DRAFT

Finance Committee

Minutes

March 7, 2012

            The DeKalb County Finance Committee met on Wednesday, March 07, 2012, 6:58 p.m., in the Administrative Building’s East Conference Room.  Chairman Scott Newport called the meeting to order and let the record reflect all members are present.  Members present were Larry Anderson, Charles Foster, John Gudmunson, John Hulseberg, Stephen Reid, Ruth Anne Tobias, Paul Stoddard and Ms. Fullerton.  Others present were Gary Hanson, Mark Todd, Joan Hanson, Maureen Josh, Jim Scheffers, Sheriff Scott.

APPROVAL OF THE MINUTES

Moved by Ms. Tobias, seconded by Larry Anderson, and the motion was carried unanimously to approve the minutes from January 18, 2012.

APPROVAL OF THE AGENDA

Chairman Newport asked to reverse the order of 6 & 7 for Ms. Josh.  Moved by Larry Anderson, seconded by Ms. Fullerton, and the motion was carried unanimously to approve the agenda.

ANNUAL PROPERTY TAX ABATEMENT FOR BOND LEVY

Gary Hanson discussed the Abatement documents presented to the committee on pages 4A and 4B of his handout (which can be found in the Finance Department).

Two Resolutions, one for the Health Facility Bond Issue and the other for the Courthouse expansion are done annually to abate two different levies. 

Moved by Mr. Stoddard, seconded by Mr. Hulseberg to approve the resolutions for the Annual Property Tax Abatement for Bond Levy, and the motion was carried unanimously.

REVISIONS TO INDEMNIFICATION POLICY

Gary Hanson discussed with the committee the noted changes on support documents 5A-C.  Recent changes include that the Medical Director be covered and noted other amended changes which are in 2.1 and 2.2 are noted by underlining or strikeout clarifications.  There are thirteen changes.  Some are clarifications and added positions.

Moved by Ms. Tobias, seconded by Mr. Reid to approve the revised Indemnification Policy and the motion was carried unanimously.

COMPENSATION FOR NON-UNION EMPLOYEES

Gary Hanson discussed with the committee that Ms. Josh, DeKalb County Circuit Clerk asked to revisit the Non-Union Employees Compensation issue.

Her suggestion is to move one Deputy Clerk position salary and benefits from her General Fund budget to her special fee funds of Court Automation and Document Storage and provide a 2% salary increase for employees not covered by a collective bargaining agreement.  This would be a permanent solution. 

Mr. Foster asked what are the balances of the Court Automation and Document Storage?

Gary Hanson noted that the Court Automation $670,000 and Document Storage $400,000.

John Gudmunson questioned how many employees would this affect?

Gary Hanson noted about 100 employees.  This would be countywide.

John Hulseberg recognized this is countywide and commended Ms. Josh on her generosity.

Mr. Anderson noted to the committee that Ms. Josh has made previous contributions in the past.

Mr. Gudmunson questioned if this $80,000 will cover all Non-Union employees. 

Gary Hanson answered that the $80,000 will take care of the General Fund Non-Union employees.  There will be a small number of non-union employees at the Highway Department and a few scattered around the county offices.  Their departments have the resources to cover the increase.  Seventy-five employees are in the General Fund and another 25 will come out of their department’s budgets.

Mr. Gudmunson questioned what years is this covering?

Gary Hanson said that it’s just for the current year, but as an add-on so that it is a permanent increase.

Mr. Foster what is the total cost for the 100 employees? 

Mr. Hanson said that it’s around $1,000 per person.

Ms. Fullerton concluded that the revenues relieved from the General Fund would assist in covering the increase.

Mr. Gudmunson was concerned about other contracts coming up and noted that they too would want increases.

Mr. Hanson that the Non-Union employees are falling way behind in their compensation.

Mr. Gudmunson discussed his concern for the Highway Departments budget not being flexible to handle the changes. 

Mr. Stoddard discussed the coverage from the General is the $80,000 only.

Ms. Hanson discussed with the committee the morale of the Non-Union employees faced with being on-call.

Mr. Reid discussed the 2% increase being permanent

Moved by Ms. Fullerton, seconded by John Hulseberg to adopt the resolution to the county board for Compensation for the Non-Union Employees, motion carried unanimously.

Chairperson Newport thanked Ms. Josh for bring this to the attention of the committee and finding a solution.

UPDATE ON HIGH DEDUCTIBLE HEALTH INSURANCE PLAN FOR 2013

Gary Hanson said he was following up on a Finance Committee budget request to offer not only a PPO but a High Deductible Health Plan, with support documents included on pages 6 A-H. He is trying to identify the key information to make the decisions, however, the decisions do not have to be made tonight.  Page 6A is an overview, which shows that the middle column is current and the far right column is the High Deductible proposed plan.  The two key items to note are the Individual Deductible is currently  $500 with High Deductible would increase to $2,500. Family Deductible currently $1,000 with the High Deductible increasing to $5,000.  This plan is a typical plan that is being proposed by our consultant.  This plan can also be tweaked.

Pages 6E-F discuss the timeline for the High Deductible Health Plan & HSA.

Pages 6 G-H highlights a news release by the American Bankers Association.  It is a study of the impact of the Medical Loss Ratio rules on HSA plans for additional information.

Pages 6 C – D cover the Analysis for Family and Single.  Column C –covers no change for 2013; Columns D & E cover the PPO Plan and HDHP. 

Mr. Hanson answered numerous questions from the committee regarding the numbers presented.

Chairman Newport questioned if this is pretaxed?

Mr. Hanson yes.

Mr. Stoddard is there any increase to the employees if they stay with the PPO?

Mr. Hanson informed there would be 4% as a result of the changes.

Mr. Foster questioned which carrier?

Mr. Hanson noted that the carrier is Blue Cross at this point.

Mr. Foster questioned if we considered HMO’s?

Mr. Hanson noted that HMO’s were looked at last year and the prices were not attractive.  Blue Cross is such a player in this that we benefit with discounts.

Mr. Newport agreed that discounts are a bigger issue with the HSA’s.

Mr. Reid discussed Kishwaukee Hospital’s impact on the costs as they are a sole provider in this community.

Ms. Fullerton discussed that you could go to other hospitals in different communities.

Mr. Foster noted that other providers did not want to deal with Kishwaukee Health System.  That has changed over the years.  It certainly should be considered.  This is just a couple options, this shows nothing but a break even.  I am looking to do something better. Do we need to alter the plan?  These appear to be rich plans. 

Mr. Newport noted that E would not be a rich plan with the High Deductible.  The employer contribution is not that high on the family plan.

Mr. Foster is meaning rich of the overall offer.

Mr. Foster asked if there is a Buy out plan for employees not utilizing offered insurance?

Mr. Hanson noted there are about 100 employees utilizing at $2,600 a year for the buy out.

Ms. Tobias asked when we should start?

Mr. Hanson noted May  and June unless you change the plan design. 

Mr. Hulseberg noted that this could be premature looking at plans not knowing the impact of the health care system changes coming.

Mr. Stoddard asked what would happen to the HSA account if someone retired? 

Mr. Newport noted after the age of 55 they can move to a retirement account or use for out-of-pocket medical expenses.

Mr. Newport thanked Mr. Hanson for putting the information together.  The conclusion was that the committee would revisit this issue as more information is provided.

FY2011 YEAR END BUDGET TRANSFERS

Mr. Hanson provided support documents 8 A – Additional Appropriations and 8 B - Appropriation Transfers.

The committee discussed the numerous lines.   Mr. Hanson highlighted what are concerns A-3 Professional Services $50,000.  For psychiatric evaluations or for additional conflict attorney.  Corner is up we may need to ask for more money for that line as well.  Under budgeting can be bad as over spending.  Sheriff is up due to the jail being full.  Other lines reflect Federal Grant or State Grants. Line A-16 is a miss in the budget.  With the economy veterans are seeking for more assistance.  That is a concern if it doesn’t level out.    Line A-21 is a fee fund and it’s not covering the staff.

Mr. Reid questioned A-17 on the Nursing Home Loan?

Mr. Hanson informed that is from paying the loan off early.

Mr. Stoddard asked if there was a total of the list.

Mr. Hanson did not add it up as it’s a mixed bag some are General Fund some are stand alone funds.

Mr. Hulseberg asked if the A22 & 23 tied to the Drug Court? 

Mr. Hanson noted the Drug Court pays their own evaluations.

Mr. Hulseberg asked if the Veterans Assistance on 14 -16 are apart of the referendum passed in the county a few years ago to offset the costs. 

Mr. Hanson said yes and that the monies available are from the fund balance to pay this expense.

Mr. Stoddard moved and Mr. Reid seconded, approved the budget adjustments, motion carried unanimously.

DISCUSSION ON BUDGET PROCESS FOR 2013

Mr. Foster suggested that the committee continue to discuss the budget process for 2013.

It appears that the twenty two department heads all approach the budget separately.

It appears to be a punitive process, but he would like to make it a more collaborative process.  We have 22 department heads.  Are they all just acting separately.  The appeals seemed vague in nature.  The process needs to get the departments together to look at these budgets and work together.  Lacking managing what we measure and measuring what we manage and put metrics in place to look at the different aspects of the budget.  Mr. Todd and Mr.  Acardo did look at zero based budgets.  Is there a way to expand what they were doing throughout the County.

Mr. Newport asked Mr. Foster what he meant by the word punitive .

Mr. Foster stated that he looked at the board members that got involved in the appeal process and out of 24 members maybe 6 got involved.  The appeals are putting board members against administrative staff.

John Hulseberg noted that performance measures implemented would be useful to have.  It would be useful for the staff to have.

Ms. Fullerton said any reduction for the 2013/14 budget would be useful to know in advance.  It would be better for the departments to do rather than the committee making management decisions for them.

Board discussed the impact of measuring that should be a countywide effort.

It was moved by Mr. Anderson, seconded Ms. Fullerton to adjourn.  Motion carried by unanimously.

Respectfully submitted,

                                                                        _____________________________________

Scott Newport, Chairman

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