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HomeMy WebLinkAbout07/30/1986 - Special Minutes City Council MINUTES CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 6:00 P.M. COUNCIL MEMBERS PRESENT: COUNCIL MEMBERS ABSENT: STAFF PRESENT: VISITORS PRESENT: Mayor Ringer, Councilmen Bond, Brown, Haddox, Tongco, Boughton, Jones None City Manager Cole, City Attorney Locke, City Secretary Jones, Finance Director VanDever, Deputy Finance Director Schroeder, Council Coordinator Hooks See guest register. Agenda Item No. 1 - Discussion with the County Tax Assessor Collector/Chief Appraiser, Central Appraisal District, on future office location planninG. Buddy Winn, Tax Assessor Collector, was present to discuss the possibility of a central location for an office for the appraisal district and county tax office. Mr. Winn explained that the First Bank & Trust building is being considered by the Board, thus centralizing the appraisal and tax collections services for easier access by taxpayers; however, a definite site has not been approved at this time. Another building under consideration is the vacant Piggly Wiggly store in Bryan located at 2700 Texas Avenue South. His personal speculation is that the county will not purchase the First Bank & Trust building; instead, they should locate another building in the direction of College Station. In addition, he noted that $34,000.00 rent paid for use of the tax building at this time could be used toward the purchase of a new building. Councilman Tongco asked if there is a time frame. Mr. Winn stated that at the time the budget was approved in October 1984, the Board began searching for a buildinG to purchase and also discussed buying land and building a new structure. 90r CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 2 Mr. Winn noted that the Appraisal District cannot legally own property; however, many districts do own property. He described various ways used to house Appraisal Districts. Many counties furnish office space within the courthouse and the county calculates the equivalent of the rent price and it is deducted from the pro-rated share of the appraisal district budget. Some counties receive buildings at no cost. He pointed out that because of the current economic conditions, many counties are trying to centralize the tax collections and appraisal districts to make room at the courthouses. Mayor Ringer asked how many people from College Station go to the Appraisal District and the time of year which is most active. Mr. Winn replied that many people come to the appraisal office to protest property values or to sign a homestead exemption. Mr. Winn acts as County Assessor where he collects taxes at a different office. He further explained that it is no extra charge for him to collect taxes for the school districts and the City of Bryan. He explained that the computer, located in the appraisal office, is capable of handling all taxes for the five jurisdictions in this county. He noted that the computer is paid for. Councilman Brown asked if the citizens of College Station would receive a statement which would include county taxes. Mr. Winn replied that one statement could list county taxes, College Station ISD taxes, city taxes, a road bond, and a total of all taxes due. Councilman Brown also asked how many taxes have been collected for the College Station ISD. Mr. Winn replied 93% collected at the end of May. Councilman Haddox asked how many people go to the office to Day taxes. Mr. Winn replied that he estimates less than 5% of the people go to his office to pay; a majority of these people come into the office around Christmas and first of the new year. Councilman Jones asked what time frame is included on the tax certification. Mr. Winn replied that the tax certificate program is on the computer and can be updated daily. Councilman Haddox questioned why the city has not already taken action in this matter. City Manager Cole replied that in discussions held by the previous council, a concern was raised about citizens of College Station going to downtown Bryan to pay their taxes. Mr. Cole explained that the organizational management consultants are considering this issue in their 005794 CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 3 study. He added that the study is concluding and the council should be receiving a report shortly. Mr. Winn pointed out that the Tax Assessors Collectors Association may propose that Section 6.6 of the Code be amended to require that collections default to the county by 1991 if the local jurisdictions cannot decide on a central collector. Mr. Winn stated that the offer is available to the City of College Station whenever the City makes its decision. Councilman Haddox asked Mr. Winn for a summary of the method used to determine the costs charged to each jurisdiction. Mr. Winn described the procedure as follows: In 1981, the City of Bryan's budget was $198,000 and the Bryan school district's budget was $295,000.00. He charged $42,076.00 to collect the taxes and pro rated between the jurisdictions by the number of parcels. The cost to the school district was approximately $26,000.00 and cost to the City of Bryan, aDproxmately $16,000.00. The collection equipment was purchased in 1982 and through a mutual agreement between the three jurisdictions, each paid approx- imately $6500.00. The City of Bryan, Brazos County, and the Bryan School District paid for the computer systems, and each agreed that the College Station School District would not need to reimburse these jurisdictions for their share of the costs. He added that the City of College Station would probably not have to reimburse these jurisdictions for the use of the computer. Mr. Winn further explained that a contract with the City of Bryan and School District states that the parcel costs not exceed $1.00. The only actual costs are maintenance fees for the software, which the county Days, so it does not cost any more to add other jurisdictions. City Manager Cole pointed out a few reasons why the city has not accepted the county's offer at this time. He explained that the city tax office is also involved in collection of other revenue, and the city would lose access to tax records which are used extensively on a daily basis. Councilman Haddox asked if the City could tie into the computer at the appraisal district. Mr. Cole replied that this is one area the management consultants are looking into. Councilman Haddox suggested relieving the tax office of this job which would enable the tax office staff to concentrate on other jobs. Mayor Ringer suggested the council continue this discussion of tax collection by the county when the management consultants present their report to council. 005795 CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 4 Councilman Haddox suggested a site be centrally located for citizens in College Station. Mr. Winn stated that he was observing a 6 acre tract next to McCoy's store in hopes to build, but the county seems reluctant to move the tax office away from the courthouse complex. He further stated that a tax office substation could also be an alternative, yet the site would need to be as large as the current tax office because of the student population. He also stated that a large number of the taxpayers who come to his office for automobile licenses are from College Station. Mr. Winn encouraged the council to visit with the appraisal board, county judge, and commissioner's court. Councilman Tongco asked who would be responsible for funding a new building. Mr. Winn replied that the building would be funded by the five jurisdictions at appraisal district rate. He pointed out that the City of College Station would have the power to veto, and obviously the appraisal district could not purchase the building. Councilman Brown asked if the purchase of First Bank & Trust Building would be a substantial savings. Mr. Winn stated that the price for the building is $1.5 million with 28,000 square feet. The building is recently remodeled and landscaped. Councilman Bond asked if the tax office would require 28,000 square feet. Mr. Winn replied that the tax office would occupy the first floor. Agenda Item No. 2 - Consideration of proposals relating to a liability insurance program for the City of College Station. City Manager Cole noted that a study team comprised of Van VanDever, Glenn Schroeder, Dick Haddox and himself had investigated four options, which they had organized for comparison and presentation as self insurance program #1, self insurance program #2, the Texas Municipal League large-city program, and a combination of other carriers from the private sector combined in a list of types of coverages and premiums for each program. Glenn Schroeder began the presentation of the options by explaining the categories in each proposal. The first category covers the following liability insurances: 1) umbrella liability coverage which covers exposures over the limits of the other policies; 2) the general liability exposure covers accidents in parks, streets, etc; 3) the police liability exposures relate to police protection and items not covered under general liability; 005796 CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 5 4) public official's liability deals with liabilities which may occur when decisions are made by council or staff which the city could be held liable for; 5) the paramedic liability relates to the paramedic department; 6) the automobile liability relates to personal auto liability; 7) and, the landfill liability. The second category relates to physical damage. The auto physical damage includes major vehicles only and the comprehensive physical is the damage on buildings, etc. The third category relates to worker's compensation. The fourth category relates to fidelity bonds and boiler machine policies. The last category relates to areas which need to be addressed as comparisons to the above liabilities because they also include exposures. Mr. Schroeder described the column headings of each scenario: 1) the city's funding requirement is comprised of deductibles, claims paid where no insurance policy exists, and the funds available for claims in the future; 2) premiums are amounts which are expected to be paid to the insurance company; 3) total of the city's funding requirement and premiums; and 4) level of coverage. Mr. Schroeder began to explain the types of coverage under the Self Insurance Program #1. He added that the total for the City's Funding Requirement would be $850,000.00 paid out of de- ductibles in claims and setting aside a self insurance fund to meet the large claims which may be filed in the future. The premium total would be $205,300.00. Councilman Bond asked if $24,000.00 for auto physical damages includes anticipated costs for future self insurance. Mr. Schroeder replied that a very important aspect of the self insurance plan is to set aside a fund of $1 million which would be used to pay the uninsured claims. Councilman Brown asked if there is a $50,000.00 deductible for public official's liability. Mr. Schroeder replied affirma- tively. He further added that the purchase of an umbrella policy is not likely in the self insurance program. Mr. Schroeder discussed Self Insurance Program ~2. He stated that if council should decide to purchase this program, action would need to be taken indicating their willingness to issue a debt in the event a major claim occurs. He explained the difference between Self Insurance Program #1 and Self Insurance 905797 CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 6 Program #2. Program #2 scenario allows continuation of worker's compensation through the carrier which currently exists and this would balance the city's funding requirement to 0.00 and a pre- mium of $219,000.00. Councilman Bond asked for clarification of the $20,000.00 premium under worker's compensation in Self Insurance Program #1. Mr. Schroeder replied that $20,000.00 is premium coverage over and above the $1 million limit and there are carriers who are writing this coverage. The Texas Municipal League program was explained by Mr. Schroeder. He noted that the premiums provided by this program in January were very high and the staff requested quotes for a large-city program. The large-city program allows the city to accept a larger deductible under each category. The premiums related to this program require $500,000.00 deductible and this may result in setting aside funds for claims in the future. Mr. Schroeder discussed the last program, other carriers. He noted that the city has received a quote from Texas Employer's Insurance for the umbrella coverage, the general liability, and the police liability coverage. Councilman Bond commented that the general liability with a $155,000.00 premium and a $100,000.00 deductible is better than a $122,000.00 premium with a $500,000.00 deductible listed in the TML program. Mayor Ringer asked if the police liability is included under "other carriers". Mr. Schroeder stated that the current carrier is willing to renew for a substantial increase in premiums and the city has not been able to find another carrier to write police liability coverage alone. He further noted that Texas Employer's Insurance has added an endorsement to their general liability policy; in essence, this covers the exposures that relate to police liability. Councilman Haddox questioned if TML would write the public official's liability coverage alone. Mr. Schroeder replied that TML requires a city to purchase policies in certain sequences. In order to become Dart of the TML program, the city must belong to workman's compensation. The public official's liability must be purchased in a particular sequence. City Manager Cole summarized the presentation by Glenn Schroeder. Mr. Cole pointed out that the city has paid $723,000 in premiums over the past six years in worker's compensation and paid losses of $301,924.00. This is a 49% loss ratio. This 905798 CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 7 means that the City has paid to the insurance companies $423,000.00. If the city had purchased the self insurance program in worker's compensation, there would be $400,000.00 in the city funds. He explained that tremendous risks are involved participating in the self insurance program, but there is also potential gain. Councilman Tongco asked about claims history in other programs. Mr. Cole replied that in the past four years, general liability premiums were $160,000.00 and paid losses were $27,000.00. Auto- mobile liability premiums were $240,000.00 and paid losses were $24,000.00. Councilman Haddox noted that two law suits are pending relating to railway intersection accidents. Councilman Tongco asked if the insurance company would write for claims pending. Mr. Schroeder replied that the insurance company may write an occurrence policy for situations described above. Councilman Bond said there may be other underwriters to consider. Mr. Schroeder pointed out that finding other underwriters will be very limited. Councilman Haddox stated that prices will be high with very little softening in the market and insurance premiums will not be lower than the "other carriers" program. Councilman Brown asked Councilman Haddox if he forsees a Tort Claims Reform and rates dropping down. Councilman Haddox explained that competition and actions of regulatory bodies, legislation, and the General public help force prices down. City Manager Cole added that Tort reform at the state level solves only part of the problem because there are many suits filed under the civil rights act. Councilman Haddox mentioned that if the city decides to proceed with the self insurance program, an additional staff person will be needed, such as an insurance expert who can handle claims. City Manager Cole added that this is a good suggestion. Mayor Ringer asked if the council consensus is that self insurance is not desirable. The council concurred. City Manager Cole said the staff would rework the plan and present another proposal to council. 905799 CITY COUNCIL SPECIAL MEETING WEDNESDAY, JULY 30, 1986 PAGE 8 Agenda Item No. 3- Adjourn. Mayor Ringer adjourned the meeting at 8:00 p.m. APPROVE D: ATTEST: Dian Jo~ Cit~-~ecretary 905800