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080789-Workshop Session260 MINU ES City Commission, Sanford, Florida August 7 19 89 The City he City Manager's Conference Room in the City :00 o'clock P.M. on August 7, 1989. Present: Hall in the City of Sanford, Commission of the City of Sanford, Florida, met in Workshop Session in Florida, at Mayor-Commissioner Bettye D. Smith Commissioner Whitey Eckstein Commissioner Robert Thomas Commissioner Lon Howell Commissioner A. A. McClanahan City Attorney William L. Colbert City Manager Frank A. Faison City Clerk Janet R. Donahoe The meeting was called to order by the Chairman. The Chairman introduced Jeff Blackstone, General Manager of Seminole Isle roperties, d/b/a as the Holiday Inn of Sanford, Lake Monroe, appeared to discuss the motel .ease with the City. Mr. Blackstone stated he had brought representatives from his :ertified Public Accountants' Firm, Cherry, Bekaert & Holland of Orlando, Florida, and ;rated they would answer questions concerning the Financial Statements submitted to the :ommission. Mr. Blackstone distributed to the Commission a proposal to solve the !inancial problems of the Holiday Inn and its lease with the City. He further stated that tis attorney, Bill Hutchison, was preparing a letter to the City Attorney bringing him up ;o date on the situation. The City Attorney questioned Mr. Blackstone regarding the first mortgage owed to Ireat Southern; if Mr. Peryear was still the person at Great Southern in charge of this Lccount; and if Mr. Peryear had indicated to Mr. Blackstone why he had not replied to the :ity Attorney's letter dated July 14, 1989. Mr. Blackstone acknowledged that Mr. Peryear 7as still the contact person but that he had no indication as to why Mr. Peryear did not 'espond to his letter. Commissioner Howell asked if the City chose to renegotiate the Holiday Inn lease, ~ould the City be obligated to renegotiate the other two leases it currently has on the larina? The City Attorney stated that each lease stands alone, and renegotiating one does tot obligate the City to renegotiate the others. The City Attorney stated he needs the status of Great Southern Loan in an Ifficial way, both in writing from Great Southern and from Attorney Bill Hutchison before ~e could render an opinion on how to proceed, but at this time, he does not recommend the :ity renegotiate the lease with Holiday Inn. The Commission requested the City Attorney obtain the necessary information and · eport back to the Commission of August 14, 1989. Martha R. Brown, Census Community Awareness Specialist, appeared to report on the Lpcoming 1990 Census. Ms. Brown distributed packets containing information on the 1990 :ensus. A brief slide presentation was also made. Ms. Brown stated the Census Bureau was ~rying to heighten the awareness of minorities in the Sanford area so that the City can · eceive the proper funding for minority programs. Ms. Brown further stated she was Lvailable to speak, as needed, to various groups and would welcome the opportunity. The lhairman thanked Ms. Brown for both the information and the presentation. MINUTES City Commission,~ Sanford, Florida A",] g13 8 t' 7 261 19 89 The Commission reviewed information submitted by the City Attorney and the Building Official regarding regulating noise levels. The Commission authorized to delay changes pending receipt of noise regulation information from a national police organization. The next item of discussion, was renewal of the Contract for the Employee Assistance Program. The Personnel Director stated that the program has been well- received by the employees% and at the current usage levels, approximately 10% of the City's workforce will have taken advantage of services available through the program resulting in 84% of the cases being resolved or improved. The Chairman requested this item be placed on the agenda for the next regularly scheduled meeting on August 14, 1989. A review of the Section 89 Compliance Report, and consideration of the Cafeteria Benefits Plan Program was next considered. The Personnel Director submitted the following Memo to the Mayor and City Commission dated August 3, 1989, as follows: DATE: TO: ¥IA: FROM: SUBJECT: AUGUST 3, 1989 MAYOR AND CITY COMMISSION BACKGROUND - On March 20, 1989 the City Commission authorized obtaining proposals to secure professional, third-par~y assistance in complying with the provisions of Section 89 of the Tax Reform Act of 1986. On April 17, 1989 (Agenda Item ~4) the City Commission approved award of this assistance to "National Risk Management Consultants, Inc." PURPOSE - On August 1, 1989 National Risk Management Consul- tants, Inc. completed all six (6) of the basic provisions of the RFP (88/89-43) as follows: Existing employee benefit plans were reviewed for compliance. All testing requirements were performed ~c determine dlscrlmlnatory excess" .Categories of exclusions were defined. Written analysis and recommended plan of action was provided regarding existing plans. 5. Plans were defined and specified. Written analysis and recommended plan of action was provided regarding cafeteria concept implementation. In addition, a software package was provided as outlined in the R.F.P. addendum. 262 MINU ES City Commission, Sanford, Florida Auqust 7 19 89 CONSULTANT RECOMMENDATIONS - A total of sixteen (16) recom- mendations were made by the consultant. For the most part the majority of these recommendations involve internal monitoring and are not necessary for Section 89 Compliance but would be helpful in analyzing cost containment. The recommendations that directly impact compliance are as follows: !. That the City Attorney not be eligible fOr any benefits. · A plan document needed to be generated addressing a synopsis of existing plans. The statistical excess regarding the City Manager's life insurance should continue to be s~bject to tax. A cafeteria plan should not be implemented at this time. STAFF RECOMMENDATIONS AND COMMENTS - Since the current year benefit plans are due to expire on or about October ~, 1989 it is recommended that the City Attorney's current benefit eligibility be terminated to coincide with that date. Unfortunately, there is no alternative to this recommendation since the City Attorney is not a regular employee. All benefit plans under Section 89 must be for the exclusive use of employees only. Inclusion of the City Attorney would negate the City's compliance with I.R.C. The plan document mentioned in "Consultant Recommendations" 02 above has been generated and will be available to all employees during the next open enrollment period. The s~atistical excess regarding the City Manager's life insurance has been taxed and will continue to be taxed thus complying with Section 89 Staff concurs that implementing a cafeteria plan in the near future would offset the current efforts of compliance with Section 89 based on the following: Ae The primary reason the City's current benefit plans met the statistical analysis required by $~ction 89 centered on passing the 50% test. Simply put, if less than 50% of the current employees eligible to participate in the plans did not participate, the City would have been in non- compliance. Adding additional options at this time would probably detract from current participation in existing benefit plans thus presenting the likelihood of not passing the 50% test. Since October of 1989, there have been countless revisions, interpretations, amendments, and other legislative attempts to change an already complicated compliance process. Although it cannot be determined at this point in time what impact, if any, these changes may produce, it is staff opinion that several of the possible scenarios pLlblicized recently would have adverse impact on compliance and possible added cost to the City (i.e. Rostenkowski modification). CONCLUSIONS AND FINAL RECOM)[ENDATIONS - After correcting the situation regarding the City Attorney, the City will have fulfilled all the requirements of Section 89 as it exists. It is recommended that a "wait and see" attitude be taken towards "cafeteria" plan implementation until the turmoil surrounding Section 89 has settled. We are in compliance as we stand but no one can possibly foresee how the situation can change from day to day. TM/jr Attachments: 1 - Consultant Introduction Page 1 2 - Letter from National Risk Management Consultants, Inc. 3 - Letter from National Risk Management C~nsultan~s, !nc. cc: Pile Finance Director MINUTES City Commission, sanf0rd~ Florida August 7 263 19 89 The City Manager recommended the City follow the recommendations, with one change, to not implement the. CafeteriaBenefits Plan at this time.. Commissioner McClanahan expressed concern that the City is paying the same. insurance premium for retirees over age 65 with supplemental benefits as for an active employee with full benefits. The City Manager stated that approximately three years ago the City was required to provide this coverage. Commissioner Eckstein stated that at a recent CALNO meeting, it was suggested that all seven participating cities join together and explore a self-insured insurance plan. He further stated that each CALNO representative was to contact their City Manage~ and ask that he appoint a representative from staff to attend a meeting to be scheduled in the near future. The City Manager stated he will monitor the situation and keep the Commission advised. There being no further business, the meeting was ad. journed. V~M A/~ O ~ ~' Attest: JCity Clerk