Hillsboro City Council makes decision to help with budget

The Hillsboro City Council met on Tuesday, May 12 via Zoom. Matt Stiles, who will be taking over as City Administrator when current City Administrator Larry Paine retires in July also attended to observe. He did not give input or vote.

The council approved the minutes of the last meeting and then got down to business.

Paine explained that in the past three or four years, the city has offered an optional contribution of $500.00 to employees to use with their flex plan benefit package.

“The plan has been a matching contribution. Employees had to contribute $500.00 of their own to receive the full $500 match. If the employee contributed less than $500.00 to the flex plan, the lower amount is matched by the city,” said Paine.

He explained that if all 27 employees elected to contribute more than $500.00 the cost would be $13,500.

“Most of our employees elected to make qualifying contributions,” said Paine.

This upcoming plan year is significantly different than past years as a result of the COVID-19 virus. Revenues are expected to be substantially lower for the balance of 2020 and are generally unpredictable for 2021.

“My feeling is that this year the optional contribution should not be given. We are planning a hefty reduction in general fund expenses for the balance of 2020. Making this expenditure would cause more line-item cuts. I recommend we pass on making a contribution to each employee’s flex benefit plan for the 2020-2021 plan year,” said Paine.

The motion to stop the contribution for this year passed unanimously.

Paine next brought up the benefits plan.

“We have a third party administrator for managing our Section 125 flexible benefits plan. This plan allows employees to deduct up to $2,700 pre-tax dollars annually from their paycheck for certain medical expenses like their health insurance and prescription co-pays.”

The Coronavirus Aid Relief and Economic Security Act (CARES) contains language that allows employees to make changes to the plan that benefits the employee. They will no longer be required to have a prescription for Over the Counter medicines. This will eliminate having to go to their doctor to get a prescription for a product that is sold without a prescription.

Paine explained that the money used for these purchases are in a tax-free account that allows the employee to purchase covered items.

“I recommend we approve an amendment to our flex benefit plan that allows for certain over the counter drugs and menstrual products and to make those purchases retroactive to January 1, 2020,” said Paine.

The council made a motion and approved the amendment unanimously.

The Council discussed a health insurance premium increase.
“We have received our health insurance renewal from Blue Cross Blue Shield. According to our employee census, our premium rises from $30,674 to $33,943 per month, “ said Paine.

Paine recommended approving the new health plan costs and employee share distribution. The council did so unanimously.

Employee Out-of-State Vacation Policy

Paine explained that as the COVID-19 travel restrictions become looser, it is important to let our employees know there are travel restrictions to various states in the country and world. In traveling to these areas, KDHE has imposed 14-day quarantine restrictions for when travelers return to Kansas from those places. Currently, KDHE has state restriction to most east coast states and all international destinations.

“We need to inform employees that travel to these locations will require a stay at home quarantine. The policy we write should refer to the KDHE list of states for restricted travel rather than specifically naming states that are currently on the list. This keeps the list fluid and is not restrictive on our part.

When the employee returns to Kansas from any of those locations, the 14-day quarantine will be first charged to the COVID-19 Leave allowance under the CARES Act,” said Paine. “If the employee has used their COVID leave allowance, their accrued vacation/sick leave balance will be charged. If there is no leave balance, the quarantine period will be leave without pay.”

He explained that this feature had been verified with LKM Legal Counsel.

Paine recommended that the council approve the Vacation Out of State Policy #89.

Council Chairman Brent Driggers made the motion to approve the policy but all were silent and no one moved to second it.

Mayor Thurston asked what the issue was with the motion.

Councilmember Byron McCartney said, “I need some more time to think through this all.”

The Council talked through the issue more. Council members had concerns but eventually all could see the benefits of the policy and it passed unanimously.

The meeting ended with an executive session where no action was taken. The next meeting will be a special meeting on Tuesday, May 26 via Zoom.