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HomeMy WebLinkAbout04-27-2020 Council Work Session PacketCouncil Work Session Monday, April 27, 2020 5:00 P.M. Orono Council Chambers, 2780 Kelley Parkway, Orono, MN 55356 Orono City Council Work Sessions are Open to the Public The Orono Council Work Session is open to the public. To participate in this Work Session please follow the instructions below: Please register to participate in the April 27, 2020 Orono City Council Work Session. The Work Session begins at 5:00 P.M. at: https://attendee.gotowebinar.com/register/1944665940515976719 After registering, you will receive a confirmation email containing information about joining the webinar. Brought to you by GoToWebinar® Webinars Made Easy® Meeting Participation Instructions for Applicants and the Public can be found at: https://www.ci.orono.mn.us/DocumentCenter/View/2255/Instructions-for-Orono-Public- Meetings-Held-Electronically WORK SESSION AGENDA 1. Insurance Committee Update 2. 2021 Streets Plan Council Work Session Monday, April 27, 2020 5:00 P.M. Orono Council Chambers, 2780 Kelley Parkway, Orono, MN 55356 Orono City Council Work Sessions are Open to the Public Past Meeting Agendas April 13, 2020 • COVID-19 Update • Staffing Discussion March 9, 2020 • Interview Planning Commissioner Candidates February 24, 2020 • Interview Park Commissioner Candidates Annual Discussions Timeframe: • Budget: Part of June, All of July, August and October. • City Administrator & Police Chief Update (3 times per year for 15 minutes) MEMORANDUM To: Mayor and City Council From: Ron Olson, Finance Director Date: April 27, 2020 Subject: Insurance Committee Update Rising insurance costs have been an ongoing issue for many years. During the 2020 budget cycle, the Council directed staff to create an insurance committee in order to explore options for insurance that may result in lower premiums; or at least smaller increases in the future. The committee met earlier this year with representatives from our health insurance agent, Gallagher Benefits Group. They outlined the current insurance environment as well as providing some detailed information on the Public Employees Insurance Plan (PEIP). PEIP is a plan created specificall y for non-state public employees and has become popular with other local governments. Currently the City part of a group of cities (LOGIS) that joined together as a larger pool in order to obtain more competitive premiums and a greater choice of coverage plans. The LOGIS group worked well for the City for many years. However, recently the LOGIS plan has been experiencing increases exceeding 10% per year. The large increases have negatively impacted both the employees and the City’s budget. For 2021, the projected increase in premiums is 13.1%. This will be a $24,000 increase to the city and annual increases ranging from $600 to $1,320 for employees. The exact amount of the increase will be known around May 15. The Joint Powers Agreement with LOGIS requires notification be June 15th of this year if the City desires to leave the group in 2021. A decision to leave is permanent. The issue for City is that most insurance carriers will not provide quotes for the 2021 coverage year until after the deadline to leave LOGIS. Staff is requesting direction from the Council on withdrawing from LOGIS for 2021 and proceeding with an RFP for a new health insurance carrier. While we expect that the RFP would result in lower premiums, there is no guarantee that it will. Exhibits: 1. Carrier Quote Availability 2. City Insurance Contributions 1 ©2020 ARTHUR J. GALLAGHER & CO. 1 Industry Happenings Carrier Specific Requirements: •Stand Alone •Allina Health/Aetna –6 months from renewal date •Blue Cross Blue Shield of Minnesota –6 months from renewal date •HealthPartners –presently with LOGIS •Medica –4-6 months from renewal date •Preferred One –May for January 2021 •UHC –quote for groups under 100 not available until October for January 2021 •Pooled plans •LOGIS –2020 rates will be available in May •To leave pool January 1, 2021 must inform LOGIS by June 15th •PEIP –6 months from renewal date •Sourcewell –4 –6 months from renewal date •Minnesota Healthcare Consortium –4 –6 months from renewal date City of Orono Insurance Contribution 2010 840.00 840.00 2011 865.00 865.00 2012 915.00 990.00 2013 915.00 1,040.00 2014 915.00 1,090.00 2015 915.00 1,165.00 2016 915.00 1,255.00 2017 915.00 1,255.00 2018 915.00 1,330.00 2019 915.00 1,346.00 2020 915.00 1,472.50 75.30% WORK SESSIO AGENDA ITEM Prepared By: Reviewed By: Approved By: 1. Purpose. The purpose of this action item is to gain council approval to commence the planning and engineering of the 2021 Street Maintenance Project. 2. Background. In order to maintain our city streets the engineering department recommends a portion of the city’s streets for various pavement preservation activities. Streets are inspected and assigned a pavement condition index (PCI) rating. The PCI allows street to street comparisons and provides the data required to conduct street maintenance programming and planning. 3. Scope. Planning and engineering will consist of topographic surveying, utility inspections, design, permitting, public input and solicitation of bids for select roads. 4. 2021 Recommended Streets. For 2021, I am recommending maximizing our efforts on mill and overlay projects on a group of residential neighborhood streets as well as executing the previously designed Casco Circle project. The table below list the streets identified for potential projects in 2021 with planning level estimates for each project. As refined cost are developed during design and the 2020 levy and budget are finalized it may become necessary to defer one or more of the projects until 2021 or latter. 5. 2022. In 2022 I propose the city focus on the reclaim and reconstruction projects in the southeast of the city. We would bundle Fox Street, Dickenson and Ferndale West into a project. 6. Funding. The projects will be funded with a combination of the Pavement Management Fund, Sewer Funds, and Stormwater Fund. Adequate funding is available in the Stormwater, Water and Sewer Funds. The Pavement Fund should have sufficient funds to realize the 2021 projects however does not have sufficient projected revenues to meet 2022-2024 needs. a. Pavement Fund for 2021. Adequate funding for the 2021 projects is based on several assumptions: one, an increase in the pavement levy for 2021to $757,450; two, available positive fund Item No.: 2 Date: April 27th, 2020 Item Description: 2021 Street Maintenance Planning and Engineering Presenter: Adam T. Edwards Public Works Director/City Engineer Agenda Section: Public Work/ Engineering Street Estimated Cost Pavement Stormwater Sewer Water Total Contracted Maintenance* $ 100,000 NA NA NA $ 100,000 Casco Circle $ 431,670 $ 52,300 $ 8,600 $ 41,250 $ 533,820 East Navarre Roads (Kenwood, Olive, Lafayette Ridge, Bayview, Navarre Ln,) $ 264,600 $ 39,600 $ 22,500 $ 49,500 $ 376,200 Lakeview Terrace and Country Club Roads $ 177,200 $ 26,600 $ 16,500 NA $ 220,300 Partenwood Road and Lane $ 122,300 $ 18,400 $15,000 NA $ 155,700 2021 projects TOTAL $1,095,770 $ 136,900 $ 62,600 $ 90,750 $ 1,386,020 * This provides funding for the pavement levy for contracted maintenance activities such as crack sealing and full width patching. balances from 2020 of approximately $300,000; and that $125,000 of water tower lease revenue remains dedicated to street maintenance. This would provide $1,182,450 for 2021 Streets. b. Pavement Fund Future. Currently the pavement fund as three funding sources; the Pavement Levy, Water Tower telecom leases, and positive fund balances. The long term annual pavement need is $1,050,000. In the short term however there is approximately $2,000,000 of additional need to catch up with previously deferred maintenance as illustrated in the graph below. In the long term the outlook for achieving a sustainable and reliable source of funding for pavement needs is good assuming the city realizes a pavement levy of $1M. An additional benefit to realizing a sustainable pavement levy would be the availability of the Water tower lease revenue moving to another general fund area such as the Park Fund. In recent years the city has capitalized on positive fund balances to augment pavement funding while gradually increasing the pavement levy. Unfortunately these balances are not a dependable source of funding and tend to only be available when the overall economy, particularly the home construction sector, is in a boom. COUNCIL ACTION REQUESTED: 1. Move to direct the City Engineer to move forward with planning for the 2021 street maintenance projects. 2. Direction on meeting the funding gap for pavement maintenance over the next 3 years. Exhibits $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2021 2022 2023 2024 2025 Pavement Needs vs Funding Cost Levy Tower Revenue Other