LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE

The Legislative, Finance, and Administration Committee meeting was held on September 8, 2008 at 6:00 p.m. with Chairman Slavin presiding. Members present were Mr. McGlumphy, Mr. Salters, Dr. Jones, and Mr. Shevock. Other members of Council present were Mr. Leary, Mr. McGiffin, Mrs. Williams, Mr. Ruane, and Mayor Carey.

AGENDA ADDITIONS/DELETIONS

Mr. Salters moved for approval of the agenda, seconded by Mr. McGlumphy and unanimously carried.

Dependent Vision Coverage

Members were advised that the City currently provides employees with City paid vision insurance; however, it does not offer its employees dependent vision insurance coverage. In an effort to remain competitive in recruiting, Mrs. Hawkins, Human Resources Director, suggested that the City offer employee paid dependent vision coverage. Mr. DePrima, City Manager, explained that the added benefit could not only be an additional recruiting tool, but could also serve as a morale builder for current employees. He noted that the State of Delaware has offered an employee paid dependent vision insurance plan for a few years and that Kent County offers dependent vision insurance on all of its health insurance plans.

Mr. DePrima indicated that the representative from the City’s current vision insurance carrier has provided monthly costs for employees to obtain dependent vision coverage. The coverage would be the same coverage that the employees currently enjoy. Coverage would be offered to all full-time employees and regular part-time employees working 20 hours or more per week (which is consistant with hours required for all other benefits). Mr. DePrima noted that the action form incorrectly reflects “30” hours. The benefit would require the employee to be financially responsible for the dependent premium, less the cost of employee coverage only. The City currently pays the employee premium.

Mr. DePrima stated that this would be a great benefit to offer to our employees, especially since it would not directly cost the City any additional expenses in regards to premiums. The labor involved with the administration of the plan for the Human Resource Department would be the greatest during the initial enrollment; afterwards the process will become more routine. The Finance Department will have ongoing responsibilities in processing the payroll deductions, accounting, reconciling additional ledger accounts and invoices, and paying the vendor.

Mr. DePrima explained that employees will have the option to have their premiums deducted from their paycheck on a pre-taxes basis and that the City would save 7.65% in Social Security and Medicare taxes on the premium (it was noted that the action form does not indicate that the pre-tax basis is an option). The savings would be small since the premiums are small; however, the savings could be utilized to off-set the labor expense. Staff provided members with a chart that details the financial cost for employees.

Staff recommended that the City Manager be authorized to implement an employee paid dependent vision insurance benefit. It was noted that this insurance would be implemented by December 31, 2008.

Responding to Dr. Jones, Mrs. Hawkins indicated that the only financial implications for the City would be for the labor costs involved for the Human Resources and Finance Departments. Mrs. Mitchell, Controller/Treasurer, indicated that approximately one (1) hour per month would be required of staff for accounting and three (3) to four (4) hours would be required for the initial set-up for the program.

Mr. McGlumphy requested that prior to January 1^st, staff provide a complete analysis of all the benefits provided to employees. He also suggested a comparison of the City’s benefit package with the State of Delaware and Kent County.

Dr. Jones moved to recommend approval of staff’s recommendation authorizing the City Manager to implement an employee paid dependent vision insurance benefit for full-time and regular part-time employees working 20 hours or more per week. The motion was seconded by Mr. Shevock and unanimously carried.

Actuarial Analysis - Workers’ Compensation Self Insurance Fund

Mrs. Mitchell, Controller/Treasurer, advised members that the City of Dover is self-insured for Workers Compensation and has established a separate fund to account for these activities. The City recently engaged AMI Risk Consultants, Inc. to perform the following functions for its self-insured workers’ compensation fund:

•Estimate the funding requirements at December 31, 2007 to comply with the Government Accounting Standards Board Statement Number 10 (GASB 10). Estimate the funding requirements at the expected (average) level and at the 75% and 90% confidence levels.

Results – Expected $754,000; 75% $907,000; 90% $1,128,000

•Project the funding requirement as of December 31, 2008 in accordance with GASB 10. Estimate the funding requirements at the expected (average) level and at the 75% and 90% confidence levels.

Results – Expected $763,000; 75% $918,000; 90% $1,141,000

•Estimate the ultimate losses for new claims occurring during prospective fiscal accident year 2008 – 2009. Estimate the funding requirements at the expected (average) level and at the 75% and 90% confidence levels. (Please note – For cash flow purposes, payments are made for old and new claims; these are new claims only)

Results – Expected $505,000; 75% 608,000; 90% 755,000

•Review current workers’ compensation rates and provide recommended changes.

Result – Revised rates are lower and should provide approximately $100,000 total in savings.

Mrs. Mitchell explained that the funding requirements include liabilities retained for claims, claim adjustments, incurred but not reported claims, credit for investment income, and contingencies for adverse results. The requirements do not include general and administrative expenses of the program. The actuarial study was conducted based on the Claims Administrator’s records of past claims experience, open claims, and payroll information provided by the Finance Department.

Mrs. Mitchell indicated that the City has budgeted $400,000 (cash payments) for claims in FY09 and has a projected Budget Balance of $1,261,000. The current funding level is in line with the study and no action is required.

Staff recommended acceptance of Actuarial Study.

No further action was taken by the committee.

IUE-CWA Contract Amendment - Uniforms

Mrs. Hawkins, Human Resources Director, advised members that, for many years, the City budgeted $300 per Code Enforcement Officer for reimbursement of docker type pants and the City’s cost of providing shirts instead of utilizing leased uniforms. In recent months, the uniform process was changed in order to provide adherence to the uniform provision in the collective bargaining agreement. As a result, the Code Enforcement Officer would be required to wear leased docker type pants rather than the purchased docker type pants. The union approached the Human Resources Director and requested that Code Enforcement Officers be extended the same benefit as their Communication Operators. Communication Operators are provided in the labor agreement a yearly allowance of $150 for pants rather than leased uniforms. The City provides the Communication Operators with an appropriate uniform shirt. This practice has existed since March 2001.

After discussing the Union’s suggestion with all effected supervisors, Mrs. Hawkins stated that it was agreed that the City should approve the Union’s request. The Controller’s request for one annual payment of the allowance rather than two payments of $75 was agreed to as well. The reduced allowance that the Union is suggesting is equal to or less than the cost for the leased uniforms, and is significantly less than the past practice.

Members were provided proposed amendments to the contract language. Mrs. Hawkins advised members that the Union, by way of official letter, has accepted the contract languages as indicated.

Staff recommended approval of amended contract language.

Mr. McGlumphy moved to recommend approval of staff’s recommendation (Attachment #1), seconded by Mr. Salters and unanimously carried.

Mr. McGlumphy moved for adjournment, seconded by Mr. Shevock and unanimously carried.

Meeting Adjourned at 6:23 P.M.

                                                                                    Respectfully submitted,

                                                                                    Timothy A. Slavin

                                                                                    Chairman

TAS/TM/jg

S:ClerksOfficePACKETS2008Council9-22-20089-08-2008 LF&A.wpd

Attachments

Attachment #1 - IUE-CWA Contract Amendment (Section 29 - Safety Shoes, Uniform Shoes, and Uniforms)