San Angelo City Council Budget Workshop 7-28-20

[0:00:01] good morning everyone and welcome to our budget workshop on july 28 2020. uh we do have a quorum all single all members of city council are present so just a reminder that when you ask to speak to please re repeat your name and your smd number so we get your comments recorded properly with that uh we this meeting is called the order and we are first of all going to have public comment and the public comment is zero so there's no public comment to offer so we will immediately go into the workshop agenda and the first item is discussion of matters regarding the fiscal year 2020 2021 budget preparation including but not limited to one other enterprise funds revenue and expenditures and tina will make that presentation and then number two is health insurance update which brian kendrick will with julie rickman we'll make that presentation so we are going to start with tina tina you're on thank you mayor good morning tina dierski director of finance and this morning as you mentioned mayor we're going to be discussing the other enterprise funds we discussed our public works enterprise funds and our last budget workshop and now we'll discuss the rest of them in this workshop and then coming up on august 13th as you know we'll be discussing the general fund budget as well so today we'll talk about the airport the state office building port concho fairmount cemetery the swimming pool and the development corporation and as you mentioned followed by an update to health insurance from hr so we'll start off with the airport fund the primary source of revenue for the airport continues to be leased income and this year there were two leases renewed one for customs air marine and one for border patrol so that caused a slight increase

[0:02:04] to their revenue there offset by a decrease to their concession revenue um and that was down due to decreases obviously in their concessions at the airport for rental cars the restaurants things like that stop right there because based off of what's happening currently um do we believe that the other line being down only 93 000 is aggressively down enough i mean um the other line includes interest revenue um and security badge fees advertising um and then it was offset by a slight increase to landing fees but they did project a decrease to concessions of i believe 55 000 dollars and is that currently 1 000. blue book for a month ending june i'm sorry man pardon me based off of our blue book numbers the end of june is that in line with those numbers i think jeremy is on the line and he is the one that projected that revenue if he's available to answer your question jeremy are you on i'm here can you see me i can't see you but i can hear you okay i'm on a new computer and i can't get my video to work um basically what we've done is the faa requires us to do put our financial revenues in a certain bucket so we're trying to align with the faas buckets and so we've actually moved some of the concessions and some of the other things into the lease revenue one of them being the charters the casino charters that we get so that 50 000 a lot of that's reflected into the leases and not so much into the concessions or other so you believe the concessions are planned down enough or conservative enough

[0:04:05] for your current trend yes i do i i think um even with covet 19 i think we're picking up pretty quick um the rental cars are back to paying their full rate um and they're still continuing to pay over their full rate because they're renting a lot of cars so i've got have negotiations with some other rental car companies about getting that other counter and so i think we'll be back up the where we were with our concessions hopefully by the start of the fiscal year okay so are the rental cars being leased because of the hail damage or is it because of the people flying here to san angelo um i i think it's people flying into san angelo we also have significant amount of rental cars that are leased people that don't use the airport they come out and use the um the the facilities out there so there jets are filling up they're talking about adding a fourth flight in august um so i think it's it's people flying into san angelo okay so you're somewhat positive uh conservative if you can be both like that's where we're at do i have questions from council on the revenue line for the airport fund okay with not let's move on down to the expenditure lines yes ma'am personnel there is a 3600 and that's strictly due to the reallocation that we've discussed in the past related to workers comp so just reallocating those in a more appropriate manner throughout all of the funds um o m is up fifty thousand dollars due to the ramp grant that's that local match match for that ramp grant that jeremy applies for so that he can do maintenance items at the airport and then capital is up 76 thousand dollars in anticipation of a planned purchase of a new tractor out there okay do i have questions from council on the expenditure lines okay with none we'll move on to the next fund

[0:06:09] okay the next fund we have up is the state office building fund um the primary revenue source for them of course continues to be rent income is decreased slightly due to the loss of a tenant other includes interest income and so other is down strictly due to that projected decrease in interest revenue do we have people interested in leasing so if we have one tenant who's left is there do we keep a list of potential future tenants i think carl white is on the phone or on the line pardon me if he can speak to that yes we always keep an eye on that including internal clients who may lease that space bob i see you're on the line as well but yes we do keep an eye on that to see who might be able to lease that space the question is okay that's my question do we have a list of people who have inquired about renting the space typically this is rick typically of course those are only state agencies so yes the state is real good about telling us if there's a client who is interested in using that and then we keep a list of those but typically we've been able to accommodate all their wishes so there's typically not a long list of others who are wanting usually it's a case of someone has requested they would like additional space and we tried to accommodate that where are we getting though the roof repaired has the roof been repaired the river is being repaired now on the state office complex any other questions from council if not move into the expenditure lines please yes ma'am personnel again just that slight decrease due to the workers comp

[0:08:11] allocations o m is up due to property insurance and rent to for port concho and then five is an offset to capital for those increases and or decreases okay talk to me about the capital expenditures of 318 000 describe what that is made up of that would be a question for carl carl i think that's a result of some of that debt service being freed up and the ability to use some of that freedom money for capital projects yes i believe so well to describe cattle projects there's always different projects at the complex either to replace carpet replace tiles do other repairs every year there's something that we we have to do i respect that again you came up with a number of 318 000 so i'm sure that there's something that you have a list of that those expected expenditures come up to the total of 318 000. carl is that correct me if i'm wrong but those are projections of what we have to spend and then we would come to council typically if we're going to do a lot of improvements where we would ask for expenditure of those dollars if there's large amounts but that's just the amount expected to be available in there i agree with that rick so i think that number is largely due to having freed up and the other expenditures and so we're able to put that into the capital account in anticipation of asking council councils to do projects as well in that 318 thousand dollars there is fifty thousand dollars budgeted as both the revenue and expense and that's a pass through whenever the state off or when one of the state agencies asks us to do work

[0:10:13] uh then we anticipate a revenue to reimburse for those expenses as well yeah so she so as tina said you shouldn't expect that necessarily all that's going to be spent those would be things we would come to you for depending on what those major expenditures may be and in some years we we don't have a lot and others we have more but we don't have a list of projects that were waiting to be funded at this point we have been real good about trying to keep up with those but as tina said typically what's always on the list is there's portions of the carpet or there's portions of the tile as agencies um move in and move out or in this case we've had water damage or whatever then it kind of ebbs and flows but typically what's on there is a constant list of things such as just general maintenance carpet wears out as you can imagine quickly in that large of a complex i think also rick in the past i think we've asked council to use some of these capital funds to do some projects at the fort as well correct i have a question yes billy please billy dewitt single member district six um if we're budgeting an amount of 318 000 in anticipation of maintaining the building why would we put it under capital rather than o m it's more than regular maintenance it's smaller projects and i believe some of this for next year is also to uh one of one of the agencies has asked for additional space that's under design now and i believe that's uh some of that funding is for that improvements to expand that space okay okay i'm sorry but um you know when we talk about replacing carpet and replacing tile isn't that a maintenance function

[0:12:16] it could be called that as well generally capital would be a bigger project not as billy said operations maintenance and that operation maintenance is a big number 842 551 so on the operations and maintenance what makes up the 842 000 so maybe we can better understand the capital line if we understand the operations and maintenance piece bob have you been able to get online carl have you have you contacted bob yes i have okay let me call him and see what's going on that he's not on because if you look at the combine that's familiar over a million million one so i think we need some detail information and we can get that for you all as well i can tell you in o m just looking at the blue book included there is professional service utilities maintenance type items looks like the rent of land and buildings is included there as well and the debt service payments and what's the debt service payment of 107. right now it looks like it's about just over 150 000 combined between um the chase building and the annex building that's for the current year yes but what's in the budget that's what i'm look i'm looking for that mayor i was just looking at the blue book to get you some detailed line items but let me figure out what the debt service payment is for next year as well 153 000 there 153 000 yes ma'am so 153

[0:14:21] 000 minus the million one so we've got you know 900 and some thousand i'm looking for some detailed information on yeah about um to 315 000 is for rent of land and buildings utilities their budget is approximately forty 140 dollars maintenance they budget about almost sixty thousand dollars and professional services there's a budget of 100 and about 161 thousand dollars and then personnel budget is about 125 thousand dollars well but we have a personnel line 122 000 oh yes i'm sorry i'm sorry yes you're correct so that wouldn't be included in l m i was just looking at the blue book like i said and the debt service number was wise 153 000. okay so we're at about five hundred thousand that's a million so we got another 500 000 we need details on well right the line is 320 000 of that yeah well okay so we are adding the 842 and the 318 plus 70 million two basically per billion one and bob can get a lot of that detail he can hear what's going on but is unable to talk so he's trying to figure out what's going on there so if we want to revisit this we can and and we can get that for you once we can get him online well we've got fort concho coming up soon i mean might be right after the state office fund so we're going to need to be able to talk to bob blueheart because of the

[0:16:22] fort concho piece that we're talking about today as well julia do i need to get him to try to call in again i know you just texted me back i just told him to do that and i resent him the link here when i add up all those numbers i'm getting really close to eight hundred thousand dollars so maybe you missed one well i was combining 842 and 318 which is a million one something so um okay deana bayer good morning this is bob can you hear me we can hear you good morning i'm my apologies i was blocked out of the meeting for some reason but i've heard all of your questions i assume tina has given you some background is there anything that we've missed no i just believe that when we're looking at expenditure lines of a million one plus we need to understand what that million one is made up of because you had to have something in your hands to total up to those numbers so i'm just asking for the best and the detail sure and i'm i'm sorry i missed them i'm sorry i missed the last five minutes are you on the state or on the fort we're on the state uh if there's no further questions from council on the state office fund then we'll move to the fort um so do i have billy do you have your questions answered um yes i do the only other question i had mayor um tina on the expenditure line rent of land and buildings what is that that is i believe that's the least payment to the fort is that correct bob that is correct that has been a part of the budgetary structure of these buildings on the fort since these buildings were renovated into the state office complex 22 years ago so that's the state paying i'm sorry that yeah that is the thing go ahead bob i'm sorry that is the

[0:18:29] the revenue mostly represents the lease payments by the various state agencies into that 201 fund the payments of the fort represents a share of that that is given to the fort for its operations and this was all designed more than 20 years ago when this project was commissioned and the building was renovated into the state offices so the state doesn't directly pay the city it pays its leases into the fund and the fund allocates a portion of that to the fort because the ford over 30 years ago was the organization that purchased this property that eventually has become the state office complex when when when is the debt paid up i know we talked about over with already the debts for the chase building remember there are two separate buildings the debt for the chase building will be paid off i believe at the conclusion of fiscal 23 the debt for the workforce building i think is another year or so beyond that both buildings will be paid off in full in the next three to five years okay billy further questions no i'm good mayor thanks okay with that any other questions from council members on the state office fund okay with none we'll move on to the next category which is the fort concho fund um bob are you going to present it or tina are you i will tina start and now that i'm on the line i can fill in with any details or answer any questions okay that sounds good so um of course sport con show operations are funded um through tax dollars of course as we just

[0:20:32] discussed to say office building support and program income um bob is projecting rentals to be down twelve thousand dollars for next year the general fund transfer in is at a decrease due to the correlated decrease in that o m line down there which is decreasing for insurance um and then other the decrease there is related to interest income and i think a slight decrease for donations expected so you want to talk about rent and programs what that says 50 basically 650 000 what are those specifics within that certainly the total operation budget for fiscal 21 represents a decline of 47 663 dollars and if you look on the summary sheet that's evenly split between a four thousand dollar less transfer from the city and we understand revenue is going to be tight in the upcoming year an almost equal amount from our programs and operations the shortest answer to any question on revenue for next year on programs is i don't know we are all in the covet situation together we are watching it almost daily perhaps my figures will shift and what i'm proposing is that initially we will have this decline and what we can do is monthly and quarterly just the budget as we go along we're looking also at uh the serious issues regarding the christmas event in december we have seen a little uptick in rentals we have seen good although not great attendance and everything else is tied to the ability of people to come and see us use us and enjoy us as a historic site and i don't think any one of us can

[0:22:37] predict where we're going to be two weeks two months or even a year out so it's based on my best estimates and i'm very willing to adjust it as we go along throughout the upcoming fiscal year we obviously know that um concho christmas is a big fundraiser for the ford is an important part of raising revenue so i just want to make sure that you have a game plan i know it's hard to have a game plan for alternative ideas for december we are looking at that mayor and council very very carefully the problem of course is the christmas event requires a very long lead time when we're already two months behind but we're a little leery about making commitments taking in money and commissioning contracts for merchants if we don't know where the event is going our current plan is we're going to be visiting with merchants volunteer groups and other stakeholders in the coming two to four weeks and my best guess is we will need to make some final decision by between labor day and the end of september because by then it will be too late for us to commission an event that's safe and manageable we're looking at our upper income lines and our expenses very very carefully we're being extraordinarily conservative other than maintenance and what we do and we're just going to try to hold the line and see where we be in the coming 30 days can you update us on the maintenance um items certainly the work the lard go ahead i'm sorry the large contract that will be on council's agenda for consideration and approval on august 4

[0:24:38] will cover the remaining 14 buildings that will include columns fascia boards cupolas windows and trim that will virtually take care of the exteriors of all the remaining buildings in question including the very ugly columns on barracks one and two we also have ongoing work in creating columns in our shop that will be installed throughout the year the roofs were all done as of a month ago under the contract with harrison roofing and we have almost caught up on all of the damage from the may 21 storm there's these little bits here and there we have to do so i am hoping by the time we have this conversation next year we're going to be in much much better shape i do i have questions from council for for bob blue heart on the revenue lines as presented um yes mayor billy dewitt single member district six and um my question may be more for tina uh tina i'm looking in the blue book on page 34 and for the current budget it shows a 350 000 transfer in is that included are a similar figure included anywhere in the 2021 budget for revenue no ma'am that was a budget amendment related to those um projects that was just speaking to where council authorized the allocation of about 100 000 total for those projects and so we transferred in 300 000 a portion of that was from i believe the state office building and a portion from uh the risk management fund for those insurance claims okay so there is not a similar amount included in our proposed budget for 2021. no ma'am again that was a a list of projects that was brought to

[0:26:41] council after the adoption of the original budget and so once council authorized that budget amendment then we transferred that money in and created the budget in the forecast okay so do you anticipate or maybe does bob anticipate that we would have a similar need in you know the next year the best way counselor to answer that is that this place is a 24 7 maintenance event there's always something to fix the large contract the council hopefully will approve on august 4 will put in motion the work to fix virtually all of the nagging exterior issues but we are in a constant maintenance mode and i expect that we will be identifying other needs throughout the year there is in the maintenance capital line item and fiscal 21 anticipated excess funds left over and those will help us build columns in our shop and address other issues as they come up throughout the year all right thank you you are welcome and we'll see you this evening yes you will with that we'll move into the expenditure lines i'm sorry mayor please repeat uh yes we're finished discussing the revenue lines we'll now move to the expenditure lines yes ma'am okay again there's a decrease of personnel of nineteen thousand dollars again related to uh the reallocation of workers comp um o m is down twenty two thousand dollars as we discussed that decrease to their property insurance or insurance pardon me and then capital is down six thousand dollars related to budget for uh technology capital items any questions concerning these expenditure lines okay with none then we will move into the next fund

[0:28:47] the next fund mayor is the fairmount cemetery there are very few changes for fair mountain cemetery pardon me by increasing general fund transfers and that is adjust that number as more or less support is needed by the by the cemetery to attain their budget um there are no changes to columbarium and no changes to other and the other is what other includes trust income and interest okay questions from council on the revenue lines with none we'll move into the expenditure lines okay personnel is up there by eleven thousand dollars that's strictly due to an increase to their retiree insurance payment and o m is down just as an offset to the other changes in their budget where does the money for landscape upkeep where is that is that an o m that would be included in the o m yes ma'am and is there a plan to do any of these i guess you call streets and fairmont cemetery fund over the next year if some of those streets driving through there are pretty wicked we get to work with operations to see if they can fit that in um yes some of them do definitely need some work but this budget doesn't reflect that at this point all right so we're going to just leave them as they are no plan typically there has not been a lot of money allocated in the cemetery fund where

[0:30:51] they can afford much of that historically what i've seen and so typically as operations is doing are doing projects if there's certain cross streets there that we would like resurfaced then they try to work that into their overall plan excuse me so what we could do is in this coming year talk to shane and see if there's some flexibility in some of his projects where some of those worst streets can be done i think they really need to be looked at you'll have questions from council on expenditures with none we'll move on to the next fund the next fund that we're going to discuss is really more of a pseudo fund if you will um the municipal pool is accounted for within the general fund but it does carry its own unbalance that is allowed to be carried over whenever there is revenue over expenditures or when the opposite is true as well uh they are carry over those excess revenues in anticipation of upkeep and maintenance at the swimming pool the main reason we brought it to you this year was that um obviously you can see there are very few changes projected but with covet and everything staff's uncertain you know about what the revenue sources and how they're going to react what kind of impact that we'll have next year so we just wanted you to be aware that there may be a need in the future um probably temporarily for some support from the general fund we just wanted you to be aware of what those needs might be what how are we doing on admission fees i think brent's on the line isn't he yes or less people using the municipal pull right now currently we have it set to a limit of 100 people but most days we're not even reaching that

[0:32:53] it's very limited people coming in we did we were doing really well with rentals and parties and things like that but we currently do have a lot of people canceling um the week of their party and things like that so we were booked almost fully for the private rentals but unfortunately they're they're dropping a lot of them due to family members or someone is actually contacting uh coming in contact with someone covered and catching the disease so for the buyers thank you yes ma'am do we have further questions on the municipal poll from anyone okay let's move for sure okay so we're moving into the expenditure lines any questions on the expenditure lines for council all right with none we will move into the next fund our next fund is the city of san angelo development corporation of course as you know this is split up between the economic development side at 28 and the ballot side at 72 so we'll first present the economic development side we are projecting sales and news tax to be down 3 000 as you recall mayor we budget um sales and use tax in accordance with whatever the city ultimately decides to do with its budget so that we can remain consistent this sales tax number is projected as um flat for the first for march april may june and july flat with the current year as the decreases that we've already seen and from there on for the remainder of a full year projected down 10 each month and then after that for the remainder of the fiscal year projected flat with this current year with the decreases that we've already seen okay that's a five percent discount from

[0:34:57] the current year budget was which was already conservative well i'm a little concerned because it looks like we're only planning it down three thousand dollars with planting down 10 or flat it would seem to me that that decrease would be a much larger decrease yes ma'am um the reason it it appears that way is that we budgeted uh 18.6 million dollars or yeah 18.6 million dollars but in the prior year we had actually received 19.9 million dollars and that's where i was going with the fact that we have already budgeted very conservatively because that's how we choose to act as a city um and with that as you've seen from the sales tax reports that we've been putting out we still haven't reached a shortfall to our current sales tax revenue budget and so that's why this is we feel like this is still a conservative number however that is the reason as you'll recall that we asked to move the general fund budget workshop so that we could get one more month of sales tax numbers under our belts and then make one more um projection before we bring this to you for the general fund workshop and of course as i mentioned we would then adjust these numbers for the development corporation in accordance whatever with what city council decides to do yeah my guess is we need to be planning the general fund down at least eight to nine percent perhaps 10 for the entire year so this would be pretty aggressive in terms of expectations compared to what i think we're going to see in our overall 20 20 20 21 budget so yes it was not a good number i wish it was a good number i'd love for it to be this number but i think it's far more aggressive than what we're going to what you're seeing right now is actually projected at a 5.2 percent decrease so again as i mentioned when we get those sales tax numbers on august 12th we will make one more projection before we bring a final recommendation or projection to city council yes because this looks like it's pretty

[0:36:58] much black yeah and the total between the two is about eleven thousand dollars but again because we already budgeted conservative conservatively this current fiscal year we also budgeted at a significant decrease from that prior fiscal year what we actually received and so we as a city have planned well and plan conservatively and so we have not seen quite the impact that maybe some of our other cities are seeing well once again budget one's against um actual numbers so we plan conservatively and thank goodness because the reality is is that we have had an impact on our sales tax clients so i'm just saying i think we're going to have to re-review these numbers and my hope is that a strong week 21 but i think these are more aggressive than what we're going to see so we will wait and see where we go on august the 12th yes ma'am and then other just includes the interest income and that is projected down 147 000 okay do i have questions from counsel or comments on these numbers all right let's go into the expenditure lines i'm sorry about that expenditure personnel is down 1600 that's in correlation with the staff services and admin contract services agreement with the city o m is down um 31 000 and capital is down 116 000 and that's just offset the decrease in interest income all right what are the assigned projects assigned projects are those projects that the development corporation has already committed to and already has an agreement with an entity and so that would be the amounts

[0:39:00] available next year that they have for incentive projects and unassigned projects or what oh i'm sorry i was looking at the wrong line assigned projects are those that have already been committed unassigned projects that means that that amount is available for other projects next year okay do i have questions from council all right we'll move to the next line so your final slide for the enterprise funds in this workshop is the cosa dc ballot side um again same projection for sales tax same methodology right now until we get further results on sales tax revenue and other again is down for interest income okay and moving into expenditures what's the six million five on o m that is almost entirely debt service payments but again that increase of half a million dollars is related to the west texas water partnership agreement so it's about 512 000 and capital is down for what's yes so the o m line is up that 512 000 almost entirely due to the agreement for the west texas water partnership for the fort stockton holdings and the development corporation ballot site is of course helping to fund that payment or actually funding the entire payment and then there is a slight increase to the debt service payments there as well less than a hundred thousand okay and capital the that is down 589 000 um entirely just to offset the decreases to revenue and the increase to the o m line so what's in that capital line for both this and the development side is basically what you'll see in your blue jet your blue book that we call

[0:41:02] future projects so it kind of acts like a contingency account where they have monies available if they have a project that comes up within that current fiscal year that they're they have that available and ready to provide those incentives or other projects okay council any questions any comments need for any more information with none move on yes ma'am and at this point i'll hand the baton to brian kendrick and holmes murphy and allow them to update you on health insurance good morning council this is uh brian kendrick director of human resources let me take off my math so i can talk um i'm gonna let julie rickman from holmes murphy uh kick off with a presentation and then we'll both be available for any questions as we go through them good morning council um so i think that we've got is julia running the presentation is that correct i can share my screen on my side i just want to make sure that i can typically whoever speaking runs their own slides but if we need to run them i am happy to share mine all right all right can we see that no all right let me try this again green one sorry about that give me just one moment all right that should be working as i

[0:43:05] correct it is all right perfect okay so um just to go over a little bit of the health sign again julie rickman with holmes murphy your we um holmes murphy is your insurance consultant for your medical and your health fund um you probably recognize me from last year when we talked through the marketing that um for our medical clinic so today i'm just giving you an update on how we're in our medical and then any questions you have again if you feel free to hop in and ask any questions and brian's here to answer any additional questions as well just to give you a little bit of background and i do this every time the city of san angelo for your medical claims has historically at least over the last 10 years has been significantly lower than the business for edna um that big portion and due to the relationship that was with community you're tr as well um meaning how are you performing against the marketplace as far as your medical trend is has always been lower than than normal as well and then when we did our marketing working here that contract that we were able to negotiate about every other word it's breaking up really bad am i breaking it bad okay hold on let me see if i turn off my video if that helps at all all right can you hear me any better that way yes ma'am okay perfect so um do you want me to start from the beginning would that be better i why don't you okay and we're seeing your presenter's view instead of the full screen of this slide that might make it easier for our online viewers if you have the full screen showing yes i can do that is that better yes okay perfect so um let me go ahead and start from the very beginning again sorry about that uh julie rickman with holmes murphy um hopefully my my voice is coming through a little bit better at this point is that better mayor yes ma'am okay excellent so again you might recognize me from last year

[0:45:09] um although you can't see my face at the moment i've worked on your marketing efforts for last year and so really what we're going to do today is just talk through how your plan is running and then see if you have any questions or concerns about um how the city of san angelo's health fund is running so just looking back on the history your claims experience for your medical plans have been historically and over this really over the last 10 years have been significantly lower than the aetna book of business and that really has a lot to do with the relationship and the contracts that we had through community and that also um reflects back into our overall trend which is lower than the market significantly lower than the market when we did our negotiations and our contracts through marketing from last year that actually created a better contract than we had before and so we've really had some luck when it comes to what we've been able to keep your plan and keep your plan as solvent as it has been over the last few years real quick so looking back at your medical and and so there's a lot of numbers on this and actually goes back to may of 2016 through march of 2020 your medical trend is looking at 2.5 and so when we look at normal medical trend over the years it's been as high as 10 percent and as low as six and a half or seven percent so 2.5 over the fullness of your plan is actually very significantly less than everyone else sees so when we look at this chart when you're looking at better explain that the 2.5 is what it is how your plan is running so when we're looking at the let's go look at the the yellowish line that is each month where your claims are setting at the purple line is the best fit curve for those lines and so when you look at that slope of that curve the slope of your medical has increased by two and a half percent since 2016 which is significantly lower than what the market looks like

[0:47:11] so those yellow points is you know kind of up and down the volatility of a plan you see maybe you have a month with high claims data so when we look at february uh march of 2020 we had some significantly high months but when we look and we try and normalize that over the fullness of time your trend for medical is 2.5 which is again incredibly good compared to what the market is okay i know we had some discussions prior um with with the prior presenters regarding covid and so i really wanted to give an update on that so there for the covid the way that the plans work is covet expenses for members are paid at 100 so meaning that if someone is diagnosed with needs to get testing and things like that that is paid at 100 and that has to do with federal regulations but also there's an impact to our claims spend because of covid and actually this is something that is is helping your plan we have a lag for elective surgeries meaning that if i needed to get a knee surgery um in earlier this year i would have had to have delayed it because our surgeons weren't performing surgeries in the beginning of the year so when we're looking at this there's a few months that we had where we had some drop down in our claims spend because of people putting off elective surgeries we'll see some of that pick up again when as time goes on and people are able to go get their surgeries done but that also is contingent on is there a bed available is there a surgeon available things like that so it's not as though we have a drop off those couple months and then we'll have two months of significantly high claims it really is it's going to spread out a little bit more when we start to see those those lags back in um the other thing with those elective surgeries there might be something such as someone had a back issue that they were going to have a surgery for and decided hey i'm not going to get that done now or they found an alternative to be able to treat that that condition so we might not even see those things pick back up again so

[0:49:14] that's that actually helps our spend we've also seen a a big increase in teledoc so our telemedicine where people can call in to a phone number and talk to a doctor on the phone um this has always been especially helpful and i know that there's some folks on council that have used these benefits before but basically if i have a child with an ear infection instead of going to the doctor and sitting down in the physician's office and getting my prescription and going to the pharmacy i can do a call over the phone talk to the doctor about what's going on with my child and able to get a prescription over the phone without having to leave the comfort of my own home with covid that actually has happened to increase our utilization which is good because the costs of those claims are significantly less than someone going to a physician or urgent care for something that might be able to be treated effectively by a less costly means and then the last piece of this is behavioral shifts we also saw we often times on on most medical plans we'll have people going to the emergency room as their primary care physician because they don't have one they this is just kind of their standard where they go to for care and there's education that hr does around that but we'll always have some folks that utilize the er probably not in the most effective manner and so we've seen with covid a behavioral shift with emergency room utilization and people really going to the emergency room really for true emergencies again more so than those lesser care types of care that they need any questions on this we'll keep going okay so our pharmacy is a little bit of a different story when we're looking back on our pharmacy you can see you're actually our yellow line and this is not surprising doesn't have as much volatility as our medical line when it comes to the actual month over month claim spend but you'll see our pharmacy is actually the trend on that is 15.9 percent

[0:51:16] so there's a few reasons for that when we look at our pharmacy and i'll hop to the next one and i'm gonna go specifically to the second bullet high cost specialty drugs are on the rise and there's there's positives and negatives with specialty medications and really the specialty medications are those medications that are treating very specific conditions and are able to in some cases cure or reverse effects of specific medical conditions for particular people's body types and genomes it's great because it does that but because they're very specific and and they're um you know they're just incredibly expensive drugs and so one of the things that we do with aetna and cbs um contract is we're we're monitoring your plan constantly i'm with your pharmacy to ensure that we're not we're mitigating future plans bends as best as we can and then we're continuing to benefit from the contract because of that aetna and cvs relationship so cvs bought out aetna a few years ago and that actually helps our pharmacy contract considerably there is a very very nominal covet impact to our pharmacy and that's just because you're not not taking your blood pressure medication because you can't go outside for most folks your medications you you're still going to get your medications and take the medications you need so that's just how your pharmacy is looking right now again we continue to monitor over the year we make adjustments to the plan so for example a medication has a generic equivalent that comes out we might put the generic equivalent in a different tier and move a brand name to another tier at some point especially if it's not impacting any members there's a lot of of looking at pharmacy because that's definitely something that will continue to rise in the future just because of the nature of medications and how we're producing them now but again it's something we're looking at and want to continue to keep a very close eye on so when we're looking at our assumptions

[0:53:19] for our budget and so i'm going to go over a few slides with a bunch of numbers on them but i'll kind of give you that focus of where i'd like you to look at we assume and the medical trend is 6.8 percent so what that means is we take a survey of all the major carriers so blue cross aetna cigna additional consultants and find out what number they are using for trend and that's the number we use when we're looking at your prior trend at 2.5 percent um we're we're also taking into account how you've historically ran as well but our medical trend we use in our budget assumption is 6.8 percent pharmacy we're our standard trend for the market right now is 7.1 percent and that's the number that we use in there we also take a normalization of how your plan has as we're performed in the past the past and have a starting point that is based off of how your plan is performed and so when we're looking at this it's not we're just looking at 6.8 but we're actually looking at your historical performance in our budget assumptions we're also including covet 19 lag again meaning that when we're looking at these numbers we're taking into consideration some delay of um those elective surgeries and giving some credit back to your your future months to indicate that that will be we'll realize some of those that lag in the future we're indicating that there's no plan design changes meaning that we're not changing deductibles co-pays co-insurance any of that your your employees your members plans will remain the same these are assuming a 4.4 increase 4.4 increase to both employees and the city and i'm going to show you what that looks like from an employee perspective next and we assume that enrollment remains the same meaning that we're not having people jump from high to low low to high and that's partly because we're not looking at a very large increase but also there's no plan design changes that would encourage members to move from one plan to another so this has a lot of numbers on it but

[0:55:21] really what i want you to focus in on is those bottom three lines so we have three plans with the city of san angelo that members can enroll in and when we're looking at that 4.4 increase to the current rates we're looking at that bottom three lines is showing the increase per pay period so we have 24 pay periods in a year that means that on your low plan for an employee only we're looking at 45 cents increase per pay period and the highest that anyone would increase would be 23.34 cents per pay period and that's in your high plan including all your family members i'll pause for one second so you can look at those numbers and then i'll hop to your current enrollment so you can see where your folks are actually sitting in so this shows you where your actual current enrollment is for your individuals when we look at your plans and so you'll see that for your high plan you have a very small percentage of your population that are sitting in the high plan only 18 folks in that employee only and nobody in the family plan the majority of your folks are sitting in that low plan employee only and so that would be that small increase of that 45 cents per pay period for that low plan employee only any questions on enrollment or the increase for employees no i think the big question will be when we look at the totality of that because when we just look at it specifically in terms of enrollment and or dollars per month it doesn't give us the impact that the budget's going to take yep so that's actually the next slide so there's a bunch of numbers on here but really what i wanted you to focus on is pretty much that center of the page where we're looking at employer contribution and employee contributions so the first column shows what our budgeted plan year for 2020 is and when we're looking at employer contribution it is 6.146 million the proposed budget with

[0:57:25] that four point four percent increase is six point four five four five million which is a difference of three hundred and ninety nine thousand dollars and that's the city's impact when we're looking at employee contribution which is a line directly below that going up from 1.743 million to the 1.812 that's an increase of 69 000 so what this does is it levels out and i'm gonna pop go to the next slide just to kind of talk through that really quick it keeps our plans solvent it levels out and make sure that we don't have a huge deficit um back to our plan that 400 000 deficit it keeps the again lower than market trend at a 4.4 increase historically the city doesn't have a whole lot of increases to employees especially and so 4.4 especially when looking at spreading the risk among or spreading those dollars amongst your entire population is not a lot of money to individual members the plan is on changes um we can do plan design changes to increase the um to to absorb the increase but it would increase the member out-of-pocket costs and then the last piece is obviously that shannon acquisition which i know is is kind of on the backs of everyone's minds it does have uncertainty for the future we're not sure how the plan is going to change in the future right now aetna works to maintain that contract integrity and we don't see any changes in the foreseeable very near future but there likely will be some but the positive of that acquisition is that those network deficiencies that we've had issues and i know folks on council had concerns last year when i spoke um about some folks that might not have access to care those networks efficiencies should be resolved as we continue to change that as for now the shannon acquisition is we are keeping our plan the way that it is it's performing the exact same way that it did before with our community

[0:59:27] facilities and relationship we're tweaking that as we go along to again make sure that we're maintaining the integrity of our contract and we're not having our our costs rise up considerably at one one at any kind of junction so we're we're monitoring that we're keeping an eye on that and we're continuing to change for that well we're very specific in asking questions when the presentations were made last year in regards to if communities sold what would happen and we were told 100 percent that the plan would not change so as a certainty for future that might be but it has nothing to do with this year's budget correct that is correct so when i say uncertainty for the future this might mean that in the future we may allow individuals to go to shannon facilities we might um change some things around again when it comes specifically to network deficiencies those types of things you're correct our current contract is not changing and we don't have any changes to what we're doing currently it's just we're not quite 100 sure how we're going to make changes in the future because of this acquisition so they're talking about today we're talking about today's budget and correct current contract is for another two two and a half years so it's not something we need to spend time on today sounds good all right and that's all i have for you today i don't know if brian wanted to add anything specifically or if there's any questions from council at all on this well my question is how do we come up with the 399 000 as a city because money is money and where do we get the money as far as where is it where where are you getting the where do i get the increase from well the employer contribution goes up from six million one four six to six million five four five so the difference between those two the budget current and the proposed

[1:01:30] budget is a big dollar amount that we've got to figure out where the dollars come from mayor if i may this is tina dierski director of finance uh that is usually something that we will try to work through at the general fund budget workshop and at that point we can work on these numbers make sure that we everything exactly accurate and bring forward what portion is actually allocated to the general fund versus other funds okay your voice there's a back talk to your voice so we can't really understand what you're saying clearly i think it's completely interesting okay okay i think they are maybe corrected their microphone so if you'll repeat that again tina if you don't mind yes ma'am uh this this health insurance increase is something that we usually work through at the general fund budget workshop and so we will work on these numbers make sure we have everything accurate and when we come back for the general fund workshop how much of that increase is related to general fund versus all the other funds yes because we're gonna have to figure out the dollar amount and whether it's a 50 50 split as it is presented it's not a 50 50. and so today you're reflecting a 50 50 contribution um from employer and employee but that hasn't been decided yet so this is something that you're saying we'll discuss further but i think we need to have questions from council or comments from council at this point in preparation for the general budget and mayor if i may just follow up on that usually when we bring this back for discussion and decision on how much will be employer versus employee hr will bring a couple of options based on all employee all employer half and that kind of a thing and so i think brian probably could have that prepared as an item for that workshop is that correct brian yes we can have that all uh ready

[1:03:42] at the general fund workshop to talk through that again this is the 4.4 we're just using that as a starting point for the discussion uh we know council will make that decision ultimately but we just wanted to throw something out there so you'd have a point of reference when we as we move forward into the general fund discussion okay council does anyone have a question or comment to make at this point minor question tommy hebert single member district one uh tina a question for you um i am assuming i i think maybe heard you say uh that there would be options presented if if council wanted to get money from this source or that source when when when this comes back for the general portion general fund portion of the discussion there'll be options um on if we want to fund it all if we want to share with employees etc that those options will be presented to us yes sir and if you'll recall by that time we'll have both better sales tax projections as well as property tax valuations and any increase to that revenue source and so as usual we will bring you any marginal revenue or deficit and try to work through those changes and decisions with you and yes in the past usually i believe hr usually brings a all employee all employer or some combination of the two thank you yes sir counsel anyone else okay continue that that was all i have for my side unless brian has anything additional from hr again just giving an update will certainly give you options um for for you to be able to present when you're doing your final budgeting but um this is a i think it's a even option on the table um as far as considering how your plan is running code with lag and just the impact to members so um if you have any other questions feel free to ask hr and unless brian has

[1:05:44] anything else i i'm i'm completed no i think that's all we have again this is kind of a primer for our discussion uh our more involved discussion next time okay with that it concludes of the agenda items unless do we have any other items that council needs direction on okay with none what we'll end up doing is um having a motion for adjournment i hear tommy hebert single member district one midwest journal in a second i'm a single member district three and with that we'll take a vote all in favor of returning this budget session say aye with none opposed meeting concludes

Captured 2026-07-26 · source: youtube.com/watch?v=pPhECMlD56M