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HomeMy WebLinkAbout03-09-2021 Special Council Meeting Minutes City of Canton Special Council Meeting 2 North Main Street Canton IL 61520 ZOOM Video conferencing 03-09-2021 5:00pm A special council meeting was held on March 9, 2021 2020 (5:00pm) via zoom webinar. STAFF IN ATTENDANCE Mayor Kent McDowell, Attorney Chris Jump, City Clerk Diana Pavley Rock, Treasurer Crystal Wilkinson, Utility Director Joe Carruthers,Street Superintendent Ron Robinson, Beka Schulz-CLA„ City Engineer Keith Plavec, System Maintenance Director Dash Wilson, Public Safety Director Richard Fairburn OTHERS IN ATTENDANCE: Tim Wyman MEDIA IN ATTENDANCE: WBYS Radio, Fulton Democrat VIDEO SERVICES BY ZOOM PLEDGE OF ALLEGIANCE OPENED THE MEETING INVOCATION—Mayor Kent McDowell PUBLIC PARTICIPATION- ROLL CALL Yes No Absent Alderman Justin X Nelson Alderwoman X Lingenfelter Alderman Fritz X Alderwoman Hale X Alderman West JOINED LATE Alderman Lovell X Alderman Quin X Mayhew Alderwoman X Chamberlin ADDITIONS OR CORRECTIONS TO THE AGENDA CONSENT AGENDA APPROVAL OF THE COUNCIL MEETING MINUTES HELD MARCH 2, 2021 Motion and second were made by Alderman Mayhew/Chamberlin to approve the consent agenda and place it on file. ROLL CALL Yes No Absent Alderman Justin X Nelson Alderwoman X Lingenfelter Alderman Fritz X Alderwoman Hale X Alderman West X Alderman Lovell X Alderman Quin X Mayhew Alderwoman X Chamberlin The motion carried. COMMITTEE REPORTS: FINANCE ALDERWOMAN ANDRA CHAMBERLIN DISCUSS, CONSIDER AND VOTE ON A RESOLUTION APROVING AN AGREEMENT BETWEEN THE CITY OF CANTON AND GUARDIAN INSURANCE FOR THE GROUP DENTAL, VISION AND LIFE INSURANCE PLAN FOR CITY EMPLOYEES. RESOLUTION #5304 City Clerk Diana Pavley Rock explained that the insurance met on March 1, 2021 to discuss the proposed renewal from Guardian Insurance for the group dental,vision and life insurance. It was the recommendation of the insurance committee to enter into an agreement with Guardian Insurance for a 24- month period. The City's insurance consultant Tim Wyman explained that the City first changed over to Guardian Insurance in 2017 and the City has not received any increase with Guardian since 2017. This year the City's loss ratio was 137%, so the City received an 8% renewal from Guardian. The rates received from Guardian are very low to the City and under market. The proposal does not have any changes in coverage and the benefits being proposed are the same that the employees had in 2020. The proposal includes a 2- year rate guarantee. Discussion took place at the insurance committee meeting about the roll over feature that Guardian offers. Since the City had this plan since 2017, employees are able to have funds roll over to the following year if not used. This benefit to the employees would be lost if the City would decide to go with another carrier. City Clerk Diana Pavley Rock further explained that the Guardian provides not only the dental benefits to the employees, but also the vision, life insurance and the employee assistance program benefits all for this low cost. A few years ago, the City had a separate employee assistance program and the Cty paid for those services. Guardian offered the employee assistance program as part of their benefit package at no additional cost, so this also saved the City the extra expense that was previously paid. Motion and second were made by Alderman Fritz/Alderwoman Chamberlin to approve the agreement between the City of Canton and Guardian Insurance for the group dental, vision and life insurance plan. The new plan with the new rates would become effective May 1, 2021 for a 2-year period. ROLL CALL Yes No Absent Alderman Justin x Nelson Alderwoman x Lingenfelter Alderman Fritz x Alderwoman Hale x Alderman West X Alderman Lovell X Alderman Quin x Mayhew Alderwoman x Chamberlin The motion carried. DISCUSS, CONSIDER AND VOTE ON A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF CANTON AND THE GROUP PROVIDER FOR MEDICAL INSURANCE FOR CITY EMPLOYEES The City's insurance consultant Tim Wyman explained that the City received the proposal from the current carrier BCBS and a proposal for a partially self-insured plan. The City currently pays approximately 2.27 million dollars for the group medical plan with BCBS. The current PPO plan has a $500.00 deductible with a $1000.00 max out of pocket/person. The plan includes a $20.00/$40.00 co-pay. Pharmacy's tier cost is $10.00, $20.00, $35.00. The City also currently offers an HSA plan with a$1500.00 deductible and a$3,000.00 max out of pocket. BCBS provided a report that shows an 80% loss ratio. Generally, an insurance company breaks even at an 85% loss ratio- and then the insurance company would lose money with a ratio any higher. BCBS offered a 1.46% increase for a renewal. This would be an increase of approximately $35,000.00 for the renewal. The second option is a renewal with BCBS with a 2-year rate guarantee for a 4.46% increase. The City would increase 4.46% at the beginning of the first year and then the rate would be flat for the second year. The third option is a partially self-funded model. This model is entirely different than what the City had years ago. The industry has evolved over the last 5-7 years and there are some safe guards under the new structure. The problem with a fully funded plan is no matter how good or how bad a year the City should have—the City would pay 2.3 million dollars to BCBS. The City did receive a good renewal with BCBS this year by getting a 1.46% renewal; however, the City is just sitting back and basically playing a game and just waiting for that 30-35% increase when a bad year comes along. When this happens then the City has 2 months to figure out what to do. A partially self-funded plan takes away this risk from the equation. The focus can then be placed on controlling the little claims and getting people heathier. To ensure the plan, there are four components that must be considered. The first figure in the component is a figure of$89,685.00 represents 3.89% of the overall spend. This is all of the fees that would be paid to a third- party administrator to pay and process claims, or anything that is ongoing fixed cost. The third -party administrator is Consociate out of Decatur Illinois, but they maintain an office out of Peoria. Tim further explained that his relationship with Consociates is better than one that would be received at BCBS or anywhere else. Tim further explained that the partially self-funded model will provide stability to the City and drive the claims downward while providing some predictability so the City can properly budget for healthcare. If the City receives a 30% renewal on a fully insured plan that would mean the City would have to figure out how to come up with $690,000.00 within just a couple of months. The proposed partially self-funded model takes this risk away. Under the proposed renewal, the City would move away from BCBS and Consociate would pay the claims for the City by paying them $89,685.00. The City would not be insuring all of the claims. A claim for dialysis or a claim for a hemophiliac could be hundreds of thousands of dollars. Under the proposed plan a purchase of a stop loss insurance policy would pay any claim over$75,000.00. The City would insure everyone from the deductible amount of$500.00 to $75,000.00. Anything over and above the $75,000.00 will be paid for by a re-insurance carrier. There is also a limit for an aggregate amount—or several claims by several different people. The City would be protected for an individual person with a large claim as well as being protected on the whole. The cost for this is $378,000.00 or 16.44% of the overall spend. Tim said in the industry this is a great quote because usually this number is between 22-25%of the spend. Tim further stated that he believes this is a very good quote. This is guaranteed with no lasers. This means that can't come in and request additional money (over the $75,000 cap) because of a large claim. This stop loss would be purchased directly through HCC life insurance company. They are the largest re-insurance company in the United States. The captive that the City would be joining is called Pareto. Pareto has 1400 employer groups in their captive, so they get some great buying power. The claims between deductible and $75,000.00-the City can actuarily see that that these will be approximately 1.7 million dollars over the next year. This amount is the money that the City will fund and put into a bank that resides in Canton. Bills will then be paid from these funds.Anything over the $75,000.00 will be paid by the insurance company. The insurance committee approved Tim Wyman's recommendation of keeping the rates that are currently in place with BCBS. This will generate the 2.3 million dollars of revenue. Some of these funds will go to the re-insurance, some will go to Consociates, but the remaining 73%goes into a bank in Canton that claims are paid out of. In a self-funded plan, the first 2-3 months you don't have any claims to pay because of the lag time between when the claim was incurred, to when the claim is processed by the hospital, and then when it gets to consociate to submit. This would allow the City sufficient time to generate the money to pay future claims. Treasurer Wilkinson said the City currently pays $170,000.00 per month in insurance premiums to BCBS. The money that would typically be sent to BCBS would be used to fund the account for claims to be paid out of. A claims report would be sent to the City with the dollar amount that need to be approved before payments would be made. One bill will be sent to the City that will include the amount for the reinsurance, claim processing and claim payments. The final cost is a two- year cost to join the captive. The captive is a collection of like-minded employers who are tired of reacting to the renewals each year, and wants to look at a 3-5-year strategy of moving the costs downward. The 1.7 million dollars for claims are the City's opportunity to drive costs down. Specialized companies can focus on the small claims can help drive the costs downward. The captive charges $37,600.00 for two years to join. This is the buy in fee and it makes sure you can't get any lasers. If the City would decide to leave and go back to BCBS or someone else, this money would come back to the City. If the City can focus on the deductible amount to the $75,000.00 claims- this is where the opportunity is at to save money instead of sending all of it to BCBS. This year the City basically gave BCBS 5% of the 2.3 million dollars to BCBS to put into their pocket. So, the proposed plan would allow the City to put this 5% back into the bank account for the taxpayers. If the City was already on this proposed plan structure, the City would have been able to keep $500,000.00 in their bank account instead of giving it to BCBS to pocket. Tim further explained that in the 3-10-year strategy the City would end up money ahead. The City will receive a concierge service for the employees. The concierge service will be proactive and reach out to the employee for various services to explain that other options are available that would cost the employee less money, but receive the same service. This will also help the plan save a lot of money along with the employee saving money. Tim further explained that he is seeing much larger increases from BCBS coming out of the COVID pandemic. The increases have been ranging from 8-9%to 35% increases. The large increases are definitely out there and businesses are receiving them. The City is currently waiting two months before the renewal and are forced to just re-act to the renewals. This plan will help the City implement a plan that will have a 3-5-year strategy where planning can take place to help decreases costs. If the City would have a horrible year with several claims over$75,000.00,the worst the City would receive is an 8% increase. Tim asked the council what they think they would get with BCBS if the City had a horrible year with several claims over $75,000.00. BCBS would want their money back. If you are going to have a bad year, you generally want to be self-funded because those claims would go away within a year or two. Consociate pays their claims in 3-4 days and their accuracy is 99.7%. They do a remarkable job of paying claims. The next step would be to receive a contract with Perato for approval. The City could bring a resolution back to the next council meeting with an agreement for a final vote. The City would setup a bank account, sign a contract, issue ID cards, and have an employee meeting. The benefits would remain the same that is currently in place with BCBS. City Clerk Diana Pavley Rock said she contacted three separate entities that utilize this same insurance structure that is being proposed to the City to check references. All three entities gave very positive comments with their experience in belonging to this plan. A letter outlining the individual comments were emailed directly to the council members and the insurance committee members. Treasurer Wilkinson said this proposed plan saves the City approximately$106,000.00 this year. Motion and second were made by Alderman Mayhew/Andra Chamberlin to have Tim Wyman move forward with the partially self- funded plan to get the guaranteed numbers and to gather the contracts. Attorney Jump said everything will be subject to a final vote by council, but this will direct Tim Wyman to move forward. City Clerk Diana Pavley Rock said that Alderman West joined the meeting earlier so he will be included in this vote. ROLL CALL Yes No Absent Alderman Justin X Nelson Alderwoman X Lingenfelter Alderman Fritz X Alderwoman Hale X Alderman West X Alderman Lovell X Alderman Quin X Mayhew Alderwoman X Chamberlin The motion carried. LEGAL AND ORDINANCE ALDERMAN CRAIG WEST, CHAIRMAN NEGOTIATIONS, GRIEVANCE & PERSONNEL ALDERMAN JUSTIN NELSON, CHAIRMAN DISCUSS AND CONSIDER AN AGREEMENT BETWEEN THE CITY OF CANTON AND THE COLLECTIVE BARGAINING UNITS FOR THE FIRE UNION, POLICE UNION AND PUBLIC WORKS UNION. Attorney Jump said that tentative dates are set for two of the bargaining units to meet. No discussion will take place tonight, but the next council meeting will have discussion. COMMUNITY& INDUSTRIAL DEVELOPMENT ALDERMAN JOHN LOVELL, CHAIRMAN PUBLIC WORKS, WATER& SEWER ALDERWOMAN ANGELA LINGENFELTER, CHAIRMAN PUBLIC SAFETY AND TRAFFIC ALDERWOMAN ANGELA HALE, CHAIRMAN STREETS AND GARBAGE ALDERMAN JEFF FRITZ, CHAIRMAN LAKE, BUILDINGS AND GROUNDS ALDERMAN QUIN MAYHEW, CHAIRMAN DISCUSS, CONSIDER AND VOTE ON THE SALE AND/OR LEASE OF MUNICIPALLY OWNED REAL ESTATE NEAR CANTON LAKE,AND POTENTIAL PROPOSALS IN RELATION TO SAME. An exhibit from the survey of land will not be completed until the end of this week. Previous discussion took place regarding the sale/lease of this property. The City will still need to determine what will be annexed into the City. Attorney Jump said the property will become zoned conservation and would not allow homes to be built on it. The property will then need to be rezoned to allow for homes to be built on it. This is just one step of the process that will need to be completed. Attorney Jump said ultimately, he would want the zoning to be residential. Attorney Jump said he would recommend coming up with the terms of the lease separately. The City can authorize leases up to two years to be expedited by someone at the City. Attorney Jump said he would not recommend leasing to the developer and then dealing with subleases. AttorneyJump said he would like to know what to include in the request for proposals. By passing a resolution it doesn't mean the City is selling the land. It just indicates that bids would be accepted. The City could accept any bid that is determined to be in the best interest of the City. The statute states the publishing requirements. Further discussion took place regarding the homes that are built on the lots and how to best develop the lots. The final terms for the request for proposals will be determined so this can be brought back to the council meeting on March 16, 2021. This will then authorize the City to obtain bids. MAYOR COMMUNICATION Mayor McDowell said that there has been a problem at the water plant with a broken pipe. Crews are working at fixing the broken pipe so water will be turned off until the repair is completed. The area impacted is from Boat Dock Road and East to the water plant and everything around Canton Lake. OLD BUSINESS NEW BUSINESS ADJOURNMENT MOTION and second were made by Aldermen Mayhew/Fritz to adjourn. ROLL CALL Yes No Absent Alderman Justin X Nelson Alderwoman X Lingenfelter Alderman Fritz X Alderwoman Hale X Alderman West X Alderman Lovell X Alderman Quin X Mayhew Alderwoman X Chamberlin The motion carried. No executive session was held Mayor Kent McDowell City Clerk Diana Pavley Rock