City of Macomb City Council met Dec. 13.
Here are the minutes provided by the council:
The Committee of the Whole, of the Macomb City Council, met in the City Council Chambers at 5:15 p.m. located in City Hall at 232 East Jackson Street, Macomb, IL.
Mayor Michael Inman called the meeting to order.
Roll call was taken and the following were present: Aldermen Mike Wayland, John Vigezzi, Don Wynn, Tom Koch, Ashley Katz, Tammie Leigh Brown-Edwards and Dennis Moon were present.
In addition to the Mayor, Deputy City Clerk Renee Lotz and Aldermen, City Attorney Lisa Scalf, and City Administrator Scott Coker were present. Also in attendance was CDC John Bannon.
Public Comment: Mr. Dana Walker spoke on behalf of 50 petitioners requesting the debt service fees for water and sewer be rolled back and frozen at the 2017 price $3; and use his recommended fee schedule for big meter users paying more than residential meter users. The petitions were presented to the Clerk for record.
The first item on the agenda for discussion was on the renewal of the current stop loss carrier, Tokio Marine HCC, for the City of Macomb’s health insurance. Ms. Andrea Leinbach from Dansig/Consociates was present to discuss the proposed renewal and additions to the city employee’s insurance. She reviewed all of the highlights from the power point discussed in the General Government Committee and the Employee’s Insurance Committee.
City Administrator Scott Coker explained that Committee’s for Employee Insurance and General Government had met on November 17th and December 1st to review the information presented regarding the renewal of the health insurance.
Ms. Andrea Leinbach reported the following information from their power point.
2060 Claims, 327 member calls and 205-member portal logins.
Healthcare Transparency Disclosure delay July 2022, ID Cards will have information on the back, deductible, co-insurance and co-pay.
Census February 2021 through September 2021, Single 367/$827.09, Family 435/$2077.26 per month. 65.1% under 70% is good, this year’s plan is running very well.
Claims Re-cap: Medical $1.2, Prescriptions $109,680.39, total paid $1.3.
All in costs, per employee/per month $1415.19 and per member $585.23.
Average age employees, 44.6, 43% Female, 57% Male, 7 members have between 5-6 chronic conditions, 1 with greater than 6.
12 Months: 32 ER visits, 1 admission, 35.2% Preventive Care visits, 1.11 Predicted Resource Index for the coming year.
Top 10 drugs were listed on the report and half of that are for diabetes.
Plan comparison, Median Deductible In-Network (Single/Family) $250/$750 as compared to Average Governmental Plan at $600/$1500 In-Network Deductible. Rx Co-Pays are $6, which is under every comparison done.
City Administrator Coker stated the city is a “partially self-funded” plan, assuming claim coverage under $50,000 and having a re-insurance policy from Tokio Marine, HCC to cover cumulative claim amounts over $50,000. Third party administrators are Consociate/Dansig.
He reviewed his memo which states the “expected plan cost” $1,837,630.26 including administration, reinsurance premium, claims paid were down about $36,000 from last year. City’s insurance trust fund is estimated at $1.98 which is up from $1.75 and recommendation is no increase in employee contributions. Premium freeze, Single $951.15/month and Family $2,227.53/month, employee contribution for family coverage $147.28 every two weeks.
He stated the General Government Committee recommended the city accept the plan proposal with Consociate as third-party administrator with Dansig as the local agent, Tokio Marine, HCC as the reinsurance, with no premium change. Tokio Marine, HCC is higher by $41,000 than the competitor Reunion Health Services. However, we have a good 5 years history with Tokio Marine, HCC and there are risks with switching.
He stated the next recommendation was an additional list of Preventive Services for an annual expense of $10,000. This has been a request by employees. This is considered a long-term gain for the plan and employees. Along with that, Dansig has recommended Hines utilization review/case management $2.30/month per employee with ROI of 8-10 times the cost. The city will realize a 2% discount on the reinsurer for the change. They help with pre-certification for procedures. We currently have Healthlink, and they’re not very good at it. Dansig has reported most of their clients have Hines.
He stated lastly, the employees have asked many times for voluntary vision/dental plans. Dansig has recommended Mutual of Omaha, this is at no cost to the city.
Andrea stated that the Preventive Services would be covered at 100% if it’s a Network Provider. Mayor Inman stated all four items would be placed on the agenda for next Monday night’s meeting.
The fifth item on the agenda for discussion was on renewing the City of Macomb’s electrical supply contract. City Administrator Coker explained the contract with AEP Energy is up for renewal. He has been speaking with George Vorhees, AEP Energy for several weeks. He explained there were many price fluctuations and changes going on in the market and electrical supply is one. His memo provided an all-in pricing for a range of months which are higher than previous. A year ago, we paid 0.03745/per kWh. Just today the price has changed from the handout he supplied, it’s now 5.7 to 5.8/per kWh.
Mr. George Vorhees explained the volatile market place. The report provided, reflects the happenings since last spring. The graph depicted a monthly historical average from January 2019 through January 2022. He explained the pandemic of 2020 wasn’t reality, so he went back to 2019. The city signed a contract in 2019 in the $37 range. It has skyrocketed from last spring, to where it stands today, 25% higher.
Also, occurring in the market place, we just saw movement in capacity bi-lateral market, basically it’s iron in the ground, a direct relative to some coal plants in Illinois are scheduled to be “moth-balled”, put out of commission and we’ll be recovering our power from further away.
AMEREN has approved several transmission increases, 23%, you’ll see it on your delivery bill. That 23% is relative to the transmission systems being built to accommodate the power from further away. At least it’s being done. Out east they didn’t build them and they’ve “moth-balled” plants years ago, causing a drastic run up in power.
Energy is increasing, capacity is increasing and transmission is increasing. Roughly the other one half of your bill is your AMEREN delivery bill, who has religiously increased their delivery charges. Our Governor wants to make Illinois “Green”; increases will occur in this area; one is energy efficiency. Therefore, there should be more money out there for the city. You’re paying it, your neighbor is paying it, so take advantage of the energy efficiency because it’s going to be going up; a little less than a tenth of a penny this 2022.
In addition, there’s Illinois Power Authority, which basically these people are not putting in solar systems behind their meters, and AMEREN’s not paying for them unless they’re paying for those certificater which is a value relative to how much that solar panel generates, so you get a discount on your capital project. The Illinois Power Authority charges are increasing, so they have more money to offset the investments in these solar projects.
Then, last but not least is, AMEREN and customers who have also taken an increase in “zero emission” credits and legislation has been approved to increase that rate as well on your delivery bill in 2022. That’s what’s carbon neutral (NUCLEAR), therefore, “zero emission” credits that come from the EXCELON Power Plants in the Common Wealth Edison area; AMEREN customers are contributing to that.
Energy is not a happy place right now, and that’s on the natural gas side as well. He is a believer that everything reverts back to the “mean”; when things are expensive and trendy, they’re higher, and he always tries to find the middle, but it’s not here today! It’s above “middle”. There’s probability it could come down depending on what transpires. Inflation is horrible on energy. The costs to carry it is expensive and there’s so much impacting this and prices we’re seeing today.
There’s nothing sweet about this contract provided.
He can’t imagine in his worst dreams, that energy is going up; but never say “never”. He has literally priced to Scott a week ago and it was about one tenth of a penny less, as well as, the bi-lateral capacity market is in a state of fluctuation, which is a component we need to include. The auction will be in the first quarter of 2022. We buy in the bi-lateral market as indications of what that potential trading will be and what final numbers will be, so we’re seeing a marginal increase there. He had to go back and reprice what he had sent Scott this morning. In 12 months, it’s 0.05833 and in 18 months it’s 0.05785.
If you believe this market is here to stay; and he is not speculating; the 48 months matches the 24 months, very slightly more, other than that, you have the 24 months and that’s what he originally recommended to Scott and he will stay with that, but he’s going to caveat that with; there’s nothing that the city is going to save compared to AMEREN default rates, all accounts with the city but one, (Sewer Plant) which is above 150 kWh that must remain off-system or go to an hourly rate.
The others could default back to AMEREN, and once that happens, you’re basically on a “hold” pattern for 12 months. He would suggest, rather than signing a contract, dump them all back to AMEREN on default rate, keep the one account (Sewer Plant), and deal with that account, and then don’t wait till the end of the contract, if we do see this market decline, take advantage of that window potentially and buy for January of 2023.
He told Scott we could handle the contract for the short period if that’s what you decide. Otherwise, AMEREN does have a default rate unknown. It’s a tiered rate because they buy in conches, year by year, blending them for an average. So, this doesn’t have the exposure that you have participated in the market, up and down, it’s a commodity. He’s more than happy, AEP is more than happy, to take your business, he just wanted to tell you there isn’t any savings one way and/or another. There’s of course convenience and the comfort level, but AMEREN default rate will be recalculated effective January 1, 2022.
What they have in place right now that he is benchmarking against with these rates; this is kind of like, you’re with AMEREN or you’re with me, but he is not going to make claims that this is a big winning opportunity for the city. With that, my recommendation is look at the 24 months and or retreat! He’s totally surprised that no one is out there talking about this. There are so many small businesses in Illinois that are renewing contracts above these default rates. He’s here telling you there is an option, and no decision need be made tonight. Review this and come back and ask your questions.
Mayor Inman asked what AMEREN’s benchmark was against his product.
Mr. Vorhees stated that would be about 55 as they speak, and that’s under review for June 1, 2022 start. City Administrator Coker commented that we would have to lock in the Sewer Plant.
Mr. Vorhees stated that is over 150 kWh and that can’t be turned back to AMEREN.
Alderman Moon stated that two quotes were given; the one in the packet dated the 8th December, until today, it has gone up that much so, it would look like there’s a good chance it will go up by next week when we have to make a decision.
Mr. Vorhees stated the events in December was that gas prices ran up over $4 and everyone gave up on December when they saw it wasn’t as cold as anticipated. So, all of those holding speculative positions in the forward market sold off gas in December. That gave us a dip in the market and we have finally started seeing a little red in the curves, but right now, they’re going back to black because now they’re predicting January.
Alderman Moon stated, then gas prices influence the electric prices.
Mr. Vorhees stated the closest correlation between the energies. Natural gas drives the peeking turbines, power plants. It’s a good indicator.
Mayor Inman stated we will take this under advisement and come up with a recommendation for action at next Monday night’s meeting.
The sixth item on the agenda for discussion was on an ordinance to provide for the levy and collection of taxes for the year 2021, payable in 2022 for the City of Macomb, McDonough County, Illinois. This ordinance had first read last Monday night. There was no discussion and Mayor Inman stated it would be placed on the agenda for second reading and final action at next Monday night’s meeting.
The seventh item on the agenda for discussion was on an ordinance to abate the direct annual tax Levied for 2021 to pay the annual debt service on $2,275,000 in General Obligation Refunding Bonds (Waterworks Alternate Revenue Source) Series 2016 and $4,010,000 in General Obligation Refunding Bonds, (Infrastructure Projects Alternate Revenue Source) Series 2020. This ordinance had first read last Monday night. There was no discussion and Mayor Inman stated it would be placed on the agenda for second reading and final action at next Monday night’s meeting.
The eighth item on the agenda for discussion was on an ordinance to amend Chapter 16, Section 54 and Chapter 15, Section 407 of the Municipal Code of Macomb, Illinois pertaining to cannabis. This ordinance had first read last Monday night. There was no discussion and Mayor Inman stated it would be placed on the agenda for second reading and final action at next Monday night’s meeting.
The nineth item on the agenda for discussion was on an ordinance to amend portions of Chapter 17 and add Article IX to Chapter 17 of the Municipal Code of Macomb, Illinois. This ordinance had first read last Monday night.
CDC John Bannon explained the ordinance was recommended by the Planning Commission because there is currently no ordinance pertaining to solar on a small scale for residential or medium and large-scale solar decommissioning plans and requirements. This would formalize a process.
There was no further discussion and Mayor Inman stated it would be placed on the agenda for second reading and final action at next Monday night’s meeting.
The tenth item on the agenda for discussion was on an ordinance approving and adopting the completion of the Macomb Downtown TIF District Redevelopment Project Area, Plan, Projects and Obligations. This ordinance had first read last Monday night. There was no discussion and Mayor Inman stated it would be placed on the agenda for second reading and final action at next Monday night’s meeting.
Upon a motion being duly made by Alderman Vigezzi, seconded by Alderman Wynn to adjourn the meeting, all Aldermen voted “Aye” by voice vote with no “Nay” votes, Mayor Inman declared the motion carried and they adjourned the meeting at 5:58 p.m.
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