Tuesday, February 21, 2012

2012 Budget Adjustments & Health Insurance Savings

The City of Monona saved about $286,994 in 2012 premiums by switching health insurance providers. The city council has been struggling with how to use this savings. At our February 6 meeting, I proposed and the council approved a budget amendment to reduce borrowing for Monona drive Phase II construction by $143,800.

At the February 6 meeting, on a 3-3 vote the council rejected a proposal by alders Speight and Munson to use $75,000 for non-represented employee compensation after a contentious debate (alder Speight lobbed a 'corporatist' grenade and alder Busse responded with a J. Paul Getty reference!). Their amendment included $40,000 for merit raises and $35,000 to reimburse those employees for part of the new 5.9% retirement contributions. Budget amendments require a 2/3 majority, so Mayor Miller could not cast a tie-breaking vote. I don't think anybody was happy with that outcome.

Shortly thereafter, unbeknownst to one another, alder Busse and I began working on a possible compromise on employee compensation as well as the remaining health insurance savings. We learned about our separate efforts when we each contacted city administrator Pat Marsh. Jim and I sat down over coffee and worked out a compromise that we each could live with. Whether we could carry the rest of the council with use was an open question.

We had two goals in mind: 1) Reduce city borrowing in 2012 (the 2012 capital budget is significantly higher than it has been in the recent past and is projected for in the future) and 2) Increase non-represented employee compensation.

Last night, at our February 16 meeting, the council adopted 3 of our 4 proposed amendments and referred the fourth to the CDA.

  1. $56,000 for merit pay raises for non-represented, permanent employees not under contract (the city administrator and Public Works Director) in amounts as determined by the city administrator and $5,000 in spot merit bonuses for which the contracted employees would eligible. Passed 5-1 with alder Wiswell opposing.
  2. $3631 to equip the two squad cars that the council approved for purchase, but didn't fund equipping them.
  3. $21,000 for purchase of an unmarked police vehicle that the council had eliminated from the mayor's proposed capital budget. Passed 5-1 with alder Wiswell opposing.
  4. $39,000 as a loan to the CDA for the Renew Monona housing rehabilitation program. Referred to CDA and the city attorney.
Between the February 6th and 20th meetings, the end result was a $168,431 reduction iun city borrowing for the 2012 capital budget.

A couple further notes:


The bid opening for Monona Drive one February 14th and R.G. Huston was once again the low bidder at $3,341,382.92.  Foth’s engineer estimate was $3,254,767.88.  The $86,615 difference is 2.67%. Monona will only pay a portion of that $86,615 because the overall project is being funded 50% with federal funds and 50% local funds. The county, city of Madison and city of Monona are paying the local 50% share.

Bear in mind that the reduced spending for health insurance premiums (compared to 2011) will carry over to future budgets (minus premium increases). Specifically, the reduction in borrowing for 2012 capital projects is a one-time event. In other words, most of the $168,431 we used to reduce borrowing in 2012 will be available for the 2013 budget for whatever uses the mayor and council choose.

Finally, the remaining $39,000 hasn't been allocated yet. It may be that we can fund the renew Monona program from TID #6 payments. If so, then we could apply that $39,000 to further reduce borrowing or use it to amend the 2012 operating or capital budgets.



3 comments:

  1. Thank you Alders Wood and Busse for working together on a fair and positive compromise. If only other bodies of government at the state and federal level were willing to work in a similar fashion, rather than the more common stand-off style of politics so common today. It is decisions and meetings like last night's that make me glad I live and serve in Monona.

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  2. "The bid opening for Monona Drive one February 14th and R.G. Huston was once again the low bidder at $3,341,382.92. Foth’s engineer estimate was $3,254,767.88. The $86,615 difference is 2.67%. Monona will only pay a portion of that $86,615 because the overall project is being funded 50% with federal funds and 50% local funds. The county, city of Madison and city of Monona are paying the local 50% share."

    Why aren't property owners being assessed on Monona Drive for the street? Just like I am on Belle Isle-if I was to live there.

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  3. "Why aren't property owners being assessed on Monona Drive for the street?"

    Monona Drive is a county highway, so county assessment rules apply.

    The city of Monona's policy is that property owners get assessed part of the cost to reconstruct a street when the street first gets concrete curb and gutters. So, *if* Monona rules applied, the property owners still wouldn't be assessed because the street already has concrete curb and gutters. (BTW, we are down to only a few streets that don't have concrete curb and gutter.

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