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Min 09/09/2008 410 CITY COUNCIL MINUTES Wichita Falls, Texas Memorial Auditorium Building September 09, 2008 Item 1 The City Council of the City of Wichita Falls, Texas met in special session on the above date in the Council Chambers of the Memorial Auditorium Building at 8:30 o'clock a.m., with the following members present. Lanham Lyne - Mayor Charles Elmore - Mayor Pro Tern - Councilors Glenn Barham - Michael Smith - Rick Hatcher - Jim Ginnings - Dorothy Roberts-Burns - Darron Leiker - City Manager Bill Sullivan - City Attorney Lydia Ozuna - City Clerk Mayor Lyne called the meeting to order. Item 2a Councilor Ginnings gave the invocation. Item 2b Councilor Elmore led in the Pledge of Allegiance. Item 3 Minutes of the August 19-20, 2008 Council meeting were approved as amended. Item 4 A Public Hearing was held on the proposed property tax rate for Fiscal Year 2008-09 Mayor declared the public hearing open. Joe Kortbawi, 4412 York, expressed appreciation to the Council for their efforts and for trying to keep the rate as low as possible. He asked how much the City contributed to MPEC last year. Mr. Jim Dockery replied that it was $1.5 million, which is hotel-motel subsidy. Mr. Kortbawi asked if that was from tax payer money. Mayor replied that it was not; it was from hotel-motel tax. Jim Berzina, 2617 San Simeon, previous City Manager, provided background information and history on retirement and health care benefits. He spoke in favor of continuing the health plan at least for the retirees. He stated that there was no legal contract but it was understood and it was pretty standard that there would not be a pay increase or only minimal but there would be retirement and health care benefits. He also asked that Council keep in mind that there are people who had only two—three years before retirement 411 , Item 4 continued and they do not have the time to recoup or build up for retirement. You need to look to see how to handle those that have no ability to change what their future has been dialed in for them for all the years of work here. I have confidence in the City Manager that he can find a way to do this and I think it is an obligation. Councilor Ginnings asked for clarification as to whether Mr. Berzina was advocating that those retiree spouses also be carried with a supplement when they become Medicare eligible. Mr. Berzina responded that therein is the balancing act but does not what Council legally could do, but there are a lot of people that are on that threshold to retirement that have no time to recover. Their future is kind of set and how far back you can go, I don't know. I think there is an obligation to some that are pretty close to it, how close I don't know. Councilor Ginnings asked if his main point was for those Medicare eligible spouses that are already retired. Mr. Berzina said that you clearly should take care of those 76 retiree spouses. They were promised when they received their retirement papers that they had those benefits. I don't know where you stop it but I think there are people with five years or ten years away from retirement. Part of it is how much time they have to recover. It has taken a lot of those 20 years to get the Texas Municipal Retirement System fixed. I don't know how you make that decision; that is something your staff is going to have to look at. Councilor Ginnings asked Mr. Berzina the following question. If you were faced with a $60 million unfunded liability that requires more than $2 million plus increase in the City budget and this unfunded liability was in the nature of the health care Medicare supplemental benefits for spouses, what would you do. Mr. Berzina responded that he cannot believe that all that is spouse health care so I can't go quite as far as you want me to go with this answer. I watched year after year when an emergency came up or unusual expenditure or gasoline prices increased, and we found the money. I ask myself who is more important to you, your employees, your retirees or a tank of gas. That is not your answer. You may have to look at the tax rate; you are not going to find the $60 million in the tax rate but you may have to pick those things that you can and say you are going to raise taxes a half a cent or a cent. I think that obligation is there. Councilor Ginnings commented that raising taxes has been the standard solution for this problem throughout the country. The federal government has it a little easier than we do because not only can they raise taxes, they can print money, borrow money and create the inflation that is eating us alive in these areas. I think the principle of raising taxes to maintain the status quo is shaky. Mr. Berzina agreed with Councilor Ginnings but felt that if you do not maintain the status quo you are going backwards. He gave a brief history on the tax rates in our City, County, and ISD. Your tax rate is eleven cents lower than the day I arrived here and part of the reason is the sales tax but part of it is that you are not the tax raising body that everybody wants to hit you over the head with. The City has done a beautiful job of keeping the tax rate low and my thought is that when you get to the point that you need to raise it for an emergency or something that is needed, you are not the ones they should throw the bricks at but you have always received those bricks, however they were sent to the wrong place. You have done a wonderful job of maintaining that tax rate. That is a culture up here at this body and sometimes to a fault in my opinion. Council thanked Mr. Berzina for coming and providing this information. Rosemary Clark, 2112 Indian Heights, one of the spouses of a close to retirement employee, stated that she and her husband have made family decisions based on that her husband had benefits. Now facing retirement, how can you suddenly think about taking the spouse out of the picture when we have not had the opportunity to plan for anything other than that. We have been looking at different plans and exploring different issues. When I become eligible for Medicare there would be a deductible and then they cover about$3000 of prescriptions and there is a long gap when they don't cover anything at all. I am a cancer patient and my medications cost $3600 a month. I would hit the Medicare point on the first month and we have not planned on paying $3600 a month. Medicare is not the complete answer. We counted on my husband's benefits to supplement Medicare and be the secondary insurance. It is extremely scary to think that this would be pulled away from us right now at the end of his career when I am sick; and to take a look at not having the coverage we counted on and thought would be there. Mayor called for additional public comments. There being none Mayor declared the public hearing closed. i 412 Item 5 Mayor stated that the discussion on various budgetary proposals offered by the City Manager would be opened to the Council only because they will have to discuss these seven different options amongst themselves to come to a decision. Mr. Jim Dockery walked through each of the seven options. This was followed by a lengthy discussion on the various options. Mayor and each Councilor expressed their opinions as to which option they preferred and their reasons. Council consensus was to continue the retiree spouses' benefits at$228,000. Councilor Ginnings wanted to make sure that they understand one thing about retirees that are not Medicare eligible or soon to be retiree. My understating of the Employee Benefit Trust proposals are that retiree spouses will have the right to remain on the City plan but will have to pay the full cost of the Medicare supplement. I would like to suggest that the premium for our plan is as good as you can get. You cannot beat it by yourself on the open market. No one is being cut off the opportunity for benefits. The issue of whether to continue to allow those that retire after January 1, 2009 to remain on the City's Medicare Supplement Program was discussed. City Manager stated that the Employee Benefit Trust Board will resolve this situation quickly since there are employees that are close to retirement and need to have an answer. Discussion on the seven options continued with the following action being taken. Moved by Councilor Ginnings to adopt Option 6. Mayor called for a second. There being no second, motion died for lack of a second. Moved by Councilor Barham to adopt Option 3. Motion seconded by Councilor Smith. Councilor Ginnings was opposed to Option 3 because he felt enough had been done in the way of raising current and future benefits in that area and that makes the City Manager's plan of funding our retirees the most acceptable and does not require a tax increase. We have established that MHMR has well within their grasp $32,400. 1 would agree that, according to Councilor Elmore, we can't continue to do new things without a tax increase but we certainly, I don't think, ought to increase taxes where someone, like them, has the ability to fund that $32,400. We have done enough in those other areas. We can take care of our retirees as the City Manager has proposed in Option 1. Councilor Barham withdrew his original motion and replaced it with the following motion. Moved by Councilor Barham to adopt Option 3 with the deletion of the $32,400 request from Helen Farabee Mental Health Retardation Center. Motion seconded by Councilor Elmore. Councilor Ginnings asked that they consider the fact that we have put $329,000 in there to take care of other future benefits and we are going to do that for eight years in order to maintain the Texas Municipal Retirement System requirement. If past history is any indication then we will raise that $329,000 in some time to come because there will be additional demands made on us from Texas Municipal Retirement System in order to maintain our retirement benefits like they are. Basically, we are operating as a defined benefit and that has to be an advantage that people ought to thank God for because a private person can't buy that. Motion carried by the following vote. Ayes: Councilors Barham, Smith, Roberts-Burns, and Elmore Nays: Mayor Lyne and Councilors Hatcher and Ginnings Mayor expressed appreciation for everyone's input. 413 _ Item 6 City Council went into Executive Session at 10:53 a.m. as authorized by Section 551.074 of the Texas Government Code. City Council reconvened at 1:42 p.m. Mayor announced that not votes or polls were taken during Executive Session. City Council adjourned at 1:43 p.m. PASSED AND APPROVED this l.G day of � 2008. MAYOR ATTEST: Lydia Ozuna City Clerk NOTICE OF MEETING Special Meeting Of The Mayor And City Council Of The City Of Wichita Falls, Texas, To Be Held In The City Council Chambers Of The Memorial Auditorium, 1300 Seventh Street, On Tuesday, September 9, 2008 Beginning At 8:30 A.M. City Council: Mayor Lanham Lyne, Councilors Glenn Barham, Michael Smith, Dorothy Roberts-Burns, Rick Hatcher, Jim Ginnings, and Charles Elmore. 1 . Call To Order 2. (a) Invocation (b) Pledge Of Allegiance 3. Approval Of Minutes Of August 19-20, 2008 Regular Meeting Of The Mayor And City Council 4. Public Hearing On Proposed Property Tax Rate For The 2008-09 Fiscal Year 5. Discussion And Possible Action On Various Budgetary Proposals Offered By The City Manager 6. Executive Session - Evaluation Of The City Manager, City Attorney, Municipal Judge, And City Clerk As Authorized By Section 551.074 Of The Texas Government Code. 7. Adjourn Wheelchair or handicapped accessibility to the meeting is possible by using the handicapped parking spaces and ramp located off the east parking lot on the Sixth Street entrance. Spanish language interpreters, deaf interpreters, Braille copies or any other special needs will be provided to any person requesting a special service with at least 24 hours notice. Please call the City Clerk's Office at 761-7409. Wireless Listening System devices are available at the City Manager's reception area or you may call 761-7404 for inquiries. CERTIFICATION I certify that the above notice of meeting was posted on the bulletin board at Memorial Auditorium, Wichita Falls, Texas on the day of , 2008 at o'clock (a.m.)(p.m.). City Clerk