- Published on Wednesday, 11 June 2014 14:00
- Written by Super User
By WILLARD KILLOUGH III
CAROLINA BEACH - The Carolina Beach Town Council voted to adopt a proposed budget for the 2014-2015 fiscal year at their Tuesday June 10, meeting. The new budget begins July 1.
Among the many topics of interest in this budget include a 5% water and sewer rate increase, commercial garbage rate increase and adjustments to the Town's healthcare plan for employees and elected leaders. The proposal maintains the current property tax rate of 23.5 cents per every $100 of property value.
Town Manager Michael Cramer explained, "We are recommending a 5% increase over last year's utility fees for water and sewer. We've had a few discussions on this item. The majority of this funding goes towards the debt service for the Phase 1-A project and for debt service for past capital improvement projects."
The Phase 1-A Infrastructure Improvement Project consists of replacing water, sewer, force main, raw water, stormwater and street infrastructure on Cape Fear Blvd, Clarendon Ave. and 5th Street between Cape Fear and Clarendon. The project is intended to start on June 16th and scheduled to be complete in April 2015.
Cramer explained the utility fund is $6,543,725. Combined with the general fund, the Town's budget is $18 million dollars.
In the budget message delivered to Council last week Cramer explained, "With the adoption of the Fiscal Year 13-14 budget the Town Council voted to combine two funds, the General Fund and the Tourism Fund. The combined total of the budgets for FY 13-14 of approximately $11.2 million. The Adopted Budget for Fiscal Year 14-15 for the combined General Fund is approximately $12.2 million, which represents an approximate $1 million increase. This is due to a number of factors, primarily; a 2% employee COLA and up to a 3% merit compensation increase, increased capital equipment and project purchases, the addition of one new employees as well as the full-year impact of several employees pay discrepancies during the previous year."
He explained, " The Utility fund provides services for water, sewer, storm water, wastewater treatment, and the billing thereof. This enterprise fund, is supported by fees (not taxes), and has a balanced budget of $6.5 million. Last fiscal year the Utility Fund supported a balanced budget of $5.2 million. The additional $1.3 million budget increase is due to two main activities; debt service and capital improvements. The Town Council initiated a water and sewer study last year which serves as a plan for future infrastructure improvements. In order to fund the upcoming infrastructure improvements Debt issuance is expected during the upcoming fiscal year and is included in this budget. A rate increase of 5% is included in this budget. The rate increase is expected to increase the typical residential water and sewer bill by .06 cents per day or approximately $1.85 per month. The Utility fund relies upon indirect services from the General fund. A transfer for these services of $600,000 is included as an expense to this budget and corresponding revenue to the general fund."
Councilman Steve Shuttleworth expressed a concern about a change in healthcare policy for employees.
In a memo to the Town Manager early Tuesday morning Shuttleworth explained, " I am concerned on the hardship and impacts to our town employees caused in part by the 20% increase to deductibles, and the other costs that are pushed towards staff" and, "There were many different cost changes and I don't think we clearly understood how this will effect people, the focus was that there was a cost savings but at what and who's cost. I have had feedback from several staff that this is being felt and seen as an extreme change. We have worked hard over the past few years to boost staff morale."
At Tuesday's meeting Cramer explained they were working on details of the healthcare proposal. He said, "One of the main concerns was that we would be disproportionately impacting the employees that have specialized needs. That have services that are provided to them by specialists that are reoccurring medical conditions. One of the ways we have looked at over the last two days and go and reinforce that and come up with other alternatives is we've gone back to our broker to see if there wasn't a way we could mitigate some of those costs for those employees and yet still meet the needs and the goals we had for the overall healthcare program."
Cramer said the program could be expanded over several years to lessen the impact. He said, "My recommendation is this budget be approved as is and you give me the flexibility to work with staff over the next couple of weeks to determine the appropriate plan. If that plan does need to come back to you and do a budget adjustment to increase the cost for the healthcare benefits to the staff, then I can come back and do that in July for that specific item."
There was also debate about healthcare benefits for Council members that stemmed from a previous meeting.
The Council held a budget meeting on Friday June 6th, to discuss changes to health insurance benefits for elected leaders. That resulted in Mayor Dan Wilcox and Council members Leann Pierce and Gary Doetsch giving a consensus to Cramer to reduce the health care benefits including eliminating coverage for dependents. Doetsch said he still felt Council shouldn't receive insurance benefits.
In addition to health and dental insurance, the Mayor receives and annual salary of $8,400. The Mayor Pro-Tem, $7,800. Council members receive $7,200.
They also receive a $3,000 annual auto allowance, reimbursement for travel expenses, a cell phone subsidy and an iPad.
Shuttleworth disagreed with Doetsch stating it was a minor budget impact and it's a policy decision rather than a fiscal issue. Pierce, Wilcox and Doetsch all campaigned on a desire to make changes to Council insurance benefits.
Shuttleworth explained at the June 6th meeting, "The issue is, do you think Council should have a benefit. The issue is, if everyone is offered the same benefit and some take it and some don't, is there a problem with that." He said, "There's nothing that precludes you from taking a benefit. There's nothing saying you have to take it."
Shuttleworth said Pierce took advantage of the health coverage but was not required and she could drop it at anytime. Pierce said she also has separate health coverage.
Councilman Doetsch is retired and already has health coverage. Mayor Wilcox already had health coverage and is also covered by the Town's insurance.
Shuttleworth said, "I didn't run for Council to get health insurance" and, "I'm not inclined to give up a benefit that I currently have. I don't think it’s out of line. I don't think whether it’s an individual or family benefit, whether I take it individually or take it as a family, it’s no different than any other employee. We have some part-time people that don't have coverage. We have seasonal people that don't have coverage."
He said, "We are not balancing a budget, a $12 million dollar budget on twenty some thousand dollars."
At that June 6th meeting Cramer said, "I need to know if I need to change the budget to take out council benefits."
Wilcox said he didn't agree with Doestch's opinion that benefits should be eliminated entirely. He said, "I ran on the fact that I would take a look at the Council's healthcare policies and make adjustments and I'm pretty sure I told a couple of people I would vote against it. I think having gotten into it and looking at it from a human perspective, it doesn't matter what the make up of the Council is... the same scenario we have here would exist. It would show three people coming into office that said they would be interested in removing the benefit and you have two people when they came into office that it was not a point of discussion."
Wilcox said, "To me in this healthcare environment I don't think it would be respectful and fair to turn the light switch off in one day. It took a while. None of us up here implemented this benefit. It's been around for a while and I agree its something that needs to be adjusted but I think we need to phase it over time to give people time to adjust, to look for other policies and other plans. To do away with it overnight would almost be a punishment when no one has done anything wrong here. We've simply taken advantage and Sarah and Steve have simply taken advantage of the benefits that were available."
Wilcox said the amount of money saved in the budget is not a lot, but it's a symbol to citizens that, "We are in it with them."
He said, "I would like to make a compromise recommendation that we keep the plan, make some adjustments to it this year and proposed adjustment to it next year and phase this benefit back rather than just turning it off. My proposal would be that we discontinue dependent contributions. That we limit the Council contribution from the Town for healthcare to 80% for the cost of a single insured and that we make that benefit whatever way it has to be done available to everyone on Council. There are some people that come on Council that already have insurance. They are only going to be on for two or four years. They can't step out of that policy and step back into it but they still have healthcare expense and if the purpose of this is to offer a benefit to the Council for healthcare, it ought to be equitable I believe."
He explained, "I would follow that with a commitment in the next budget cycle to further reduce that to 50%. I think to me, after weighing all the options and looking at the work that Council does, that that's a fair benefit and that would be my proposal for consideration."
Shuttleworth said, "I don't think I'm ashamed of or I'm doing anything wrong taking health insurance benefits and to penalize my family and have me reach in half way through a term and start paying for my children's additional cost and I'm the only one on Council that affects on that compromise, no I don't think that's a compromise. It's not broke. It's not a policy that I implemented. It cost the Town $27,000 a year for five people. We have employees that have no dependents. We have employees that have multiple dependents. When I'm not on Council there may be five Council people that all have dependents or none have dependents."
At the Council's June 10th, meeting local resident D.A. Lewis asked if an adjustment to healthcare benefits for Town Council that was discussed at the June 6th meeting was reflected in the proposal Council was considering that night.
Cramer explained, "Currently there has been no change to the existing budget from what I reflected at the meeting on Friday. There was no specific vote establishing the recommended 80%. This has 100% funding as is."
Wilcox explained to Cramer, "Michael I'm sorry. That's not what we agreed to. You asked for consensus from the board and we gave it to you. I don't know what's going on here but we gave you a clear consensus."
He said, "If that consensus is not part of this budget, I won't be voting for it."
On the topic of the water and sewer increases, Wilcox responded to a citizen who expressed concern with the high cost of water above what he typically paid living the Raleigh area.
Wilcox said coastal areas typically have a higher cost to operate a water and sewer system and said the increase also helped cover debt for ongoing and planned infrastructure projects.
Currently average residential meter access fee is $13.18 for water and $23.82 for sewer for the first 3,000 gallons of use per month. The fee per 1,000 gallons of water and 1,000 gallons of sewer above the first 3,000 is $10 per month.
Cramer explained, "To address the question that was brought up earlier about the benefits. My intent is that if the Council votes tonight to approve the budget, that I would prefer that include the provision of the 80%, taking out the healthcare for dependents so that what I have is a documented trail of what the requirement is supposed to be. What that will effectively do is that it will change what the actual budget figure will be when we expend funds."
He said, 'With this budget along with adopting the motion and the resolution for the budget that you also include in there the change to Council benefits so that we have that on record and have that related to the budget. One of the questions that was brought up previously at the workshop was whether or not this was a policy decision or a budget decision. The Council at the time in the workshop suggested that I get together with the Town attorney and get to that issue."
He said the attorney said it was a budget issue and not a policy issue.
Wilcox said, "So do we want to vote on every other discussion and every other consensus that we gave you. That still makes no sense to me. I will make a motion to approve the budget based on the outline of the compromise for elected officials healthcare, eliminating the coverage for dependents and reducing the Town coverage for the Council people to 80% and making that even distribution across the board. Somebody has their own private healthcare then they still get the same amount to apply to their private healthcare with the intent that in the next budget cycle we reduce that to 50%."
Wilcox said, "My concern with the budget presentation was, had D.A. not got up and asked that question, apparently we weren't going to be told that. I think that should have been part of the presentation if you were going to go do something differently than what we understood at the last meeting."
Shuttleworth explained, "I have a question about that motion Mr. Mayor. I was under the impression at the workshop your motion was to reduce Council benefit from 100% to 80% and to reduce dependent contribution from 25% to zero. Tonight you also included a cash equivalent if you chose not to take the health insurance."
Wilcox said, "I included that the other day as well. It was part of my consensus."
Shuttleworth said, "So now I chose not to take the healthcare I can just take more money?"
Wilcox said, "You can take the money and apply it to a private healthcare plan."
Shuttleworth said, "Or I could just take the money... That's a total restructure of the benefit."
Council member Sarah Friede said taking the cash equivalent would have tax implications.
Wilcox said, "You can't expect a council person to drop their healthcare coverage that they've had and need to maintain in this healthcare environment when they come on Council but also not be subject to any benefit when other people are getting the benefit."
Shuttleworth said, "That's historically how it's been. Historically there has been a number of council people that have chosen not to take it."
Friede said, "So, we get our benefits cut and you get more cash in your pockets."
Shuttleworth said to Doetsch, "That conversation we had Gary was nothing like that. When we talked about the whole idea of the health benefit and cutting back and not cutting it back you said you could go either way but you had made a commitment on the health insurance. I said well what about this compensation and making it equal in cash distribution and you said I think I'm getting paid enough, I told Dan I don't need any cash. Now the motion comes out and well you take the cash instead."
Gary said if Wilcox's motion didn't pass he'd be happy to vote to do away with all of the insurance benefits.
Wilcox's motion would allow a Council member to get healthcare through the Town at the 80% coverage or use that towards their own separate policy. Council members could still opt out of receiving the benefit or cash equivalent entirely.
The motion passed by a three to two vote. Mayor Wilcox and Council members Pierce and Doetsch voted in favor. Shuttleworth and Friede voted no.
Following the vote Friede said, "Is there some way for the additional money that Steve will actually have to pay the Town to come out of my paycheck because I'm so offended by this. I really am. It's the issue to me. Steve should not have to pay the Town."
Wilcox said, "This is not about Steve... this is about a compromise between what was offered which was zero."