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HomeMy WebLinkAbout2009 EOCC MinutesMINUTES Elected Officers Compensation Commission Friday, February 13, 2009, 2009 —12:00 p.m. Tenth Floor Council Conference Room, City Hall CALL TO ORDER The meeting was called to order as a Committee of the Whole at 12:05 p.m. ROLL CALL William Castanier, Member Patricia Curran, Member_' Don LeDuc, Member -- Thomas Hay, Member Brian T. Huggler, Member Joan Nelson, Member Marilyn Plummer, Member co OTHERS PRESENT Jack Roberts, Law Terese Horn, Council Staff Rob South, WKAR, Suzy Vela, LSJ COMMUNICATIONS None. BUSINESS SESSION Mr. Roberts called the meeting to order as a committee chair has not been appointed. He informed the Commissioners that Don Kulhanek is the attorney assigned to this Commission; however, he was not able to attend today's meeting. He reported on some institutional history on the Commission. He explained that the Commission's recommendation is usually in a form of a letter of recommendation. The Charter of the City of Lansing set up the Commission so that the recommendation is in effect unless rejected by Council. Rules of Procedures were included in the packet. He reported that the Rules of Procedure are subject to change if the Commission decides to do that. He commented about the ordinance requirement that the Commission meet to make a recommendation on salaries of all elected officials. The ordinance pre -dated the 1978 City Charter. The City Charter because of the hierarchy controls over the ordinance itself, and the Charter provision indicates that the Commission shall recommend the compensation (fringe benefits) for elected officers. Even though the ordinance was not changed to reflect that, the Charter preempts the ordinance so the Commission establishes the pay rate and compensation. The Commission does not establish expense accounts. He reported on the vision benefit that was included at the last session. He reported that the last salary increase was in July 2002. In 2003, the Commission recommended a moderate increase that the Council rejected. He highlighted some particulars of the Ordinance that governs the Elected Officers Compensation Commission (EOCC). It takes four people to be a quorum and four people to take official action. The Commission is not to meet more than 15 times. The determination is to be made 45 days from the first meeting. The Rules of Procedure directs the Commission to elect a chair person and vice chair person for their first line of business. He reviewed the Rules of Procedures. There is a provision to appoint the recording secretary and in the past, it has been the Council secretary. He explained the provision to allow the Commission to meet without a quorum as the Committee of the Whole, which does not allow official action to be taken. There is a need to restate a motion and for the motion to be second on action items, which takes a majority to pass. Motion should be done with a voice motion except when voting on a recommendation, and he asked that the vote be taken by person. In the past, it has been beneficial to give the elected officials an opportunity to come and present to the Commission their feelings on what they think of the compensation and salary received. In addition to that, the past Commission found it beneficial to ask the Finance Director to make a presentation to the Commission to explain the current financial status of the City. The last thing found helpful is to get some comparables from other municipalities. A source used in the past was the Michigan Municipal League for those comparables. In the past, the Commission received information from mid -size and bigger cities for comparables: Kalamazoo, Troy, Southfield, Farmington Hills, Westland, Dearborn, Livonia, Ann Arbor, Detroit, Flint, Grand Rapids, and Warren. Election of Officers for 2009 Session BILL CASTANIER NOMINATED PAT CURRAN AS CHAIR OF THE COMMISSION; MOTION SECOND BY MARILYN PLUMMER. MOTION CARRIED, 6-1. DON LEDUC NOMINATED BILL CASTANIER AS VICE CHAIR OF THE COMMISSION; SECOND BY MARILYN PLUMMER. MOTION CARRIED UNANIMOUSLY. Determining EOCC Meetina Schedule Ms. Curran briefed the Commissioners on past practice with respect to inviting elected officials and the Finance Director to attend a EOCC meeting. After input from Commissioners, it was the consensus to meet on Mondays from 11:30 a.m. — 1:30 p.m. starting on February 23, 2009 and every Monday in March. At the next meeting, February 23, 2009, the Budget Director is to be invited to attend the meeting along with comparables being provided. March 2, 2009 invites are to be extended to the Mayor and City Clerk - 45 minutes each, and March 9, 2009 invitations to Councilmembers. 2 Interviews are to start at 12 noon. Staff was requested to ask elected officials to be brief and put their ideas in writing. Comparables from municipalities is to be provided to the Commissioners along with what is happening in mid -size cities given the economic crisis, in compensation and fringe benefits. Mr. Castanier also requested obtaining information from the Ingham County Board of Commissioners. Detroit is not to be included in the comparables. Mr. LeDuc requested information from other capital cities such as Madison and Des Moines. It was requested to include with comparables, health benefit costs and co -pays for health benefits and prescriptions along with what other municipalities are doing this year due to the economy. It was requested to include the State Officers Compensation Commission constitutional questions over the authority regarding reduction of elected official pay. Include in comparables, whether full time, part time, Mayor or Manager, etc. Mr. Castanier made note that the Governor recommended 10% decrease statewide for elected officials. Ms. Nelson suggested looking at the Charter to determine what is expected of elected officials. Staff is to extend an invitation to union representatives to attend the March 16, 2009 and anyone who works with Council closely. OTHER None. PUBLIC COMMENT None. ADJOURN The meeting was adjourned at 12:55 p.m. Respectfully Submitted, Terese Horn Recording Secretary Legislative Office Manager Lansing City Council Approved by the Commission on �"� (Al MINUTES Elected Officers Compensation Commission Monday, February 23, 2009 @ 11:30 a.m. Tenth Floor Council Conference Room, City Hall CALL TO ORDER The meeting was called to order at 11:35 a.m. ROLL CALL William Castanier, Member Patricia Curran, Member Don LeDuc, Member Thomas Hay, Member Brian T. Huggler, Member Joan Nelson, Member Marilyn Plummer, Member OTHERS PRESENT Don Kulhanek, Law Terese Horn, Council Staff Suzy Vela, LSJ COMMUNICATIONS Letter from Mavor Bernero BY CONSENSUS, THE COMMITTEE PLACED THIS LETTER ON PENDING UNTIL THE MAYOR'S INTERVIEW. BUSINESS SESSION Approval of Minutes DON LEDUC MADE A MOTION FOR THE APPROVAL OF THE MINUTES OF THE ELECTED OFFICERS COMPENSATION COMMISSION MEETING ON 2-13-09, AS REVISED. MOTION CARRIED, 6-0. 1 Reaffirm Action Taken at Meetina of 2-9-09 as Outlined in Minutes THOMAS HAY MADE A MOTION THAT ALL ACTIONS TAKEN AT THE PRIOR MEETING BY THE COMMISSION BE AFFIRMED BY THIS PRESENT MOTION. MOTION SUPPORTED AND CARRIED, 6-0. Reports, Presentations, Commission Questions, and Discussion • Presentation by Finance Director Jerry Ambrose Mr. Ambrose reported on the City's financial condition as described below: FACING A PERSISTENT STRUCTURAL DEFICIT AND A CHALLENGED ECONOMY City Financial Forecast Comments presented to the Elected Officials Compensation Commission, February 23, 2009 For the past several years, the City of Lansing has faced a persistent structural deficit. This is defined as a situation where the ongoing costs of maintaining current services and staffing levels regularly exceeds the income received from established revenue sources. The City is also facing a challenged economy. Poverty levels of residents remain high, unemployment is increasing, property foreclosures are high, and business profits are down. The mainstays of our economy, including the automobile industry, state government, and health care, are all undergoing significant transitions which in the short term at least are contributing to these challenges. There are also positive developments which bode well for the future of the City's economy. The City is increasingly becoming a center for insurance and financial services, as well as for information technology related business. Some manufacturing, such as defense related industries, remain strong. Some major construction projects will be underway in the next year, providing much needed construction jobs. Anticipated federal stimulus funds will also be helpful. However, the impact of construction activity and federal stimulus funds will primarily be short term. The next several years will be difficult, and the economic challenges will exacerbate the city's structural deficit, not reduce it. Since 2003, the growth in the costs of city operations has exceeded the annual growth in revenues. Financial reserves have been reduced from a high of $13 million (12% of General Fund (GF) revenues) at the end of FY 2003 to $10.5 million at the end of FY 2008 (9.4% of GF revenues). The Administration's goal is to maintain reserves at between 10% and 15% of GF revenues. The total city property tax rate is currently 15.83 mills, or .1 mill less than levied in 2004. However, the total property tax rate, including schools, county, state, and special millages, has risen from 60.64 mills in 2004 to 63.67 mills in 2008. iN Since taking office in 2006, Mayor Bernero has been adamant that property taxes supporting city services will not be increased, and that the City's financial reserves will not be used for the expected recurring expenses of city government. Mayor Bernero's position recognizes the challenges our residents have in meeting their basic needs in these difficult times and the need the city government has to remain financially viable. More than 75% of the City's operational expenses are related to personnel expenses — wages and benefits. For every dollar paid in wages, benefits add more than 65% to the cost. Health care (for active and retired employees) and pension costs are the predominate costs of benefits. Mayor Bernero's administration has been working diligently to contain the cost of health care while continuing to provide adequate health insurance for employees. The restructuring proposed to the EOCC by Mayor Bernero is reflective of that approach. That approach has been implemented for Cabinet members, non -bargaining unit employees, and some bargaining units. It is a continuing topic of negotiations with others. City staffing levels have been reduced from 1,299 in the 2004-05 budget to 1,147 in the 2008-09 budget, and 32 additional positions are being held vacant in the current year's budget. The total reduction in staffing level from 2004 is 184 positions, 14% less than in FY 2004. The budget for FY 09-10 is anticipated to reflect the continuing financial challenges of the past few years. Preliminary revenue projections indicate the same or slightly less revenues than the current budget. Falling property tax revenues, potential decreases in income tax revenues and in state shared revenues are strong potentials. Unfortunately, the FY10-11 budget is also forecast in the same light, and with potentially even more revenue decreases possible. The Governor's proposal pledges to keep the state shared revenues the same. However, her recommendation last year was to increase 4% and the City ended up getting only 2%. He indicated that he didn't expect to increase charges for services much this year. He stated due to the property tax structure, the revenues from property taxes lag from the assessment by about two years, so we haven't seen the worst yet. This is a good/bad event. The citizens will see their property assessments and property values go down but that will mean less revenue for the City. Mr. Castanier arrived at 11:45 a.m Mr. Ambrose provided a general expense report with respect to personnel reductions. They have worked very hard not to layoff any city employees. The reduction of personnel has been done basically through attrition. They have had to make some reassignments for some personnel to places that had specific money. The 32 positions held vacant reflected in this year's budget probably will not be reflected in the budget next year. He expects that they will maintain a hiring freeze. Even through they have attempted to do that, they recognized police and fire services as priorities. He indicated that this is expected to carry on for the next couple of years. They will have a hiring freeze with exceptions, looking at every vacant position carefully and determining the need. There are several collective bargaining units in various stages of negotiations. Last year they negotiated a new contact with Teamsters 214 and are close to finalizing a contract with the FOP 911 Operators. They are currently in negotiations with the Teamsters 580 and UAW. Next year they will start negotiations for Police, and the year after they will start negotiating with Fire. They have worked hard in negotiations to restructured healthcare benefits. They were successful with the Teamsters 214 and believe they will be with other bargaining units. Salary increases are minimal. Pension costs have also gone up significantly in the past few years because of changes in the actuarial assumptions. Pension funds have been impeded by the weak economy and that will have to be dealt with in the next several years. Healthcare costs have gone up regularly, and they are working hard to contain that. Financial Reserves are 9.4% of GF revenues, which is sufficient to deal with unscheduled events, but the administration would prefer 10% to 15% reserves. The City has a strong bond rating of AA, and their goal is to maintain that. Mr. LeDuc questioned one of the Mayor's recommendations made to allow incoming members of the Council to purchase health insurance under the same terms and conditions as other part- time employees, a provision which would apply to only new City Council enrollees in the City's health insurance plan. Mr. Ambrose stated that some part-time employees are able to purchase their healthcare through the City but are not provided healthcare as part of their compensation. Mr. Ambrose is to confirm the number of regular part-time employees and the number of seasonals along with their eligibility for healthcare. Mr. Ambrose is to provide the Commission with the costs of wages and benefits for each elected official and its percentage of the budget. Old Business Ms. Curran reported on an idea to have Bill Castanier as an appointed liaison to the press. Mr. Castanier indicated that he would be willing to serve in that capacity, but he would like some direction. Ms. Curran indicated that she felt it prudent to refer everyone to one member to keep the press up to date on what the Commission is working on. The Commissioners will know who to refer to when there are questions about the information. There was review and discussion about the information received relative to wages and benefits for elected officials. The Commission was informed that staff was not able to obtain all of the information requested but will continue to gather the information and provide it to them before the next meeting. In response to a question raised on what the Charter directs as it relates to the expectation of how much time a Councilmember is to put into the position, it does not state it is a full or part-time position. Joan Nelson questioned what the City considers to be a decent part-time salary. There was discussion with respect to whether part-time city employees would be paid salary or paid by the hour. Mr. Castanier reported that the Ingham County Commissioners gets a perdiem of $60 per meeting on top of their base salary. Mr. Castanier submitted an e-mail outlining wage and benefits for the Ingham County Board of Commissioners. The information provided on their wages indicates that the perdiem of $60 for a Commissioner with good attendance to meetings equals about $3,000. Ms. Plummer commented about dedication of service to the community and its value. One would never be able to be paid the value of the time and service offered. She made note of two key factors - elected and choice. One chooses to dedicate the service, and there is no way that one could be paid totally for that. rd Mr. Castanier questioned whether there is coordination of benefits. Mr. Kulhanek reported that it is his understanding that there are four Councilmembers who have medical and four who opt -out. He is to check to see if they coordinate benefits. He reported that Councilmembers have the Defined Contribution Plan for their pension. The City contributes a percentage of their pay to the Defined Contribution Plan and when they are eligible to retire, they would be able to draw on it. He was unsure of whether Councilmembers may contribute more. Since 2001, there has been an option to participate in the retirement healthcare. The current members at that time had an opportunity to elect to participate in the retirement healthcare plan. New members have either 30 or 60 days to make that election. If they make that election, they pay a certain percentage of their base salary. It takes 15 years to accrue the right to draw retirement healthcare. It is a gamble when making that decision because if one elects to participate in the retirement healthcare, money would be deducted throughout their tenure, and if their tenure doesn't last 15 years, that money would be forfeited. He reported that he would confirm that regular part-time employees do not have any retirement benefits. The Commission requested that meeting dates and times of their meetings be placed on the City Council web page. Mr. Kulhanek indicated that it is his understanding that in the past the recommendations started on July 1st. He suggested that the Commission's 2009 recommendation should not impair the retirement healthcare for those who are currently paying into the retirement healthcare plan, but there should not be a problem with those who are not a current participant of the program. He clarified that the Commission has the authority to enhance, modify, or eliminate current healthcare benefits. The Council has the option to reject the Commission's recommendation, but they do not have the option to modify it. New Business None. Commission Member Comments Mr. Huggler questioned at what point, the Commission starts working on the recommendation. Ms. Curran indicated that this would take place after speaking with the elected officials. Ms. Plummer and Curran reported that they have received comments about not being able to afford giving elected officials more money or benefits. PUBLIC COMMENT None. MS PLUMMER MADE A MOTION TO ADJOURN. MOTION SECOND AND CARRIED, 7-0. ADJOURN The meeting was adjourned at 12:37 p.m. Respectfully Submitted, Terese Horn Recording Secretary Legislative Office Manager Lansing City Council Approved by the Commission on: 3-2-09 0 MINUTES Elected Officers Compensation Commission Monday, March 2, 2009 @ 11:30 a.m. Tenth Floor Council Conference Room, City Hall CALL TO ORDER The meeting was called to order at 11:34 a.m. ROLL CALL Patricia Curran, Chair William Castanier, Vice Chair .a Don LeDuc, Commissioner r� f Thomas Hay, Commissioner -Excused absence K= Brian T. Hu ler, Commissioner 99 Joan Nelson, Commissioner Marilyn Plummer, Commissioner c OTHERS PRESENT Jack Roberts, Law Terese Horn, Council Staff Susan Vela, LSJ COMMUNICATIONS Letter from Mavor Bernero There were comments made in support of the Mayor's recommendations and particular concern expressed about the costs of healthcare. There was also a suggestion to make a 10% cut in salaries. Commissioner LeDuc requested that rather than scheduling individual Councilmembers for interviews next week, the Council should submit a communication on behalf of the full Council outlining their recommendations. Commissioner Curran remarked that if Councilmembers would still like to attend the meeting, they are welcome, but it would be beneficial to have a communication indicating Council's recommendation. BUSINESS SESSION Approval of Minutes 1 COMMISSIONER LEDUC MADE A MOTION TO APPROVE THE MINUTES OF THE MONDAY, FEBRUARY 23, 2009 EOCC MEETING AS REVISED. MOTION SECOND AND CARRIED, 5-0. Joan Nelson entered. Mr. Roberts reported that elected officials who elected to participate in the Defined Contribution Plan are vested after 3 years and entitled to receive payment, if they choose, when they leave. This is the only group that still participates in the Defined Contribution. The City contributes 6% of the elected official's salary and the elected official may contribute up to 5%. There was discussion about the long term disability aspect of the Defined Contribution Plan. Mr. Roberts indicated he does not know the specifics of it; however, someone from the Department on Human Resources would be able to explain it. Mr. Roberts briefed the Commissioners on the history of the establishment of the Defined Contribution Plan. Prior to the establishment of the Defined Contribution Plan was the Defined Benefit Plan. In 1990, the City was in the posture of changing their benefits, and it was agreed, except for the UAW, to go to the Defined Contribution Plan. The interest of the City in doing that was that the City would pay a certain percentage of salary, on behalf of the employee, into the Defined Contribution Plan and the plan would be the investment. The employee would have the option to pay into the plan up to a certain percentage, and they also had the ability to make an election for pre-tax dollar. However, if an employee made that election, they could never change it. The UAW and Police and Fire system stayed on the Defined Benefit Plan, which has a retirement factor and a longer vesting period. Upon retirement, if the person has vested with 8 years of service and reaches a certain age, the benefit would be calculated on the final average compensation and years of service. It provides a guarantee for the individual to receive a certain dollar amount. From a budgeting point of view, a Defined Contribution is easier. At a point in time after the switch to the Defined Benefit Plan, the unions did not feel comfortable with it due to the market or the individual employee's ability to invest and asked to have the Defined Benefit Plan offered again. The City worked out an arrangement to allow employees to change over to the Defined Benefit Plan. At that point, all employees were required to switch to the Defined Benefit Plan but at a much lower retirement factor than the previous Defined Benefit Plan. Elected officials are the only people still in the Defined Contribution Plan as active members. Commissioner Nelson questioned if the Defined Contribution Plan is offered to part-time employees and Mr. Roberts responded, no. Reports, Presentations, Commission Questions, and Discussion • Interview with Jerry Ambrose on Behalf of Mayor Bernero Mr. Ambrose indicated that the Mayor was not able to attend today and asked that he attend in his place. The letter from the Mayor lays out clearly his recommendations. He would gladly answer any questions. Commissioner LeDuc questioned elected officials' entitlement with respect to pay rate or fringe benefits. Mr. Ambrose stated that it could be argued that every time one is elected, they could be considered a new official. However, grandfathering in is not unusual in workforces. Commissioner LeDuc commented about the City having treated elected officials as employees 2 who, in the legal sense, are not city employees. The analogy is questionable as in the basis for continuing on with this practice. If the theory is to alter the basic premise by which they are provided, the Commission should look at whether their recommendation should incorporate the changes during their term of office. However, that term of office expires at a point. Mr. Roberts stated that even though the employment is commenced by election, there is a great distinction under fringe benefits compared to pension benefits. A pension benefit has a specific kind of protection under the Michigan constitution compared to other benefits. If a municipality or private business offers a benefit that could be argued to be contractual and the employee avails themselves of that, there is some contract protection and constitutional protection for a pension. He believes that health insurance for active employees is compensation and is subject to change. As it is relates to a pension when a pension is offered and one avails them of that pension, under the Michigan Constitution, it probably could not be altered or taken away. Mr. Roberts explained that if an employee was hired under an agreement of a pension, the pension could not be changed. He believes that the pension aspect is the same for elected officials. In response to a Commissioner's question, Mr. Ambrose reported that one of the collective bargaining groups is offered the ability for their part-time employees to purchase healthcare. Mr. Ambrose stated that active Councilmembers are provided healthcare at 100% premium paid with a very generous benefit level. What is described in the letter from the Mayor is the restructured healthcare that has been implemented in Teamsters 214 and consistent with that which is aggressively being pursued with all other bargaining units for the same. The essential elements are a premium co -payment and a three tier prescription rider. He explained the co -pay premium not only reduces city costs but helps to put ownership to the user. The three tier prescription rider is a type of structure, they are consistently told, needed to encourage behavior to make economical choices and still provide very adequate healthcare. The Mayor strongly feels that these changes should be made. He further explained Councilmembers would have the ability to purchase retirement healthcare at cost should they ever achieve an age of retirement. Mr. Roberts explained the healthcare retirement option put forward to the City Council members. The existing Councilmembers at that time were given the option to pay toward a retirement healthcare, and if they elected to, they would be eligible to receive it when they retired and obtained a certain age provided they had a term of office of 15 years. They were given a period of time for them to elect to do so. If they elected to do it, they had a certain percentage taken from their pay. Some chose to do it and some chose not to do it. Since that time, Councilmembers who came into office have 30 days to elect to take that option. This is like a contract, unlike current healthcare insurance, but it could be eliminated prospectively for anyone who has not taken it. For any current official who has availed themselves with this benefit and has been meeting the obligation, he believes it to be a contract obligation that cannot be changed; however, it could be eliminated prospectively. There are two Councilmembers who participate in this program. He further explained that this fringe benefit could be eliminated for any new person elected or appointed. He clarified the definition of a new elected official as one who is initially elected or appointed, not one who would be serving terms consecutively. Mr. Roberts stated that in his opinion the Mayor's letter does not distinguish between current part-time and fulltime employees, and the proposal as it relates to current healthcare not retirement healthcare, is meant to bring all of the people, full and part time, in line with the contribution and co -pays that are currently of the Teamsters 214 contract. He clarified for part- time that the current Councilmembers continue to have the current healthcare but contribute 10% toward the premium and increase the co -pays. For those Councilmembers elected or appointed in the future, allow them to purchase into the healthcare plan at no cost to the City. Commissioners questioned if current Councilmembers would become new employees after their current term of service? Mr. Ambrose clarified that there are two parts to the Mayor's proposal. First, is that incoming Councilmembers to be offered the ability to purchase into healthcare under the same terms and conditions as other part-time employees of the City. This change would not apply to current Councilmembers. In addition, the restructured healthcare plan, as laid out in the bullet points, would be implemented into the current Councilmembers plan. Commissioner Curran commented that former Councilmember Belen stated that she use to get healthcare. Commissioner LeDuc commented that what makes a person an employee is control, and it is his opinion that the City has no control over the amount of work effort provided by Councilmembers. He expressed concern about the analogy to employees rather than referring to elected officials as public servants or public officials. Mr. Roberts clarified that the Commission could not eliminate the Defined Contribution pension Plan or the retirement healthcare and dental if one currently participates. He suggested a chart indicating current benefits, retirement benefits, retirement healthcare benefits for fulltime and part-time employees and current and future employees. THE COMMITTEE REQUESTED AN OFFICIAL OPINION FROM LAW ON THE QUESTION AS TO WHETHER ELECTED OFFICIALS ARE EMPLOYEES, AND IF THEY ARE, DO THEY HAVE CONTRACTUAL OR CONSTITUTIONAL PROTECTION FROM CHANGE IN HEALTHCARE AND RETIREMENT HEALTHCARE. IT WAS THE CONSENSUS OF THE COMMISSION TO HAVE A FINANCIAL COST ANALYSIS ON FRINGE BENEFITS FOR ELECTED OFFICIALS AND DEPARTMENT HEADS. Mr. Ambrose stated that he would provide the Commission with a chart on costs for all fringe benefits. The recommendation from two years ago was that the Mayor receives a car. It is the Commission's consideration whether he would continue to receive a car. Mr. Ambrose stated that currently because Councilmembers are offered healthcare, they are also eligible to receive $1800 annually to opt -out of insurance. If they were to purchase their healthcare, it would costs anywhere from $5,000 (per single subscriber) to around $15,000 per year (per family prescription). The restructured health plan would lower those premium costs by about 10%. If there is a premium share on top of that, there would be an additional savings to the City. In response to a question, Mr. Ambrose stated that city employees have not been requested to take a pay cut. When negotiating with employees, they consider costs of compensation and how to reduce expenses. The Mayor is not planning on having the cabinet take a pay cut. Mr. Ambrose reported that because of the tax structure and the relationship to the County, the City collects 100% of what we are owed in terms of property tax collection. They expect about the same next year, but the year after, they expect it to go down. They expect the assessed value to continue to go down. The taxable value also went down this year. The inflation factor used this year was 4.4% and it is expected to be 1.1 % next year. Mr. Ambrose stated that from the time Councilmembers received their last salary increase in 2002, city employees have received probably between a 10-15% increase. Interview with Citv Clerk Mr. Swope appeared before the Commission and provided a communication with his comments relative to recommendations. He encouraged the Commission to get as much data as possible and consider relevant factors before making a determination. He felt it important to look at neighboring communities with respect to salaries. He submitted documentation on comparables in salaries according to population for Delhi Township, Delta Townships, East Lansing, Kalamazoo, Macomb Township, and Waterford Townships. Mr. Swope reported that they administer business licenses through the City Cerk's office. He stated that his office works in coordination with the County Clerk and Secretary of State. He is the official record keeper and maintains vaults for storage. Comments from Commissioners were that the City Clerk is underpaid in comparison. Old Business None. PUBLIC COMMENT None. ADJOURN COMMISSIONER NELSON MADE A MOTION TO ADJOURN. MOTION SECOND AND CARRIED, 6-0. The meeting was adjourned at 1:12 p.m. Respectfully Submitted, Terese Horn Recording Secretary Legislative Office Manager Lansing City Council Approved by the Commission on: 3-16-09 MINUTES Elected Officers Compensation Commission Monday, March 9, 2009 @ 11:30 a.m.>. Tenth Floor Council Conference Room, City Hall_n CALL TO ORDER The meeting was called to order at 11:34 a.m. ROLL CALL Patricia Curran, Chair William Castanier, Vice Chair Don LeDuc, Commissioner Thomas Hay, Commissioner Brian T. Huggler, Commissioner Joan Nelson, Commissioner Marilyn Plummer, Commissioner OTHERS PRESENT Don Kulhanek, Law Terese Horn, Council Staff Susan Vela, LSJ BUSINESS SESSION Approval of Minutes MINUTES OF 3-2-09 PENDING UNTIL THE NEXT MEETING TO ALLOW TIME FOR COMMISSIONERS' REVIEW. Reports, Presentations, Commission Questions, and Discussion Mr. Kulhanek reported that he is the attorney who will be providing the opinion requested at the last EOCC meeting; however, he has not had time to write it up. He expects to have it ready for the next meeting. The Chair reported that City Council could not come to a consensus on a letter of recommendation. 9 Elected Officials Compensation The Commissioners reviewed the chart outlining elected officials' compensations. • Executive Management Plan Salaries The Commissioners reviewed the list of salaries for the Mayor's cabinet. There was general discussion with respect to salaries and fringe benefits for part-time and fulltime elected officials. Each Commissioner expressed their opinion on compensation and healthcare benefits in consideration of the Commission's recommendation. Some Commissioners indicated that their view on certain aspects will depend on the legal opinion from the City Attorney's office on whether elected officials are employees and if there is contractual or constitutional protection from a change in healthcare and retirement healthcare. The following observations and issues were highlighted: 1. Councilmembers are part-time public servants. 2. Comparable size cities throughout the state as well as Midwestern capital cities do not provide healthcare benefits to part-time elected officials. 3. Salaries for part-time elected officials in the City of Lansing are on the high scale in relationship to comparables. 4. Is it fair for Councilmembers to have 100% healthcare provided when city part-time employees do not have healthcare provided at all? 5. Mayor's recommendation for in -coming Councilmembers is to offer them the same access to health insurance as other part-time City employees with the option to purchase healthcare at the same rate as other part-time employees with the City but current Councilmembers not be affected. 6. Grandfathering-in healthcare benefits for current part-time elected officials was considered. 7. Due to economic hardships, the current healthcare benefits for fulltime elected officials should be reformed to put more of the burden of costs on the user and align with the Mayor's recommendation and his goal for all bargaining units. 8. The City Clerk and Mayor are underpaid in comparison to comparables from other municipalities. 9. The Mayor requested a 5% reduction in salaries for all City elected officials. 10. The Mayor has not requested a reduction in salaries for his cabinet or City employees. 11. Part-time public officials were granted fringe benefits at some point of time for some reason. 2 12. City Council did not provide the Commission with a recommendation, which concerned some Commissioners. 13. It may be possible to phase -in a requirement for Councilmembers to purchase their healthcare at the same rate as City part-time employees. 14. Hard choices have to be made during these economic times. 15. Public servants are elected due to their dedication to public service and are offered compensation so that it is not a financial burden. 16. Recommendations need to be implemented within two years. 17. Coordination of benefits would be appropriate. 18. Are there any legal issues with respect to prospectively eliminating healthcare benefits and retirement benefits? 19. Are elected officials City employees? 20. When a current elected official runs for office and wins re-election, do benefits continue or is he/she to be considered a new elected official so that they should not expect benefits to be provided as in the past; after a term expires and a Councilmember is re- elected, can their benefits be discontinued? 21. Are the Defined Contribution, Retirement Healthcare, and dental fringe benefits contractual or constitutionally protected? 22. Comparison was illustrated between healthcare costs, approximately $15,000, and Councilmembers' salaries, approximately $20,000. 23. Question was raised as to the objective in eliminating healthcare for part-time elected officials when the only recommendation was from the Mayor to restructure healthcare? 24. How and when were fringe benefits, especially healthcare benefits, recommended for Councilmembers? 25. If healthcare was continued for a period of time for current Councilmembers, would the City be obligated, for those who currently opt -out of healthcare, to pay all or part of the $1800 for opting out? 26. What is the City's responsibility with respect to the Defined Contribution Plan for those Councilmembers who participate? 27. Compensation for elected officials should be healthy enough to draw in a wide range of people to run for those seats. 28. Will those part-time elected officials who elect to purchase healthcare benefits be able to also purchase life, vision, and dental? 29. Part-time elected officials should not consider their salary as a supplement to their salary of profession. The recommendation from the Commission is required to be submitted by Monday, March 30, 2009. THE COMMISSION REQUESTED THAT STAFF INVITE UNION REPRESENTATIVES TO THE NEXT MEETING TO PROVIDE THEIR VIEWS ON COMPENSATION AND FRINGE BENEFITS FOR ELECTED OFFICIALS. After receiving input from all Commissioners, it was the consensus of the Commission to have a draft document prepared outlining the following ideas, subject to amendments, to be considered for final recommendation: 1. No healthcare benefits to be provided for newly elected (incoming part-time) or re- elected Councilmembers; however, they will be offered the option to purchase healthcare benefits through the City's restructured plan. 2. Implement a restructured healthcare plan and retirement fringe benefits for fulitime elected officials. 3. All current and newly elected officials who participate in healthcare will do so under the restructured healthcare plan. 4. Maintain healthcare as reformed for incumbent Councilmembers who term expires December 31, 2009 until January 1, 2010 at which time those who are re-elected would be considered as a new elected official and would be offered the option to purchase healthcare in line with part-time employees. 5. Maintain healthcare as reformed for those incumbent Councilmembers who participate and term expires at the end of 2011 until January 1, 2011 at which time will be offered the same opportunity to purchase healthcare as part-time employees. 6. The City Clerk's salary to remain the same. 7. Reduction of 5% in salaries for all Councilmembers and Mayor if the healthcare benefit was not able to be discontinued. 8. All retirement benefits will be eliminated for all incoming part-time elected officials. 9. Eliminate providing fringe benefits for all part-time elected officials as of January 2011. STAFF WAS REQUESTED TO RESEARCH THE HISTORY ON THE HEALTHCARE BENEFITS FOR COUNCILMEMBERS. ADJOURN A MOTION TO ADJOURN WAS MADE AND SECOND. MOTION CARRIED, 7-0. The meeting was adjourned at 1:18 p.m. Respectfully Submitted, Terese Horn Recording Secretary Legislative Office Manager 11 Lansing City Council Approved by the Commission on: 3-16-09 MINUTES Elected Officers Compensation Commission p Monday, March 'Zn 2009 @ 1f3 nn Tenth Floor Council Conference Room, City Hall CALL TO ORDER The meeting was called to order at 12:00 p.m. era C- ROLL CALL t r; Patricia Curran, Chair William Castanier, Vice Chair - c.;ri <^i Don LeDuc, Commissioner - Thomas Hay, Commissioner _F Brian T. Huggler, Commissioner , Joan Nelson, Commissioner Marilyn Plummer, Commissioner OTHERS PRESENT Don Kulhanek, Law Terese Horn, Council Staff Avvroval of Agenda Mr. Kulhanek announced that he would explain the process to be followed in order to officially approve the Commission's recommendation. He stated that with respect to the question raised at the last meeting on how many Councilmembers it would take to reject the Commission's recommendation, he reported that it would take a 2/3 vote of the Council. Mr. Kulhanek reported that after further research within Robert's Rules and the EOCC Rules of Procedure, he found it inappropriate to have a separate signature area for Commissioners Plummer and Hay's dissenting votes. Robert's Rules provides that a report of the Commission could have a separate area for written dissent for particular Commissioners. However, the document to be submitted by the Commission is not a report but a determination (more like a resolution) and Robert's Rules do not provide dissenting signature areas. The EOCC Rules of Procedure do not provide for a written dissent for particular Commissioners. The minutes would reflect the actual vote. Mr. Kulhanek informed the Commission that the final determination and attached summary of benefits must to be approved by roll call vote. Commissioners Hay and Plummer voiced concern about not being allowed to have a separate signature area with a sentence indicating their dissenting vote on the elimination of healthcare benefits for Councilmembers. Commissioner Nelson noted that she had a dissenting vote on the Mayor's decrease in salary. Mr. LeDuc suggested indicating the dissenting votes in the body of the letter. BUSINESS SESSION Approval of Minutes COMMISSIONER LEDUC MADE A MOTION TO APPROVE THE MINUTES OF THE MARCH 23, 2009 COMMITTEE MEETING, AS SUBMITTED. MOTION SECOND BY COMMISSIONER CASTANIER AND CARRIED, 7-0. Reports, Presentations, Commission Questions. and Discussion • Commission's Recommendation The Commissioners reviewed the proposed letter of determination from the Commission and determined to add the following language: Page 1, last paragraph - at the end of the first sentence (Commissioner Nelson dissenting) Page 2, bullet point after "As of January 1, 2010... at the end of the bullet point (Commissioners Hay and Plummer dissenting) Page 3, Fringe Benefits - at the end of the paragraph (Commissioners Hay and Plummer dissenting) Page 3, Transmittal Remove "and concur in" COMMISSIONER NELSON MADE A MOTION TO APPROVE THE LETTER FROM THE COMMISSION AS REVISED. MOTION SECOND BY COMMISSIONER CASTANIER AND CARRIED. ROLL CALL: CURRAN, CASTANIER, HAY, HUGGLER, LEDUC, NELSON, AND PLUMMER; 7 YEAS, 0 NAYS. The Commission reviewed the City of Lansing Elected Officials Fringe Benefits summary for 2009, as revised. COMMISSIONER LEDUC MADE A MOTION TO APPROVE THE CITY OF LANSING ELECTED OFFICIALS FRINGE BENEFITS SUMMARY FOR 2009. MOTION SECOND BY COMMISSIONER HUGGLER AND CARRIED. ROLL CALL: CURRAN, CASTANIER, HAY, HUGGLER, LEDUC, NELSON, AND PLUMMER; 7 YEAS, 0 NAYS. Mr. Kulhanek explained the process formerly used to approve the minutes for the last EOCC meeting. The recording secretary would complete the minutes and e-mail them to all Commissioners. After a two week period, if no one responds indicating corrections needed, the minutes would be deemed approved. If corrections are required, the secretary would make the changes and e-mail them back to the Commissioners. Another two week period starts at that point to allow Commissioners time to respond indicating any further corrections. The process would continue as stated above until no changes are requested. At that time, the minutes would be deemed officially approved and submitted to the City Clerk. COMMISSIONER PLUMMER MADE A MOTION TO ADOPT THE ABOVE PROCESS FOR APPROVING THE MINUTES OF THE LAST EOCC MEETING. MOTION SECOND BY COMMISSIONER HAY AND CARRIED, 7-0. Commissioners commented about the cohesiveness of the Commission and expressed appreciation for a job well done. ADJOURN The meeting was adjourned at 12:35 p.m. Respectfully Submitted, Terese Horn Recording Secretary Legislative Office Manager Lansing City Council Approved by the Commission on: 4-13-09 N