Loading...
HomeMy WebLinkAbout05-24-2010 Regular MeetingPublic Meeting Notice Committee: Fairhope Financial Advisory Committee Date & Time: Monday, May 24, 2010 at 4:45 p.m. Place: Delchamps Room 161 North Section Street Subject: See Posted Agenda Notice must be stamped, dated and initialed before posted on bulletin board. POSTED ~Jr1.· a()lt2 tila:hd IJ~~ SIGNATURE .. City of Fairhope Financial Advisory Committee Agenda -Monday, May 24, 2010 4:45 p.m. in the Delchamps Room City Hall -161 N. Section St., Fairhope, AL 1. Approval of Minutes for April 26 , 2010 2 . Status of RFP for health insurance bid 3. Status ofFY2010 funding of OPEB liability, compared to budget 4. Review of cost reduction projects, as follow-up from May 17 City Council Workshop 5. Discussion of cost reduction assumptions for FY2011 budget Schedule Of Future Meetings {Note: Regular meetings are on the 4th Monday of each month at 4:45 p.m. in the Delchamps Room at City Hall, 161 N. Section St., Fairhope, AL.) • Next regular meeting: Monday, June 28 , 2010 STATE OF ALABAMA )( COUNTY OF BALDWIN )( The Financial Advisory Committee met at 4 :45 p .m., City Hall , Delchamps Room, 161 North Section Street, Fairhope, Alabama 36532, on Monday, 24 May 2010. Present were: Chuck Zunk, Chairman Members : Stan Grubin, Mac McCawley, Marvin Wilder, John Brown, and Mayor Kant. Ex-Officio Members : Debbie Quinn, Dan Stankoski, Lonnie Mix on , Mike Ford, and Rick Kingrea. Dick K wapil was absent. Chuck Zunk called the meeting to order at 4 :45 p .m. He announced that the first item is to approve the minutes from the April 26 , 2010 Financial Adv isory Committee meeting . Marvin Wilder moved to approve the minutes from the April 26 , 2010 Fairhope Financial Advisory Committee meeting. Seconded by Mac Mccawley, motion passed unanimously by voice v ote. The next item on the agenda was the status of RFP for health insurance bid. City Treasurer Nancy Wilson gave a brief update and stated that the RFP was ready to go. It has been compiled and a cover letter prepared for the request. She stated it had been reviewed by Chuck Zunk today and the content of the RFP contains sensitive information , so that will not be presented . The RFP will go out tomorrow and we should get the requests via e-mail. The status of FY 2010 funding of OPEB liability compared to budget was discussed next. Ms. Wilson stated we did budget and the liability decreases as w e pay insurance. In September, our year end, we will have a lump sum payment. Thi s will be a cash is sue at year end . The City will still show an unfunded liability with as as s et account to offset. The General Fund amount due is $318 ,000 and this will be real tough for cash flow . Ms. Wilson stated the question now is "How are w e going to fund this?" At this time, we are right on our budget for this liability. Review of cost reduction projects , as follow-up from May 17 , 2010 City Council Workshop was the nex t item. City Administrator Gregg Mims briefly hi ghlighted the list of items Department Heads turned in for cost saving measures . Jim Homer also explained the need for an energy audit and discussed four companies for possibly performing the audit. Stan Grubin questioned the underground electric project and Debbie Quinn asked if it could be postponed for a couple of years and put aside funds to jump start program in the future. Financial Advisory Committee Monday, 24 May 2010 Page -2- Mr. Zunk mentioned these cost reduction projects need more evaluation and are policy issues. Public Works need to be more specific in cost reductions. James Gillespie replied that some of the reductions will be looked at through the request for proposals for grass cutting services , custodial services , fleet maintenance, etc. Lonnie Mix on questioned the Christmas tree lights and what kind of lead time is needed. Scott Sligh replied mid August. Mr . Zunk stated that number 5 on the agenda: Discussion of cost reduction assumptions for FY2011 budget would be deferred until a later date. Mayor Kant commented that he had met a week prior to meeting and thought everything that was needed for the May 17 , 2010 Work Session w as clear. He apologized that the necessary information was not on hand for that meeting. Chuck Zunk thanked all Department Heads for the hard work they did for preparing cost reduction measures . Mac McCawley mo v ed to adjourn the meetin g. Seconded by Marvin Wilder, motion passed unanimously by voice vote. There being no further business to come before the Financial Advisory Committee, the meeting was duly adjourned at 5:19 p .m . May 24, 2010 Dear The City of Fairhope is requesting quotes for healthcare and dental coverage for eligible employees and retirees. The City is currently insured by BlueCross Blueshield of Alabama, with the premium adjusted in accordance with a Contingent Premium Settlement Agreement, with contract year ending September 30 , 2010. Included for your review are the following: • Completed Industry-standard RFP form • Current Declaration of Benefits • Employee Census summary sheet • Employee Census • Retiree Census • History of claims paid 4/2007 -3/2010 • History of health enrollment 4/2007 -3/2010 • Statistical Analysis by Type Service for period 4/07 -3/2010 • Large Claim History for 4/07 -3/09 Please provide your quote for coverage that is identical or comparable to our existing coverage, effective October 1, 2010. If no comparable is offered, please provide details and cost for your standard insured plan. In addition, please provide your Network information, and tiered premium rates for single, family, and employee- plus-one. Please disclose administrative fees as both a percentage of claims and as a per-employee per-month fee. I ask for your proposal to be mailed or emailed to me at nancy.wilson@cofairhope .com, prior to June 18 , 2010. Please advise if you choose not to participate in this request for quotes. The City reserves the right to select the coverage which best fits the City's needs and objectives, including rejection of all proposals. Your participation will be greatly appreciated. Please do not hesitate to call me if you have questions. Yours truly, Nancy K. Wilson, CPA City Treasurer SPECIFIC FINANICIAL OPPORTUNTIES SUBMITTED BY: BRENTL Y GREGG MIMS CITY ADMINISTRATOR L.i6()..i (1) Friends of the Library-Owes the City of Fairhope 1,001,000.00 dollars. Ten Year loan. Payment made by the City of Fairhope of 146,000.00 dollars in March of 2010. City should notify Friends of Library to make arrangements . (2) Fines & Outstanding Debt 599,372 .62 in Outstanding Municipal Court Fines 790,649 .98 in Outstanding Utility Fees Total: 1,390,022.60 Authorize City Administration to hire a collection firm to work with the City to collect on these accounts and make long term recommendations for handling collection issues in the future .. (3) Grass Cutting Services bid -Date -May 24, 2010 * (* As submitted by the Public Director) (4) Custodial Services Bid -Date -June 7, 2010* (As submitted by the Public Works Director) (5) Fleet Maintenance Bid-Date-June 21 , 2010 ( 6) Sales Tax Collection -Consider alternate collection firm to collect sale taxes. Anticipated savings of up to forty percent of the collection fee currently charged to the City of Fairhope. Annually the City of Fairhope budgets 76 ,000 .00 dollars for this collection fee . One other option is to collect it ourselves . I do not recommend this option. (7) City wide review and possible reorganization. Review organization structure of every department. Goal to evaluate future opportunities to save money through the reduction of personnel primarily through attrition and associated expenses. The process could be completed within six months. (8) Police Jurisdiction -The Alabama League of Municipalities has issued a variety of conflicting information concerning this topic. Instruct the City Attorney to issue an official opinion concerning our options to continue or discontinue the PJ. After this opinion is rendered The City of Fairhope Mayor and City Council can make an informed decision to continue providing services in the PJ. IT Department Potential Savings • Cellphone services were costing the city an average of $3400 per month. By eliminating unnecessary lines, we can reduce that number to $2960 per month. Further, I am proposing that the city stop issuing cellphones. Instead we should give employees a monthly 'allowance' to apply against their personal cellphone bill. If the city saves at least $20 per line using this method, it will provide a cost savings of over $20,000 per year. • A cost analysis program found that Fairhope averages $45,000 annually on printer supplies for our 96 desktop printers. We can feasibly drop the number of printers from 96 to 20 by encouraging sharing of resources. The City Administrator has also suggested that the remaining devices be donated to local schools with the approval of the Mayor and the City Council. • Integrate our phone system, phone lines, and internet into one infrastructure. Government agencies, have reported cost reductions of 60 -80% by leveraging these products with VoIP solutions. • Issue an RDP to replace our current Time and Attendance system. Other vendors may be able to offer a more streamlined system for far less than the $33,000 than we currently pay for annual maintenance. • Move pier web camera from DSL circuit to the City's internet lines. This will save $1200 annually. • Eliminating one DSL circuit at the library would save almost $2300 annually without adversely affecting the speed or quality of the internet connection. • Setting up long distance authorization codes will reduce the amount of long distance charges for the City. • Consolidation of the 25 servers in the City's 3 "data centers" down to 2 servers in one room will reduce power consumption , cooling, and maintenance costs while increasing redundancy and disaster recovery options. • We should explore the use of our unused fiber-optic network by third parties. Vendors are interested in using lines that we have already put in place, but not utilized. We could either charge for use, or swap for in-kind services such as phone, internet, and public safety communications. • The City currently maintains our own GIS system, software, and server. We should explore the possibility of using Baldwin County's infrastructure with our data. • Citizens could pay fees, utility bills, and fines through a payment Website to streamline the payment process and reduce our overhead for staffing at the payment window. • Enable the power management settings on all computers, laptops, and monitors throughout the city to reduce power consumption. There would be no cost to implement. Gregg Mims From: Bill Press Sent: Thursday, May 20, 2010 9:28 AM To: Gregg Mims Reference is made to your directive concerning cost savings and revenue generation . The following is submitted for your review: Page 1 of 1 • Going to an 8-hour shift vs . a 12-hour shift. This should save overtime and reduce the fatigue factor for our officers • E-ticket should increase revenue • The draft of the alarm ordinance is being finalized. The fines regarding false calls will bring in significant revenue as we respond to approximately 130-150 alarm calls each month. As penalties occur, alarms will be fixed and therefore reduce incoming revenue and increase available time for our officers. • The 1033 program continues to bring in equipment for all departments. This adds to the overall cost savings for the City. Thus far, we have brought in approximately one million dollars worth of equipment. • Overtime events are going to be presented to the Financial Advisory Committee for review. A number of in-kind services can be reduced, thereby curtailing overtime (see attachment). • In cases of major investigations, we will seek restitution. • Food for the jail is now going out to bid instead of going to the highest cost resource, as mandated by the mayor. • The temperature for the jail is being raised by five degrees to reduce electrical costs. • We continue to actively seek grants and forfeitures to reduce costs. • We have instituted a policy to reduce gas consumption and electrical costs within the police station by shutting off lights and maintaining the building temperature no lower than 72 degrees. Chief Bill D. Press, PhD Fairhope Police Department (251) 990-0131 "There is no right way to do something wrong." 5/20/2 010 Suggestions Immediate Results in Reducing Costs or Increasing Revenue for Nix Center, Civic Center, Museum Most of these could be implemented in 30 days so to give adequate notice and/or get ordinances prepared for Council approval. 1. Begin charging a higher fee to non -resident members of the Nix Center . We currently have 1000 members who are residents and 400 who are non-residents. By charging non -residents $40 and increasing resident fee to $25 we can increase revenue by $11,000 next fiscal year. I would ask that we give members 30 days notice on increase . 2. Change ordinance to allow daily rentals of rooms at Nix Center. The smaller rooms may be good for depositions , small business meetings, etc. We already allow monthly rentals to local not for profits for $100 per year . We could do this not interfere with Senior Services. 3. We could also begin charging to use the museum on the 2nd floor . We currently allow folks to use that facility for free . It is used a couple times a month but we could charge a nominal fee . We could also begin collecting donations at the museum in donation containers that would be deposited into the general fund . This is a common practice at many museums throughout the country . 4. We could open Nix Center daily from 8 a.m. to 4 p.m. By closing an hour early, we can reduce our yearly costs by $10,000 on salaries and energy costs . This would mean cutting each employees time at the Nix Center by 2 hours each pay period . 5. Discontinue Shuttle Bus Service Maintenance $7500 Gas $6500 Employees $20,000 Service provides assistance to approx . 20 people total per year , delivering meals (11 ), transporting vision impaired , etc. These services could be absorbed by Ecumenical Ministries , Meals on Wheels, Brats , local churches , etc . Savings $34,000 We will also continue to secure community sponsorships to off-set our expenses at the Nix Center. Other Areas of to Reduce Spending or Increase Revenue City Wide These are listed according to the items that will have immediate impact this fiscal year. 1. Stop waiving rental fees for parks , streets , Nix Center and Civic Center and security fees . 2. Do not allow any city vehicles to be taken outside the police jurisdiction or city limits . Only utility stand-by folks should be allowed to take vehicles outside the specified area and emergency personne l/police as necessary . 3. No travel unless it is required as continuing education for your profession . 4. In 2008 , we spent almost $15 ,000 on food for poll workers during elections not including employee labor preparing the meal. We could order box lunches and save almost $1000 per election on food and there would be minimal labor expect for going to pick-up . Cost depends on number of elections we have each year but cost runs about $2000 per election or just a little less to feed about 50 poll workers. We have an election on June 1st and we can order box lunches starting with this election and serve some additional snacks throughout the day for approx. $500. This would save money in this fiscal year. 5. Offer early retirement incentives to eligible employees . 6. Follow insurance guidelines set for by our insurance carrier to not allow to drive after the age of 72 . Do not give special permission (which is allowed by insurance company) to any employees so to help retirement of older employees . 7. I want to continue City Sketches but make it available online and only place about 1000 copies around town. I can do this for about $3000 per issue reducing costs by $20 ,000 per year. I think it is important to have some hard copies to place at the library , Welcome Center and Nix Center for seniors who do not have computers . According to the resident survey, most folks like getting this by mail but I understand reducing costs and I think others will too. This will save approx. $7000 this fiscal year and $21,000 next fiscal year. 8. Follow insurance guidelines set for by our insurance carrier to not allow employees to drive after the age of 72. Do not give special permission (which is allowed by insurance company) to any employees so to help retirement of older employees. This would requ ire notice to existing employees and an ordinance or resolution by the council. 9. Charge Eastern Shore Chamber of Commerce and Eastern Shore Art Center $25 per vendor for arts shows to help cover costs of overtime . I would do this for the ESAC fall show also . This could result in more than $12,000 in revenue. We also need to make sure a revenue officer is working all these festival on all days to collect business license from squatters . 10 . Stop making community appropriations except to Ecumenical Ministries, BCEDA & the $6000 sponsorship to the Chamber. I would place Rotary Youth Club in recreation Budget. Total appropriations would be $26,000. 11. For next year, I would discontinue NYE. We had the most negative comments on th is event in the res ident survey the mayor just completed . Most residents love July 4th and Tree Lighting . This would not be any savings this fiscal year but I think we have to start looking at events that do not serve the whole and make some tough decisions about what events we want to endorse. We do need to make a decision this year because we begin booking bands in July and paying deposits. P.O. Qra\v'~r 129 ~alrl,~l;JC.Al~bama 36533 ~ 2S,t-~28·2 136 251 ·928:6776 !'ax www.cofairhope.ron1 TQ;: FROM::: RE: MltMORANDt.lM May 19, 20iO· _,Q .,'Grc.MMih1$}0i!,Y b4nmifsQ11tor f} . / foruUhruit Smilo. ,1mu>o!j!larl\\ Buildffig D-f'1'l +v f b C:ost·Savii;ig W.tiativC$ ~~<;tfi'c:lo the Plann~ng and ~«ildiu~~~-gi.t amt some d~er~l-,I<I.®~ . ' A_sJ~®~!(:{{: {!le:f9ll6ivJtig;'lists. mciM <t~y:i,d~'to save m!'.>ney, Specific~tcHhc Planning;and Buildingncpattincnt L l,r~~toi: :C1J1plq>.:<J$,r11Ulor th40 tclil);o •·when ' ilio·ppport:un.it~,ox1.§.ij;.,SQm~~fil plqy.c<;s>~d, ~11'ri«g~~cmaf ;pt1(e_.rWl$:'tJW$fxJ._, Tlte ~la~1~ing ~M ~~ujtdi~gj .. ~~th~lp,_~_}lf~ p.urchasmg ,Dc,partment,11!l<fbity,,HaU Admtn1s trat101nn lhls..wi , (Y,' J1orardy-transferr-111g WiII!!il?'.N9lsoti,_il!id~npj;~, . 2-~r .ey_a'lu~tc -tAe:.ci,aily-:work r out~ Q!thc Buikll11,sJns~t~--- ~~!' Wma~ct-s'l1r~,,tl,t~y ip:6-a_c,h\~iJ:pg inaiQmumf.q.ohn'4,,'filil..¥&~., productivity. it When a otenibernf',i11e; P.lanmn-g-'All'<i Suilding D.epartrne111,an&.6Uret1<Ji:cy,'departments arc: ~uired 'tQ aJtcnd..an iospecbO{l'O,C:1DC<;Ung, we could make ·-ll<ldfl;i.'Qoatcffoits ,to carpQO.I. 4., :Suif<Iin~ Pcrnut.Si_gus coutd ·p,qssiblr be re.designedro .cost less ~swi. 5:. Zooil:!J.f Chang'c' tmd Subdivi's'io1rnt>(i'ce sisns could possiblt~-rC9esig11i;cf to oost'l~s' P,<:r' siji , 6. Gttr;D.epartine.nl can .cecycJc:thc:md.31:stekcs we ptilUfom the. Cff~~WJfoC Way . These $t:iw.e;,.:.ar~i $1.oo JJ(<t:sJ.n~e. W1c:tr.i\.t <i .t~~1y ~tart.e<l ,doiogl!,11,s , · 7, R¢cy.clc: ~e~t,SiiPS ; WJthJipl(fC«tlfica111 of Occupa,p~e$JJJUti'L-mi~WJcailtretufQs biS' or }i¢t~1l s1git 9, ~11cp:~9 an10\µJ)'.h1f~a~·~C<J;fo41re1>are ,pitC.k<~~.'foi: tbs,, ~f!lJM.lon anq Jlgiu'd &fX.dju~®'~. We have Qt¢ c.ilP~bjJ fog¢dicnia email' a.nd ,projcctoricehn.ology. ~1-UNJJ,J!J1uming- ~~!fnµtt)ite-pa~lla,~cts all i 0., Lfnkait co1nputers 'in our Dcpartmeilt\fQ a central and :reiia6it'r.cdl6t:~ioo:in the. wareh90sc, which coulil beJ 1sed.by ,art dep.artrucnl$-a_t the warehouse . fuJh~l ,, I'~licvet\lls,will ~,a;y~:W.Qri.¢Y ~n 'in~f~tti;idg~'.al).q/pl,g~. L,imitiog'.wlor; print)o,~, ~cs-foj:-ccJtjiill employees wJU .a'.lso-be.,costhcneucud. 11 . ltf,an.efiort·to save on gas -and vehicfo -costs , more fuel efficfent---vebfcites:\co.l.tldbe· slowly int~1m1t<i.d i nto Olif'dai~y ins~tion§~l'!ltions (-as •il:tjrcoqi;f~el peJ.itu(~): l?Z, Make. eil'ortsto keep <e1r-wJoyees 1Ji,.P,J?.f,.8appy:empfoyces are.nJor~'~rQdu.ctivc . 13 . Startan:'employoe. su,ooestion pr0$.(&liiJ S<>n1e cntpl<>y~·may-<ifl'ermu'hd other city st.afli'efffioial's va,luablc ~11$ight and cost.saving tips . 14. Qur ~~artmcJltwut(Lutiliro, co1lege.~t.1<rns for speplfic projQCt~. M~t W1iversiti!:lS· nave iijl~shlp pr◊gr~ip:s' UraJ require v9cy-litilc compej~ati9_n'on th..C:P!!.tl!P.~Jlj.;c;,City. 2 General Cost Saying Ideas I. Perform an energy audit to determine the energy efficiency of all City Build ings and facilities . 2. Retrofit existing buildings with energy saving features, such as efficient lighting and appliances ; city building HVAC systems should all be audited and re -evaluated for efficiency purposes . Evaluate the possible use of alternative energy sources such as solar power and wind generators . 3 . Evaluate existing City employees and determine if they are operating in an efficient and effective manner. 4 . Reduce the use of paper ; go electronic on document.ation and City publications , if possible . 5. Reduce the layers ofburcaucrncy and committee involvement for efficiency purposes ; hire educated and capable employees. 6. Purchase fuel efficient City vehicles . 7. Evaluate the possibility ofa 4 day work week . 8. Pay bills only when they arc due. 9. Broaden staff responsibilities if possible and cut unnecessary vacant positions . 10. Make efforts lo keep employees happy . Happy employees arc more productive. 1 I . StHrt an employee suggestion program ; some employees may give City Officials valuable insight and cost saving tips . 12 . Utilize college interns for specific projects related to each department's goals . Most universities have internship programs that require very little compensation on the part of the City. If you have questions , please do not hesitate to contact me at (251) 990-2884 . Page 1 of~ Gregg Mims From: Tom Kuhl Sent: Wednesday, May 19, 201 O 2 :58 PM Gregg Mims To: Subject: Cost Saving Suggestions revised .docx Cost Saving Suggestions Submitted by: Tom Kuhl Parks and Recreation Department • Close Pool and Recreation Center on Sundays and Holidays from June 1, 2010 through September 30, 2011. Cost savings of$20,928.00 . (May lose some Membership) • Close Summer of Fun Day Camp 2011. Cost $24 ,000.00 income $12,000.00. • All staff work to become more efficient with lights and air conditioning . • • Replacement employees will be hired as part time in order to save the cost of benefits. • There will not be a replacement of the recent opening of a parks maintence position at this time cost savings of $47,600.00. • The Previous Parks and Recreation Directors salary ends as of June 1, 2010. Revenue Generating Programs • Approval to continue having fitness and other programs implemented by the Recreation Center to generate revenue (that may not compete with other local business). • Adding additional swim lessons and other revenue programs at the pool. • Franchise Agreement should state that we receive 15 % from any programs example tennis lessons used by the Parks and Recreation Facilities . 5/19/2010 '. ' Gregg Mims From: Sent: To: Subject: Gregg, Nancy Wilson Thursday, May 13, 2010 7:41 PM Gregg Mims Budget suggestions For the FAC special Budget meeting on Monday, 5/17, I would like to suggest the following, for discussion: 1-Delay indefinitely the reinstatement of the Education Reimbursement benefit 2-Omit any overtime pay for workers on stand-by during the time they are not called in for emergency work; pay at OT rate only for the actual time spent on work called in to do; workers shouldn't be paid for sitting at home or working in their yard , or whatever they are doing during stand-by time . Rotation of weekends being available for emergencies should be considered part of the job description, as it is for all of us. 3-Discontinue the Fire call pay -hence the name "volunteer" 4-Discontinue the 'No sick day' bonus at year end . The sick days are carried forward , not lost. If an employee is sick, he/she should stay at home. The reward is that if the employee uses his/her sick days wisely, they will have them if a serious health issue arises, and/or if they work until retirement , they will be paid for some or all of the accumulated days at that time . Thank you- Nancy Nancy K. Wilson, CPA City Treasurer City of Fairhope P. 0 . Drawer 429 Fairhope, AL 36533 (251) 929-0346 (251) 929-0373 -FAX 1 Electric Department Executive Summary May 19, 2010 Prepared By: Scott Sligh The Fairhope City Council and the Fairhope Financial Advisory Committee met on Monday, May 17th at 2 p.m. to discuss the budgets of the various departments of the City of Fairhope. As a result of this meeting, all department heads were asked to submit cost reduction measures that could be enacted very soon and were long term in nature. My list of possible cost reduction measures is attached, but I felt it might be beneficial to provide some additional background information to assist you in your decision making. For FY2010, the Electric Department submitted approximately $585,000 in capital improvement projects to strengthen the system and replace vehicles that are aging . To date , we have already deferred $400,000 of these requests, due in large part to cash flow requirements. Many of these projects have already been deferred in prior years, and require long lead times for ordering equipment. Each year that goes by without completing needed upgrades brings an increased risk of failures on the system. We have already had two substation failures since spring of 2009, and we continue to experience underground cable failures throughout the system. Similarly, the older our vehicles become, the more likely they are to fail when we need them. Meanwhile, Fairhope is also continuing to lose ground in technological advancements such as SCADA systems, two-way metering, and distribution automation. On the basis of number of meters per employee, the Fairhope Electric Department currently operates in the bottom ten percent with respect to our peers across the state. This statistic was obtained from the figures provided by Electric Cities of Alabama members . We operate efficiently for what we provide, and with whom we provide it, compared to almost everyone else, but it also means that we have little room to shrink further . Over the past year, we have operated with one less employee than we did in FY2009, as we have a vacancy that we did not fill due to budget constraints. This vacancy alone saved over $50,000 in salaries and benefits. We have been able to improve our financial situation this year both through our operations and our billing and collections. We reduced energy losses on our system by operating more efficiently in 2009 than in 2008, leading to over $70,000 savings in purchased power costs. This increase in efficiency was due in part to more aggressive tree trimming measures, as well as more efficient equipment and materials. We have also targeted services that had been undercollected, and have worked toward collecting for services we have rendered. In one case, we identified a customer who had never been billed for security lighting -this correction equates to an annual revenue increase of approximately $6000 per year. While I can appreciate the city's current financial situation and the need to make budget cuts, my assertion is that the Electric Department has already undertaken a number of actions in this budget year which have both saved money and brought in additional revenue. This department is arguably one of the most technically demanding in the City, and is not only operating within our budget, but also bringing in much-needed revenue. In fact, the Mayor recently stated in an open meeting that the Electric Department was $400,000 ahead of its budget goals, year to date. We began the year with the presumption that this was our budget to manage and how we allocated this money was up to each department head, as long as we met our budget goals. Certain line items, such as overtime pay, are often cited as possible areas in which to decrease costs, but in practice, it is often hard to make such cuts. Storms and cable failures don't follow a 7-to-3 Monday through Friday schedule, and meters don't spin if the power isn't on. The City needs the revenue that the Electric Department generates, and the Electric Department needs to be able to operate at a level that enables us to continue to provide quality service to our customers and help to fund the excellent quality of life that we have here in Fairhope. The items detailed above collectively represent real money that has not been spent, money that has been saved, and money that has been earned . The figures are significant. Based on these facts, I am requesting an exemption from the budget reduction mandate. In the event that is not possible, I have attached a list of possible items for consideration as requested. ·. Proposed Electric Department Revenue Enhancements and Budget Cuts May 19, 2010 Submitted by : Scott Sligh Revenue Enhancements: 1. Renegotiate Joint Use Contracts with AT&T, Mediacom and Southern Light. This will cost $4,000 on the front end to hire a consultant to perform but will add approximately $20 ,000 in revenues, annually. 2. Start charging $100 for after hours reconnects , or stop performing them entirely. Charging for them will result in revenue additions of $5 ,000 annually . 3. Charge $100 per overtime callout for problems that tum out to be customer problems or meter tests that result in no meter error. This could add $2 ,500 annually in revenues . 4. Start cha rging connection fees/deposits that are realistic of 2 months estimated revenue . 5. Charge $50 per banner for all banners that must be installed on City poles . This could add $2 ,000 in revenues . 6. Begin charging $100 each for boxes that are put out for special events ' electrical use to cover labor and electricity usage . Budget Cuts (numbers with an • are educated guesses): 1. Re-bid the tree trimming contract to bid a cost per substation circuit instead of doing the work on an hourly basis. This could save $40,000 * annually and start a 3 year trimming cycle. The drawback is that the public will not be in favor of the way the trees will need to be trimmed to accomplish this cycle (i.e. no trees within 10 to 12 feet of any lines.) 2. Permanently remove the $750,000 underground project from all future capital project lists . This could be rolled back out of the rates and the rates reduced to account for it. Th is was included in the capital needs projections of the rate study. This could save $15 to $20 million in capital costs over the next 20 years . 3. Change the way the Christmas tree lights are done . Instead of wrapping trees in individual lights and buying $20,000+ worth of imported lights every year , consider using colored LED up -lights to light the trees from the bottom up . Lights would take less time to install, would not be subject to damage during parades and by vehicles and would give a new look. They also would not cause tree trimming conflicts and crews would not kill flowers installing or removing them. This would save all the overtime and be much quicker and easier to do . This could save $60 ,000 annually. 4. If #5 if not feasible , do not expand the tree lights but instead reduce the number of trees that must be done . The trees that have recently been planted will not be conducive to lighting the way we always have for long, as they will grow to be much too large. This could reduce the overt ime required by one third to half. 5. Stop trimming trees for Public Works that do not conflict with utility lines and/or are outside Electric Department territory footprint. Use individuals from solid waste division combined with 3 existing Certified Arborists and have Public Works start trimming trees. This could save $20 ,000 * annually in Electric Department manpower and equipment and save wear and tear on Electric equipment not designed for tree trimming use and abuse . It would also provide a potential job for displaced solid waste workers , should outsourcing of that function come to fruition. 6. Quit collecting mistletoe at Christmas to give away to the public . This could save over $1,000 annually. 7. Remove bulbs from one half of all street lights . This would save over $45,000 annually in energy consumption alone , exclusive of maintenance costs . 8. Stop paying for street lights in subdivisions not served by the City of Fairhope Electric Department. Th is would save over $60 ,000 annually, currently paid out of the Electric Department's budget. 9. Stop New Years Eve involvement by Electric Crews. This could save $1 ,000 * and would keep from over exerting/straining an expensive vehicle not designed to hold the New Year 's Eve Ball . 10. Turn off lights at pier at 12 a.m. This could save $2,000 annually. 11 . Spend $3 ,000 per ballpark to install controls that would limit the amount of ti me ball field lights could be turned on . Energy savings could result in payback of less than three years per field. Page I of I _ Gregg Mims From: James Gillespie Sent: Wednesday, May 19, 20101 :36 PM To: Gregg Mims James Gillespie List of financial opportunities I. No free or reduces rates for any city services such as but not limited to golf and recreation center for anyone. 2. New stand-by polity for utilities. (WEEKENDS 16 OVERTIME?????) 3. Collect our own sales taxes. 4. Work order system (supervisors should know where their employees are at all times) 5. Increase utility deposit (we can easily reduce bad debts in half or more. ($50,000 to $100,000 per year) 6. Pull building inspections into city limits. 7 . Combine jobs when someone leaves. (example revenue/meter dept) 8. Look at all bank fees. (Credit cards , interest, ect.) 9. Move employees around to more productive roles. ( some talent seems to be wasted) Important: Team work, the city should be a team all pulling in one direction. No l's in team . We should not be divided into two teams. We must work together. 5/19/2010 To: Gregg Mims City Administrator Ref: proposed cuts 1. Move Charles Durgin from the Water and Sewer dept to the Recreation dept. Cost Savings to Water dept. approximately $50,000.00. (Time frame immediately) 2 . Bid out Construction Services (i.e. installation of new water services, Fire Hydrants , Sewer Services, and Repairs of water and Sewer mains .) Approximate cost savings cannot be determined until bidding has been completed. Time frame 45 to 60 days ( this would also decrease our inventory ) 3 . Return Leased Backhoe (November time Frame)= cost savings fourteen thousand and five hundred ($ 14,500.00) dollars per year. 4 . Deposits on meters needs to be increased from twenty dollars($ 20 .00) to fifty dollars ($ 50.00). Or possibly higher. 5. After hour reconnect's needs to be the next business day if customer pays after 2 :00 pm. Cost savings is two hours of overtime per call. 6 . If item two (2) is implemented the employees could be used as a second shift for the water department there by eliminating stand by overtime. Thanks Dan McCrory Superintendent Water & Sewer Dept. City of Fairhope Quail Creek Golf Course -Budget Recommendations INCREASE IN REVENUE 2010-2011 • In_crease Cart Fees $1.00 will Increase annual revenue by $30,000 .00 • Increase Annual Pass Rates by $100 .00 will increase annual revenue by $30,000.00 • Increase price of Driving Range Balls $1.00 will increase annual revenue by $10,000 .00 • Increase Equipment Purchases to $185,000.00. Will increase profit to $51,800. • Recommend that all City Employees and Golf Course Employees pay for Carts and Green Fees. Recommend that City Employee's enjoy the following fee structure: Increase in revenue: $12,000.00 9-Hole Green Fee : $5.00 and 18-Hole Green Fee: $10.00 9-Hole Green Fee w/Cart: $12.00 and 18-Hole Green Fee w/Cart: $20.00 *Presently Golf Course Employees enjoy complimentary carts and greens fees. * Presently City Emplayees_pay_only_cartfees. Total Increase: $133,800.00 REDUCTION OF EXPENSES 2010-2011 • Salaries -Pro-Shop -Restructure Marshall Hours by reducing IO hours per week Summer months and 5 hours during winter months: $6,500.00 • Salaries -Pro-Shop -Restructure Golf Cart Attendants by reducing 6 hours per week: $2,650.00 • Salaries-Pro Shop-Reduce Full Time Employee's to 38 hours per week: $3,350.00 • Discontinue American Express Credit Carts for another year : $10,000.00 • Operating Supplies Grounds: Reduce by $5,000 .00 Total Reduction of Expenses: $27,500.00 * Any future loss of a Full Time Employee due to retirement, transfer, resignation, etc ... in the Golf Shop or Grounds Maintenance will be replaced by Part Time Personnel as needed. INCREASE IN REVENUE 2011-2012 • Increase Cart Fees $1.00 will Increase annual revenue by $30,000.00 • Increase Daily Green Fee from $23.00 to $25 .00: $12,000.00 • Increase Pro Shop Prices by 7% will increase annual revenue by $12,950 .00 • Increase Annual Pass Rates by $100.00 will increase annual revenue by $30,000 .00 Total Increase: $84,950.00 P~RCHASING DEPT. Dan Ames, Purchasing Manager 05 -20-10 COST SAVINGS AND EFFICIENCY IMPROVING SUGGESTIONS 1. Change padlock on driveway gate ~t warehouse to unique lock and assign keys sparingly. A swipe card reader would be better. Reduces theft of materials, equipment and fuel . Reduces liability. 2. Install card swipe system at fuel dock. Robertsdale did this recently -cost savings were great. Can get dollar estimate from Robertsdale if needed . 3. Use low salaried, or part time employees as parts and materials runners . Keeps high pa id employees doing their jobs, not sitting at vendors drinking coffee. Increases productivity, reduces cost of doing business. Have done this before, it works . 4. Put all field work, including Public Works on a tight Work Order system, where all work performed is assigned, and timed, with accurate accountability of every minute of the field workers time assigned to a defined task. Have done this before, it works . 5. Hold Supervisors accountable for flowing the field workers from Work Order to Work Order with minimal downtime between Work Orders. Increases productivity, reduces cost of doing business. Have done this before, it works. 6. Conduct in-house study of HVAC systems, map thermostat controlled zones, adjust thermostats to mainta i n balanced temperatures . Reduces energy cost and needless equipment wear. 7. All buildings decay and die. Identify current status and plan now (long term budget) for life cycle replacement of building components before catastrophic failure. Replace building components with greater energy efficient versions (examples : roofs, HVAC equipment). Have done this before, it works . 8. Conduct in -house energy cost analysis of building insulation status versus cost savings by increasing and/or modifying types and quantities of insulation. 9 . Replace 30 yr. old, inefficient, antique computer system . This will have major front end cost, but great savings over medium to long term. Benefits and savings in soft dollars too many to list. 10. Define in finite detail, the ornamental sites of the City. Develop master detailed plan for ornamenting the City, and detailed individual plans for each site. Include all change outs (seasonal, etc ... ) in master and individual site plans. Use more permanent, less throw away ornamentation. Establish cost of master plan, have City Council approve plan and total cost, including labor, equipment including greenhouse expenses, and all materials, including fertilizers, herbicides, pesticides, etc .... 11. Do comparative analysis with other cities, increase employee contributions in benefits to match other cities . Hard dollar cost savings. 12. Develop integrated SOP Standard Operating Procedures for all City Depts . that interface all Depts. So that everyone is on the same, streamlined page, and that page is written and approved by City Council. Long term, but needed. Will reduce operating costs. Street Division: Cost Cutting Ideas Submitted By Jennifer Fidler Increase Street Fees: Mardi Gras Organizations, Arts & Crafts, Fall Festival. Eliminate setup/takedown and sanitation services for all special events; or charge real costs to organizations requesting setup services and sanitation: Mardi Gras Parades, Arts & Crafts, Earth Day, etc. Eliminate New Year's Eve Ball Drop event, look at eliminating other special events, and do not add any additional special events . Sanitation Division: Eliminate curbside recycling, the garbage fees will pay for garbage and trash services. If we eliminate curbside recycling, we do not need to stop the twice a week pickups. Charge for C & D pickup and charge for organic debris pickup (Example: $50 minimum for one scoop, $100 for more than four scoops, $50 per half truck of organic debris, $100 per whole truck for organic debris). Eliminate policy for return pickups on garbage (if we miss a pickup, pickup will fall on next regular schedule-could easily be done by remaining with twice a week pickups). Holidays and eliminating return pickups would cause problems ifwe went to a once a week pickup. We could go to once a week garbage pickup if a contractor kept once a week curbside recycling pickup. Landscape Division: Reduce beds on Magnolia Avenue and Fairhope Avenue, this would reduce manpower therefore allowing us to focus on other areas (Would the City save $2,500 per year). Drop 10% in bulb production, no real changes needed "if it isn't broken, don't fix it" and brings people to the City every day. Ideas for Higher Paid Personnel: Next fiscal year if the City still cannot give an across the board COLA to each employee or merit increases, any employee who makes less than $55,000 should get some type of pay increase. If you bid employee health insurance and decide to charge the employees for a portion of their insurance, there should be a sliding scale based on the employee's pay. For example, someone who makes $70,000 would not pay the same rate for either family or single coverage as an employee who makes $10 an hour. The purpose is to make it fair for those lesser paid employees who may not take insurance because of the cost they have to contribute. It would still be a cost saving to the City and every employee would still be required to pay something for their healthcare insurance. The current personnel handbook policy regarding take home vehicles should be followed. Implement an early retirement incentive program, Social Security began for a reason. Incentives and reductions can be implemented until the economy strengthens. Ideas for City Wide: Cost Cutting Ideas Submitted By Jennifer Fidler Look at individual departments for the past ten years : where were they ten years ago , where are they now, what type of changes were implemented in the past ten years, how has that department's services changed, was there a reduction or increase in services, are the changes justified. Graph it out to see the changes . If that increase is more due to more than just the cost of inflation, serious questions need to be asked as to why and if it is justified. Verify the ad valorem taxes coming back into the City from the County: how do we account for it, who is verifying these taxes , number of households , households paying, and what type of accounting system is in place to verify that? Eliminate excessive paperwork in purchasing. Submitted By: Rhonda Bishop, HR Director Reclassify Certain Positions from Non-Exempt (Hourly) to Exempt (Salary) • We currently have 7 positions that can be reclassified to an Exempt position. By reclassifying these positions, we will no longer be paying overtime. Last fiscal year, we paid $30 ,000 just in overtime for 5 of these positions . "On-Call" Time • I recommend we eliminate "On-Call" Pay and utilize our Emergency Call-In policy only. This will save over $100 ,000 annually that we've been paying in "On-Call" pay. We paid $120 ,000 in FY09 and $85 ,000 FYIO (to date). • Or change our existing "On-Call" policy from paying 8 hours a day to paying 4 hours a day (for each non-scheduled work day, usually Saturday & Sunday). Incentives for Voluntary Retirement • We currently have 24 employees who meet the criteria, as required by RSA, to retire . Their annual salaries total over $1.2 million dollars . Option A : A one-time severance payment available to employees who are over 60 years of age and have been employed for at least 10 years . They will receive a one-time , lump-sum payment of $15 ,000. OptionB: Employees who have 25-29 years of service will be given the opportunity to retire now and continue with the same health care benefits as employees who have 30+ years of service . We will waive our current requirement of reaching age 55 . We will save $412 ,000 . (We will pay approximately $90,000 for the ir insurance premiums, but this is only a fra ction of what it would c os t us to pay the ir combined salaries o/$503,000.00). We can reevaluate which of these positions need to be replaced & which positions can have their duties absorbed into other similar positions . Sick Leave Pay Upon Termination of Employment • We currently allow employees to sell or use up to 960 hours (6 months) Sick Time upon termination of employment. I recommend that we change it to 480 hours (3 months) Sick Time, effective Jan 1, 2011. This will encourage employees who are currently eligible to retire to go ahead and do so .