULD CREATE A SEPARATE FUND THEN ALL
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OF OUR, THE GENERAL FUND, THE WATER AND SEWER FUND, THE STORMWATER FUND, ALL THE FUNDS WOULD CONTRIBUTE INTO FUND 5 0 9 AND ALL EXPENSES WOULD COME OUTTA THAT FUND.AND BASICALLY WHAT WE WOULD, WHAT WOULD HAPPEN UNDER THIS PROPOSAL IS THAT WE'RE SELF-INSURED UP TO $3.5 MILLION.
AND IF THERE'S ANY CLAIMS OVER $3.5 MILLION, WE HAVE A RISK LOST INSURANCE POLICY THAT THEY COVER THE REST.
IF THE CITY HAS A TERRIBLE EXPOSURE YEAR, THE HIGHEST THE RISK INSURANCE PREMIUM CAN GO UP.
AND THAT'S THE SMALL PART OF THIS BIG SPEND IS 30%.
IT'S NOT 30% ON THE $4.2 MILLION YOU'RE SPENDING NOW.
IT'S 30% ON THE 6 88 RISK LOSS PREMIUM, WHICH IS YOUR PROTECTION, OUR PROTECTION IN CASE WE HAVE CATASTROPHIC INCIDENTS.
I'LL KIND OF STOP THERE AND SEE IF YOU WANNA HAVE ANY QUESTIONS.
WELL, STEVE, DO YOU HAVE ANY, DO YOU HAVE SOMETHING TO ADD OR WOULD YOU LIKE TO ADD SOMETHING? YES, PLEASE.
YEAH, I MEAN, I THINK, I THINK THE IMPORTANT PART OF THIS IS IT IS A VERY, VERY BIG DECISION.
AND I HAVE TAKEN A LOOK AT THIS, UM, IN GREAT DETAIL.
UM, BUT IT'S BIG DECISION EMPLOYEE.
SO, YOU KNOW, WE LOOKED AT, YOU KNOW, THIS OPTION, YOU KNOW, I THINK AND DID A GOOD JOB DESCRIBING IT AS BASICALLY WHAT IT DOES.
BUT ULTIMATELY, UM, YOU KNOW, WE ULTIMATELY HAVE TO MAKE THE RIGHT DECISION FOR OUR EMPLOYEES AND RIGHT DECISION FOR THE GROUP.
AND, YOU KNOW, WE'RE STILL LOOKING AT THINGS IN DETAIL.
WE'RE STILL LOOKING AT, YOU KNOW, THE, THE OVERALL COST, THE MAXIMUM EXPOSURE THAT THE CITY WOULD HAVE IN TERMS OF COST.
BUT ANDY'S DONE A GREAT JOB BY ANALYZING THOSE COSTS.
AND, YOU KNOW, I FEEL PRETTY CONFIDENT THAT THIS IS A VIABLE OPTION.
UM, YOU KNOW, AND I THINK THE OTHER ASPECT OF THIS PLAN THAT, THAT ANDY REALLY DIDN'T REALLY TOUCH ON IS BEING PART OF THIS GROUP HAS THE POTENTIAL TO PROVIDE, UM, A LOT MORE OUTREACH TO EMPLOYEES.
UM, YOU KNOW, A LITTLE BIT BETTER SERVICE TO EMPLOYEES IN TERMS OF JUST BENEFITS IN GENERAL AND, YOU KNOW, PREVENTATIVE CARE.
AND IT ALLOWS THE CITY TO BE A LITTLE BIT MORE FOCUSED ON WELLNESS AND PREVENTION AS OPPOSED TO JUST, YOU KNOW, UH, A FULLY INSURED PLAN WHERE YOU'RE, YOU'RE PAYING A PREMIUM AND THAT'S IT.
SO, UM, A LOT TO CONSIDER WITH THIS PLAN, BUT I THINK IT'S, UH, DEFINITELY SOMETHING THAT THE CITY NEEDS TO LOOK AT VERY, UM, VERY HARD.
AND, YOU KNOW, IF WE HAVE APPROVAL TO MOVE FORWARD WITH THIS, I THINK IT'S, UM, YOU KNOW, DEFINITELY, UH, YOU KNOW, A, A GREAT OPTION DOWN THE ROAD IF THINGS WORK OUT THE WAY WE THINK IT WILL.
AND, YOU KNOW, WE'LL KNOW BY JUNE WHETHER OR NOT ALL THE DETAILS ARE THERE.
BUT I WANT TO, FIRST OF ALL, I CAN SAY BEFORE WE GO FORWARD, AUTHORIZATION TO MOVE FORWARD.
BUT IF SOMETHING HAPPENS IN JUNE, I'M SAY, OKAY, I'M GONNA PULL BACK JASON.
NUMBER ONE, WHO'S GONNA MANAGE IT? 'CAUSE OBVIOUSLY YOU PAY A PREMIUM, THAT'S WHAT HIGHMARK DOES FOR US.
THEY JUST, HERE'S YOUR MONEY, THEY MANAGE IT, WHO'S GONNA, WHO, WHO'S GONNA MANAGE THE CAPITAL? SO THERE'S THREE PRONGS TO THIS.
ONE IS A THIRD PARTY ADMINISTRATOR THAT MANAGES ALL CLAIMS. THAT'S, THAT'S THE CONTACT FOR THE EMPLOYEE, THAT'S THE CONTACT FOR THE CITY.
SO THAT'S, THAT'S WELL NET THAT'S, THAT'S INCLUDED.
THAT'S THAT, THAT'S PART OF THIS PROPOSAL.
WELL NET THE SECOND PRONG, WHICH IS THE BIG EXPENSE, ARE CLAIMS. AND SO WHAT WILL HAPPEN IS, IS THAT EVERY WEEK OUT OF A FUND, WE'LL GET A REPORT FROM OUR THIRD PARTY ADMINISTRATOR AND THE CLAIMS WILL BE DEBITED FROM OUR ACCOUNT.
THAT'S THE CLAIMS. AND THEN THE THIRD PART OF THIS IS, UM, RISK LOSS INSURANCE PREMIUM, WHICH IS, UH, THE INSURER IS CALLED PARETO HEALTH.
SO IT'S, WELL WELLNET, PARETO HEALTH, AND THEN THE AGENT IS ONE DIGITAL OUT OF WINCHESTER.
AND SO, UM, AS A FULLY SELF-INSURED, WE'D HAVE THE RIGHT TO ADMINISTER THAT.
WE DO NOT HAVE THE CAPACITY TO DO THAT, AND WE DO NOT WANT TO, UH, ADMINISTER THAT.
SO PART OF THIS, UH, UH, COST IS A, UH, THIRD PARTY ADMINISTRATOR CALLED WELLNET.
SO THEY, THEY WOULD HANDLE A LOT OF THE CLAIMS ADMINISTRATION.
WE WOULD GET BILLED BY, YOU KNOW, WEEKLY, UH, WHICH WE DO THAT NOW CURRENTLY WITH AN HRA.
UM, BUT THEY HANDLE THE BURDEN OF THE ADMINISTRATIVE SIDE.
AND IN TERMS OF, UM, YOU KNOW, THE CLAIMS PROCESSING AND ANY, ANY, YOU KNOW, ANOTHER PART OF THIS IS PHARMACY REBATES THAT THE CITY WOULD QUALIFY FOR AS WELL.
SO, YOU KNOW, ALL OF THAT WOULD BE HANDLED BY THAT THIRD PARTY ADMINISTRATOR.
AND THERE'S BEEN A LOT OF WORK TO LOOK AT THOSE DIFFERENT OPTIONS AS WELL.
AND THERE'S MANY DIFFERENT THIRD PARTY, YOU KNOW, TPAS OUT THERE THAT, UM, YOU KNOW, OFFER DIFFERENT THINGS.
AND, YOU KNOW, THE THE ONE WE'RE PROPOSING HERE IN THIS, UM, IN, IN, IN ANDY'S MEMO IS A VERY GOOD REPUTATION.
YOU KNOW, THEY, AGAIN, DO A LOT OF, DO A LOT OF OUTREACH.
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TO THIS, THIS TYPE OF PLAN IS, YOU KNOW, THE EMPLOYER IS MORE VESTED IN TO THE, WELL, YOU KNOW, THE HEALTH OF THEIR, THEIR EMPLOYEE GROUP.SO THERE, YOU KNOW, IT, IT KIND OF FORCES YOU TO GET MORE INVOLVED IN, AGAIN, WELLNESS INITIATIVES.
YOU KNOW, LOOKING AT THINGS THAT COULD BENEFIT THE GROUP LONG TERM, YOU KNOW, AND HELP DRIVE DOWN THOSE COSTS LONG TERM.
UM, YOU KNOW, RIGHT NOW THERE'S SOME THINGS THAT HIGHMARK DOES ON, ON, ON THEIR END, BUT THERE'S, THERE'S REALLY NO ACTIVE ENGAGEMENT FROM, YOU KNOW, FROM THE EMPLOYER ITSELF.
UH, AND THAT THIRD PARTY IS BASICALLY YOUR PARTNER IN BEING ABLE TO ANALYZE YOUR, YOUR DATA, LOOKING AT DIFFERENT COST CONTAINMENT MEASURES OR COST CONTAINMENT, UM, INITIATIVES THAT YOU CAN PUT IN PLACE TO HELP CURB THE COST OF HIGH, HIGH HEALTHCARE, UM, AND THE INCREASE IN HEALTHCARE LONG TERM.
CAN YOU SPEAK TO THAT IDEA OF REINVESTING? THAT'S KIND OF A NEW CONCEPT.
YOU DON'T, WHERE DOES THAT MONEY COME FROM? AND THEN HOW DO YOU GET TO REINVEST IT? SO RIGHT NOW, IF WE HAVE, SAY OUR GROUP CLAIMS COME IN MUCH LOWER THAN ANTICIPATED UNDER THE GROUP PLAN, WE STILL PLAY A, THAT A FLAT PREMIUM NO MATTER WHAT.
YOU KNOW, WE DON'T GET THOSE DOLLARS BACK.
SO, YOU KNOW, HIGHMARK, YOU KNOW, THEY, THEY CREATE OUR PREMIUM BASED ON PROJECTED CLAIMS COST AND, YOU KNOW, THAT'S WHAT WE PAY.
UM, WHETHER IT'S A GOOD PLAN YEAR, WHETHER IT'S A BAD PLAN YEAR, YOU KNOW, THE, THE UPSIDE TO THAT IS IF WE DO HAVE A LOT OF CATASTROPHIC, YOU KNOW, UH, CASES THROUGHOUT THE PLANNED YEAR, THEN WE'RE STILL PAYING A SET PREMIUM.
BUT THE DOWNSIDE IT IS, IS, UM, SAY EVERYONE'S HEALTHY, EVERYTHING'S GREAT, YOU KNOW, WE HAVE LOW CLAIMS COSTS THROUGHOUT THE YEAR, THEN, YOU KNOW, THE CITY DOESN'T REAP ANY BENEFIT FROM THAT.
SO BEING MORE SELF-INSURED, YOU KNOW, ANY OF THOSE CLAIMS COSTS THAT ARE NOT BEING PAID OUT, UM, OBVIOUSLY WOULD COME BACK TO THE GROUP.
WE GO RIGHT BACK INTO THAT HEALTH, HEALTH, UM, THAT HEALTH FUND.
UM, SO WE CAN TAKE ADVANTAGE OF THOSE LOW COST CLAIM YEARS BASICALLY IS, IS WHAT THAT MEANS.
YOU KNOW, THOSE, THOSE DOLLARS COME BACK TO US AS OPPOSED TO, YOU KNOW, A FULLY INSURED PROVIDER.
SO SAY YOUR CLAIMS ARE 3.2, 3.2, WHAT, LET'S JUST SAY IT'S 3.2 MILLION AND YOUR FULLY INSURED PREMIUM'S FOUR, BUT YOU'RE CLAIMING YOU'RE AT 3.2 800,000 AND THAT'S $800,000 COMING BACK INTO THAT FUND, WHICH WE CAN BE REINVESTED INTO EITHER COST OF LIVING RAISES OR BETTER BENEFITS OR DECREASED PREMIUMS. MY MY CONCERN ABOUT NOT TRYING TO FIND SOMETHING A LITTLE BIT DIFFERENT IS WE'RE IN A TRAJECTORY LIKE THIS.
AND SO WHEN YOU START OFF WITH A 25% AND YOU GO DOWN TO A 10% AND IT MAKES YOU FEEL GOOD ABOUT YOURSELF, 10% TO THE CITY IS 3 70, 370 4,000.
SO NEXT YEAR, IF IT'S 10 OR 15%, IT'S 10 OR 15% OF THE PREMIUM FIGURE OUT PLUS 374,000.
AND WHAT IT'S GONNA GET TO THE POINT OF IT IS, IS THAT HEALTH INSURANCE COSTS ARE GONNA GET SO HIGH THAT EITHER OUR COST OF LIVING RAISES ARE GONNA MAKE A NET, UH, IS GONNA REDUCE THE PAYCHECK OF EMPLOYEES.
'CAUSE YOU'RE PAYING MORE FOR INSURANCE THAN WHAT WE CAN GIVE TO COLAS BECAUSE GET, BECAUSE WITH OUR 90, WITH OUR 90 10 AND OUR 70 30, SO WHEN A 10% INCREASE COMES TO US AND IT'S 3,370 $4,000 IN INCREASE, 30 SEVENS COMING FROM THE EMPLOYEE GROUP AND THE REMAINDER IS COMING FROM THE CITY, AND THEN YOU'RE TRYING TO GIVE A COLA IN ORDER TO MAKE SURE THAT YOUR PAYCHECK IS HIGH ENOUGH THAT IT PAYS THE INCREASE OF THE INSURANCE, PLUS YOU'RE GETTING A RAISE.
SO IT'S A REALLY COMPOUND, IT'S A COMPOUNDING INTEREST SITUATION, WHICH, WHICH IF YOU CASH FLOW IT, IT'S SOMETHING THAT LOOKS JUST LIKE, IT LOOKS JUST LIKE THAT
AND, AND, UM, I'M NOT GUARANTEEING THAT IN THE FIRST YEAR THAT YOU SAVE MONEY, ALTHOUGH I THINK THAT IN THE WORST CASE SCENARIOS I GAVE TO YOU, WE DO.
UM, THIS IS A LONGER TERM GAME.
IT'S KIND OF LIKE THE STOCK MARKET.
THE LONGER YOU'RE IN IT, THE MORE, THE MORE SAVINGS YOU CAN GET.
BECAUSE THE REALITY IS WE'RE GOING TO HAVE A BAD PLAN YEAR.
STATISTICALLY, I MEAN, WE'RE GONNA HAVE A BAD PLAN YEAR EVERY, EVERY FIVE TO SEVEN YEARS.
YOU'RE GONNA HAVE A REALLY, YOU KNOW, REALLY BAD CLAIM YEAR.
UM, BUT WHEN THAT HAPPENS, YOU KNOW, THOSE HIGH COST CLAIMS, I MEAN THAT, THAT COST IS SPREAD THROUGHOUT THE CAPTIVE SPREAD THROUGHOUT THE GROUP.
SO IT'S ABSORBED BY, YOU KNOW, EVERY MEMBER OF THAT CAPTIVE.
UM, BUT AGAIN, YOU KNOW, ON THOSE LOW COST CLAIM YEARS, YOU KNOW, ANY, ANY REDUCED OR, UH, RATES ON OUR STOP LOSS PREMIUM OR, UM, YOU KNOW, ARE CAN BE ULTIMATELY REDUCED, YOU KNOW, IF WE HAVE A GOOD YEAR.
RIGHT? SO AGAIN, IT'S JUST ANOTHER WAY TO, UM, REALLY TAKE A LOOK AT OUR GROUP, SPECIFICALLY REAP THE BENEFITS WHEN WE'RE HAVING A GOOD YEAR, UM, BUT ALSO SPREAD THE, SPREAD THE COST WHEN YOU HAVE A BAD YEAR AS WELL.
THERE'S NO GUARANTEE TO THIS, BUT THE ACTUARIES,
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AND I GAVE YOU A LOT OF DOCUMENTS TONIGHT, BUT IF YOU LOOK AT A DOCUMENT THAT'S A GOOD SUMMARY OF THIS ACTUARIES HAVE SHOWN BASED UPON JUST A 9% INCREASE UNDER OUR CURRENT PLAN OVER THE NEXT 10 YEARS, WE'LL SPEND $56 MILLION IF WE DO SOMETHING LIKE THIS.IT'S ESTIMATED TO SPEND $15 MILLION LESS OVER 10 YEARS.
AND SO, UM, YOU MIGHT NOT SEE THAT NEXT YEAR, AND WE MIGHT DO THIS AND IT MIGHT BE A BAD CLAIM YEAR, AND WE MIGHT REACH OUR RISK LOSS PREMIUM OF 3.5.
THE BUDGET, THE WAY THE BUDGET IS SET IS I BUDGETED FOR THE WORST CASE SCENARIO.
SO ANYTHING THAT'S LESS IS REINVESTED BACK INTO THE FUND IN ORDER TO HOPEFULLY COVER NEXT YEAR WHEN IT'S TIME TO, YOU KNOW, SAY, HEY GUYS, WE NEED TO REMAIN COMPETITIVE IN THE LABOR MARKET.
IT'S TIME TO, YOU KNOW, FUND A COLA OR IT'S TIME TO SEE IF WE CAN REDUCE PREMIUMS TO INSURANCE.
THE OTHER ALTERNATIVE IS WE KEEP DOWN THE PATH THAT WE ARE, WHICH WE ABSOLUTELY CAN.
AND THIS YEAR IS A 10% INCREASE.
AND, AND WE SEND A MEMO TO SAY, EMPLOYEES, WE'VE TRIED THE BEST WE CAN AND WE'VE REDUCED IT DOWN TO 25 TO 10, BUT THE DEFINITION OF INSANITY EXPECTING THE SAME, YOU KNOW, DOING THE SAME THING, EXPECTING DIFFERENT RESULTS.
I MEAN, LAST YEAR IT WAS 17.99% UNTIL WE DECIDED TO DO THE HRA AND WE ARE EXCITED BECAUSE IT INCREASED IT TO 10.76% AND WE DID NOT PASS IT ON TO ANY OF THE EMPLOYEES.
WE, WE AS A CITY, UM, ABSORB THAT.
UM, BUT I ALSO, BECAUSE IT'S SUCH A COMPLICATED THING AND THEY'RE LOOKING AND ON AND ON AND ON, I ALSO WANNA GIVE US SOME ROOM RIGHT.
BETWEEN NOW AND JUNE TO SAY, OKAY, YOU KNOW WHAT, THERE'S A COUPLE THINGS THAT WE ADMIT BECAUSE AS WE GO THROUGH THIS, AND THEY KNOW THIS.
I MEAN, THEY, AND I CAN SAY OUR, UM, OUR COLLEAGUES DOWN THE STREET, THE COUNTY, THEY AGREED TO GO THIS ON THURSDAY.
THE AMBULANCE AUTHORITY HAS AGREED TO DO THIS, AND THE WATER DISTRICT DID IT TWO YEARS AGO.
SO YOU HAVE A THOUSAND INSURED SOULS NOW THAT ARE BASICALLY IN THE LOCALLY IN THE CAPTIVE, WHICH GIVES YOU A LITTLE BIT MORE NEGOTIATION, NEGOTIATING POWER DIRECTLY WITH MEDICAL PROVIDERS TO HAVE DIRECT COST OF, OF CARE.
AND IT'S A DIFFERENT WAY OF, I MEAN, IT'S, I WANNA MAKE THIS VERY CLEAR.
WE'RE NOT CHANGING NECESSARILY HEALTHCARE EXCEPT WE'RE BEING MORE PROACTIVE.
WE'RE REALLY CHANGING THE WAY WE FINANCE HEALTHCARE.
BECAUSE ONE WAY OR THE OTHER, WE'RE SPENDING FOUR POINT SOME MILLION DOLLARS.
THE QUESTION IS, HOW ARE WE DOING IT? WELL, WE'VE GOTTEN A LOT OF INFORMATION.
APPRECIATE YOU GUYS, EVERYTHING THAT YOU'VE DONE TO, TO GET THIS ALL TOGETHER.
I THINK THE NEXT STEP HERE IS TO, UM, WHETHER WE, SO I'LL NEED A MOTION TO, TO MOVE FORWARD IN THIS DIRECTION.
HOW DO, HOW DO YOU WANT THAT WORDED? UM, JUST ALL I'LL A MOTION.
A MOTION I BE IS TO, TO, TO MOVE FORWARD WITH THE DIRECTION, WITH THE, UH, WITH THE, THE INSURANCE.
UM, KIND OF LEAVE IT BROAD FOR RIGHT NOW.
MAKE A MOTION TO CONTINUE GETTING MORE INFORMATION.
UM, YOU WANNA AUTHORIZE IT? YES.
NOT, YOU DON'T WANT MORE INFORMATION CONTINGENT UPON MORE INFORMATION, BUT YOU WANNA AUTHORIZE IT.
I'D LIKE TO MAKE A MOTION TO AUTHORIZE CITY OFFICIALS GOING FORWARD WITH THIS NEW INSURANCE PLAN.
AND WE'VE HAD ALL THE QUESTIONS.
UM, NOTHING FOR EXECUTIVE SESSION.