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MInutes November 3, 199280 CITY OF DENTON CITY COUNCIL MINUTES NOVEMBER 3, 1992 The Council convened into the Work Session at 5:15 p.m. in the Civil Defense Room. PRESENT: Mayor Castleberry; Mayor Pro Tem Hopkins; Council Members Chew, Perry, Smith and Miller. ABSENT: Council Member Brock 1. The Council convened into the Executive Session to discuss legal matters (considered action in Coats v. City of Denton and considered legal action regarding Martin Luther King, Jr. Recreation Center), real estate (considered sale of real property along Carroll Blvd. to Dale Irwin and considered lease regarding the City Hall Annex at 324 East McKinney), and personnel/board appointments (considered an appointment to the Electrical Code Board). 2. The Council received a report and held a discussion regarding the architectural/engineering recommendations to repair the Martin Luther King, Jr. Recreation Center and gave staff direction. Bruce Hennington, Facilities Manager, stated that the Martin Luther King, Jr. Recreation Center was constructed in 1988 and from the beginning there were serious moisture problems with the building. The original construction retention funds on this project were held because of those moisture problems but since that time, a settlement with the contractor had been reached. There continued to be problems with moisture in the building with the wood floor buckling, the carpet continued to be wet and there was mold in the building. Council authorized a study for the cause of the moisture problems, what would have to be done to resolve those problems and the cost to permanently fix the building. Brent Byers, Corgan and Associates, reviewed the contents of the report presented to Council. The report included an executive summary, a final report on the investigation of the facility,.soils analysis by Rone Engineering, work previously done at the site to try and remedy the problems, and Corgan's recommendations for each area analyzed along with a cost analysis of each recommendation. The following were the recommendations proposed by Corgan. (1) Humidity and Moisture Reduction - with the current amount of water present, Corgan was proposing to reduce the amount of moisture under the building. In order to deal with the surface and subsurface water, a proposed French drain would be installed at the perimeter of the building to divert water away from the building. (2) Under the Building - currently three sump pumps were under the building which were intended to drain any water under the building away from the building. Currently there was no drainage underneath City of Denton City Council Minutes November 3, 1992 Page 2 81 the building and the water was not getting to the sump pumps. It was proposed to do grading under the building to allow the water to drain to the sump pumps and to install a silt mechanism on each of the sump pumps to keep the units from plugging up. A poly - membrane was recommended to be installed under the building in the crawl space to keep the water from coming up through the floor. It was also recommended to spray foam installation on the bottom side of the concrete floor slab which would decrease the temperature differential between the floor and the soil underneath. (3) Wood Floor Replacement - the recommendation would be to do the above measures which would hopefully reduce the moisture under the wood floor. After the above measures were completed, sand the floor to eliminate the irregularities in the floor. Another option, which was much more costly, was to remove the floor that was damaged and replace that portion of the floor. Byers felt that it was necessary to carry a contingency fund for any unforeseen situations which might arise. This was not reflected in the report as no determination had been made as to the amount needed. (4) Another area which needed to be addressed was the control joints in the exterior masonry. While cracks had been observed in the exterior brick masonry it was felt that the cracks were cosmetic only and not related to any building structural movement or failure. It was recommended that the excess mortar in the control joints be removed and replaced with an expansive sealant. This condition did not have anything to do with the moisture problem with the gym floor. (5) HVAC System - two different conditions existed in the building. One was a condensation problem in which cool air was passing through heating coils. When the cool air hit the heating coils, water was condensing on the units which resulted with water on the floor and rusting coils. It was recommended to have a bypass mechanism which would allow the air in the cooling cycle to move past the coils and not through them. The second problem dealt with the actual moisture content in the building which indicated that there was not enough air movement in the building and was contributing to the problem of mold in the building. It was recommended to install a bypass to the system to handle the situation. A least cost - most cost scenario was presented for Council consideration. Suggested repairs were prioritized and phased, beginning with the most effective and crucial repairs. Hennington continued that the repairs were in a step process and if done in steps, not all of the steps might have to be done. He presented options for Council to consider as to how to handle the problems~ Step one would include completing Part A: Humidity and Moisture Reduction of the Corgan Report, Step two would include completing the gymnasium portion of Part B: HVAC System Alterations of the Corgan Report, Step three would include uncovering and/or repairing the circle vent on the north end of the building and Step 82 City of Denton City Council Minutes November 3, 1992 Page 3 four included evaluating the results of Steps one through three for a six month period in order to determine if further steps needed to be taken. Lloyd Harrell, City Manager stated that staff recommendation was to proceed with Steps one through four at a cost of $118,000 and then evaluate those repairs for six months. Consensus of the Council was to proceed with the staff recommendation to proceed with steps one through four. Council Member Miller asked how long it would be to do those four steps. Byers replied approximately 6 months for the work and the 6 months for evaluation. Council Member Chew asked that after all the steps had been completed, would the problem be solved. Byers indicated that he believed the problem would be solved. Council Member Miller asked about the size of the proposed contingency fund. Byers indicated approximately $15,000 which might not have to be used at all. 3. The Council received a report and held a discussion regarding a staff recommendation for Philadelphia American Life's rate renewal and plan design changes for the 1993 plan year and gave staff direction. This item was considered during Miscellaneous Matters from the City Manager. 4. The Council received a report and held a discussion regarding the platting process and gave staff direction. This item was not considered and would be brought back to Council at a future meeting. 5. The Council received a report and held a discussion regarding nominating a candidate for possible appointment to the Appraisal Review Board for the Denton Central Appraisal District and gave staff direction. City of Denton City Council Minutes November 3, 1992 Page 4 83 This item was considered during Miscellaneous Matters from the City Manager. 6. The Council received a report and held a discussion regarding a survey received from the Denton Central Appraisal District in regard to changing the District,s fiscal year and gave staff direction. This item was considered during Miscellaneous Matters from the City Manager. The Council convened into the Regular Session at 7:00 p.m. in the Council Chambers. PRESENT: Mayor Castleberry; Mayor Pro Tem Hopkins; Council Members Perry, Smith and Miller. ABSENT: Council Member Brock, Council Member Chew 1. Pledge of Allegiance The Council and members of the audience recited the Pledge of Allegiance. 2. The Council considered approval of the minutes of the Regular Session of October 20, 1992. Perry motioned, Miller seconded to approve the minutes as presented. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. 3. Citizen Reports A. The Council received a citizen report from Herman Wesley regarding a City Charter review. Mr. Wesley withdrew his request to address the Council. 4. Public Hearings A. The Council held a public hearing to consider the preliminary and final replats of Lots 26 and 27, Block 1; into Lots 26R-1, 26R-2 and 27R, Block 1, of the C. C. Bell Addition. The site was located on the west side of Frame Street, approximately 350 feet south of Mingo Road. (The Planning and Zoning Commission recommended approval by a 6-0 vote at it~ 10/14/92 meeting.) 84 City of Denton City Council Minutes November 3, 1992 Page 5 Frank Robbins, Executive Director for Planning and Development, stated that the site was currently occupied by three detached homes, one of which was constructed over a lot line created with the original 1882 plat of the subdivision The replat under consideration would put each existing house ~n an individual lot. The Mayor opened the public hearing. No one spoke in favor. No one spoke in opposition. The Mayor closed the public hearing. Council Member Chew joined the meeting. Hopkins motioned, Smith seconded to approve the preliminary and final replats of the property. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. The Council convened into Executive Session to discuss legal matters. The Council reconvened into Open Session. 5. Consent Agenda Perry motioned, Chew seconded to approve the Consent Agenda as presented. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. A. Bids and Purchase Orders 1. Bid #1425 - Wire, Cable, Conduit and Connections B. Contracts 1. The Council considered adoption of an ordinance approving an agreement between the City of Denton and the North Texas Community Clinics, Inc. City of Denton City Council Minutes November 3, 1992 Page 6 85 No. 92-184 AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE NORTH TEXAS COMMUNITY CLINICS, INC.; AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT APPROVING THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE. 2. The Council considered adoption of an ordinance approving an agreement between the City of Denton and HOPE, Inc. authorizing the expenditure of funds for assistance to homeless families. No. 92-185 AN ORDINANCE APPROVING ANAGREEMENT BETWEEN THE CITY OF DENTON AND HOPE, INC. AUTHORIZING THE EXPENDITURE OF FUNDS FOR ASSISTANCE TO HOMELESS FAMILIES; AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE. 3. The Council considered adoption of an ordinance approving an agreement between the City of Denton and Denton Housing Authority to provide funding to TWU Cares, a primary health care clinic. No. 92-186 AN ORDINANCE APPROVING ANAGREEMENT BETWEEN THE CITY OF DENTON AND DENTON HOUSING AUTHORITY TO PROVIDE FUNDING TO TWU CARES, A PRIMARY HEALTH CARE CLINIC; AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE. 4. The Council considered adoption of an ordinance approving an agreement between the City of Denton and Denton County Friends of the Family. No. 92-187 AN ORDiNANCE APPROVING ANAGREEMENT BETWEEN THE CITY OF DENTON AND DENTON COUNTY FRIENDS OF THE FAMILY; AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FORAN EFFECTIVE DATE. 5. Considered adoption of an ordinance approving a funding agreement between the City of Denton and Fred Moore Child Care Center. City of Denton City Council Minutes November 3, 1992 Page 7 No. 92-188 AN ORDINANCE APPROVING A FUNDING AGREEMENT BETWEEN THE CITY OF DENTONkND FRED MOORE CHILD CARE CENTER; AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING THE EXPENDITURE OF FUNDS THEREFOR; A~ND PROVIDING FOR AN EFFECTIVE DATE. 6. The Council considered adoption of an ordinance approving an agreement between the City of Denton and Services Program for Aging Needs, Incorporated. No. 92-189 AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF DENTON AND SERVICES PROGRAM FOR AGING NEEDS, INCORPORATED; AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FORAN EFFECTIVE DATE. 7. The Council considered adoption of an ordinance approving an agreement between the City of Denton and Denton City- County Day Nursery. No. 92-190 AN ORDINANCE APPROVING ANAGREEMENT BETWEEN THE CITY OF DENTON AND DENTON CITY-COUNTY DAY NURSERY; AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FOR AN EFFECTIVE DATE. 6. Ordinances A. The Council considered adoption of an ordinance accepting competitive bids and awarding a contract for purchase of materials, equipment, supplies or services. (5.A.1. - Bid #1425) The following ordinance was considered: No. 92-191 AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF MATERIALS, EQUIPMENT, SUPPLIES OR SERVICES; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE. Perry motioned, Smith seconded to adopt the ordinance. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. City of Denton City Council Minutes November 3, 1992 Page 8 87 B. The Council considered adoption of an ordinance authorizing the Mayor to execute an agreement between the City of Denton and John West for services in assisting City to research and prepare a revised set of Local Rules for City's Civil Service Commission. Tom Klinck, Human Resources Director, stated that the item requested a contract with John West to provide assistance in revising and updating the Commission's local rules and regulations. The agreement would provide the City Attorney, Fire Chief, Police Chief and Director of Civil Service with expert advice and assistance in completing this project. Denton's Civil Service Commission local rules were last updated in 1980 and since that time, several legislative changes to the laws governing police officers and fire fighters had occurred. The following ordinance was considered: No. 92-192 AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND JOHN WEST FOR SERVICES IN ASSISTING CITY TO RESEARCHAND PREPARE A REVISED SET OF LOCAL RULES FOR CITY'S CIVIL SERVICE COMMISSION; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. Hopkins motioned, Chew seconded to adopt the ordinance. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. C. The Council considered adoption of an ordinance authorizing the Mayor to execute a contract between the City of Denton and David M. Griffith and Associates, Ltd. relating to services to perform a general management survey and study of City's Fleet Services Department's motor pool and garage divisions. John McGrane, Executive Director for Finance, stated that the agreement would allow the City to enter into an agreement with David M. Griffith and Associates to perform an overall management study of both the motor pool and the garage facilities. It was anticipated that the amount of the contract would not exceed $20,500 for services and $3,500 for travel. Mayor Pro Tem Hopkins asked if the last item on the agenda and this item were provided for in the budget. It would not be necessary to look fo~ money, for th~ ~Qntra~t. 88 City of Denton City Council Minutes November 3, 1992 Page 9 McGrane replied that the items had been budgeted for in last year's budget and the funds had been carried over. Council Member Perry questioned the travel expenses at $3500. McGrane replied that the firm was located in Arlington and as the study was estimated to be a very detailed study, the fee would not be excessive. The following ordinance was considered: No. 92-193 AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT BETWEEN THE CITY OF DENTON AND DAVID M. GRIFFITH AND ASSOCIATES, LTD., RELATING TO SERVICES TO PERFORM A GENERAL MANAGEMENT SURVEY AND STUDY OF CITY'S FLEET SERVICES DEPARTMENT'S MOTOR POOL AND GARAGE DIVISION; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE. Hopkins motioned, Smith seconded ~o adopt the ordinance. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. D. The Council considered adoption of an ordinance authorizing the City Manager to execute an agreement with the Texas Department of Transportation for installation of traffic signal controllers on FM 2181 at its intersection with Interstate Highway 35E, Oak Meadow Drive, and Londonderry Lane in Denton. City Manager Harrell indicated that the Council had seen this ordinance several times and each time the City had approved the contract and returned it to the State, the State had made minor modifications. Staff was again recommending approval of the contract. The following ordinance was considered: No. 92-194 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH THE TEXAS DEPARTMENT OF TRANSPORTATION FOR INSTALLATION OF TRAFFIC SIGNAL CONTROLLERS ON FM 2181 AT ITS INTERSECTION WITH INTERSTATE HIGHWAY 35E, OAK MEADOW DRIVE, AND LONDONDERRY LANE IN DENTON; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; AND DECLARING AN EFFECTIVE DATE. City of Denton City Council Minutes November 3, 1992 Page 10 89 Chew motioned, Smith seconded to adopt the ordinance. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. E. The Council considered adoption of an ordinance releasing Larry D. Hemphill, Elizabeth A. Hemphill and Virginia E. Bridges from the obligations contained within the escrow agreement in lieu of performance bond and the agreement providing for deferred street improvements for perimeter paving on Masch Branch Road which they executed on July 31, 1987, authorizing the party named therein as escrow agent to release funds held pursuant to these agreements. City Manager Harrell indicated that Council had discussed this item several weeks ago during a work session and at that time directed staff to have the formal agreement drawn up to release the funds. The following ordinance was considered: No. 92-195 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, RELEASING LARRY D. HEMPHILL, ELIZABETH A. HEMPHILL AND VIRGINIA E. BRIDGES FROM THE OBLIGATIONS CONTAINED WITHIN THE ESCROW AGREEMENT IN LIEU OF PERFORMANCE BOND AND THE AGREEMENT PROVIDING FOR DEFERRED STREET IMPROVEMENTS FOR PERIMETER PAVING ON MASCH BRANCH ROAD WHICH THEY EXECUTED ON JULY 31, 1987, AUTHORIZING THE PARTY NAMED THEREIN AS ESCROW AGENT TO RELEASE FUNDS HELD PURSUANT TO THESE AGREEMENTS, AND DECLARING AN EFFECTIVE DATE. Hopkins motioned, Chew seconded to adopt the ordinance. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. 7. Resolutions A. The Council considered approval of a resolution postponing the regular Council meeting of December 1, 1992 to December 8, 199.2. City Manager Harrell indicated that the changing of the meeting would accommodate the Council attendance at the NLC annual conference on December i in New Orleans. The following resolution was considered: 90 City of Denton City Council Minutes November 3, 1992 Page 11 No. R92-072 A RESOLUTION POSTPONING THE REGULAR COUNCIL MEETING OF DECEMBER 1, 1992 TO DECEMBER 8, 1992; AND PROVIDING FOR AN EFFECTIVE DATE. Hopkins motioned, Smith seconded to approve the resolution. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. B. The Council considered approval of a resolution adopting a personnel policy relating to nepotism. Tom Klinck, Director of Human Resources, stated that this was a minor change to current policy. The revision would include that an applicant for a job in a department which reported to or provided staff assistance to a City board or commission would be ineligible for employment in that department if the applicant was related within the second degree of affinity or the third degree of consanguinity to any member of the board or commission. It also included that if a relative of an existing employee was appointed to a board or commission, the employee would not be in violation of the policy. The following resolution was considered: No. R92-073 A RESOLUTION ADOPTING A PERSONNEL POLICY RELATING TO NEPOTISM; AND PROVIDING AN EFFECTIVE DATE. Hopkins motioned, Smith seconded to approve the resolution. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "nay", Perry "aye", and Mayor Castleberry "aye". Motion carried with a 5- 1 vote. C. The Council considered approval of a resolution accepting a grant offer from the Texas State Library and Archives Commission for constructing a public library facility. Joella orr, Library Director, stated that the Library Board had recommended that the grant be accepted. Since the grant had been awarded and the application approved, the contract needed to be signed if all compliances could be met. In order to keep the grant intact, actual construction needed to be started no later than September 1, 1993. City of Denton City Council Minutes November 3, 1992 Page 12 City Manager Harrell stated that accepting the grant would reserve the amount of money and not lose it to the State. Council had asked the staff to return with a comprehensive plan as to what to do with the money. Accepting the grant was merely to reserve the money and not to obligate the beginning of any construction. Dorothy Adkins, Chair-Library Board, stated that this project had been worked on since 1986 when the voters authorized $1 million in bonds for the library. $400,000 of that money had been sold and less than half of those funds had been spent by the Library for renovation of the current library. The library site had been chosen in conjunction with a new fire station. $600,000 from the bond money and $200,000 from the grant would be used for the building of the new branch library. She wanted a goal for the community to build this library. The following resolution was considered: No. R92-074 A RESOLUTION ACCEPTING A GRANT OFFER FROM THE TEXAS STATE LIBRARY AND ARCHIVES COMMISSION FOR CONSTRUCTING A PUBLIC LIBRARY FACILITY; AND PROVIDING FOR AN EFFECTIVE DATE. Hopkins motioned, Smith seconded to approve the resolution. Council Member Perry indicated that accepting the grant would be in keeping with a crucial service to expand library services in the community. It was a commitment to continue to provide important services to the citizens of Denton. Council Member Chew stated that he fully supported the efforts of the library services. Libraries were a vital need in the community. On roll vote of the motion, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. 8. The Council considered an appointment to the Downtown Advisory Board. Mayor Pro Tem Hopkins motioned, Smith seconded nominated Bebe Olufsen to the Downtown Advisory Board. On roll vote, Miller "aye", Hopkins "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. City of Denton City Council Minutes November~3, 1992 Page 13 9. Miscellaneous matters from the City Manager. The Council returned to the Work Session items which had not been discussed earlier. Work Session Item 3. The Council received a report and held a discussion regarding a staff recommendation for Philadelphia American Life's rate renewal and plan design changes for the 1993 plan year and gave staff direction. Tom Klinck, Human Resources Director, stated that current program began last year with Philadelphia American Life. The plan year renewal would be effective January 1, 1993 with a 15% increase in the rate and plan design changes. In order to keep the rate increase within the budgeted 15% there would be a need to reduce plan benefits by 22% of the current level. Dave Palatiere, Coopers and Lybrand, stated that over the last several months staff had been working on plan design changes in order to stay within the budgeted 15% increase. He detailed a plan - financial status. Paid premiums, to date were $1.7 million, paid claims to date in the medical area were $1.5 million and pharmacy claims were $127,000 for a total of $1.647 million for the first nine months on a paid basis. On an incurred basis, which was the time lapse of approximately two to three months, medical claims were approximately $2 million and pharmacy was $156,000 for a total of $2.2 million. The loss ratio, which was the relationship between premiums to paid claims, on a paid basis was 96% which should have been at an 80% level. An excellent trend rate had been built into the financial model based on the contractual arrangements made with the two local hospitals and the many physicians on the plan. When the incurred ratio and the dollar amount needed to process the plan through the trend rate was looked at, an initial 48% increase was discussed. If a 48% increase was needed to fund the current level of benefits and only a 15% rate increase was budgeted, that 15% increase would purchase 78% of the current plan benefits. In order to purchase 100% of the benefit plan, benefits' would have to be reduced by approximately 22%. Palatiere detailed what happened during the year with the plan. He compared the City usage of insurance compared to national norms. Admissions per 1,000 on the national level were approximately 72 while the City had 104. Nationally the patient days per 1,000 was 435 while the City's was 539. The average length of stay nationally was approximately 6.0 days and for the City was 5.2. This gave a general feeling that the plan was over utilized. Areas where the most money was spent was in ~h~ ar~a of tumors, cancers, mental/nervous disorders. Palatiere detailed physician utilization. He presented an example of a family practice City of Denton City Council Minutes November 3, 1992 Page 14 93 physician who was paid $52,110 for the first nine months of the plan with an average paid per patient cost was $434. There seemed to be a practice pattern situation that while there was an agreement on the schedule of payments that a physician could charge, additional charges were being charged per patient to add to the costs. Palatiere reviewed the drug program utilization for the first nine months. Through August, 71% of the prescriptions were brand drugs while 29% were generic. It was more costly to use the brand drug versus the generic drug. In the demographics area, there was an increase in the family usage over any other category with the next increased category being employee and spouse. Council Member Chew asked if there was not some type of plan history going into the new plan which would have indicated a trend from the previous program. Palatiere replied that the problem with the Sanus bid was that it was an HMO which severely limited the number of providers. When the majority of the individuals were in the HMO it was very difficult to try and determine what would happen when the HMO was removed. Council Member Chew stated that he was referring to the claim history and not the providers. The claim history should have had some bearing on the new program. Palatiere stated that the number of providers did impact the claim history. A limited provider network would have a bearing on the claims as it reduced utilization. He could not foresee how the change from limited providers to the current system would affect utilization. Klinck stated that when the City was self-insured, claims were approximately $1.6-1.7 million. When the City went to the Sanus program and limited access especially in the specialist area, claims dropped to approximately $1.4 million for several years. The PALICO system eliminated that gate keeping system and expanded the network of doctors. PALICO could really only work on current enrollment and the mix with Sanus. council Member Chew stated then that PALICO did not have the five year claims history which would have noted some of those trends. Klinck replied correct. 94 City of Denton City Council Minutes November 3, 1992 Page 15 Palatiere detailed the proposed plan design changes: 1. Reduce the current Life Time Maximum from an unlimited amount to $1 million 2. Implement a pre-existing condition limitation Change the drug prescription policy from a 3/10 copay and $100 deductible to a 5/15 copay and $150 deductible 4. Implement a managed mental health/drug abuse program Council Member Perry stated that by including all the various types of providers, the City conformed with the Texas State Freedom of Choice law which was very important. While it might result in a small increase in utilization of the program, it gave the employees the benefit of using the provider they wished to use. Mayor Castleberry asked why the City was twice the national average- was the City plan too liberal. Palatiere replied yes. The options were to either limit access through limiting providers or provide higher quality and run the risk of higher utilization. Mayor Castleberry asked how the situation were handled if one of the employees had mental problem. Palatiere replied that the employee could go to any practitioner, private physician or specialist he chose. Mayor Castleberry stated that the employee could select whether to go to a mental health provider and not go through a medical doctor. Palatiere replied that that was correct. Mayor Castleberry stated then if an employee only thought he needed to see a mental health provider he could go directly to that provider and not have a referral from a medical doctor. Palatiere stated that the proposed change would require the employee to make a phone call to get authorization to see the doctor of his choice. Council Member Perry stated that State law required that the patient have the freedom of choice and selection of what doctor to see. City of Denton City Council Minutes November 3, 1992 Page 16 95 Palatiere replied that under the proposed program, the individual would be required to make a call prior to seeing a selected doctor and would work out a practice plan for seeing the doctor. Klinck stated that on the Sanus program before an individual could go to a specialist he had to see to a general doctor first. Now the employee could go directly to the specialist. Mayor Castleberry indicated that most health plans did not provide this kind of service. Mayor Pro Hopkins stated that the City's health plan was tracking what was happening to everyone else. There was no difference affecting smaller businesses and larger businesses. Palatiere continued with the proposed plan design changes: 5. e Change the annual deductible from $250 to $500 for network and $500 to $1,000 non-network; change the coinsurance from 100/70% to 100/60% non-network; change the out-of-pocket maximum from $1,000 to $2,000 for network and $5,000 to $6,000 for non-network Change the physician payment from a $15 copay 100% coverage to $15 copay plus a $50 copay for any other services The $15 copay covered office visits only The $50 copay covered diagnostic tests, allergy tests, etc. Council Member Miller asked if all physicians unbundled the costs in order to administer that type of a program. Palatiere replied that there were enough physicians who did unbundle the costs to administer such a program. Council Member Miller asked if all physicians on the program would have to play by the City's rules if they wished to continue to be a provider under the plan. Palatiere replied yes. They did not want any one gouging the system. Klinck stated that this was not an indication that the physicians were practicing medicine inappropriately. This was perhaps an indication that the way some physicians practiced was too expensive for the City for them to remain on the ~y~tem. City of Denton City Council Minutes November 3, 1992 Page 17 Palatiere reviewed future considerations for the program which included wellness program issues, a review of the levels of coverage changes with the intention of distributing costs based upon utilization of services, and a Flex (125) feasibility analysis. Alternative plan options included sending preliminary RFP's to Sanus, Kaiser, and Metropolitan. Sanus recommended a 15% increase with limited physicians. Metropolitan declined to bid and Kaiser indicated that they had only limited doctors in the area. Klinck reviewed the open enrollment schedule with an effective date for the new plan of January 1, 1993. Consensus of the Council was to proceed with staff recommendation for plan design changes. Work Session Item 5. The Council received a report and held a discussion regarding nominating a candidate for possible appointment to the Appraisal Review Board for. the Denton Central Appraisal District and gave staff direction. John McGrane, Executive Director for Finance. stated that there had been a request for nominees to the Appraisal Review Board. The Board reviewed all the appeals on disputed property on an annual basis primarily during the months of May and June. It was a significant amount of work and very time consuming. The nominees were limited due to that type of time schedule. Staff had attempted to secure some names to recommend to Council including a former Council Member and former City employees but have not been able to discuss with them if they would be interested in serving. Mayor Castleberry indicated that the City had until December 1 to proposed any nominees to the District which would allow for an additional meeting to consider any possible nominees. Consensus of the Council was to place this item on a future meeting. 6. The Council received a report and held a discussion regarding a survey received from the Denton Central Appraisal District in regard to changing the District's fiscal year and gav~ ~taff direction. John McGrane, Executive Director for Finance, stated that the Appraisal District had made a request for preliminary indication to see if the jurisdictions would have a problem with the changing of their budget year. If the District decided to pursue tha~ change, Council would have to approve a resolution in the future. City of Denton City Council Minutes November 3, 1992 Page 18 97 Consensus of the Council was to not oppose the change. Lloyd Harrell, City Manager, presented the following items for consideration under Miscellaneous Matters from the City Manager: A. The next meeting was a planned study session on proposed revisions to the sign ordinance. A public hearing was planned for November 17 and final consideration on December 8. The notice of the public hearing had been given to the Denton Record-Chronicle but it had not been published. As there was a 15 day requirement on a public hearing notice, the public hearing could not be done on November 17. The public hearing was not lengthy at the Planning and Zoning meeting and staff was suggesting holding the briefing on November 10, have one official item on November 24 which would be the public hearing. The Council could begin employee evaluations at 5:15 p.m., have the public hearing at 7:00 p.m. followed by the completion of the evaluations after the public hearing. Mayor Pro Tem Hopkins stated that the schedule would work if the feelings of the Council were along the same lines as the Planning and Zoning Commission. If the feelings of the Council were not on the same lines at the Planning and Zoning Commission then the schedule would not work. City Manager Harrell suggested that Council could start advertising for the public hearing to be during the work session on the 24th and if necessary could postpone the public hearing if there were unresolved issues. Council Member Chew indicated that he did not want to be rushed during the discussions of the proposed revisions and wanted to take as much time as was needed. He did not feel it would be appropriate to advertise for the public hearing until Council had a chance to review the proposed revisions. Consensus of the Council was to proceed with the work session item for the proposed changes to the sign ordinance on the November 10th meeting but to'not advertise for a public hearing to be held on November 24th. 10. There was no action taken on Executive Session items discussed during the Work Session Executive Session. 11. New Business There were no items of New Business suggested by Council Members -- for future agendas. 98 City of Denton City Council Minutes November 3, 1992 Page 19 12. The Council did not meet in Executive Session during the Regular Session. With no further business, the meeting was adjourned at 9:32 p.m. CITY~ECRET~RY CITY OF DENTON, TEXAS ACC000C5