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HomeMy WebLinkAboutMinutes_Miscellaneous_05/10/1995_Finance & Administration Committee c f�A VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive Tequesta, Florida 33469 -0273 • (407) 575 -6200 3 Fax: (407) 575 -6203 o b 4 f,CN COUHSy VILLAGE OF TEQUESTA FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES MAY 10 1995 I. CALL TO ORDER AND ROLL CALL The Tequesta Finance and Administration Committee held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Wednesday, May 10, 1995. The meeting was called to order at 9:03 A.M. by Chairman Joseph Capretta. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were: Chairman Joseph Capretta and Co- Chairman Ron T. Mackail. Also in attendance were: Village Manager Thomas G. Bradford, Village Clerk Joann Manganiello, and Department Heads. II. APPROVAL OF AGENDA The Agenda was approved as submitted. III. REVIEW OF EMPLOYEE BENEFIT (HEALTH INSURANCE) CONSULTANT REPORT FOR THE VILLAGE OF TEQUESTA BY BLACK INK ASSOCIATES, INC. Steven A. Carter. Village Manager Bradford explained that one year ago at budget preparation time when the Florida Municipal Health Trust had proposed a 25% increase in their insurance program for the Village, he had contracted with Mr. Steven A. Carter, representative of Black Ink Associates, Coconut Grove, Florida, for a review of the program. Subsequently, the proposed increase was dramatically reduced and the Village had stayed under the program for another year. Mr. Carter reported that last year the Trust had added a managed health care provision to the Village contract which called for precertification of any elective hospital admissions and Recycled Paper Finance and Administration Committee Meeting Minutes May 10, 1995 Page 2 ----------------- - - - - -- post certification of emergency confinements, with the intent of reducing the number of hospital days and consequently the overall claims cost. Mr. Carter explained that he recommended that the Village go to a Preferred Provider Organization option which would reduce rates further as well as change the co- insurance and provide a financial incentive to employees and dependents to go to providers in the PPO network. Mr. Carter explained that a PPO would contract with the Trust to provide services at less than reasonable and customary expenses so that the Trust could then afford to pay 90% benefits in that type of plan and thereby lower claim costs and lower premiums further than last year. The PPO option would provide 90% reimbursement to the out -of- pocket maximum, paying 10% rather than the current 20 %. The employees could elect to go out of the network in which case they would be reimbursed at 70% and would pay 30% out -of- pocket expenses up to the maximum. Mr. Carter reported that PPO and HMO organizations were taking over most of South Florida and he believed it would be a proactive position for the Village to elect a PPO type coverage as the next step into more strictly controlled health care environment, keeping in mind that last year the precertification and post certification requirements had been added to the Village plan without choice. Mr. Carter explained that Dade County, formerly the second highest cost county in the U.S. for health care delivery, was now 35% lower than Orange and Hillsborough Counties as a result of becoming 90% networked with PPOs and HMOs to provide their services on a reduced fee for service basis. Mr. Carter reported that the Trust was working to rectify the loss of business created by its price increase of last year since it could not remain competetive without offering PPO or HMO options, and was currently in the process of conducting interviews with PPOs and EPOS (Exclusive Provider Organization: defined as being the same as an HMO except that it was self - funded), which they would offer at the October 1, 1995 renewal date. Mr. Carter advised that if the Village chose to remain under its current traditional benefit program the rates would probably increase approximately 20 -25 %; and since the Village had formerly been in negotiation with the Trust they would allow the Village the option of choosing a PPO under Anthem Health Care Systems of West Palm Beach, the best offered by the Trust since the others did not include the hospitals that Tequesta employees would normally choose. Mr. Carter summarized the options of the Village as follows: (1) Enter into the negotiatied PPO with the Trust and with Finance and Administration Committee Meeting Minutes May 10, 1995 Page 3 ----------------- - - - - -- Anthem, or, ( 2 ) Keep the current plan and delay any decision until the 10/1/95 renewal action by the Trust, and be forced at that time by budget constraints to choose a more restricted PPO which would not have all of the hospitals preferred by the employees, or ( 3 ) Prepare a request for proposal to insurance carriers to further evaluate a PPO, however, since this would have to be in tandem with an HMO it was not recommended by Mr. Carter as a first step into managed health care. Mr. Carter explained that the cost would be a savings of 9% by staying with the Trust and implementing the negotiated PPO on July 1, 1995, and a reduced increase on October 1; or possibly 10 -15% savings of current premiums by preparing an RFP for PPO only. Mayor Mackail discussed the trend to managed health, and that the real reason for having health insurance was to provide for catastrophic problems, and questioned what assurance the Village would have that the hospitals under the negotiated PPO would remain, since big hospitals were trying to take over the smaller ones. Mr. Carter explained that the only way the hospitals could stay in business was to remain with PPO /HMO networks. Mr. Carter explained the history of Blue Cross /Blue Shield, and stated that it was the only other company networked in Martin County other than Anthem. In response to Mayor Mackail's question regarding deductibles, Mr. Carter explained that under the proposed PPO arrangement that only the out -of- pocket amount would be changed, and commented that Tequesta's present plan was the richest benefit plan by far of any of his company's clients, and in return for that, Tequesta also paid the highest premiums of any of their clients; and gave examples of various local municipalities which in order to control their budgets were offering either HMO only and allowing employees to buy up to PPO benefits at their own cost through payroll deductions, or were offering PPO /HMO combinations and varying the contribution levels between the two plans to reflect the difference in cost. Village Manager Bradford stated that the Village could no longer afford to keep its present plan, and preferred to incrementally move toward less expensive alternatives so that no radical adjustment would have to be made by the employees and their families. Chairman Capretta agreed, and cautioned that a plan must be selected that would be convenient for the employees by offering the preferred hospitals. Chairman Capretta discussed the preference of older people to go the doctor frequently so that they needed Finance and Administration Committee Meeting Minutes May 10, 1995 Page 4 ----------------------- a plan similar to the one the Village currently offered, while younger people did not go to the doctor very often and could use a different type of health care plan; and concluded that the Village should choose a plan designed to fit the age range of the employees and one that would reduce the employees' contribution. Finance Director Kascavelis reported that the median age for Village employees was in the low 40 Village Manager Bradford explained that virtually no one would still accept assignment of benefits so that employees were required to pay at the time of each doctor visit, however, under the PPO plan offered by Mr. Carter many physicians would accept benefits; and stated that employees were worried about large premium increases since they were paying a portion of the premium. Mr. Carter explained that under a HMO /PPO arrangement most Village employees because of their ages would choose the PPO, and that Blue Cross /Blue Shield was the only HMO available to the Village. Mr. Carter stated he would not recommend a HMO initially since their delivery was very different and a PPO would offer specialists. Village Manager Bradford explained that under the negotiated PPO plan with Accordia that the Village would realize a 7 -1/2% net reduction, employee coverage would be paid, and the employees present 25% contribution of the family portion would be reduced by 7 -1/20. Mr. Carter stated that Anthem offered more doctors and more hospitals than the other networks, and that employees would still have the option to go outside the network and pay the difference. Tom Hall commented that all of his wife's specialists were listed on the Accordia PPO. Village Manager Bradford estimated approximately 33% of the Village employees lived outside Palm Beach County. Mr. Carter explained that although the number of providers in Palm Beach County was much greater than for Martin County that because of the low Martin County population that their number of providers would be much less, however, he was unable to evaluate whether the listed providers were the best. Mr. Carter commented that the term "freedom of choice" would be changing over the next few years, and that under the current plan it meant total freedom to choose a provider, under a PPO it meant freedom to go outside the network, and under an PPO /HMO offering it would mean the freedom to choose either the PPO or the HMO. Mayor Mackail recommended that the Village work with Anthem and over a period of time phase into an HMO since in the future there would be no choice, and stated that it was important for management to explain to employees why the Finance and Administration Committee Meeting Minutes May 10, 1995 Page 5 ----------------- - - - - -- change was being made. Chairman Capretta gave examples to illustrate how people made decisions based on their personal experiences. Village Manager Bradford questioned why many of the League's clients had changed to Blue Cross and Blue Shield. Mr. Carter responded that they offered a Point of Service Indemnity Plan with limited access to specialists and no freedom to go in and out of the PPO, however since the premium was 20 -250 less the Trust could not compete and had lost eight cities to them since 10/1/94. Village Manager Bradford explained that the reason the Village had not accepted Mr. Carter's recommendation was that the Trust had reduced their increase to a cost that the Village could handle, and that he would need to negotiate the proposal with CWA, who he believed would want to obtain relief from the cost of their plan. Mr. Carter explained that the Trust had agreed if the Village accepted the Anthem PPO by July 1 that it would be grandfathered, however the Village should consider that at the June trustees' meeting everything could change, and Village Manager Bradford stated that the Village needed to act immediately if they wanted the Accordia PPO, and commented that Mr. Carter would be able to help with education of the employees. Chairman Capretta discussed the importance of fully educating the employees. In response to a question by Mayor Mackail, dental coverage was discussed, and Mr. Carter stated that he would look into whether that coverage was feasible. Motion was made by Co- Chairman Mackail to allow Village Manager Bradford to move in the direction of providing a PPO changeover from the existing health coverage plan. Motion was seconded by Chairman Capretta. The vote on the motion was: Joseph N. Capretta - for Ron T. Mackail - for The motion was therefore passed and adopted. IV. REVIEW OF REQUESTED PRODUCTIVITY FACTORS REPORT FOR TEQUESTA WATER DEPARTMENT WELLS. Thomas C. Hall, Water Systems Manager. Chairman Capretta explained that he had requested the productivity report at the last meeting to determine the amount of water that could be obtained from the existing wells so that figure could be used to calculate the size of Finance and Administration Committee Meeting Minutes May 10, 1995 Page 6 ----------------------- R/O plant needed, and to see if the Village was obtaining all the water that they should be getting from their current wells. Water Systems Manager Hall commented that the quality of water was also a factor and that water used by golf courses for irrigation might not be acceptable for drinking. Chairman Capretta reported that greens supervisors for local golf courses had responded to information that the IQ water they used to water their grass was of such poor quality that newly planted grass sprigs might not survive by testing which proved that information totally wrong, and in fact determined that the IQ water was of higher quality than that from the wells. Mr. Hall reviewed the productivity report and stated that 89% of permitted capacity was pumped from Tequesta's wells and that the rest was obtained from Jupiter. Mr. Hall reported that Seacoast Utilities was running at 72.3% of permitted capacity. The amount of time required to obtain wells was discussed. Mr. Hall commented that although the time for acquiring the last three wells had been lengthy that litigation had been avoided in two cases. Village Manager Bradford responded to Co- Chairman Mackail that the Village had played politics to appease some members of the Council. Mr. Reese, with the firm of Reese, Macon and Associates, explained that the Village was operating at 89% of what they were allowed to take, and that the design pump rate was only the pump itself. Chairman Capretta questioned down time; Consultant Reese responded that some wells had been down longer than desired and that Tequesta wells suffered from iron bacteria infestation which was an organic iron that clogged up the wells so that they periodically must shut down to be cleaned. Village Manager Bradford explained that the report stated (1) that more wells were needed for redundancy in order to maximize production when one was down, (2) the preventative maintenance program needed to be upgraded and enhanced, and (3 ) if a higher permitted level could be obtained from SFWMD that more water could be pumped from the ground. Consultant Reese expressed concern whether the Village could prove to SFWMD that they could obtain more water if the permitted level were raised. Mr. Hall commented that Jupiter had just added 9 sufercial wells for a total of 38. Village Manager Bradford stated that there was only one more site that had never been used which might be needed for an R/O plant, which was the location at the end of Cypress Drive. Chairman Capretta stated that operating at 89% was too close Finance and Administration Committee Meeting Minutes May 10, 1995 Page 7 ----------------------- to capacity, and planned efficiency would allow for plenty of backup when shutdown of a well was necessary. Chairman Capretta questioned whether the solution for Tequesta would be to put in eight more wells and a smaller R/O plant or to build a bigger R/O plant and still put in some more wells as a backup. Consultant Reese commented that the presence of wetlands might not allow more wells in South Martin County, and explained that Tequesta would be unable to double its 89% rate to meet peaks. Village Manager Bradford commented that Jupiter's consultant had stated that when all costs associated with surficial wells were considered that the operating costs were similar to R/O operation, and staff's conclusion was that there were probably no more sites available to be obtained for surficial wells. Discussion of sites for wells was concluded with Chairman Capretta's suggestion that in lieu of litigation the Village could buy the land, obtain the needed easement, and immediately sell the land while retaining the easement. Village Manager Bradford explained that in 1990 SFWMD had reduced permitted capacity, considered the area a sensitive water area, and because of a history of salt water intrusion the Village was obliged to pay for equipment to monitor the salt water intrusion level. Taking these factors into account as well as the fact that a permit had already been granted for an R/O plant, the Village Manager stated that chances for more surficial wells seemed very, very slim. Co- Chairman Mackail recommended the insertion of this information into a timeline, to which Village Manager Bradford responded that chart would be finished in approximately two weeks and would be reviewed at the next meeting. Chairman Capretta questioned whether SFWMD had access to numbers for various water companies so that they might see that one was operating close to 90% of their capacity; Consultant Reese stated they had the data. Co- Chairman Mackail expressed his opinion that although the decision for an R/O plant had always been postponed before, that now there was no other alternative, and if the Village was going to be in the water business that they should be agressive, and that Tequesta had an opportunity to end up in a very lucrative position with Jupiter Island. Further discussion ensued regarding the intentions of Hobe Sound and Jupiter Island. Chairman Capretta stated the alternatives as (1) agressive -- Tequesta would be a provider, build a larger R/O plant and drill as many other wells as possible, or (2) minimum -- Finance and Administration Committee Meeting Minutes May 10, 1995 Page 8 provide water only to Tequesta and have Jupiter take back Tequesta's Jupiter customers. During discussion of whether Jupiter was bluffing when they said they wanted Tequesta off their system, Consultant Reese offered the idea that since Tequesta would not want to build a plant to accommodate customers that might disappear in a few years that his suggestion was to tell Jupiter to take their customers back, pay Tequesta for the customers, and in exchange Tequesta would eliminate the agreement to 2007 and serve all their own water needs. After further discussion, Village Manager Bradford stated that at the next meeting the decision chart would be reviewed and a plan presented. IV. REVIEW OF THE CENTRAL GARAGE PROJECT AND AUTHORIZATION TO PROCEED WITH SAME. Thomas C. Hall, Water System Manager. Water System Manager Hall reviewed the site plan for the centralized garage, and explained that the space was needed since there was no longer space to wash and clean vehicles, no centralized storage place for parts and fittings used by Public Works and Water personnel, no place for personnel to shower after a muddy job so that presently they would be working the rest of the day covered with mud. The new garage would also provide office space for Public Works. Co- Chairman Mackail stated he had no problems with the garage provided it would cover long -term needs for possibly the next 25 years. Village Manager Bradford expressed concern that although this money was in the budget the Public Works Committee believed design costs to be outrageous and that building costs should be similar to building an equipment barn on a golf course, and could not be convinced that more money should be spent to make the facility more secure since the repairs for the Village would all be done from this building in the event of a hurricane or other disaster. Mr. Bradford stated that now a new state law would allow a design /build option rather than the standard separate design and construction. Mr. Hall explained that the building was expandable and that several hundred feet of land was available for expansion, and that the cost figures included site work, utilities, parking, Police Department impound area, etc. Village Manager Bradford agreed with Chairman Capretta that this building would be for a municipality, not just a water department, and therefore he believed the plan should be expanded 25% now. Co- Chairman Mackail suggested the larger structure be Finance and Administration Committee Meeting Minutes May 10, 1995 Page 9 ----------------- - - - - -- built but that interior finishing not be completed until needed. Discussion ensued in regard to long -term needs. Village Manager Bradford informed the Committee that a lease had been granted by a Village Council in the early 1980's for a portion of the land shown on the site plan for parking at a price of $500 per month to the owner of the 222 building, who was now trying to obtain permission to build a shed there. The consensus of the committee was to cancel the lease and evict the tenant. Co- Chairman Mackail requested three plans, short -term, intermediate, and long -term, with goals established for each. Village Manager Bradford reported that the architect had interviewed each department head to identify needs, but did not make projections, and he wanted projections from an engineer to be sure that long -term needs would be covered. Village Manager Bradford stated that the Police Department would use the facility; and it would also be used by the Fire Department if a central fueling facility was included. Tom Hall requested permission to go back to the constutant with concerns and to move forward with a design /build concept to mainstream construction of the project. He explained that the structure would be partially CBS and partially metal, that the Village owned the land, and that it was not visible from any road. Co- Chairman Mackail commented on the St. Lucie West Industrial Park, and Mr. Hall commented on Jupiter's new facility. Mr. Hall stated that cost of the project was budgeted at $422,000, and reviewed the breakdown by categories, and estimated 18 months construction time. Consensus of the Committee was to proceed with the project. Mr. Hall stated that Village Council would need to adopt a policy by Ordinance in order to use the design /build concept. Councilmember Hansen suggested that a master plan for all Village needs be considered before proceeding; Village Manager Bradford responded that the architect had been consulted and was fully aware and that he would make sure needs were met. Co- Chairman Mackail inquired as to the status of a possible cultural facility. Mr. Bradford responded that he would be meeting with Gary Van Brock regarding his direction from the Village Council to pursue the purchase of land for a cultural facility. Discussion ensued with Village Manager Finance and Administration Committee Meeting Minutes May 10, 1995 Page 10 ----------------- - - - - -- Bradford pointing out that the commitment from Lighthouse Gallery would expire June 1 and might need to be extended. Some concern was expressed over the management of Lighthouse Gallery and of the ability of BRIT to make a commitment in light of their financial problems. V. REVIEW OF ORDINANCE ABOLISHING BOARD OF ADJUSTMENT Village Manager Bradford told the Committee that his recommendation made approximately three years ago to abolish the Board of Adjustment was done with the intent of saving money and eliminating the problem of the Village Council being presented with Site Plan reviews with no idea of why a variance had been granted, by making variances a function of the Village Council. Most of the requests for variances in the past have involved housing additions which were desired at the same level of the existing home rather than the height above mean sea level now required by FEMA. Chairman Capretta's suggestion that possibly two members of the Council could work with variances led Mr. Bradford to reply that since the power was granted across the board that he did not believe that would be possible. The Village Manager also informed the Committee that the only criteria under the law that was to be used to grant a variance was for hardship and that the Board of Adjustment had been extremely liberal in granting variances, which could lead to serious problems for the Village. Ensuing discussion of the present process included comments that staff recommendations should be such that the Council could depend upon them, that the Council would be much tougher in granting variances, and how the K -Mart situation had led to embarrassment for the Council. Mr. Bradford reported that Mr. DiVosta had recently announced a new project and that since large sums of money had been spent to hire the best people that his firm could not afford to spend time going before the Community Appearance Board each time a change was desired. Village Manager Bradford offered an option of keeping both the Board of Adjustment and the Community Appearance Board but reversing the process so that the Village Council would see the project in the beginning. Building Official Scott D. Ladd commented that he leaned toward reversing the process, and that the Council would then be under the Snyder decision and would be unable to converse with developers. Chairman Capretta stated the Council should have final say, and requested advice on the matter from Village Attorney Randolph. Village Manager Bradford recommended that the Village Council hold a workshop with any board they decided to abolish. Village Manager Bradford stated that he would make a total recommendation to the Committee after a month Finance and Administration Committee Meeting Minutes May 10, 1995 Page 11 ----------------------- regarding all Boards. VI. REVIEW OF ORDINANCE REGULATING POLITICAL SIGNS. Village Manager Bradford explained the Supreme Court had ruled it unconstitutional for communities to prohibit political signs and that an Ordinance would be needed to comply with the law. He explained that the Ordinance could contain rules pertaining to the signs such as they must be temporary, etc. He also explained that since this would also require a Zoning Ordinance Amendment and since it was not required immediately that he would wait to combine it with another amendment to lower the cost. VII. COMMUNICATIONS FROM CITIZENS There were no communications from citizens. VIII. ADJOURNMENT There being no further business before the Committee, the meeting was adjourned at 12:01 P.M. upon motion by Co- Chairman Mackail, seconded by Chairman Capretta, and unanimously carried. Respectfully submitted, Betty our Recording Secretary ATTEST: Joann Mangardello Village Clerk DATE APPROVED: