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HomeMy WebLinkAboutMinutes - 20080312 APPROVED 613/2008 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION March 12, 2008 7:30 p.m. The Orange County Board of Commissioners met for a Budget Work Session on Wednesday March 12, 2008 at 7:30 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Moses Carey, Jr., Valerie P. Foushee, Alice Gordon, and Mike Nelson COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: Geoffrey Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon and Assistant County Managers Willie Best and Gwen Harvey, and Clerk to the Board Donna Baker. (All other staff members will be identified appropriately below). 1. Discussion Regarding the County's Employee Benefits Laura Blackmon said that she wanted to bring issues to the Board of County Commissioners to discuss so that staff could get guidance as they go through the budget process. She said that the Board and staff need to talk about an overall philosophy of the benefits plan that the Board of County Commissioners has. Human Resources Director Michael McGinnis introduced Benefits Manager Dianne Shepherd. He said that he meets with every new employee that comes to Orange County government and he asks them what they want from the organization and he also tells them that he wants them to leave with more money and with better health. He said that employees are responsible for their own health and the organization is responsible to provide opportunities, options, and services to help them with their health. Benefits are very expensive to both the County and to employees. He made a PowerPoint presentation, as shown below: 2008 Benefits Discussion Purpose Provide Current Status of County Benefits Provide Comparison with Other Organizations Discussion Points on Options Contributory County Benefits Health Care Plan Dental Care Plan EAP/Mental Health Life Insurance Plan 401 (k) Deferred Compensation Plan Current Health Care Plan Vendor— NCACC with Administration through CIGNA Two Fully Insured Plans • HMO In-Network Plan (100% coinsurance after deductible of$250) • PPO In and Out of Network Plan (90% coinsurance after $250 deductible) Co-pays • Physician/Specialists $15/$30 Pharmacy $10/$151$30 Monthly Premiums • 9.7% Increase for 2008, Projected 10.5% for 2009 ***County Pay 100% of Employee Monthly Premiums and 52% of Dependent Monthly Premium based on HMO Plan 2008 Monthly Employee/County Health Care Cost HMO Plan Total Cost County Cost Employee Cost Single $445.06 $445.06 $0.00 EE + Spouse $938.66 $701.72 $236.94 EE + Child $623.06 $537.62 $85.44 EE + Children$858.98 $660.30 $198.68 Family $1335.18 $907.92 $427.26 PPO Plan Single $522.08 $522.08 $0.00 EE + Spouse $1101.52 $701.72 $399.80 EE + Child $730 90 $537.62 $193.28 EE + Children$1007.54 $660.30 $347.24 Family $1566.18 $907.92 $658.26 Comparison with Others Type of Plan Design Large organizations offer multiple options and smaller organizations are more likely to offer only one option Orange County's co-pays, deductibles and co-insurances are comparable to most other jurisdictions Cost to Employee and Organization Other jurisdictions share the cost of premiums with employees, including Alamance, Wake, Davidson, Gaston, Guilford and Caldwell Counties Other organizations provide reduced premium plans with higher co-pays, deductibles and co- insurance to encourage healthier employee to select less costly options 85% of other counties offer a no cost option for employees Health Care Options to Consider Provide More Options in Plan Design Encourage Employee Participation in Cost of Plan Develop and Fund Formal Wellness Plan Employee Assistance Program Vendor: Magellan Plan Design: Three counseling sessions per incident/situation Referral for child care/elder care and legal consultation Administrative Cost of$1.54 per employee per month Other Organizations Most have between 3-12 visit Plans Options to Consider Replace child care/senior care referral with Financial Consultation Services Increase #of sessions to 5 (increase cost to $1.61) County Wellness Initiatives No Formal Plan or Budget Sports Plex Membership and Activities All Initiatives Provided Through Health Care Plan • HRA = 20% Participation • Preventive Care: "10k Steps", OTC Smoking Cessation, "Passport to Wellness" Wellness Committee Formed Several Years Ago, Only recently began meeting regularly. Currently Applying for NCACC Wellness Grant Comparison with Others Mandatory Health Risk Appraisals Exercise and Wellness Incentives Reduction in Premium — Time Off — Gift Certificates — Memberships — Paid Time to Exercise Weight Management Programs Diabetes, Hypertension, Cancer Prevention Free Generic Medication Programs Dental Care Plan Vendor Delta Dental Type of Plan Self Insured Plan Design: 100% for Preventive (2 per Year) 85% for Restorative 50% for Orthodontics ($2,000) Monthly Dental Premiums Employee County Employee $0 $24.30 Employee + Children $41.94 $24,30 Employee + Spouse $35.18 $24.30 Family $60.08 $24.30 Comparison with Others All other organizations reimburse claims based on "Usual and Customary" rates while Orange County reimburses according to a Table of Allowances that provides a lower reimbursement and the employee pays a higher portions of the claim Cost to fully implement Usual & Customary rates would result in a 170% increase over current costs (from approximately$336,000 to $571,000) Recommendation: Change to "Usual and Customary" rates incrementally, beginning with Preventative benefits. Group Life Insurance Vendor: MetLife Type of Plan: Basic Term w/AD&D * Annual Salary up to $50,000 ■ County Cost Based on $.22.5 per $1,000 Salary Supplemental Employee Paid Options: * Options up to $200,000 for employee, $100,000 for Spouse and $10,000 for Children ■ Dependent ($5,000) @ $1.86 401k Deferred Compensation Plan Vendor: Prudential County Plan Status: • County Contribution $27.50 per Pay Period ($715 per year) • Employee Contribution up to $15,500 per year • Loan Program Other Organization Comparisons Options to Consider Other Organization Comparisons 60 of 100 Counties Contribute to 401 (k) Of those, 58 Provide Contribution Based on % of Salary (from 1% to 8%) Michael McGinnis said that one of the biggest issues for employees is the 401 K and how much the County contributes. He said that this is an excellent retention benefit and an area the County should look at in reviewing the overall compensation plan. He said that Orange County is out of sync with other counties in this respect. Chair Jacobs asked if paying $27.50 per pay period to 401(k) is at the lower end of the spectrum and Michael McGinnis said yes. Most counties provide a contribution based on a percentage of salary. Commissioner Gordon said that she will need to think about all of this information and Laura Blackmon said that staff would be coming back in April with more information. Commissioner Foushee said that she would like to see more specific details of 401(k) programs of counties that are similar in size to Orange County. Laura Blackmon said that this is a recruitment tool as well when a good benefit package is offered. Commissioner Foushee said that there is a dichotomy between law enforcement employees and non-law enforcement employees. Chair Jacobs asked about childcare assistance Diane Shepherd said that she has not had any requests. There is a flex-pay option that allows employees to pay for childcare on a pre-tax basis. Social Services Director Nancy Coston said that there is no waiting list for childcare assistance at this time. Chair Jacobs said that the Board has had discussions in the past about employees having interest in more options for the health care benefit. He asked if the County could look at offering a cafeteria plan and Michael McGinnis said yes, but it is not easy to administer and it is not easy for an employee either. Commissioner Carey said that the model of matching an employee's contribution to the 401(k) plan worked at his past place of employment. Chair Jacobs said that the Democratic Party was supporting a resolution for collective bargaining by public employees, and the NCACC is vigorously lobbying against it. Also, Senator Dole is opposed to it. He asked if the County Commissioners had any interest in supporting collective bargaining for employees. He said that he is interested in it. Commissioner Carey said that he has supported this is the past. Laura Blackmon said that the staff needs to discuss this first before moving forward because there are some impacts on organizations. Chair Jacobs agreed. He said to inquire of the Employees' Consortium as to their opinions on this and Laura Blackmon said that she would. 2. Discussion Regarding the Proposed 2008-18 Capital Investment Plan (GIP) a. County Owned Properties Laura Blackmon made reference to Attachment 1 and said that they wanted to look at these properties and proper disposal of some of these. Commissioner Foushee said that this is good information but hard to read and some addresses are not matching with the correct columns. Purchasing and Central Services Director Pam Jones said that the first sheets are buildings that are in action and will continue to be in action for a long period of time. The last page includes the school properties that the County holds because of financing arrangements. The last section is "Buildings Potentially for Disposal." This is just the buildings that people have been moved out of, and there are no long-term uses for these buildings. EMS/911 Center on New Hope Church Road: There was previous discussion about this being a location for the Parks Operations space for the administration building. There has been no decision. She said that the proposal was not to have this become the Parks Operations Base, but that it be the administrative offices. The Parks Operations Base would be more appropriate for Blackwood Farm. Clerk of Court Annex on Churton St.: When the courthouse is finished, the Clerk of Court will be moved and this building will be vacant. She gets at least two calls a month from someone wanting to buy or lease the building, should the County put it up for sale. Former ABC Building: This has previously been used as a storage facility before the Tweeter Building. There is no need for it since the Tweeter Building was acquired. There is a lot of interest in this building as well. Graham Building: The Literacy Council is the primary user of this facility right now. The Literacy Council has expressed an interest, that if the County has room, it would like to co- locate and pay rent at the old Wal-Mart facility. This could be disposed of fairly easily because there is interest. Northside Human Services Center: This used to be occupied by the Department of Aging and OPC Mental Health. There is a daycare facility still located there. The buildings are older and would need a lot of upfitting. This could be an appropriate place for affordable housing and the daycare could be kept onsite. Purchasing and Central Services Building: This could be tied to the Whitted Human Services Center and what is done with that, and whether or not the Heritage Center is actually located. The Purchasing building is where there was original discussion about locating the Heritage Center. This is also a very marketable facility. Whitted Human Services Center: Staff can put together options for this facility and its disposal. Chair Jacobs asked if Orange County owned the body of water at Lake Orange and Pam Jones said yes. He asked if Orange County did anything to exercise ownership rights other than participate in the water system. Geof Gledhill said that it is a public water supply and is utilized by the Town of Hillsborough, Orange-Alamance Water System, Eno River, Piedmont Minerals, and Lake Michie. Orange County does not have a water utility, but it owns the property and the right to the water in the lake. There is an agreement between Orange County and those who use the water that is a use agreement and Orange County is the manager of that agreement and provides the water pursuant to that agreement. Chair Jacobs asked about the Water Conservation Ordinance. Geof Gledhill said that there is a difference between the Capacity Use Agreement and the Water Conservation Ordinance. One is that the Capacity Use Agreement resulted from the State threatening to put the Upper Eno River into a capacity use area, which would have the end result of the State controlling the water. The users of the water got together and put together the Capacity Use Agreement. Commissioner Nelson said that all of these facilities need pros and cons for use and divesting. He said that there should be a no-brainer category and a category with properties that need more discussion. He recommends that staff identify issues that the Board of County Commissioners needs to discuss and keep this conversation going forward. Commissioner Carey agreed and encouraged staff to discuss with Hillsborough the Whitted Building (and not as a gift). Commissioner Gordon agreed with Commissioner Nelson and said that the ones on North Churton and King Street should be sold and returned to the tax base. She thinks that the County should get full market value from these buildings. She said that the Northside Human Services Center requires more thought about what should be done. Regarding the EMS/911 center, she wants to explore the divesting of these facilities. She asked about the Government Services Center Annex and the Planning and Agricultural building. She is not sure exactly what is going to happen with these facilities. Commissioner Gordon said that, by buying the Wal-Mart shopping center, they are forming another County campus with a lot of additional space. Since the Whitted Center will then be almost vacant, she thinks that the County should divest itself of the Whitted Center and thereby obtain resources to pay for other capital projects. Chair Jacobs asked if there has been any discussion with the school system about using the Northside building as a school site. Pam Jones said that it was examined early on, and because of the property size it was not pursued. Chair Jacobs said to at least offer to land bank it as a school site. Staff will bring back an analysis on this site. Chair Jacobs said to add to the pros and cons the timing of some of these things. Especially with the Whitted Building, there is no guarantee of when the County will be moved out, so there needs to be a plan. He asked staff to go through the CIP and look at the functions that are homeless or un-located, such as an administrative headquarters for Parks and Recreation or a central office for schools, and consider using the Whitted Center for these rather than building a new building. This could save money. Pam Jones said that the County is closer than it has ever been to fulfilling the needs listed in the space study. Chair Jacobs asked if the County has communicated lately with the Town of Chapel Hill about the downtown Chapel Hill post office/court facility. Laura Blackmon said not within the last month or so. More will be known after the completion of the justice facilities. Commissioner Gordon said that it would be helpful to have listed what these buildings are used for and make the document more readable. She requested that be accomplished and the resulting document be given to the Commissioners. b. Tentative Proposed Debt Issuance Plans To Meet Unfunded County And Schools' Capital Needs Laura Blackmon said that this item came out of the March 6th County Commissioners' meeting regarding the purchase of the old Wal-Mart. Attachment 2 addresses the tentative proposed debt issuance plans. The Proposed Issue #1 for alternative financing includes Animal Services Facility Construction, Remainder of 2001 Voter Approved Bonds, and Efland Sewer Completion. Commissioner Gordon asked about the detail for the Efland Sewer Completion. Donna Coffey said that this is part of what the Board of County Commissioners spoke to County Engineer Paul Thames about on February 19th when he brought a report back to the Board that identified that, in order to complete the project to the point that the Commissioners wanted it completed, an additional $1.7 million was needed. Chair Jacobs said that the Board said that there would be a public hearing, and he thinks that the total cost could go up to more than $2 million. Donna Coffey made reference to Attachment 2 and Proposed Issues #1 and #2 and said that these are already programmed into the debt service and would not affect the debt capacity charts. The next two pages have debt service that is not yet programmed. Page 2 lists what the County could afford, given the debt service capacity, for the next four years and for the last four years of the CIP. This is a tentative proposal to meet unfunded needs of the County and schools. For 2009-2013, there is a debt service face value capacity of$154 million that can be issued. Proposal Issue #4 is where the old Wal-Mart facility fits in at $25.3 million. This would be the purchase of Hillsborough Commons, costs to upfit the building, and construction of a 15,000-square foot addition to the Southern Human Services Center to relocate the dental health clinic from Carr Mill Mall as well as provide health services. Donna Coffey reviewed lines 10-16 on page 4. She said that this is a very aggressive proposal. Laura Blackmon said that this proposal would incur some tax rate increases and the Board may want to wait until after the May 6th referendum to determine what should be on this list, should the voters approve the Land Transfer Tax. Chair Jacobs said that two-thirds of the $150 million is going to one school system and the other one is getting only one-tenth, and this does not seem equitable. He just raises this as a point. He said that the Board has talked to the Planning Director about reexamining the impact of Mebane's growth on the Orange County School System as far as whether or not it is going to project another school. Laura Blackmon said that this issue would be addressed in the next phase. Donna Coffey said that the SAPFO—TAC met and they all did acknowledge that the numbers for student membership are based on historical growth and that OCS is getting closer to needing a new elementary school. Line #29 in Proposed Issue #5 has an allocation of$40 million for OCS. Chair Jacobs made reference to Proposed Issue #5 and said that McDougle Middle School Auditorium could not possibly cost as much as a middle school. Lisa Stuckey said that Line #26 for Elementary#12 should be $42,895,000, if inflation is factored in. Line #27, the auditorium, should be $6,611,000. Commissioner Gordon said that some of these numbers are not correct and the staff should ask the CHCCS staff to make sure the right numbers are in the chart. She said that she is concerned about the projected completion date of Elementary School #11 of 2011-12. She said that CHCCS has said that they want this school in 2010-11. Her understanding is that if this school does not open on schedule, then the Chapel Hill-Carrboro City Schools will have to stop issuing CAPS. Commissioner Gordon said that if the County could somehow fund the $30 million elementary school a different way, then that would make the bond issue $98 million, which is more in concert with the kind of bond referenda that have been done. She said that there is very little time to get this on line before the SAPFO would require that CHCCS stop issuing CAPS. She wants to figure out how to fund this school. Laura Blackmon said that staff was only trying to show the Board of County Commissioners what the top ceiling of debt was. There will have to be a tax rate increase to fund the entire debt capacity. Chair Jacobs made reference to items #15 (County-Parks) and #16 (County-Land Banking) and clarified that parks is park development. He said that land banking has a connotation that might be different than land purchase and easement purchase. He said that if it is land banking for schools, then it is not a County project. He asked Laura Blackmon to break down the land banking issues between schools and County. Commissioner Foushee said that she was thinking that land banking could also include affordable housing. Related to that, the Greene Tract has 18.7 acres that is earmarked for affordable housing. Donna Coffey made reference to the last page and the major projects not included in this: Central Administration Building for both school systems, conversion of Lincoln Center to Educational Center, County parks beyond what is currently programmed, Parks and Recreation Administration Building, and Parks Operations Base. Commissioner Gordon made reference to line #14, CHCCS technology, and suggested adding "/Culbreth Science Labs". This is a project that has been on the books for a long time and she does not want it forgotten. She also wants to flag the Seymour Center expansion, the Wellness Center, and the adult day center which are about $2.5 million. She also wants to consider the adult day center at the Seymour Center. Laura Blackmon said that once the projects are started in the first four years, and as they see changes in the future, then some projects might be moved up. Commissioner Gordon said that the Town of Chapel Hill has a committee to look at the old post office and the County might need to plan that it will have to fund a justice facility at some point (not within the eight-year period). Commissioner Gordon asked for a report from the school systems about any updates on needs. She is not clear about the needs for OCS. Chair Jacobs suggested that line #38 say, "County parks, open space, and land banking." Commissioner Gordon said that the Human Services Reserve should be used for the old Wal-Mart facility. However, she does not want to lose the Southwest Library. Commissioner Gordon said that she thought that the Board was going to talk about the Land Transfer Tax issue tonight and how this can help solve some of the County's needs if passed. Laura Blackmon said that the staff is looking at debt capacity and the cap, but how it is paid for is another issue. Donna Coffey said that the unfunded needs and the debt tied to this is going to be greater than what a land transfer tax would bring in. The meeting was adjourned at 9:47 p.m. Barry Jacobs, Chair Donna S. Baker, CMC Clerk to the Board