City Council Minutes 2014 01 14 SP

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City Council Special Meeting Minutes January 14, 2014 Page 7 of 14 • General Fund Forecast: COUNCIL COMMENTS Council member Loo noted the cost of employee health insurance is always calculated lower than the actual amount. She asked if there is confidence the rate will be lower. City Manager Fleming confirmed the cost came in lower than anticipated. Finance Director Watson explained the increase is because there are more employees to insure. City Manager Fleming noted the trend for health care cost has moderated below a 10% increase over the past three years. Council member Loo questioned the reduced budgeting for attorneys. Finance Director Watson explained all the attorney fees have been consolidated and the graph reflects a reduction in the water attorney's time. Council member Keany addressed the health insurance issue and asked if there were no new FTE's would the insurance rate remain flat. Finance Director Watson confirmed the estimates do not include any new employees and the rates would be flat. City Manager Fleming was not aware of any new staffing requests. Council member Keany did not feel the health insurance fit the model. Finance Director Watson explained it is a target, not an assumption. Council member Lipton asked for the rate of vacancy in the City's employment. Human Resources Director Hix explained out of 155 employees, 28 left in 2012 and 7 left in 2013. Generally the turnover rates averages 8-10%. City Manager Fleming explained the general fund forecast general includes a 3% turnback every year. Council member Stolzmann inquired about the minimum general fund balance going down in 2018. Finance Director Watson explained the minimum was set by policy and is 15% of the operation of the expenditures per year. The reason it is lower than what is presented in the 2014 budget document is the General Fund is funding the operational cost of the golf course in 2014. City Manager Fleming explained if the fund balance was as low in 2014 as it is projected in 2018 it would be a violation of the policy. He stated the City has five years to resolve the deficit by either reducing the capital projects or transferring less money from the general fund to the CIP budget or scaling back certain programs. Council may also decide whether the targets are too stringent. Capital Projects Fund Forecast: City Manager Fleming reviewed the graphs of the Capital Projects Fund Forecast, which included the South Street Underpass, DDI, Bridge Reconstruction and transfers to the Golf Course Fund for flood reconstruction projections. He will prepare a list of CIP