HomeMy WebLinkAbout1983-09-16_BUDGET MEETINGMEMORANDUM
TO: MAYOR AND COUNCIL mm
FROM: KENNETH ROSLAND, CITY MANAGEpt
SUBJECT: 1983 BUDGET MESSAGE - SPECIAL MEETINGS SCHEDULED FOR:
MONDAY, SEPTEMBER 19 5:00 P.M.
THURSDAY, SEPTEMBER 22 7:00 P.M.
MONDAY, SEPTEMBER 26 7:00 P.M.
DATE: September 16,-1983
INTRODUCTION
Economically, 1983 has shown an upswing mainly on the national level,
although to some degree on the state level with the inflation rate having eased
considerably to the 3 -5% range as measured by the Consumer Price Index with
unemployment both locally and nationally beginning to drop. Given the fact that
there have not been any announced short falls in state revenue projections over the
last few months, coupled with the fact that the State is only three months into the
new biennium, it is expected that a special legislative session to determine any
revenue short falls during the balance of 1983 will not be necessary.
The budget year 1983 has turned out to date to be less problematic than
1982, when because of short falls on the state level, the City needed to cut back
due to reductions both in state aids and homestead credits. While the funding for
1983 looks to be stable, the problem, that we encounter for 1984 and beyond, is the
eventual reduction of our total state aids of about $1,031,000 annually (or 1.5
million total for 1984 and 1985)
The following are proposed principle goals for budget year 1984:
A. Maintaining current service levels pending the completion of
the Council's strategic plan objective #2 next July.
( See Appendix A) .
B. Retention of a high caliber City staff.
C. In line with strategic objective #4, development of an
ongoing capital budgeting for both facilities and equipment.
D. Given the change in a local government aid formula on the
state level, the City will need to shift to a greater reliance
on local revenue sources including property taxes.
The major decision for the Council regarding the 1984 budget on the revenue
side will be whether they desire to make up the loss of $558,000 in state aids
through a corresponding rise in property taxes, or if not, what other revenue
sources should be undertaken or expenditure cuts desired to make up the difference.
This decision should be made in light of the fact that the City will lose its
remaining $473,000 in state aids for budget year 1985.
Monies for salaries have been budgeted in the reserve for contingency fund
pending budget hearings. It is our recommendation that salaries for 1984 be
increased by 5 %. This is in line with increases being discussed in other
municipalities, and given the track record for City increases as evidenced in
Appendix B, it is not out of line with what has been given both the public and
private sector of the last several years, particularly as they relate to the school
district.
FINANCIAL PROVISIONS - 1983
REVENUES
Overall - For 1984, the overall revenues are projected to increase
about 8.8% over the original 1983 budget. (Please refer to Appendix C regarding the
history of selected financial changes).
Real Estate Tax Base - The estimated market value for property at
Edina increased 2.8% for assessed 1983, payable 1984 with an assessed value after
fiscal disparities and tax increment increasing approximately 3 %. The revenue from
property taxes in the budget is proposed to increase by 17% over budget 1983 and
would make up 68.8% of the general /park fund budget which is up from the 64% in the
1983 budget. Almost 60% of the increase in property taxes is due to the reduction
in state aids or is responsible for the 10.3% property tax increase. While the
combination property taxes and state aids are limited for Edina to an overall 7.3%
increase, the proposed budget increases that total tax /state aid combination by only
6.4 %. The City, however, is levying the maximum, subject to the limit by taking less
in special levies. For 1984, the City has the capacity to levy an additional
150,000 for 1984 under the rules. The City mill rate with the proposed budget would
increase about 1.3 mills given this budget and the City would increase from about
10% to about 11% of the property tax dollar raised in the City, depending on amounts
raised by the County and School District.
Intergovernmental Revenue - As mentioned, the reduction in state
aids for 1984 which amounts to a 54.5% decrease, is the first half of the City's
reduction which will be followed in 1985 by the total elimination of the 473,000
remaining. The share of budget for state aids and federal revenue sharings will
decrease from 14.5% in 1983 to 10.7% in 1984. All other intergovernmental revenue
is expected to decrease from 4.1% in 1983 to 3.2% in 1984.
Licenses /Permits /Fees /Charges - As has been traditional, revenues
from these sources have been estimated to be on the conservative side and will make
up approximately 7.7% of the 1984 budget. During 1984, it is expected that in
addition to the exploration of service levels, there may be some discussion of
alternative funding sources apart from the property tax for selected services. This
may result in a significant increase in this as a share of the budget.
Off Sale Liquor Contributions - The-1984 budget projects a
contribution amount identical to the one for 1983. The upturn that has been seen in
the economy during the first half of 1983 has not evidenced itself in retail liquor
sales locally or in wholesale liquor sales on a statewide basis. A continuing _
-2-
effort is being made to even further improve the efficiency of our liquor operation
in light of an increasingly competitive atmosphere of retail liquor operations here
in the State of Minnesota. The $450,000 contribution noted in the budget will make
up about 4.8% of revenues and, as was true in 1983, will make up about 7/10 of a
mill. Actual profits from the liquor store are expected to be in the $350,000
range.
Other Revenues - The balance of revenues, about 4.8 %, will come from
sources including court fines, income on investments and inappropriated surplus. It
is anticipated that income from investments will not be as significant a factor
given the continuing lower interest rates.
EXPENDITURES
Personnel - This item, which makes up 3/4 of the general /park fund budget,
is proposed to have a general 5% salary schedule increase for wages and an
additional $5.00 (costs to go up about $16 -25) for health insurance. At this time
we do not have a good handle on what amount health insurance rates from the county
will be increasing for 1984, but will better know by the end of September.
Capital - 1984 will hopefully be the year that the City is able to develop a
more comprehensive look at this area. The budget for 1984, however, does show an
increase from the 1983 capital expenditure in order to stay abreast of our equipment
replacement program in which funding has not been increased significantly dollarwise
since 1980. The budget for capital is on par with the proposed 1983 budget in this
area.
Commodities - It is hoped that for 1984 the increases in this area, which
represent a relatively small percentage of the overall budget, will slow to a rate
that is at or below the relatively low levels of inflation we have seen during the
last twelve months.
SUMMARY
The budget for 1984 as outlined above on the one hand represents a "steady
as you go" budget in terms of expenditures, in terms of programs with the
anticipation that the major decisions in this area will be made next summer for the
1985 budget. The major decision as mentioned for the 1984 budget will be how to
make up the loss of state aid funds. It is my recommendation that we do such for
1984 by a corresponding increase in property taxes. Any expenditure cuts, apart
from the reduction in overall salary increase would represent cuts in services and
would not have the benefit of both the completion of objective #2 of the strategic
plan or the work of the Council's blue ribbon community on service provisioning.
KER:jkm
Attachment - Strategic Objectives .
Historical Budget Changes
Survey of Salary Schedule Increases
cc: Department Heads
-3-
SHORT TERM OBJECTIVES
1. Review, update and utilize the comprehensive plan in the ongoing
policy decision making process. (12/83)
2. Identify areas of service and establish service levels in selected
areas for use in budget preparation. (7 -1 -84)
3. Develop a long range revenue program for total City operations
to gain greater self - reliance. (7 -1 -84)
4 -. Develop a capital and facilities renewal program. (7 -1 -84)
5. Implement an ongoing system of strategic planning and policy
discussion meetings September through May. (9 -1 -83)
6. Utilize Council Members to represent the City on policy matters
before policy boards of other governmental units and the private
sector. (Implement by 9 -1 -83) Inform community of long range
planning efforts.
HISTORICAL BUDGET CHANGES
Finance
The following outlines how the 1984 budget compares with the previous years.
1980 1981 1982 1983 1984
Overall Budget Increase Over Previous
Budgeted 8.7% 6.2%. 8.5% 6.3% 8.8%
Local CPI 11.0% 15.6% 2.6% 5.5%* 5%
Percentage Funded by Property Tax
Budgeted 59.1% 60.5% 60.8% 64.0% 68.8%
Actual 58.9% 57.2% 60.3% 61.2%
Percentage Increase in Taxes Raised
Budgeted 12.9% 7.8% 9.1% .11.7% 17.0%
Actual 13.3% 8.2% 6.7% 13.8% -
Mill Rate
Actual 9.849 9.214 9.065 9.049 10.35
of Tax Dollar 10.9% 10.9% 10.3% 10.0% 11.3%
(The 1982 actuals reflect the reduction in Homestead Credit paid by the State).
*Projected by year end
The market value of all property in Edina reached $2,305 Billion for 1982
payable 1983, a 2.8% increase over 1983 with assessed value increasing 3% over 1983.
While Edina ranks sixth in population in the State behind Minneapolis, St. Paul,
Duluth, Bloomington.and Rochester, it ranks fourth in assessed value, ahead of
Duluth and Rochester, and has more taxable value than 81 of the State's 87 Counties.
Estimated Market Value
Percentage Change
Assessed Value
Percentage Change
1980 1981 1982 1983 1984
$1.530 Bil $1.797 Bil $2.008 Bil $2.242 Bil $2.305 Bil
17.6% 17.4% 11.7% 11.6% 2.8%
$431.4 Mil $498.8 Mil $558.5 Mil $629.0 Mil $648.0 Mil
4.9% 15.6% 11.9% 12.6% 3%
T0:
FROM:
SUBJECT:
DATE:
M E M O R A N D U M
MAYOR S COUNCIL
KENNETH ROSLAND, CITY MANAGER
SALARY REVIEW
SEPTEMBER 12, 1983
I have had staff take a look at salaries in the Metropolitan area over the
past five years. The following is the result of their research and a
recap of salary increases since 1979.
The private sector figures are based on 96 major companies in the Twin
Cities Metropolitan area. Non - exempt employees are those eligible for
overtime. Exempt employees are those not eligible for overtime, generally
supervisory personnel.
The category marked Metro Agencies include the Metro Waste Control, MTC,•
Airports Commission, etc.
FIVE YEAR SALARY REVIEW
* *Minneapolis, St. Paul, Hennepin and Ramsey Counties
Suburbs over
Non- Exempt
Exempt
Edina
School
School
School
Metro
TC Hennepin
Suburbs
Edina
10,000
Private Sector
Private Sector
Teachers
Clerical
Custodians
Supervisory
Agencies
Ramsey **
Under 10,000
1979
8%
7.3%
6.8%
7.7%
6.1%
7.48
6.7%
6.9%
7.3%
9.0%
7.0%
1980
6%
9.8%
7.5%
11.2%
7.6%
8.3%
8.3%
10.5%
11.8%
9.3%
10.4%
1981
10%
10.8%
9.9%
10.3%
7.9%
7.8%
- 9.1%
9.2%
10.9%
8.7%
11.1%
1982
9.5%
9.7%
9.4%
8.6%
11.7%
11.6%
10.1%
9.6%
8.9%
7.7%
9.3%
1983
6%
6.8%
7.0%
7.0%
10.1%
10.5%
10.98
8%
8.0%
7.1%
8.4%
5 year
39.5%
44.4%
40.6%
44.8%
43.4%
45.6%
45.1%
44.2%
46.9%
41.8%
46.2%
TOTAL
* *Minneapolis, St. Paul, Hennepin and Ramsey Counties
%1
MEMORANDUM
TO: MAYOR AND COUNCIL
FROM: KENNETH ROSLAND, CITY MANAGER
SUBJECT: CITY HEALTH INSURANCE
DATE: MONDAY, SEPTEMBER 19, 1983
Last fall the City hired Towers, Perrin and Forester to do.consulti.ng work on the
City's health insurance plan. The summarized results from the three-part report sub-
mitted are as follows:
- Since under 10 percent of Edina's employees are on the insured plan, the City
does not currently have enough insured experience (due to limited numbers) to
offer a self insured plan.
- The City could possibly improve its overall costs by getting away from the County
and offering only two plans - one insured plan and one closed panel HMO. (For 1983
the County bid the municipalities separately from the County. While the
Municipality prices were slightly lower, they were not appreciably so.)
- In order to attract people to the insured plan, the City would establish an ex-
pense account that single persons on the insured plan could use for a selected
range of items.
- That the City establish the availability of a pre -tax expense account for all
employees to use "pre-tax" dollars for payment of selected expenses which is
permitted under current IRS rules. (Congress is looking at present to at.
least make such subject to Social Security.)
- As for long term disability, it is recommended that a higher benefit rate be
bid competitively.
- As an alternative to one insured and one HMO, the City could offer on its own
one or at most two HMO's. The advantage of offering one insured and one HMO
is that the employees can select their own physician which is not the case
particularly if both HMO's are closed panel HMO's. (Medcenter, Nicollet - Eitel,
Group Health).
Mayor and Council
City Health Insurance
Page 2
- As for life insurance, the consultant recommends that the current $5,000
Policy which has been in place since at least 1970 be increased. (An increase
to $7,500 would cost the City about $700 /year.)
While the consultant did suggest institution of a charge to single HMO participants,
it is felt that starting such a charge would effectively create considerable
animosity to change as the City currently pays from $14.00 to $60.00 a month more
towards a person on family coverage than a person on single coverage.
The staff is pursuing the following scenario:
- Conceptual approval from Council at this time.
- Soliciation of initial participation from employees. ( The City needs to know
approximate number of persons in the insured plan in order to bid.)
- Prepare bid specifications.
- Hold open enrollment.
- Award bids.
- Initiate switch.
Tom Kuhlman, the consultant, can be scheduled to answer any questions
you may have.-
Attached is a sample memorandum outlining the Various aspects of the change
over plan.- We would like to have -you review it for your comments.
Given the fact that the pre -tax portion of the plan is key in making the shift
from the County, Staff has been taking a wait and see attitude up to this point re-
garding the pre =tax accounts to see if the IRS or Congress intend any significant
alterations which could radically effect this entire benefits program. Your thoughts
on this matter are appreciated.
TO: ALL EMPLOYEES
FROM: KENNETH ROSLAND, CITY MANAGER
SUBJECT: HEALTH INSURANCE
DATE:
As you are probably aware, the City has been exploring various avenues to reduce
or at least slow the overall costs of health insurance to both the employees and the
City. This past fall the City hired a consultant to look at the problem and identify
the avenues the City could explore to accomplish this goal. The areas available for
savings included the following and still allow some choice of physicians if desired:
- Be strictly rated on City experience and not on a larger group (can be both
positive and negative). (It is assumed that our experience is better than
the larger County groups.)
- Reduce the number of carriers available.
- Make the employee more integral to the decision of utilization of services
by having a monetary stake in the decisions of when and when not to use.
Taking this tact the consultant proposed the City look at a package with these
features coupled with some incentives to take advantage of changes in the federal tax
laws regarding deductibility of certain expenses prior to determination of taxable
income subject to withholding.
The package proposed by the consultant would have the City get away from the
County's plans and go by itself. One its own, the City would offer one health mainten-
ance organization (HMO) and one modified insured plan (MIP). In the following information
you will find approximate rates together with information as to generally what would be
covered under each approach.
After you have had an opportunity to review the rates and summary of coverage,
please indicate your choice as to:
a) Whether you desire to get away from the setup with the County, and
b) Which you would choose if the City did get away, even if you do not desire
to change.
The results of this survey will be informational only. This survey is not to be
construed as an employee vote in which the majority rules.
-1-
Memorandum
'Page 2
Once the results of the survey are compiled, the City will make a determination
as to whether it should go ahead or not. Should it decide to go ahead, it will then seek
bids for the insured portion of the plan and once received will hold an open enrollment
period to make the switch.
At this point, the City has not committed to make an alteration and will not be
committed until the Council actually awards an insured plan to a carrier.
Should you have questions regarding the process or the plan, feel free to contact
Ceil Smith, Lisa Lammer or Mark Bernhardson.
City Manager
0
INSURED PLAN
Deductible - $250 /year per person (_including employee). (Present Blue Cross Plan
has no deductible for the employee). .
- maximum of $750 for a family of three or more.
After the initial deductible, the insurance pays 80% of covered costs and the employee
would pay 20% of the costs of the initial to a total of $2500 per year. This would
leave the employee on single coverage with a maximum annual exposure of $700. $250
deductible, plus 20% of the remaining $2250 = $450; $250 + $450 = $700) The maximum
annual exposure for the family coverage of two individuals would be $1400 and for three
and more it would be $2100, however, it is projected that the average liability claims
paid by the employee will be only $144 /year ($12 mo) for single and $240 /year ($35 /mo)
family. The principle features of this plan would be to allow people freedom to select
their physican and have some control'in their medical expenditures and costs.
For those on single.coverage they would receive a .$15 /month expense account amount
which could be used to pay for any of the followinq expenses:
- Health deductible or co -pay
- Medical costs
- Physical exams
- Life insurance
- Dental care
- IRS deferred compensation
-/ Cancer insurance
- - (Accidental death and dismemberment)
These would be reimbursed on a quarterly basis.
For those on,family coverage, the advantage would be in addition to having an
expense account into which they can defer pre -tax monies, would be substantially decreased
premiums from the current rates for Physicans. (Decrease in premium would be $45 /Month
or $540 /year).
General costs that would be included under insured coverage, after deductible and
co -pay are satisfied:
Hospital Coverage - Hospital room and board excluding a private room charge in
excess of the hospital's average semi - private room charge, unless a private room
is prescribed as medically necessary by the attending physician. All other
services and supplies prescribed for medical care which are furnished by a hospital.
Insured Plan
Page 2
Non -Acute Care Coverage - Up to 120 days of room and board coverage in an approved
semi - private accommodation (unless a private room is prescribed as medically
necessary). Coverage for all services and supplies, provided that 24 hour a day
nursing care.is necessary for treatment. Non -acute care must begin within 14 days
after confinement in a hospital for at least three days for the same or a related
illness.
Home Health Care - Coverage of up to 180 visits per year by an approved Home Health
Agency team. The team may include such members as a registered nurse or licensed
practical nurse, a medical social worker, physical therapist, occupational therapist
speech therapist, medical technologist, nutritionist or a home health aide.
Physicians's Services - Coverage for professional diagnosis or treatment of an
illness by a physician, including services of a physical therapist, speech therapist
or inhalation therapist; X -ray and laboratory services; X -ray, telecobalt radioactiv
isotope and electroshock therapy; corrections of cosmetic defects resulting from
injuries occurring while coverage is in effect; human organ transplants and more.
Costs not covered under the plan include:
- Injury or illness covered by Workmen's Compensation or Employer's Liability.
- Injury or illness resulting from an act of war.
- Treatment received primarily for cosmetic purposes.
- Dental or peridontal care, except as specified or provided for in the contract.
- Eye refractions, eye glasses, contact lenses, hearing aids or their fitting.
- Domiciliary care, custodial care, rest cures, routine physical examinations,
pregnancy tests.
- Services and supplies which are not furnished by an approved facility.
- That portion of any charge for services or supplies which exceeds the Usual
and Customary charge of the locality where the services were provided.
- Charge for private room in excess of that for the average semi - private.
- Charge for services or supplies not medically necessary.
The advantage of the insured plan over the HMO is that the individual may select
their own physician and can benefit from participating in the decisions regarding their
own care.
Insured Rates/Monthly:
Rate City Pays Employee Pays
Single $47 $62 -0-
Family $135 $99'.40 $36.60
Emplo,vee Expense
Account Received
From City
,15
$0
Current Program
GENERAL
All quotations of City's share are after the cost of term insurance and long term
disability (LTD) has been subtracted. ($10.60 for Life Insurance and LTD)
(The listed plans do not include LTD and Life Insurance which equal $10.60.)
HMO's
Rate
City Pays
Employee Pays
Physicians
Single
85.24
85.24
-0-
Family
181.77
99.40
82.37
MedCenter
Single
56.50
56.50
-0-
Family
152.80
99.40
53.40
Nicollet /Eitel
Single
64.45
64.45
-0-
Family
151.75
99.40
52.35
Group Health
Single
54.52
54.52
-0-
Family
159.04
99.40
59.64
Insured Plan
Blue Cross /Blue Shield
Single
80.58
80.58
-0-
Family
145.63
99.40
46.23
While there is a greater exposure under the insured plan, the person on single
coverage will receive $180 expense account to,use for a wide range of expenses and
if their expenditures remain under that $180 figure they are money ahead.
Additionally, they can place some of their own money into such an account and by
avoiding the taxes, spend only a portion of a dollar for each medical expense
dollar paid.
For those on family coverage, the monthly savings is up to $46 /month ($550 /year)
if they switch from Physicians. By deferring to the expense account of additional
amounts of their income to cover the premium they would pay, they can save even more
over the current set -up.
1 VY. rV 11 a4 ,•
`Cafeteria' Benefits Plans Let Employees Fill
Their Plates, Then Pay With Tax -Free Dollars
By M1e110:1. \ \4LhnnL%
ltnfr R.'I'll-r n, T10 N.� .,Ye•rr J1 ��,�.
Scott Winn. a vice president at Comenca
Inc.. figures he x'111 save about S2.iw this
year on child care, thanks to a remarkable
change in his company s employ" benefit
program.
"It's fantastic." says the *year -old de
cooed lather of two. "I can't believe the
IRS is letting us gel away with d."
In fact. officials at the Internal Revenue
Service may have their doubts. at least
about some of the program's features. Still.
Comenca, a Uetmit bank holding company.
Is among an Increasing number of compa-
nies offering what are called "cafeteria"
fringe- benefits plans.
The plans let employees select from a
menu of benefit options rather than being
limited to what the company serves up. And
those menus are likely to include a number
Of items rarely seen In regular benefit
plans.
Until about a year ago, only a handful of
companies had these Innovative plans. Be-
hind the Increase now are some new tax -law
wrinkles and a desire by employers to save
money. Some of the new programs hold the
promise of controlling the steeply rising cost
of medical insurance.
Up to Date
The plans are a far cry from the rigid
benefit structures typical of most American
businesses. They are designed to accommo-
date the varied needs of todav's work force,
which includes a large number of single par.
ents and two-career families with young
children..
"Today's benefit plans were designed for
the family of the '50s, where dad worked
and mom stayed at home with the kids."
says Marsha McDonald, a benefits manager
at Public Service Co. of New Mexico.
While only about a dozen companies to
date have set up the flexible benefit pro-
grams. "we're perched on the edge of an ex-
plosion of these plans," says Michael
Treacy, a benefits consWtant with Wyatt Co.
in Washington. D.C.
The most intriguing aspect of the plans is
that they enable people like Mr. Winn to re-
duce child -care costs and other personal ex-
penses by paying for them with tax -free dol-
lars. The company simply takes money
from Mr. W'inn's pretax wages and puts It In
a "reimbursement account." The funds
never show up on his W -2 form. Yet he can
withdraw the money, tax -free, to pay for his
live -in housekeeper. Or he can use it to pay
for other expenses not covered by tradi-
Donal benefit plans. such as legal advice,
the care of elderly parents, orthodontic
work, even home and auto insurance.
Retirement Account, Too
And If Mr. Winn isn't interested In com-
prehensive medical or life Insurance, he can
trade In these high -cost benefits. In ex.
change. the company will give him cash.
which would be taxed as regular income, or
credits in a reimbursement account. Mr.
Winn even has the option of putting the
money Into a lax- deferred retirement ac-
count. whicrf is invested for him.
This kind of flexibility enables people to
tailor their benefits to their individual
needs. "Why does a single worker need a
rich life- insurance plan asks lance Wy-
att. another 1\yatt Co. benefits consultant.
"Ail he winds up with when he dies is a rich
cat."
Both the retirement and the reimburse-
ment accounts grew out of amendments to
the federal tax code in 1978. The IRS is ex.
petted to publish final rules this summer
regulating the use of the retirement ac
counts, which are called 4011k1 plans after
the section of the law outlining them.
It 1s vie reimbursement accounts. which
come under the law's section 125, that are
rats no some eyebrows at the IRS. Because
the tax implications of the 125 plan are com-
plex and uncertain. the IRS has been slow to
grapple with th ^:n, benenls experts say. The
agency hasn't started work on preliminary'
rules for section 12a and isn't expected to re-
lease final ones for some time.
Genesis of Law
As a result, a number of companies are
taking a wait and -see attitude. The major
reason for hesitanry is the potential tax lia-
bility either for the firm or for employees
should 1. -.._ . .. .- =tare
ment accounts are little more than "tax
dodges;' as one consultant calls them.
The taxcode amendment initially was
developed to encourage cafeteria plans that
merely let workers swatch around lher ben'
efit options. In some of these plans. workers
were encouraged to enroll In less-expensive
plans with the promise of receiving the sav-
ings In cash. But because of the way the law
was worded. the monev was taxed.
The revised law removed that penalty,
says Slary Hevener, an attorney in the Trea-
sury Department's Office of Tax Legislative
Counsel But she says manv cafeteria bete
fit plans go loo tar. 'It's outrageous to think
Z
BuYl 1, g & Borrowving
Here are some recent 1-9ures on hnan-
c1dl trends ahKI,,9 consumers and inalvld-
ual rave ImS.
SOW JONFS INDUSTRIALS —
Closing: 1232.59, Year earlier: 889.20.
— MOODYS CORPORATE YIELDS—
Average for Aa -ralea bonds:
11.81 %. Year earlier 14.86 %.
-- FEDERAL HOME LOAN eANK-
Average effective conventional mortgage
rate on new homes
13.13 %. Year earlier: 17.39%.
Average once on new homes:
S87.600. Yeer earlier: 595.700.
—BANK MONEY MARKET DEPOSITS—
Rates for accounts with minimum bal.
ance of 52.500:
At one maim commercial bank: 8.5 %.
At one maim savings 6 loan association:
8.25 %.
the law was designed to allow workers to
shelter large sums of their income." she
says, noting that many plans are being set
up in just that way.
Yet uncertainty over the IRS regulations
hasn't stopped a number of companies from
establishing flexible benefits programs. "If
you are a conservative company, 1 can un-
derstand waiting until the IRS acts," says
Kevin O'Brien, a lawyer with the Employers
Council on Flexible Compensation. "But
there certainly are ways of setting up 125
plans that look safer than others. And If you
were to wait until the IRS miles. well, it
could be a very long time."
Comerica is one company that decided
not to wait. It set up its flexible benefit prce
gram late last year as part of an effort to
spruce up its image. Comenca provides em-
ployees with credits equivalent to dollar val-
ues placed on each benefit option already
provided. Using these credits, workers can
buy or sell benefits as they choose. The only
requirement is that they retain minimum
health and life insurance.
In this way, workers can trade up, using
available credits or pretax wages, to buy
more expensive options, such as a more
comprehensive medical coverage than the
company previously offered or a richer life -
Insurance package. Or they can save credits
by selecting less expensive plans. The accu-
mulated credits can buy other options or can
be converted into cash for use in the 4011k1
re tirement account or reimbursement ai
count.
I Comerica's plan also lets employees buy
I life insurance for dependents, increase or
decrease disability coverage and even buy
additional paid vacation days or convert va-
cation days into credits or cash. "We were
surprised to see how many people sold a
week of vacation in order to buv other bene-
fits." says Larry Emmons of Comerica's
1 benefits office.
Comenca says the program has been re-
I ceived enthusiastically. Nearly 94"t, of em-
ployees elected to change some aspect of
their benefits, and about 404 chose to make
use of the healthcare reimbursement ac.
count.
This year. for example. Mr. Winn will
have the company subtract 5230 from his
gross pay every two weeks. for a total of S5:
9S0. During the year he will submit bills
from his housekeeper and be paid out of the
company's child -care reimbursement ac.
count. Assuming a 254 tax rate. Mr. Winn
last year needed to make more than 58.000
to come up with the 56.000 needed to pay for
his children's care. This year he will need to
1 make only $6.000.
But benefit cnnsullants say an employee
shouldn't be bowled over by claims of lax
savings and newfound flexibility. Many com-
panies jumping Into the new programs hope
to reduce their benefit costa. Their motive
may be financial rather than altruistic. so
I an employee should take a hard look at the
i figures.
Robert Mathieu. an assistant vice presi-
deal at Mellon Bank in Pittsburgh. says that
a cafeteria plan the bank instituted In Janu-
I ary allowed it to "upgrade our benefits, give
the program high visibility, without provid.
I ing any new benefits or increasing the real
I cost of the plan." The idea, he says, is to
I keep the bank competitive with other em.
ployers.
One whose employer has decided to offer
3 cafeteria plan Is :!n! to he in for =_ selling
i lob. The combination of options and tax in-
Panel Backs Ruckelshaus;
Full Senate Nod Seen Soon
era w,..• s.....T J.n ...�. .,mu u. u�.ne
iv, S SGTi I\ –The Senate 'nv:
ronment Committee unammously dp-
proved the nomination of Willuun Ruck -
elshaus as administrator of [tie Enciion'
mental Protection Agency.
The 160 vote, which had been ex.
peeled. means that Mr. Rurkelshaus Is
almost certain to be confirmed by the
full Senate In the next few days.
Meanwhile, Mr. Ruckelshaus gave
lawmakers a few more mdu'al of
the rv111rles and persnnn"i I ;-- Intends I-,
hrlre In I:e• ;111'n1', H•' 1 ..•,1 1 :11'i ;" "1 . 1:
plicatiuns can be confusing, 0 It a ry mp, m"
decides to take the plunge a no dnuhl will
Iry to make sure employees understand the
program.
'You First'
Wyatt's Mr. Treacv says his rompanv
spends nearly as much time mapping Inner
nal pubhaty campaigns for Its clients as It
does restructuring the clients benefits. To
promote a new flexible program at 1linne'
apolls's First Bank Systems. W)'al1 pro-
duced a slick color video show that even in
eluded a bounev jingle: "You first What
benefits you/Benefits us You first.'"
But not all companies are enamored of
The caretena approach. One reason is that
start-up costs can run from S.W,000 to $1 5
million. Most of that is for a complicated
computer program to keep track of all the
trading of benefit options.
And, of course. there s the tax issue. Still.
companies that have set up flexible benefit
programs say they believe they are acting
within the spirit of the law and don't expect
any problems.
"Anytime you do anything with tax impli-
cations you run the risk of the law chang-
ing." says Mellon Bank's Mr. Mathieu. "If
you waited for final 'reps' to come out on
every law change, you'd find yourself never
doing anything."
111 t. 1.1 Illti l II III \ .hill tl lll:l
IJ 1'x(1 1't. A( II. ('.till - -J"( Allierlr.l Air
Imes s :uA a pLlns In I"Ve, thtnts IJ OIn lime
Fie.0 1, to iI I outs Ai nr 21. l :urreolly'. file
airline then from Lune Beech In llallas and
In l'mr.gn
Th--;�,n,pmv also rep,rtnd That its pals
singer rallir rose ht', In April m \6.-1 11
h.1, ret'enue passenger nines. In the first
'our mnmrm eI the vrar. is Irathr ruse 11'
r In7.s mahnn II IIIes. A re\'elllle pausenger
Ingle Is one p:p'mg passenger flown ono-
1.111 ..
.let .Amenca said its lead factor m- I
rmased to h%. ;i , In April Irmn ht.h'. a year I
carper and ruse to h0.6'- In the first four I
months from ».I'. a year earlier. The load I
Inco or reilects the percentage of available I
seals filled.
5 KEYS TO OFFICE LOCATION
Why... What... How
Where... Whether
Send rorcomollmeeforynedorrion'
Office Location
Location - Related Strategies
ftmmi.01Pm0CRG090 Iteoea1O12134 1940
NJ 120'13764100 • NY r2121752-6040
Than wasn i sc a few'Ya w
An owner was duce. wlln t.r
the other
But Several 0eve:oorn "
ce3noeo all that Tre use :
oUlers to ana:vze foe e:vc c'
a'Iernallve maler:a's d ^C T
of conslrUCllon Ire r,7e�;_"
roore- enerav- elnc:enI ma:P'
the Orow.nc sopnisilcai'on r
oudcers now mane boln –_
0
a
MEDICAL PLAN ALTERNATIVES
FOR THE CITY
OF
EDINA, MINNESOTA
October 4, 1982
nw&JU TOWERS, PERRIN, FORSTER & CROSBY
TABLE OF CONTENTS
Page
BACKGROUND
1
SELF INSURANCE 2
KEEP INSURANCE WITH THE COUNTY 3
OFFER ONLY HMO COVERAGE 4
OFFER GROUP PLAN AND ONE HMO 7
OFFER BLUE CROSS /BLUE SHIELD GROUP PLAN AND HMO g
TMC TOWERS, PERRIN, FORSTER & CROSBY
ww
BACKGROUND
The City currently offers employees medical coverage through four HMO's (Group
Health, Med Center, Nicollet /Eitel and Physician's Health Plan) and high and low
option Blue Cross /Blue Shield Plans sponsored by the County. Most employees are
currently enrolled in Physicians Health Plan (101), followed by-Group Health
(48), Med Center (30), Blue Cross /Blue Shield high option (14), Blue Cross /Blue
Shield low option (4) and Nicollet /Eitel (3).
The low number of employees enrolled in the Blue Cross /Blue Shield Plans has
made it appropriate to stay with the County for these coverages. Most insurers
would not provide coverage for this small of a group. Many insurers will also
not provide coverage for public groups because of the frequency of the bid soli-
citation process.
The City is interested in investigating whether it is feasible to obtain
coverage outside the County sponsored programs including consideration of
whether self insurance is appropriate.
The following sections of this report respond to these specific points and
outline four alternatives that we feel are appropriate for the City to consider.
1
TAU TOWERS, PERRIN, FORSTER & CROSBY
SELF INSURANCE
9
Many organizations have found self insurance as an attractive means to reduce
the cost of their medical plans. The actual cost savings in a self insured
arrangement come from the following two sources:
- lower retention expenses through
• low premium taxes in a modified self insured approach or no premium
taxes in a full self insured approach
• possibly no commissions
• no risk charges in a full self insured approach;
possible cash flow savings since the dollars to pay claims expenses may be
held by the City until needed to pay claims and thus, may earn a higher rate
of return than the insurance company is crediting.
However, if claims experience is poor, the City could pay more in a particular
year than the monthly premium that would be charged by the insurance company.
Since the City needs to know the exact amount (or reasonably close to the exact
amount) of monthly premium for budgeting purposes and to determine the
employee's share of the total premium, we do not recommend that self insurance
be used at this time.
V TOWERS, PERRIN, FORSTER & CROSBY
KEEP INSURANCE WITH THE COUNTY
We are presently analyzing whether the rates being charged by the County are in
line with the claims experience of the City or whether the City is subsidizing .
the other participants in the County pool. This analysis will center on the
Blue Cross /Blue Shield coverage, Physician's Health Plan and Western Life Group
Insurance Plan, since these are the only plans that have each year's premiums
based on the experience of the County pool.
The remaining HMO's (Group Health, Med Center and Nicollet /Eitel) are for the
most part, community rated. Coverage in these HMO's could be obtained outside
the County sponsored program at approximately the same.premium level that is
currently being charged the City.
If the rates charged by the County sponsored program are favorable to the City,
the City may then decide to remain in the County sponsored program. This alter-
native may also be used if none of the other alternatives are attractive to the
City.
3
TFU TOWERS, PERRIN, FORSTER & CROSBY
OFFER ONLY HMO COVERAGE
Since 90% of City employees are currently enrolled in HMO's, the City could
offer only HMO coverage. The number and choice of HMO's to be offered should be
considered on the basis of cost, coverage, location and employee satisfaction.
There are two HMO's in the Twin Cities that allow employees to use any physi-
cian, hospital or pharmacy that participate in the program. These are
Physician's Health Plan and HMO Minnesota. The large selection of hospitals and
physicians that may be chosen by the participant makes these two HMO's very
Popular. Over half of the City employees have chosen Physician's Health Plan
for medical coverage.
These two HMO's are experience rated based on the actual claims experience of
the organization. The costs of these HMO's is typically higher than the costs
of the other HMO's, which are community,rated. For example, in 1982 Physician's
Health Plan had premiums that were 25% to 53% higher than the other HMO's for
single coverage and 20% to 30% higher for family coverage.
The other HMO's in the Twin Cities area are organized on a group practice con-
cept. Each of these HMO's has specific clinics or hospitals that participants
may use. Thus, locations of these clinics and hospitals should be a major fac-
tor in selecting these HMO's. The participants may choose the physicians from
those practicing in the particular clinics. These HMO's are community rated;
premiums are based on the experience of all the members in the'Twin Cities area.
Only Share and Coordinated Health Plan are federally qualified HMO's. The
Federal HMO Act states a federally qualified HMO may mandate that you offer
2T
TJU TOWERS, PERRIN, FORSTER & CROSBY
their coverage to your employees. However, Share is the only federally
qualified HMO that has clinics /hospitals convenient to City employees.
The Minnesota State law requires that organizations of 100 or more employees
offer at least one HMO to participants.
The location of the rou
g p practice clinics and participating hospitals are sum-
marized below.
Group Health
85th Nicollet
Bloomington
Highways 12 & 100
St. Louis Park
Nicollet Blvd.
Burnsville
Lancaster Lane
Plymouth
Lee Avenue
Brooklyn Center
Group Health
Fairview Hospital
Minneapolis
Nearest Clinics
Med Center Nicollet / Eitel
St. Louis Park Nicollet Clinic
Medical Center - 2001 Blaisdell
- West 39th St. Minneapolis
St. Louis Park
- Highway 12 by
Ridgedale
Minnetonka
- Highway 7
Minnetonka
- 9th Ave. So.
Hopkins
- West Old
Shakopee Rd.
- Metropolitan
Office Bldg.
Minneapolis
- Nicollet Blvd.
Burnsville
- East Lake
Wayzata
- 79th Xerxes
Bloomington
Nearest Hospitals
Med Center Nicollet / Eitel
Methodist Fairview Southdale
Eitel
Minneapolis
5
Children's Hospital
Minneapolis
Ridges Health Center
Burnsville
Share
Main Clinic
79th Cedar
Bloomington
Family Physician's
P.A.
- Southdale Medical
Building
Edina
- Nicollet Blvd.
Burnsville
- W. 78th St.
Eden Prairie
Brooklyn Park
Medical Center
Share
Fairview Southdale
Unity Hospital
Fridley
TT&C TOWERS, PERRIN, FORSTER & CROSBY
Med Center Plan has facilities closest to Edina, St. Louis Park, Minnetonka and
Hopkins. All of-the HMO's have locations convenient to Bloomington.
Monthly premium rates for 1983 should be close to the following levels for the
group practice HMO's:
Coverages under all HMO's are similar. Minor variations exist for nervous and
mental disorders, alcoholism, chemical dependency and drug addiction, out-
patient hospital coverages, prescription drugs, eye examinations and
prescriptions.
Greater variation exists for coverage outside the Twin Cities area and coverage
for pre- existing conditions.
In offering only HMO coverages, the City should be aware of employee reaction if
the choice of HMO's is altered from those currently offered. In particular, if
Physician's Health.Plan, the highest cost and most used HMO, is eliminated as a
choice, employees may view this negatively. The City should be prepared to
handle this type of reaction through effective communication of the medical plan
choices.
ITT&JU TOWERS, PERRIN, FORSTER & CROSBY
Single
Family
Group Health
$60
$150
Med Center
60
.165
Nicollet /Eitel
63
160
Share
65
155
Coverages under all HMO's are similar. Minor variations exist for nervous and
mental disorders, alcoholism, chemical dependency and drug addiction, out-
patient hospital coverages, prescription drugs, eye examinations and
prescriptions.
Greater variation exists for coverage outside the Twin Cities area and coverage
for pre- existing conditions.
In offering only HMO coverages, the City should be aware of employee reaction if
the choice of HMO's is altered from those currently offered. In particular, if
Physician's Health.Plan, the highest cost and most used HMO, is eliminated as a
choice, employees may view this negatively. The City should be prepared to
handle this type of reaction through effective communication of the medical plan
choices.
ITT&JU TOWERS, PERRIN, FORSTER & CROSBY
OFFER GROUP PLAN AND ONE HMO
The third alternative is to offer a group plan in combination with one HMO. At
least 75 employees should be enrolled in the group plan to make this alternative
feasible. If less than 75 employees are enrolled, there will be very few, if
any, insurance companies who would be interested in writing the coverage on a
public group.
The HMO should probably be one of the group practice plans that the City already
offers. The City should give prime consideration to Group Health Plan or Med
Center Plan due to their locations and the fact that these two HMO's have
approximately 40% of the employees enrolled. Share Plan may also be considered
as an alternative.
Careful consideration should also be given to the design of the group plan. The
plan should be attractive to employees in order to encourage a high level of
participation. One alternative would be to offer a low option plan similar to
the current low option Blue Cross /Blue Shield Plan. Another alternative would
be to offer a high option plan similar to the current high option Blue Cross/
e
Blue Shield Plan. The City could also offer a group plan that provides coverage
levels at an intermediate level, between the'high and low option plans.
The danger of this approach is that the cost of the HMO may ultimately fall
below the cost of the group plan, if the HMO has the better risks (younger
employees and younger families). Enrollment in the group plan'may fall to a
very low level so that it is not feasible to continue the group .plan. The City
could then decide to offer only HMO coverage or to restructure the coverage
levels in the group plan.
7
TOWERS, PERRIN, FORSTER & CROSBY
In order to obtain a group insurance bid, the number of employees participating
in the group plan will need to be known. Some type of preliminary open
enrollment will have to be offered in order to obtain the number of employees
in the group plan.
Further discussions should commence regarding the coverage-level to be offered
in the group plan, if this alternative is to be studied further.
OFFER BLUE CROSS /BLUE SHIELD GROUP PLAN AND HMO
Blue Cross /Blue Shield may be willing to offer a group plan, regardless of the
number of employees enrolled, if the HMO offered employees is HMO Minnesota (the
Blue Cross /Blue Shield Plan). HMO Minnesota premium rates will probably be com-
parable to those from Physician's Health Plan since both are experience rated by
individual plan and both allow free choice of participating physicians/
hospitals /pharmacies.
The group plan rates may be more or less favorable than the rates from the
County. Further discussions with Blue Cross /Blue Shield will indicate whether
this alternative is feasible.
0
i W TOWERS, PERRIN, FORSTER & CROSBY
C
Benefit Plan Design
for
The City of Edina
Report II
October 21, 1982
T` i1C" TOWERS, PERRIN, FORSTER & CROSBY
C
The purpose of this report is to provide further discussion on the
Medical Plan alternatives from our October 4, 1982 report and
meeting and to present final comments on the design of the City's
benefit programs.
The alternatives that were initially attractive to the City include
offering only HMO coverage and offer a group plan in combination
with one HMO. Offering only HMO coverage is an alternative that
will be available even if the second alternative presented above
(group coverage and one HMO) does not prove to be a practical alter-
native. The selection of the HMO's should be based on the factors
given in our October 4, 1982 report, including cost, benefit coverage,
location and employee satisfaction.
Recent updates from the HMOs have indicated that the group practice
plans, Share and MedCenter intend to experience rate premiums in
the future based on the experiece of the covered groups. Group
Health and Nicollet /Eitel plans have no plans to experience rate.
Structuring a group plan with one HMO option has the following
potential problems:
- 900 of the employees are currently enrolled in HMO's; if
this level of participation does not drop to at least
70%, there will be few, if any, insurance carriers willing
to underwrite the coverage.
-1-
- - V TOWERS, PERRIN, FORSTER & CROSBY
C
Due to Minnesota "bid law" many carriers will not provide
coverage to the public market.
- If older employees elect the group plan and younger
employees elect HMO coverage, the ultimate group plan
premiums may become higher than the HMO rates (as exists
at Hennepin County).
To- encourage enrollment in the group plan, the City should consider
restructuring the group plan as a low or lower option plan that has
a lower monthly premium and hence, lower required employee contribu-
tions. This plan may serve initially as a core plan that the City
offers on a non - contributory basis (or with very low employee contri-
butions). The cost of HMO coverage in excess of the cost of the
core plan (or the premium level paid by the City) would be paid by
the employee.
-2-
1TV TOWERS, PERRIN, FORSTER & CROSBY
Suggested medical plan design features of the low option plan include:
A B, C
Annual
Deductible
Coinsurance
Percentage
Paid by Plan
Maximum out -of- pocket
expenses paid by parti-
cipant before plan pays
1000
0
m
nom.
a
z
m
O
A)
FH
A3
R°
O
a
O
$150 or $200 per per-
son (maximum of 3
per family)
:m
$1,500
First $150-per hos-
pital confinement or
first day room and
board per hospital
confinement; $150
per person for other
expenses (maximum of
3 per family)
80%
$250 per person
(maximum of 3 per
family)
80%
$1,500 $1,500
plus a medical care ex-
pense account of $150
per employee plus $300
per family to be used
for non- covered medical,
dental, vision and
hearing claims
A
C
All three plans have higher deductibles than the current "high
option" Blue Cross /Blue Shield plan, but lower out -of- pocket
maximum benefits ($1,500 vs. $2,000). Plan B has a deductible
that applies per hospital confinement, which is intended to
i) discourage hospital utilization if it isn't necessary (i.e.,
if surgery can be performed on an outpatient basis) and ii)
shift some cost sharing to participants.
Plan C has the highest deductible ($250), but the plan also in-
cludes a medical care-expense account of $150 per employee and
$300 per family. The expense account could be used for
non - covered medical expenses (i.e., up to the deductible), dental
expenses and vision and hearing expenses. This plan could be
implemented in lieu of adding a separate dental plan. Due to the
expense account feature, this plan will have a higher cost than
P1ans.A or B.
Withdrawals from the medical expense account could be made at the
end of each calendar quarter or at any time a participant is
hospitalized. Employees would submit bills, receipts, etc., to
demonstrate the validity of the expense and the fact that it was
not reimbursed by the medical plan. Amounts remaining at the end
of the year would be carried over to the following year and paid
out in cash at termination of employment.
The Minnesota "bid law" requires that the aggregate value of bene-
fits before a contract change cannot be less than the aggregate
value of benefits after the contract change without obtaining
employees' approval or approval of the bargaining unit. Therefore,
prior to a change to a low option plan, the city should poll employees
for approval, in order to comply with the "bid law ".
0
-4-
Tai TOWERS, PERRIN, FORSTER & CROSBY.
C
c
In communicating any of the proposed plan to employees, it should
be emphasized that:
- Costs and utilization are up sharply,
- The City's philosophy is that employees should share
responsibility for medical care,
- The progran is being re- designed to provide incentive to
use coverage wisely and increase employees' awareness of
where healthcare dollars are being spent,
- If Plan C is utilized, the benefit package overall is being
improved by the addition of the medical expense account and
removal of contributions or substantial lowering of contri-
butions.
We recommend that the City not offer a "high option" plan in the
group plan /one HMO alternative. There will be fewer insurance car-
riers willing to underwrite the high option plan and the cost will
probably be higher than the current HMO cost.
Regardless of whether the City initially elects to pursue the high
or low option approach, we recommend that the City poll employees
regarding whether they would elect the HMO or group plan. This poll
will serve two main purposes:
- The City will know whether the group plan is feasible if
at least 300 of employees elect the plan.
- The exact number of employees /dependents electing the group
plan will enable us to obtain exact premium quotes from the
insurance carriers.
-5-
17V TOWERS, PERRIN, FORSTER & CROSBY
If insufficient number of employees select the group plan in the
poll, the City can abandon the single group plan /HMO approach and
offer only HMO choices to employees.,
Recently we polled several insurance carriers, regarding their
interest in bidding on a group plan for the City. The following
carriers indicated a willingness to bid:
- Blue Cross /Blue Shield
- Prudential
- Travelers
- Occidental Life
- Metropolitan
- United Benefit,(if exact number enrolling are known)
Other Group Benefits
The current non - contributory life insurance coverage of $5,000 is
quite low. A more typical level of non - contributory coverage is
one to two times base annual salary. Since life insruance coverage
has a fairly low cost, the City should consider increasing the
coverage levels.
TMIC TOWERS, PERRIN, FORSTER & CROSBY
c
A
We estimate that the City should be able to obtain a life rate of
32� to 35� per month per $1,000 of coverage (at least 10� per
$1,000 above the County rate of 22G). We have estimated the
monthly cost of the current and proposed benefit levels in
the following table for various pay levels.
Current
Coverage ($5,000) One times Pay Two Times Pay
$10,000
$1.60 - $1.80 $ 3.20 -
$ 3.60
$ 6.40
- $ 7.20
$15,000
of 4.80 -
5.25
9.60
- 10.50
$20,000
6.40 -
7.00
12.80
- 14.00
$25,000
8.00 -
9.00
16.00
- 18.00
$30,000
9.60 -
10.50
19.20
- 21.00
$40,000
12.80 -
14.00
25.60
- 28.00
The maximum monthly benefit level of $1,200 (or $14,400 annually)
in the long term disability (LTD) plan is low. The employee is
provided with 60% salary up to annual salary levels of $24,000
under this formula. The current monthly cost of 91G per $100
of covered payroll is high. The City should investigate increasing
the maximum monthly benefit level to $2,000 or $2,500 (thereby
covering annual pay levels up to $40,000 or $50,000). The City
should also consider obtaining competitive bids on this coverage.
Although the City does not currently have a dental plan, the City
may want to consider offering a plan in the future. Dental plans
are extremely popular plans with employees. High levels of partici-
pation are typical in dental plans, even where employees share in
the cost.
-7-
TMJU TOWERS, PERRIN, FORSTER & CROSBY
Dental plans typically provide coverage in the following areas:
Plan Typi-
Coverage Description cally Pays
Preventative teeth cleaning, oral
exams, x -rays, flouride
treatments
Basic fillings, emergency
Restorative treatments of pain
Major root canals, gum diseases,
Restorative crowns
Prosthetics bridges, dentures
Orthodontics teeth straightening
80% to 1000
800
60% to 80
500
500
Deductibles typically range from $25 to $100 per person per year and
often are not applied to preventative care. The plans contain annual
maximum benefits of $500 to $1,000 and a separate lifetime maximums
of $500 to $1,000 for orthodontics.
Monthly dental plan costs may range from $12 to $15 for employee
coverage and $35 to $40 for family coverage for a comprehensive plan
outlined above. A basic plan providing only preventative care can
be obtained for approximately $4 per month for employee coverage and
$11 for family coverage. The City may want to consider offering
only a basic dental plan initially and expanding coverage types
and levels in the future. Alternatively, the medical care expense
account approach described earlier could be used to reimburse dental
expenses.
TMIC TOWERS, PERRIN, FORSTER & CROSBY
C
The vacation /holiday /sick leave policies are very generous. Retire-
ment benefits are dictated by statutory plans and are therefore, not'
subject to change.
Tax Saving Opportunities Using Flexible Compensation
A detailed memorandun describing the use of pre -tax earnings to
pay the employee contributions to benefit plans is contained in
Exhibit I.
7V TOWERS, PERRIN, FORSTER & CROSBY
r
fi
Hc
BACKGROUND
The topic of flexible compensation has received considerable atten-
tion in the last few years with the implementation of some very
innovative plans by a few major employers. While interest in
this subject has been high, the number of plans actually implemented
has been small. The primary reason for this limited popularity has
been the high cost usually associated with the design, communication
and - administration of these programs. In some cases, start -up costs
have reached several hundred thousand dollars. Since most companies'
benefit plans already -offer a significant amount of flexibility and
choice, employers have seen a limited opportunity to enhance employee
satisfaction through these programs.
Quite recently, however, companies who have studied the tax advantages
of flexible compensation have realized that the concept can be applied
solely to the employer /employee cost sharing aspects of a benefit
program without affecting the benefit plans themselves. These
employers see an opportunity to shelter.the contributions employees
are required to make to medical plans and other welfare plans from
current taxation. Instead of the conventional arrangement where
income and Social Security taxes are withheld from gross earnings,
and benefit contributions are deducted from the balance, the new
arrangement provides for benefit contributions to be deducted from
gross pay before income and payroll taxes are computed. The result
of this. arrangement is lower taxes and higher take -home pay for
employees and also lower payroll taxes for the employer.
In this memorandum we describe this application of the flexible
compensation concept and discuss both the opportunities and pit-
falls associated with these programs. The memorandum is intended
as a discussion of the issues; it does not recommend a specific
course of action for the City.
-1- TMJC TOWERS, PERRIN, FORSTER & CROSBY
E 7
DESCRIPTION OF PRE -TAX APPROACH
The ability to shelter employee contributions to medical and other
welfare plans lies in establishing a "cafeteria plan under Sec-
tion 125 of the Internal Revenue Code. The term "cafeteria plan"
(which is used synonymously with flexible compensation plan or
flexible benefits plan) generally refers to an employee benefit
program under which employees may choose their benefits from a
variety of alternatives offered. More specifically, a choice is
offered as to how the company's dollars will be spent. In this
way, a cafeteria plan (or flexible compensation plan) is distin-
guished from a conventional benefit progams through which employees
can choose optional benefits, but must pay for any additional
benefits with additional employee contributions.
Section 125 deals with a situation in which an employee has a
choice between a non - taxable benefit (e.g., a medical plan) and
cash or some other taxable benefit. The law says that the
employee will be taxed only if he actually elects the cash or
taxable benefit. There will be no tax incurred just because of
the opportunity to elect cash. The most straight - forward applica-
tion of this principle involves an employer allocation which can
be used to provide additional benefits or can be taken in cash.
A somewhat more subtle application involves a voluntary salary
reduction on the part of the employee. Under this application,
the employee agrees to reduce current income by a stated amount
in exchange for the employer providing an additional benefit.
The result is that the employee pays for optional benefits with
salary reductions, rather than with after -tax payroll deductions.
-2-
iV TOWERS, PERRIN, FORSTER & CROSBY
MOM
The salary reduction approach was blocked for many years by the IRS.
However, changes in the tax law made in 1978 (and related regula-
tions proposed last year) have reopened this approach for cash
or deferred profit sharing plans.. In those proposed regulations,
the IRS concluded that it could not distinguish between employer
contributions which were made in addition to regular compensation,
and employer contributions which were made in exchange for an
employee's agreement to forego some current compensation. The
logic is equally applicable to flexible compensation plans under
Section 125 and, accordingly, we now believe that salary reduction
flexible compensation plans can be implemented. We understand that
individuals within the IRS agree with this thinking and that regu-
lations have been drafted which would sanction the salary reduction
approach. However, it should be noted that no regulations have
been issued or proposed at this time.
To date, we are aware of one salary reduction flexible compensation
plan which is in operation. Earlier this year, Harvard University
implemented such a program along with an increase in the amount
employees are required to pay toward their medical plan. As a
result, Harvard was able to soften the effect of the medical cost
increases they were,experiencing. A number of other employers,
including two major employers in the Twin Cities are currently in
the process of implementing such programs. Thus, by next year
there will be additional examples of such programs in operation.
As with most plans which offer tax advantanges, flexible compensation
plans must meet certain nondiscrimination requirements. However,
these requirements simply require the plan to cover a broad cross
section of employees and require that the medical plan, if one is
included, be a relatively generous plan. Neither of these nondis-
crimination requirements appears to pose any significant problems
for employers wanting to use this approach.
-3-
IC TOWERS, PERRIN, FORSTER & CROSBY
C
FINANCIAL EFFECTS FOR EMPLOYEES
By agreeing to accept a salary reduction in exchange for additional
employer provided benefits, the employee reduces the amount of
income subject to taxation. More specifically, these salary
reductions are not considered income for Federal income tax
purposes nor are they subject to FICA (Social Security) taxes.
In most states, these amounts would also not be subject to
state income taxes although in a few states (notably Pennsylvania,
New Jersey and Alabama) these amounts may be currently taxable.
Potential Tax Savings
Under the current medical plan, employees pay nothing toward the
cost of their own coverage. However, contributions of at least
$43 per month are required for dependent coverage. The salary
reduction arrangement would shelter these entire amounts from
tax. (Prior to 1983, up to $150 of medical premiums was deductible;
however, the 1982 tax law will eliminate this deduction.)
Under the life insurance plan, employee contributions toward sup-
plemental coverage would also be excluded from current income. How-
ever, since the cost of company -paid coverage in excess of $50,000
is considered current income, there would be tax savings for this
benefit for employees earning less than $45,000 per year.
-4-
TMIIC TOWERS, PERRIN, FORSTER & CROSBY
Exhibit I demonstrates the tax effect of the pre -tax approach for
a married employee with two children. We have assumed that this
employee participates in the HM0 coverages offered and has
enrolled for LTD coverage. We have illustrated three different
pay levels - $15,000, $25,000 and $35,000. For these benchmark
employees, the increase in take -home pay ranges from about $200
to $300 per year. For the $15,000 employee this represents an
increase of 1.8% in after -tax earnings while for the $35,000
employee it represents a 1.3% increase. These savings are avail-
able for employees with covered dependents (about 53o'of City
employees have dependent coverage). No significant savings would
be available for single employees.
City Benefit Plans
Switching to benefits which are totally employer -paid will have
no effect on the taxability of benefits paid under the medical
plan or the life insurance plan and little effect on the taxability
of benefits from the-LTD plan.
A related issue is whether pension benefits can be based on un-
reduced pay or only that pay which is currently taxable. Although
the IRS has not issued any revenue rulings which deal with this
precise issue, their position in similar situations indicates that
unreduced pay can be used so long as it does not result in discrimi-
nation in favor of higher paid employees. Given that medical contri-
butions are uniform regardless of pay level, we see little problem
in demonstrating that no discrimination would result.
-5-
TJi TOWERS, PERRIN, EORSTER & CROSBY
Statutory Benefits
With regard to Social Security and other statutory benefits, the
salary reduction approach will lead to slightly smaller benefits.
As illustrated in Exhibit 2, a 3% salary reduction over ten years
would reduce Social Security benefits at age 65 by 0.3% to 0.70.
In terms of today's benefit levels, this would amount to a reduc-
tion of less than $5 in the monthly benefit.
In Minnesota, salary reductions would also have an effect on
Workers' Compensation and Unemployment benefits. Both of these
benefits are related to earnings up to a maximum of approximately
$20,000. Consequently, employees earning at or below that level
would have slightly smaller benefits should they be injured on the
job or be laid -off.
Nis
TOWERS, PERRIN, FORSTER & CROSBY
3
FINANCIAL EFFECT FOR THE CITY
Since salary reduction amounts are not subject to FICA taxes, the
City's FICA taxes would be reduced. There would also be a savings
from Workers' Compensation taxes. There would be no savings in
Unemployment taxes, since these taxes relate only to earnings
up to a maximum of approximately $8,000 per year.
-7-
IC TOWERS, PERRIN, FORSTER & CROSBY
OTHER ISSUES
Communications
Effective communication plays a key role in the success of any
benefits program, but in the case of a flexible compensation pro-
gram with pre -tax contributions, a well - planned and well- executed
communication program will be essential.
In addition to the descriptions of the benefits themselves,
the City will need to explain the pre -tax approach. Along with
appropriate announcement materials, you will need a more detailed
explanation, possibly in the form of a brochure that focuses on
the pre -tax contribution concept and the advantages to employees.
Naturally, this material must also explain the disadvantages
(e.g., reduced Social Security benefits) that are a part of this
arrangement.
Salary Administration
It will be essential to focus on unreduced gross pay in communicating
with employees. While their taxable income will be reduced, their
basic gross pay will not be affected by the program. Consequently,
the entire salary administration program would continue to operate
without regard to the "salary reductions" resulting from the
flexible compensation program. Implementing this arrangement,
however, will likely necessitate certain changes in the City's
payroll system. For instance, the computer program must be able
to deduct the payroll deductions for benefits before figuring income
tax withholding and Social Security taxes. In addition, it will be
necessary to.modify the paycheck stub. The check stub can continue
to show unreduced gross pay; it need not highlight the reduced pay
which is subject to tax. You would, however, want to indicate that
the contributions for benefits have been deducted before the tax
withholding is figured. Also, to the extent that there is variation
-8-
JU TOWERS, PERRIN, FORSTER & CROSBY
CI
in state tax laws, it may be necessary to treat benefit contributions
as taxable for state purposes but not taxable for federal purposes.
Finally, the W -2 form furnished in January each year will have to
show the appropriate taxable income, i.e., after the salary reductions
for benefits.
Plan Structure
The City would probably establish a separate flexible compen-
sation plan which would control the salary reduction mechanism. It
would "collect" the salary reduction amounts and feed these, along
with the regular employer contributions into the medical, life
and disability plans. The purpose of the plan would be to provide
the legal basis for converting cash compensation into additional
employer contributions for benefits. It would not actually receive
funds nor would it require a trust or separate accounting.
The plan would operate under Internal Revenue Code Section 125.
However, it would not be submitted to the IRS for approval since.
the IRS has indicated-that it will not issue rulings covering the
status of these plans. We expect this to change in the future,
once regulations governing these plans have been issued.
Other Possibilities
The modest amount of savings for employees and the City makes it
impractical to establish a flexible compensation plan solely for tax
reasons. However, the salary reduction flexible compensation struc-
ture does offer the City the opportunity to:add� other optional
employee -paid benefits to its program very conveniently. For exam-
ple, dependent care assistance, dental benefits or legal assistance
benefits could be offered to employees who want such benefits and
are willing to pay for them through the salary reduction arrange-
ment.
-9- JU TOWERS, PERRIN, FORSTER &CROSBY
C
A
Exhibit 1
THE CITY OF EDINA
Illustration of Potential Tax Savings from Pre -Tax
Approach for Married Employee with Two Children
Assumed Benefit Coverage: Medical - $50 per month
Life - No supplemental coverage
Conventional Approach
Annual Salary
$15,000
$25,000
$35,000
(taxable income)
FIT Withholding*
1,201
3,276
5,983
Minn Withholding*
780
1,846
2,838
Social Security Tax
1,005
1,675
2,171
P/R deductions for
718
1,776
2,772
Medical
600
600
600
Net Take Home Pay $11,414 $17,605 $23,408
Pre -Tax Approach
Annual Salary
$15,000
$25,000
$35,000
P/R deductions for benefits
Medical
600
600
600
Taxable Income
$14,400
$24,400
$34,400
FIT Withholding*
1,101
3,108
5,750
Minn Withholding*
718
1,776
2,772
Social Security Tax
963
1,629
2,171
Net Take Home Pay
$11,616
$17,887
$23,707
Amount $ 204 $ 284 $ 299
Percent 1.8% 1.6% 1.30
* Based on 7/82 withholding tables
1T V TOWERS, PERRIN, FORSTER & CROSBY
C
F.srhihi� 7
Between 4/1/80 and 3/31/82, $35,612 was paid in premiums for the
Blue Cross /Blue Shield plans and $18,532 was paid in claims for
the same period. This is a paid claims cost ratio of 52% for
this two -year period. Although these number are based on a
small group of employees (11 to 13 with single coverage and
4 to 5 with family coverage), this illustrates the tremendous
subsidy being paid to.the County sponsored plans during this
period.
Physician's Health Paln experience from June, 1980 through June,
1981 resulted in an incurred claims loss ratio (incurred claims/
premiums) of 93.5%. The corresponding loss ratio for the June,
1981 through June, 1982 period is 950.
LTD claims paid between 1/1/80 and 7/31/82 were $4,050 as com-
pared with approximately $54,932 of premiums paid for the same
period.
TPF&C TOWERS, PERRIN, FORSTER & CROSBY
CITY OF EDINA
Report III
I. Comprehensive Plan Quotes from Blue Cross /Blue Shield vs.
current Rates of County Plans - Monthly Premiums
Employee Family
1.
BC /BS
$250 deductible
$500 maximum
out -of- pocket
$46 - $47
$132 - $135
2.
BC /BS
$250 deductible
$1,000 maximum
out -of- pocket
45 - 46
128 - 131
3.
Group Health (County)
55
159
4.
MedCenter (County)
57
153
5.
Nicollet /Eitel (County)
65
152
6.
PHP (County)
85
182
7.
BC /BS (County)
base hospital and
major medical -
employee comprehensive -
$300 deductible per depen-
dent and $740 maximum out -
of- pocket
81
146
II. Overall rates more favorable than BC /BS plan 7 which is comparable;
however, dependent premium is higher $88 vs. $65.
T` V TOWERS, PERRIN, FORSTER & CROSBY
III. Strategy
a) Goal - get employees into group plan
b) Consider selecting one closed panel HMO - Group Health
or MedCenter
Monthly Rates
Only
Employee Family
Group Plan $47 $130
HMO (Mc� 5 7 153
Difference 10 23
c) Assume City reimburses $47 /month for single and $100 /month
for family coverage; health care expenses account of
$20 /month for single and $25 /month for family coverage
Only
Employee Family
City Reimbursement $47 $100
Health Care
Expense Account 20 25
67 125
Employee Cost /Month
- Group Plan 0 30
- HMO 10 53
d) As,in (c) above but only give $10 per month health care
expense account for HMO participants with employee only
coverage ($61total monthly cost minus $57 monthly HMO
premium)
e) As in (c) above but no health care expense account for HMO
employees
- gutsy from employee relations standpoint
- HMO's may bow out
!U TOWERS, PERRIN, FORSTER & CROSBY
IV. Approach
a) Test employees
b) Will they opt out of HMO's
especially if PHP not offered
under cost incentive in III above
C) If above scheme will not result in large percentages opting
for group plan (at least to employees)
- stay in County program
- opt for only HMO's
d) May also use pre -tax salary to pay employee contributions
V. Addendum to Report II (Social Security tax savings to city using
salary reduction concept for employees' medical contributions)
a) current situation - annual savings of approximately
$4,200 - $4,400
b) If above strategy adopted - annual savings from
$3,500 - $4,300
TI%F TOWERS, PEPPIN, FORSTER & CROSBY
9
M E M O R A N D U M
TO: MAYOR AND COUNCIL
FROM: KENNETH ROSLAND, CITY MANAGER
SUBJECT: FEES AND CHARGES
DATE: SEPTEMBER 1, 1983
In preparation for our budget hearings, I have asked that Department Heads
submit changes or adjustments to any of the fees that we currently collect.
I would like for you to consider all the proposed changes at the same time
you are reviewing the budget. I feel that this is the most appropriate time
to review and discuss these items and proposed changes.
As you can see from the attachments, Staff is not recommending many changes
in fees for 1984. This is primarily due to the fact that we find ourselves,
for the most part, in line with other communities in the Metropolitan area.
This fact was borne out in a review of information we received from the
Association of Metropolitan Municipalities. In the area of Public Safety,
you may recall that we set up new ambulance fees in May, 1983, and for
that reason we see no need to adjust those charges at this time.
The Building Department is not recommending changes in the fees that they collect
as they are currently in line with what is recommended in the Uniform
Building Code. This seems to be what most communities in the Metropolitan
,,rea use as the reference upon which to base their fees.
Health Department is recommending a 5% increase in fees. (See Attachment A).
lAis adjustment is for fees to cover the increase of activities in the
various inspection areas and to continue our program of bringing the fees
generated more in line with the.Department's service delivery' costs.
Fees and charges that the City collects and that are regulated by resolution
or Manager's discretion are found in Attachment B. As you can see, we are
recommending some changes in the Park and Recreation fees. In the other areas,
I have asked that fees be raised for the most part by 50 cents per item.
It is the Staff's feeling that this would adequately cover rising costs over
the last two years, which was the last time we adjusted those particular
services.
KER: j km
i'
ATTACHMENT A
M E M O R A N D U M
DATE: July 15, 1983
TO: Ceil Smith
FROM: David A. Veld
SUBJECT: License Fees for 1984
I would like to amend the following license fees for 1984 and add three additional
categories:
Ordinance No. Purpose of Fee or Charge Amount Fee No. 1983
434
731
Indoor Swimming Pool
$ 185
17a
Outdoor Swimming Pool
100
17b
Whirlpool
30
18
Food Establishment
215
25a
Each Additional Facility
65
25a -1
Take -Out Facility Only
130
25a -2
Packaged Food Sales
80
25a -3
Food Warehouse
30
25a -4
Itinerant
25 per event
25b
Retail Candy
25
25c
Readily • Perishabie ood Veh;cla
30
25d
Fleet of 5 or More a'�',eadily Perish-
able Food Vehicles
150
25e
Bakery Food Vehicle
20
25f
Catering Food Vehicle
105
25g
Perishable Food Vehicle
30
25h
Fleet of 5 or More Perishable
Food Vehicles
150
25i
Food Vending Machine (per
machine)
15
25j
Ice Vending Machine (pkg.)
5
25k
Ice Vending (other)
15
251
1301 Garbage Hauler 40
Each Additional Vehicle 25
These fees represent a 5% increase..
DAV /Ide
V
175
95
30
205
60
125
75
25
20
20
25
125
15
100
25
125
15
5
15
41 25
41a 10
ATTACHMENT B
FEES AND CHARGES /OTHER THAN
BY ORDINANCE
$32.00
Park and Recreation
Recommended
$20.00
Contributing
1984
1983
Aquatic Instruction
$16.00*
$15.00
Playground
$ 6.00
$ 6.00
Dramatics and Theatre
$16.00*
$15.00
T =Ball
$16.00*
$15.00
Tennis Instruction
$16.00*
$15.00
Tennis Reservations
$ 2.00 /hour
$ 2.00 /hour
Fire Arm Safety
$ 5:00*
$15.00,
Racquetball
$20.00
$20.00
Soccer
$16.00
.'Not offered
Art rmn+mw-
Memberships:
Family:
$32.00
$32.00
Individual
$20.00
$20.00
Contributing
$50.00
$50.00
Sustaining
$100.00
$100.00
Patron
$500.00
$500.00
Class Fees:
Adult
Members
$
42.00
(8 weeks)
Adult
Non - members
$
50.00
(8 weeks)
Child
Member
$
28.00
(8 weeks)
Child
Non - members
$ 1.06
3?.�Ji'
(8 weeks)
Arena
Single Hour Rate
$70*
$ 65.00
Contract Rate (10 or more hours)
$65*
$ 60.00
Late night - midnight or later
$50*
$ 45.00
Open Skating
$ 2.25*
$ 2.05
Guards
$ 2.15
$ 2.15
Skate Rental
$ 1.06
$ 1.06
Skate Sharpen
$ 1.50
$ 1.50
Season Tickets
Effective 10/1/84
Resident Family
$50.00*
$45.00
Resident Individual
$30.00*
$25.00
Non - Resident Family
$60.00*
$55.00
Non - Resident Individual
$35.00*
$30.00
Classes
$35.00*
$30.00
i
Fees and Charges /Other Than By Ordinance
Page 2
Braemar Golf Course
Patron Cards:
Proposed 1984
1983 FEES
Husband & Wife
$ 75.00-
$65.00
Individual
40.00
.35.00
Additional Family Member
35.00
30.00
Computerized Handicaps
5.00
4.50
Lockers;
- non patron
6.50
Men's 72"
30.00
30.00
Men's 42"
18.00
18.00
Ladies 72"
10.00
10.00
Club Rental
4.00
3.75
Pull Carts
same
1.25
Golf Cars:
18 holes
15.00
14.00
9 holes
8.00
7.50
Group Golf Lessons:
Adult
35.00
33.00
Junior
20.00
17.00
Golf Range:
Large Bucket
3.00
2.75 -
Small Bucket
2.00
1.75
GREEN FEES:
18 hole -
non patron
$ 8.00
18 hole
- patron
6.00
9 hole
- non patron
5.50
9 hole
- patron
5.00
Seniors:
18 hole
- non patron
6.50
18 hole
- patron
4.50
9 hole
- non patron
4.00
9 hole
- patron
3.00
Par 3
Adult - non patron 3.50
Adult - patron 2.50
Junior - non patron 2.25
Junior - patron 1.50
Fees and Charges /Other Than By Ordinance
Page 3
1983 1984
Building Department
Code Compliance Inspections $40.00 hr (1 hr minimum) N/C
Investigation Fee: (Building)
Work done without permit fee shall be equal to the amount
of permit fee required by the code.
Police Department
Finger Print Cards 5.00 N/C
Assessing Department
Special Assessment Search 7.50 N/C
Engineering Department
Developers Agreement:
6 112% for Plan "A" improvements
Xerox Copies
.06
to
.25
per
copy
.30 per copy
Copies
Ordinance Book (complete w /binder)
40.00
44.00
Ordinances (complete wo /binder)
22.00
24.00
Binder.Only
10.00
11.00
Ordinances (Printed)
1 page
.50
.55
2 - 4 pages
1.00
1.50
5 or more pages
2.00
2.50
Agendas:
Council
10.00
per
yr
11.00
Planning Commission
5.00
per
yr
6.00
Council Minutes
75.00
per
yr
80.00
Planning Commission Minutes
25.00
per
yr
30.00
Certified Copy of Minutes.
1.50
plus 50� per
2.00 plus 50�
additional page
additiona
Cable TV Commission Minutes
25.00
per
yr
30.00
Election Map
2.00
2.50
City Map
.50
.75
For Refunds Issues (Business & Professional
Licenses) 2.00 2.50
Bond Forms (Professional Licenses -
Duplicates Only) .50 .75
Fees and Charges /Other Than By Ordinance
Page 4
1983
Proposed Changes
for 1984
Planning Department
Zoning Ordinance (No. 811)
$ 9.00
$ 10.00
Zoning Map
1.00
1.50
Flood Plain Ordinance (No.
815)
2.00
2.50
Sign Ordinance (No. 451)
2.00
2.50
Sub - Division Ordinance (No.
801)
2.00
2.50
Soil Erosion Ordinance (No.
817)
2.00
2.50
Tree Removal Ordinance (No.
823)
2.00
2.50
Western Edina Land Use Plan
2.00
2.50
Southwest Edina Plan
2.00
2.50
South Edina Plan
2.00
2.50
1985 Population Projections
2.00
2.50
1971 Apartment Study
2.00
2.50
50th & France Commercial Plan
5.00
5.50
Engineering Department
Paper
Myler
Paper
Myler
112 Section Map
$ 1.00
$ 3.50
1.50
4.00
1/4 Section Map
2.00
4.50
2.50
5.00
Aerial Photo
2.50
5.00
3.00
5.50
Topographical Map
10.00
12.50
10.50
13.00
Aerial /Topo
10.00
12.50
10.50
13.00
City Map 400' scale
5.00
7.50
5.50
8.00
City Map 600' scale
2.50
5.00
3.00
5.50
Watermain Map
2.50
5.00
3.00
5.50
Sanitary Sewer Map
2.50
5.00
3.00
5.50
Storm Sewer Map
2.50
5.00
3.00
5.50
Street Surfacing Map
2.50
5.00
3.00
5.50
Construction Print
1.00
3.50
1.50
4.00
Plat Map
1.00
3.50
1.50
4.00
Calendars
.50
3.00
1.00
3.50
!.
EDINA PARK AND RECREATION DEPARTMENT
1984 REPLACEMENT & REPAIR
Playground Equipment $100,000
Braemar Arena & Pavilion Repair 10,000
8 foot Tables - 8 500
Chairs - 100 11000
Bleachers - 2 3,000
Picnic Tables - 12 3,000
Picnic Table Blanks 3,000
Pathways - Tennis Court Repair 15,000
Painting and Park Building Repair 25,000
Gun Range Clay Target Building and Roof 10,000
Backstop 5,000
Total $175,500
PARK EQUIPMENT
Water truck (with trade in) $ 22,000
Tree pick -up truck and tool box 13,000
(with trade in).
Complex Cushman (with trade in) 7,000
Misc. Equipment 2,500
$ 44,500.00
Total $220,000
Ab PARK ADD RECREATION DEPARTMENT
MAJOR PROJECTS
POOL
Inlets $ 70,000
Pool Bathhouse 50,000
Handicap Bathrooms & Entrance 50,000
Pool Water.Slide 30,000
Total $200,000
PLAYGROUND EQUIPMENT
New Equipment and Concrete Curbing:
Tingdale $10,000
Birchcrest 10,000
Normandale 15,000
York 10,000
Alden 5,000
Beard 5,000
Garden 10,000
Heights 5,000
Todd 10,000
Lake Edina 10,000
Countryside 10,000
Total $1007000
Need Concrete Curb only (hood curbing presently existing )
Pamela $ 5,000
44th St. 5,000
Braemar 5,000
Chowen 51000
20,000
Completed with new equipment and curbing:
Highlands Park
McGuire
Walnut Ridge
Weber
Lewis
Arden
BRAEMAR GOLF COURSE
Club House $450,000
Maintenance Bldg. 125,000
Par 3 350,000
925,000
BRAEMAR ARENA - PAVILION
Pavilion Balcony $ 75,000
TREE TRIMMING ASSESSMENT PROJECT
Inventory $ 10,000
Computer Program 3,000
Total $ 13.000
BREDESEN PARK IMPROVEMENT $200,000