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07-25-95 WS)4 41 MEMORANDUM TO: Mayor Norm F. Freske Councilmember Suzanne Ackerman Councilmember Ron Black Councilmember Larry Fournier Councilmember Vern Heidner FROM: Phyllis Boedigheimer, Finance Directo DATE: July 25, 1995 SUBJECT: Discussion of City Contribution to Long Haul Industrial Park Interior Road My understanding of the background of this issue is that approximately a year ago when Long Haul Trucking was considering purchase of the property now known as Long Haul Industrial Park, discussions were carried on between the owner, the EDAAC, Dan Wilson, Wilson Development Service, and the City Council regarding the upgrading of Kadler Avenue to access the property and the City's participation in that upgrade. According to the information from the individuals I have talked with, the amount of $65,000 was estimated as the cost to upgrade the road. The development process of the industrial park is well underway with the final plat approved at the July 24th City Council meeting. The developers agreement has been drafted and forwarded to the owners for review, approval and signature. Obviously, the issue of the City's commitment to the project is foremost on the developers mind. The issue is not addressed in the developers agreement, but the letter of credit requirements include the cost of all the public improvements including the road. I have had some conversations with Dan Wilson and Andy MacArthur regarding the issue of the road and the City's possible contribution to the project. It is Dan Wilson's understanding that there will be a commitment from the City and that commitment is $65,000. Dan Wilson has pursued various ideas regarding the method of payment of the $65,000 to the developer. He contacted the Farmers Home Loan Administration, but found that this was not an eligible project. He also has suggested that the City use the taxes generated by the development for reimbursement to the developer, and has furthered that suggestion to include the County in a commitment of their share of taxes generated. He has also indicated that Wright Hennepin Electric does offer business development loans. Because the letter of credit includes the cost of the road, the developer is very anxious to arrive at an agreement with the City Council regarding the possible reimbursement for the road in the industrial park. Attached is a copy of a letter sent to Mr. Dan Wilson from John Gries, attorney for John Daniels, Long Haul Trucking. I have also discussed this project, including the background of the development, Dan Wilson's involvement, and the possible funding of the $65,000 should the City Council agree to the reimbursement of the road, with Ron Langness at Springsted. Ron indicated to me that he felt there were some possibilities that the City Council could consider but needed more information before specific options could be presented. He strongly felt that Tax Increment Financing should be further explored. He agreed that the TIF laws have changed and certainly are more restrictive than in earlier years, but that it still was an option for industrial parks. We further discussed the possibility of incorporating it into a bond issue with the Island View Estates and Mississippi Shores projects should they be approved. He also discussed the means of justifying the City's commitment to the industrial park. In my discussions with Ron Langness it was apparent to me that the City Council would benefit from a meeting with him to discuss the Long Haul Industrial Park. This discussion would also benefit future industrial park development. He would be happy to meet with the City Council in a presentation format and indicated that he would be available either August 2nd or 3rd. In summary, I believe there are two issues to be discussed and direction provided to the staff. 1) Is the City willing to make a commitment of $65,000 to the Long Haul Industrial Park? If so, Andy MacArthur recommends that a resolution be adopted confirming that commitment. 2) If there is a commitment by the City, how will that commitment be paid? There are a variety of options including bonding, possible MSA construction funds, tax reimbursement, or possible tax increments. I also feel it would be of benefit to discuss this issue with Ron Langness, Springsted, Financial Consultants. 6123750647 FOSTER WPLDECK LIND F-267 T-064 P-002./002 JUL 25 '95 15:33 FOSTER, WALD EC K. LI N D 8 CRIES, LTD. ATTORNEYS AND COUNSMORS AT LAW T1lorus A. r o.Tan TWAO- „Y W. WALDOM Plrw� E. LJNo jow R. GPw fwg.r E. so,++arv- Orro J. Lmrawwr Svwoa M.1XV. N d*aVrw 'L' TOVA90"M 41alsOnv J. VAN H=Mr jmnn/!R L K. PAox<in lwar J. DAMM Mr. Dan Wilson Nilson Development Service 310 Chestnut Street Chaff, HB 55318 July 25, 1095 RE: Otsego Industrial Park and John Daniels asoo Mar—oLRAN CW"VW =S 8OUT" ewnMTM a . MwwaArOua. K4jrm aTA 864M (e z) xre-Ino r'Ax (010) X78 -a"7 100 EAW CEKrnw A WOW 8T MWK4U L. I wwwo sows FAx (012) 4077-30M - Dear Dan: I have been trying to reach you and was expecting to hear from you regarding the above matter. As you know, the Otsego City council gave the final plat approval for the Industrial Park. We will be ready to sign the Developer Agreement, place the letter of credit and record the plat shortly. we cannot proceed, obvious ly, until we have the agreement in place with the city regarding the reimbursement for the road costs. As you probably know, the costs of the road are substantially higher than anticipated due to the city road specifications. My understandingfrom you is that you have a commitment from the City that they will participate at least to the level of $65,000 or more in regard to those costs. I would think that John's building alone, much less the other buildings that will be constructed in the future, will justify more than the: $65,000. However, it is very t that we got the plan in place. The ice arena people ant start right away on their construction but again that w 1 al held up until we can get the increment issue resole Pully. easy 1 me hear from you. JRG/kls cc: Mr. Bob Rirmi.s Mr. Andrew MacArthur Kiri, Elaine Beatty Xr. John Daniels A1T0F*M" LUM!'isao To PTA :?iR '^ 44Mfe0rY►. WmsCaNaN ANO MuMOUN MEMORANDUM TO: Mayor Norm F. Freske Councilmember Suzanne Ackerman Councilmember Ron Black Councilmember Larry Fournier Councilmember Vern Heidner cp FROM: Phyllis Boedigheimer, Finance Directo DATE: July 26, 1995 SUBJECT: Insurance Program As I indicated at the June 26, 1995 council meeting, there are a variety of insurance options available to our City in all areas of interest. An insurance program can be structured to our needs, dependent upon the City's commitment to an insurance program, and the City's monetary contribution to that program.. I have worked with and received quotes from our current agent at First National Insurance, and from another agent, T. C. Field & Company, for health, dental, life, short term and long term disability insurance. I have attached a summary of the insurance plans that K.C. Foster, First National Insurance has quoted and in addition, I have attached quotes from T.C. Field & Company. Through the two agencies, quotes have been obtained from Medica, Blue Cross, League Of Minnesota Cities Insurance Trust, Fortis, Employers Health, Delta Dental, Guardian, and Woodman's Insurance. Quotes have been received for a variety of options, for example, $10,000 and $15,000 life, various deductibles for dental coverage, various benefits for short and long term disability, and a variety of coverages for health insurance. Medica provided sixteen options. The quotes are based on the current employee census assuming normal health conditions, final quotes are subject to change based on completed health histories. I might also add that these quotes are based on an August implementation. I worked on developing a questionaire for our employees regarding their insurance needs, but found it was impossible to question them, when at this time I did not have information to provide regarding the various insurance options and the commitment from the City. All employees are very interested and want an insurance program, but they can not make decisions until they know the City's contribution. I also have investigated the possibilities of implementing a Section 125 Plan. This plan is known by a variety of names, for example, Cafeteria Plan or Flex Benefit Plan. It can be a very simple plan allowing for employee share of medical premiums to be deducted pre-tax to a more complex plan allowing for medical reimbursement, premiums, and child care to be deducted pre-tax. Pre-tax also includes FICA, which would save the City, the City's share of FICA. To implement a Section 125 Plan, three procedures are necessary, 1) the City Council must formally adopt a plan, 2) the plan must be administered by staff, and 3) IRS reporting requirements must be met. I believe that if the City Council would choose to offer this program to its employees, it could be readily administered through the Finance Department. To summarize, I would request that the City Council provide direction to the following: 1. City's monetary commitment to the insurance program in a dollar amount for all insurances, or the City could provide life insurance, short and long term disability, and a spec dollar amount to health and dental with employees contributing for family coverage, or some combination thereof. 2. Implementation of a Section 125 plan, and how that plan should be structured based on decisions regarding the City's contribution. 3. MandAtory coverage for all employees and optional coverage for spouses and dependents, or allowing employees to opt out of coverage, and whether they will be allowed to receive cash in lieu of insurance. Some of the insurances, i.e. dental, require 100% participation. After these decisions are made, I will then be able to pursue the appropriate insurance package for the City's employees. I would anticipate the employees participation in the decision process and final recommendation to the City Council. July 17, 1995 Phyllis Boedigheimer City of Otsego 8899 Nashua Ave NE Elk River, MN 55330 RE: Employee Benefits Dear Phyllis, This letter is a summary of all the programs we discussed. First of all let's look at: 10,000 LIFE with 10,000 Accidental Death .Company .,-,-league of MN Cities Monthly Rate $24.60 ortis Benefits 33.90 Blue Cross Blue Shield 38.40 Employers Health (15,000 minimum) 49.50 Medica, (15,000 minimum) 67.# II. MEDICAL. INSURANCE 'see brochures for complete details Based on the census provided the following plans were quoted. Company Blue Cross Blue Shield Monthly Rate $1,410.65 (current carrier) 300 ded 80/20 to 4500 Medica $1,458.10 $10.00 co -pay 100% thereafter $9.00 PCS drug card Employers Health $1,582.00 $10.00 office co -pay 500 ded 90/10 to 5000 League of MN Cities $1,728.94 500 ded 80/20 to 3500 III. DENTAL INSURANCE Preventative 100% Basic 80% Major 50% after 12 month waiting period $50.00 calender year deductible for Basic and Major. Company Employers Health Monthly Premium $255.23 Fortis Benefits 293.00 League of MN Cities 308.53 Guardian Life 365.85 IV. SHORT TERM DISABILITY & LONG TERM DISABILITY League of MN Cities (current carrier) provides up to max of $300/wk for 26 weeks. $81.00 per month. Possible to add a long-term disability program onto the short-term thru the League of MN Cities. It would be an initial benefit provided by the city with a voluntary option to increase it. It is a guarantee issue program with a pre-existing clause of 6/3/24. Benefit period is to age 65. $500.00 per month - 6 month wait - paid by city $75.80 Optional is paid by Employee up to 5000 per month or 60% of earnings whichever is less. The cost varies by age. Another option is to go through Fortis Benefits and integrate a short term & long term program that provides a better benefit. It is completely underwritten so if one employee is rejected then the entire group would be rejected. It is a stronger benefit, but also more costly to the city. A) Short Term 60% of earnings to 13 weeks Long Term 60% of earnings starting at 3 months .....................$410.69 per month B) Short Term 60% of earnings to 26 weeks Long Term 60% of earnings starting after 6 months..................$396.42 per month Each employee would receive a higher short-term benefit and a higher long-term benefit without the employee having to pay additional. This is a summary of your options. Thank you. Sincerely, 444 K.C. Foster CLU, ChFC Under 10 19�E L= o! mw..M atw Elective. J o#g Term Disability League of Minnesota Cities Rate Page Qualifying Period - 6 Months Actual cost to the employee is based on the rate per $100 benefit. Each employee pays the rate based on aurent age. Rate increases due to a change in age are effective as of the policy anniversary. Monthly Premium Rates Employee Age . per 5100 of Benefit -24 $0.28 25-29 0.39 30-34 0.60 35-39 0.96 40-44 1.58 45-49 2.54 50-54 3.95 55-59 4.52 60 plus 4.87 Em INSURANCE PROPOSAL MEMO CITY OF OTSEGO T. C. FIELD & COMPANY Insurance & Bonds Since 1912 530 NORTH ROBERT STREET ST. PAUL, MN 55101 Telephone: (612) 227-8405 (800) 766-4016 Facsimile: (612) 227-0507 MARLON DUBINSKY Account Executive MARK LENZ Commercial Insurance Representative Proposed Effective Date:J U LY 1, 1995 IVILL.IIl..I1 Out of Pocket Maximum �1 IIL/I') `�/JVI L,/I IIVi. 'II JJV CJI I 4/ U4-) UNIIUN 4/ b.30 $3000 per member $3000 per member $3000 per member $750 in HMO Network Preventative Health Care $2250 out of network • Routine examinations, • Immunizations 100% coverage 100% coverage 100% coverage 100% 100% coverage 100% coverage • Well-child care • Routine eye and hearing exams 100% coverage 100% coverage 100% coverage 100% coverage 100% coverage 100% coverage 100% coverage coverage 100% coverage 100% coverage 100% coverage Medical Care in Doctor's Office • Office visits for illness or injury 100% coverage $10.00 copay $10.00 copay $10.00 copay Medical Care in Other than Doctor's Office • Out-patient surgery • X-rays 100% coverage 100% coverage $10.00 copay $10.00 copay • Laboratory tests 100% coverage 100% coverage 100% coverage 100% coverage 100% coverage 100% coverage 80% coverage 80% • Physical therapy 100% coverage $10.00 copay $10.00 copay coverage $10.00 copay Maternity Care • Prenatal -Postnatal care • Hospital -Physician care 100% coverage 100% coverage 100% coverage 100% 100% coverage 100% coverage coverage 80% coverage 80% coverage Hospital Care • Surgery • Semi -private room 100% coverage 100% coverage 100% coverage 100% coverage 80% coverage 80% 80% coverage coverage 80% coverage Emergency Care • Urgent Care • Emergency room • Ambulance $10.00 copay $40.00 copay 80% coverage $10.00 copay $40.00 copay 80% coverage $10.00 copay $10.00 copay 80% coverage $10.00 copay $40.00 copay 80% coverage Prescription Drugs $9.00 copay P Y $9.00 copay $9.00 copay $9.00 copay Durable Medical Equipment Prosthetic devices 80% coverage 80% coverage 80% coverage 80% coverage Chiropractic Care • Office visits COST • Monthly prepareo i. C. Field & Company I u.uu copay $1980.12 $10.00 copay $1884.28 $10.00 copay $1833.67 $10.00 copay 1741.84 Page 1 BLUE CROSS BLUE SHIELD Out of Pocket Maximum Preventative Health Care • Routine examinations • Immunizations • Well-child care • Routine eye and hearing exams AWARE GOLD CMM ($200 Deductible) $2500 per person $600 per person $1200 per family 100% coverage 90% coverage 100% coverage 90% coverage 100% coverage 90% coverage 100% coverage 90% coverage CMM ($100 Deductible) $100 Deductible $500 single $1000 family no coverage no coverage no coverage no coverage CMM ($500 Deductible) $500 Deductible $900 single $1800 family no coverage no coverage no coverage no coverage Medical Care in Doctor's Office • Office visits for illness or injury $15.00 copay $15.00 copay 80% copay 80% copay Medical Care in Other than Doctor's Office • Out-patient surgery • X-rays 100% coverage 90% coverage 80% coverage 80% coverage • Laboratory tests 100% coverage 100% coverage 90% coverage 90% 80% coverage 80% coverage • Physical therapy 100% coverage coverage 90% coverage 80% coverage 80% coverage 80% coverage 80% coverage Maternity Care • Prenatal -Postnatal care • Hospital -Physician care 100% coverage 100% coverage 100% coverage 100% coverage 100% coverage 80% 100% coverage coverage 80% coverage Hospital Care • Surgery • Semi -private room 80% coverage 80% 90% coverage 80% coverage 80% coverage coverage 90% coverage 80% coverage 80% coverage Emergency Care • Urgent Care • Emergency room $10.00 copay $40.00 copay $10.00 copay $40.00 copay $15.00 copay 80% $15.00 copay • Ambulance 80% coverage 80% coverage coverage 80% coverage 80% coverage 80% coverage Prescription Drugs $9.00 copay $8.00 copay $9.00 copay $9.00 copay Durable Medical Equipment • Prosthetic devices 80% coverage 80% coverage 80% coverage 80% coverage Chiropractic Care • Office visits $10.00 copay $10.00 copay $10.00 copay $10.00 copay COST Monthly $1842.62 $1567.13 $1651.26 $1354.32 Prepared . C. Field & Company Page 2 MEMORANDUM TO: Mayor Norman Freske Councilmember Suzanne Ackerman Councilmember Ron Black Councilmember Larry Fournier Councilmember Vern Heidner cl� FROM: Phyllis Boedigheimer, Business Tinance Directo DATE: June 26, 1995 SUBJECT: Attachment to June 26th Agenda Item 8.6 - City's Contribution to Insurance Program Currently the City's employee insurance program includes a short term disability policy with Minnesota Mutual, a Life and AD&D policy with Blue Cross/Blue Shield and a health insurance policy with Blue Cross/Blue Shield. The City provides the short term disability insurance and contributes $150.00 toward employee health, life and AD&D. The City's current policy allows employees to opt out of health insurance if they choose. The City pays those employees $150.00 a month. The short term disability premium is $81.00 a month for six employees or $13.50 per employee. This coverage is effective the first day of accidential disability and the eighth day of sick disability. This coverage pays up to $300.00 per week for 26 weeks. The health insurance is a $300 deductible policy with an 80/20 split if within the network at a monthly cost of $215.60 and $244.94 for the employees currently covered under the plan. The Life and AD&D monthly premium ranges from $2.10 to $7.90 per employee. I have received quotes for a variety of coverages from one insurance agent. It is obvious that there are many options to choose from, and certainly a plan that could be structured to work for the City. The following is an outline of the quotes I received, based on the current employee census. Medica Select with no co -pay - $166/mo. for single to $536/mo for family MIC Choice which is a deductible plan - $105/mo single, to $340/mo family There were nine options between the above best and least coverages. Blue Cross/Blue Shield - various deductibles with an 80/20 plan $140/mo single to $450/mo family for the least deductible to $115/mo single to $369/mo family for a higher deductible to Aware Gold at $157/mo single to $502/mo family. Life Insurance - $10,000 - $3.00 to $6.50 or $28.90/mo for current employees to $6.70/each employee or $40.20/mo. Dental - Delta Dental - ranging from $7.75 single to $12.35 and from $24.90 family to $36.45. Short Term Disability - up to $250/week beginning at day one for accident and day eight for sickness, up to 26 weeks for $35.00/employee to $5.10 -$10.20 per employee or $50.10 per month. As you can see from above, there are a variety of options available to the City for insurance coverages. I also have information from the Public Employees Insurance Program which offers three different health plans, Delta Dental and Life insurance through Minnesota Mutual. The League of Minnesota Cities Insurance Trust also offers health, dental, life, short and long term disability. Both the League's insurance and PEIP must be purchased through an agent. In addition, I have received information from the City's short term disability agent, informing the City that the plan can be extended to a long term disability at $80.40 a month for the current city employees. The attached schedule is a sampling of sixteen cities outside of the immediate metro area showing the type of insurance coverages provided and the city's contribution to employee insurances. I hope this will be of some benefit to the City Council in their decision process regarding the City's contribution to employee health, dental, life, and disability insurance. SIXTEEN CITY SAMPLING OF EMPLOYEE INSURANCE BENEFITS WMk Albertville Health - HMO 100% - Single Big Lake Health - Aware Gold 100% - All Dental - 80/20 100% - All Life - a $10,000 & $25,000 100% - All Corcoran Health - HMOs (LOGIS) 100% - Single Life - PERA Program Dayton Health - HMOs (LOGIS) Life - $5,000 100% - All East Bethel Full Cafeteria - Employees purchase their own Elk River Health - HMO 100% - Single Dental 100% - Single Life - $25,000 100% - All Ham Lake Health - HMOs(Anoka Cty) 100% - Single Dental 100% - Single Life - PERA Program 100% - All 1�on hl Cost $140-$195 Up to $435 Up to $284 for health Additional $350/year for all other reimburse medical costs $170.74 for health $235 to Cafeteria Plan for H, D, L. Also will match employee contribution up to 3% of base wage to Deferred Comp Up to $295 - Union Employees and up to $405 - Non -Union Up to $230 - also allow waive out if covered by spouse Isanti Health - Principal Ins. Co. 100% - All Average cost $290 Dental - Principal Ins. Co. 100% - All Life - Principal Ins. Co. 100% - All Lexington Health 100% - All $174-$505 Dental 100% - Single $19 Life - PERA Program 100% $12 Maple Plain Health - HMOs (LOGIS) 100% - All F.T. $187-$449 in conjunction with 100% - Single P.T. City of Independence Dental 100% - All F.T. $26.40 - $71.05 Life - $10,000 100% - All Monticello Health - Preferred One 100% - Single Up to $390 for all Dental - Principal insurances Life Rockford Health - HMOs (LOGIS) 100% - Single & $187-$287 60% - family Dental - League 100% - Single $23.47 Life - $10,000 100% - All Rogers Health - HMO -Medica 100% - Single Up to $250 for H & D Dental - League 100% - Single Life - PERA Program 100% - All $12.00 St. Francis $200 to each employee St. Michael $100 to two employees Watertown Health 100% - Single $185-$333 Dental 100% - Single The Cities of Dayton and Albertville specifically pointed out to me that they will be considering additional coverages in 1996. C MEMORANDUM TO: Mayor Norm F. Freske Councilmember Suzanne Ackerman Councilmember Ron Black Councilmember Larry Fournier Councilmember Vern Heidner FROM: Phyllis Boedigheimer, Finance Director DATE: July 26, 1995 SUBJECT: Database Software Councilmember Heidner requested that the City investigate the possibility of implementing a database program for all of the City's property information. This issue is of particular interest at this time because of the Database Intern hired by the EDA to gather information and set up a database on the City's home occupations and home extended businesses. Councilmember Heidner contacted the County and discovered that they would be very interested in providing all their property information to us via computer software. This would be a basis for our database to which we could add the specific information the City needs. I investigated cost of a database and spreadsheet software, specifically MicroSoft Access and Excell. A single user copy of MicroSoft Access cost approximately $330 and Excell cost approximately $320. Additional licenses would have to be purchased to use on a network environment. I also learned that a single user copy of the total office products packages now on the market, "Office Profession" would cost $599. This product includes Word (word processing), Excell (spreadsheet), Powerpoint (presentation), Mail (e-mail), and Access (database). I think implementing a database for the entire city property information is an excellent idea and one that should be pursued at a time when the information is still at a manageable level. We will need to research the computer storage required for the database, the specific information the City wants in the development of the database and the requirements necessary for conversion of the county data. Councilmember Heidner further indicated that he had contacted St. Thomas University regarding the possibility of the project as an internship for computer science students. He will be contacting the University regarding specifics of the project when the next school year begins. I would recommend that if a student internship is possible, the City authorize purchase of one license of the software and incorporate the additional licenses in the 1996 budget. MEMORANDUM TO: Mayor Norm F. Freske Councilmember Suzanne Ackerman Councilmember Ron Black Councilmember Larry Fournier Councilmember Vern Heidner n FROM: Phyllis Boedigheimer, Finance Director , DATE: July 25, 1995 SUBJECT: Update on Storm Water District Process Larry Koshak and I have met twice regarding the storm water tax districts. He has provided various information regarding stormwater management and the possibilities of implementing a tax or a utility fee. He has also estimated the number of units or REP's in each watershed tax district, and developed a basic maintenance budget. I was to refine the estimated number of REP's in each watershed tax district and to also review the maintenance budget. I have not been able to complete this project by this date. Larry indicated that a fee of $2 - $3 per month per REP is reasonable, but the number of REP's in the City and a realistic maintenance budget is necessary to support the monthly fee the City Council may impose upon the residents. I have discussed the possibility of billing a monthly fee to the residents on their electric bill with both electric utility companies in the City. They both have indicated to me that it was possible for them to provide this service to the City. They both would need more specific information before a firm commitment and cost could be quoted. This possibility would certainly help in the collection process of the fee. There are three procedures that need to be completed prior to actual implementation. 1) Schedule a workshop with the City Council, providing maps, actual number of REP's, a maintenance budget, new construction projections, and possible billing procedures. 2) Order a public hearing. 3) Hold the public hearing and authorize implementation. We need the month of August to prepare the proposed 1996 budget, therefore, I would recommend that the City Council establish a worksession and subsequent public hearing in September and early October. That schedule would allow time to get the fee on the assessment roles should that be the method of billing the Council chooses. If billing through the utility companies is the method used, it would allow them to set up their system for billing by January 1996. PC, �a All -- - Gam' .✓ CITY OF OTSEGO SPECIAL WORKSHOP MEETING JULY 26, 1995 - 6:30PM **AGENDA** 1. Mayor Freske will call Meeting to order Six Month Budget Update Discussion of insurance Discussion of City Contribution to Long ] Industrial Park interior road Discussion of Legal Fees Negotiation 6. Discuss Database for City Property Information 7. Update on Storm Water District Process Discussion of Job Descriptions for Ad mistrativ and Public Works Posit ons � �0 9. Any oth p Worksho B�Tsiness ll� 10. Adjourn � 6k Q