Fort Walton Beach Council agenda — 04-19-05 — reading text

remained unfilled due to unusually high wages in the construction sector as the result of Hurricane Ivan' s destruction. Okaloosa County has one of the lowest unemployment rates in the state, exacerbating recruitment and retention difficulties. The cost of employee turnover may be conservatively estimated at 25% of the position' s compensation including benefits. However, each turnover in a service worker position costs the City $ 14,400, which equates to 47% of annual compensation including benefits. Policv Impact Competitive and equitable compensation, both internally and externally, improves recruitment and retention and translates to a more efficient and productive work force. The cost of compensation adjustments as a result of this year' s study is currently being developed and will be presented to Council when completed. Recommendation compensation adjustments in accordance with MGT of America' s Implement recommendations and funding feasibility. n~" 17  FY 2005. 06 Budget Policy Workshop HEALTH INSURANCE Policv Decision Should reasonable coverage levels and affordable premiums be developed at a reduced cost to the City? Backaround In order to maintain a competitive edge, over the past five years the City has tried to provide the same level of healthcare coverage while minimizing the impact to the employee. It'" Despite the health insurance plan design changing several times, the City' s contribution to health insurance premiums has increased 34% or $ 376,587 over the past five years. In order to keep the cost of health insurance affordable for both the City and its employees, three health plans were approved offering a base plan and the option for employees to " buy up" or " buy down" to another plan based on desired coverage. A majority of employees ( 86%) elected to participate in the base plan. Discussion Compared to five years ago, employee coverage costs $ 980 more per year and dependent coverage costs $ 2, 675 more per year. In FY 2005- 06, medical insurance is anticipated to increase 12% or $ 178,000. A recent survey of 87 jurisdictions conducted by the Florida League of Cities revealed that 75% of jurisdictions pay 100% of employee health coverage and 59% pay 50% or less of dependent health coverage. As a preliminary estimate, maintaining the City' s contribution to the employee premium at 75% and reducing the City' s contribution to the dependent premium from 75% to 70% would yield annual savings of approximately $ 48, 000. Policv Impact Affordable health insurance providing quality coverage is an important part of the City' s benefits package. An attractive benefits package including good health insurance keeps the City competitive and able to recruit and retain qualified personnel. Average annual increase in wages for General employees is approximately $ 1, 050 and changing the health care costs would offset the wage increase, reducing available compensation to the employee. This may affect recruitment and retention. Reducing dependent premium coverage concurrently with wage increases resulting from the pay and classificationstudy would ensure employees do not experience a net decrease in compensation. A reduced City contribution could be phased in over a 5- year period to alleviate the effect on employees. Recommendation Incorporate coverage and contribution adjustments into FY 2005- 06 budget. 18  FY 2005-06 Budget Policy Workshop RETIREMENT EARL V- OUT Policv Decision 1IiiI!* t Should an early- out retirement program be offered? Backaround An early- out retirement program was offered in 1999 at an estimated savings of $ 79, 600. Discussion Early- out would be offered to employees who are at least 52 years old with 25 years of service. Police officers would only have to meet the requirement of 25 years of service. A net savings of $ 76,800 is anticipated if all eligible employees ( 9 general & 11 police) participate. Though not a direct result of an early- out program, vacation/ sick payouts would total 463, 100. Staff is investigating methods for limiting the effects of these payouts on cash flow. Alternately, tenured workers with specialized skills or knowledge could " phase- in" retirement. Some of the more prevalent approaches include reduced hours, special assignments, and consulting work. Policv ImDact Benefits of offering such a program include rewarding long- term employees, reducing personnel costs due to vacant positions being filled at lower pay grades, and improving retention by providing opportunities for advancement for other employees. Recommendation Develop an early- out retirement program and incorporate into FY 2005- 06 budget. i~ 19  FY 2005-06 Budget Policy Workshop SOFTBALL COMPLEx/FAIRGROUNDS LAND ACQUISITION Policv Decision Should purchase of the land and facilities be pursued? Backaround For the past 34 years the City and the Northwest Florida Fair Association have operated under various lease agreements and special use permits with the Air Force and U. S. Forest Services utilizing 42 acres of property for fairgrounds ( 30 acres) and a softball complex ( 12 acres). Discussion mandate to sell this property and recent passage of the Florida Land A federal Management Act allow for purchase of land. The appraised value of the 42- acre property is $ 4 million, payable over 3 years. The softball area would be improved and a lease agreement developed with the Northwest Florida Fairgrounds Association, which would offset a portion of maintenance costs. Policv ImDact Fund Balance would decrease if grants and/ or state assistance is not available. Recommendation Develop a funding methodology for property acquisition. j/ ifft IfW I! W 20  FY 2005-06 Budget Policy Workshop CRA FOCUS STRATEGIC PLAN GOAL - Policv Decision Should redevelopment efforts continue to be focused in residential neighborhoods? Backaround The Community Redevelopment Agency ( CRA) was established to address conditions of deterioration in residential and commercial areas and provide a funding mechanism for improvements. Discussion Because of the CRA designation, the City receives approximately $ 450,000 in additional annual ad valorem proceeds that would normally be retained by the County. As a result of City Council' s strategic planning sessions, improvement efforts have been refocused to eradicate blight and improve infrastructure in residential areas. 5- Year Major CIPs Needing Funding Beal Pkwy Neighborhood Plan 665, 000 Underground Utilities - Eglin Pky 1, 100,000 Parking Lot - Brooks Bridge 88, 000 Municipal Auditorium 760, 000 Brooks Street Access 300,000 l Santa Rosa Sound Boardwalk 100, 000 Parking Lot - Brooks Street 135,000 1'1 A~ .... I..} j Y' 1..-... US 98 Tree Replacement 160,000 l/ l,... ' I, v~, r, 1'~ Ferry Road Lighting 51 , 500 I r I.....I.,' V. 111 \.. 1\1 I4W Other Infrastructure 630, 000 Y 3, 989,500 Policv ImDact II Eradicating blight in residential neighborhoods improves property values and quality of life for citizens. Recommendation Continue to focus redevelopment efforts in residential neighborhoods. HiiI