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02-11-2014 - Special CITY COUNCIL OF EDGEWATER SPECIAL MEETING FEBRUARY 11, 2014 2:00 P.M. COUNCIL CHAMBERS MINUTES 1 . CALL TO ORDER, ROLL CALL, PLEDGE OF ALLEGIANCE, INVOCATION Mayor Thomas called the Special Meeting to order at 2 : 00 p.m. in the Council Chambers . There was a silent invocation and pledge of allegiance to the Flag. Present Mayor Michael Thomas Councilwoman Christine Power Councilman Mike Ignasiak Councilman Gene Emter City Manager Tracey Barlow City Clerk Bonnie Wenzel City Attorney Aaron Wolfe Excused Councilwoman Gigi Bennington 2. PUBLIC HEARINGS/RESOLUTIONS a) Award bid for Capital Improvement Loan Agenda Request City Manager Barlow and Finance Director John McKinney made a staff presentation. The purpose of the meeting was for Council to authorize staff to proceed forward with one of the respondents to the RFP that could put together a contract for the March 3rd agenda. The recommendation was to go with BB&T. This was going to be a fixed rate throughout the term of the contract. Andrew Mazlin, First Southwest, spoke about the specifics of why they were recommending BB&T as the bank the City should select even though they weren' t the lowest interest rate. Councilman Ignasiak liked what he was hearing but asked if there was any prepayment penalty if they pay the loan off early, which Mr. McKinney and Mr. Mazlin elaborated on. Councilman Emter felt this sounded better than expected and further commented on why he thought this was really beneficial . 1 Council Special Meeting February 11, 2014 Mr. McKinney then identified what their next step would be if Council approved this today. City Manager Barlow asked if they were required to draw the entire amount they submitted. Mr. McKinney informed him no and explained the way it would be done. City Manager Barlow elaborated on why he asked that question. Councilman Ignasiak questioned if the money was held in escrow, who would make the interest. Mr. McKinney informed him the City did. City Manager Barlow didn' t think they would make as much as they were charged. He further identified he wanted to make sure they were all on the same page . Councilman Emter asked at what point the loan would actually be implemented and when the loan became effective. City Manager Barlow explained it would be put in escrow and the City draws it when they need it. Mr. McKinney informed Council they would have a pre-closing on Wednesday, March 5th, which meant the money would be available to the City on Thursday, March 6th. They wanted to make sure they acquire the assets as soon as possible. If everything was approved on March 3rd they would turn around and immediately acquire those assets and pay for the Fire Truck and Vac-Con truck almost immediately because they receive a 10% discount by paying upfront. Due to there being no further comments, Mayor Thomas entertained a motion. Councilman Mike Ignasiak moved to approve awarding the bid for the Capital Improvement Loan to BB&T, second by Councilman Gene Emter. The MOTION CARRIED 4-0-0. Yes Councilman Gene Emter, Councilwoman Christine Power, Councilman Mike Ignasiak, Mayor Michael Thomas No None Abstain None b) Resolution No. 2014-R-03 - Amending the Purchasing Policy Agenda Request This item was removed from the Agenda. c) Approval of Settlement with Stephen D. Hastings This item was added to the agenda on February 10, 2014 . 2 Council Special Meeting February 11, 2014 City Attorney Wolfe made a staff presentation. They had worked out a tentative settlement whereby the Plaintiff would agree to accept $15, 000 plus $3, 750 in Attorney Fees as full and final settlement of the claim. The settlement payment and the cost of the mediation would be paid for by the insurance carrier with no capital outlay by the City. He reminded Council of the consent to settle clause in the policy which limited their liability to this tentative settlement agreement. If Council rejected it the City would be on the hook for any costs and indemnity payments above that amount. In settling premiums the carrier looks at the total cost of the claim. He was looking for a motion to either approve to disapprove the settlement with Stephen Hastings . Councilman Ignasiak asked how they enforce the element of confidentiality. City Attorney Wolfe spoke of it being difficult to enforce as it would require going back to court to try and enforce that clause. Councilman Ignasiak asked if the other party broke the agreement and decided to brag about it what would be their recourse. City Attorney Wolfe identified they would have to go to court and get an injunction to prohibit that. Councilman Ignasiak questioned to prohibit what was already said. City Attorney Wolfe informed him yes and damages if any. Councilman Ignasiak asked how they would prove damages . City Attorney Wolfe again mentioned it was difficult to enforce. Councilwoman Power questioned what the point was and if this was a deterrent in any way. City Attorney Wolfe identified it was meant to be a deterrent. Councilman Ignasiak stated as much as he found this revolting, they were looking at it from a moral and ethical standpoint which he found offensive but the insurance agent was looking at it strictly from a business perspective and were holding all of the cards . He recommended Council adopt this . Councilwoman Power asked if they were allowed to hear any of the back and forth. City Attorney Wolfe informed her unfortunately there was confidentiality connected with the mediation conference. In a public meeting he couldn' t discuss it but privately he could. Councilman Emter commented on why he felt this was absolutely disgusting. He didn't know what they could do about it. He asked how many of these they have had now and described it' s the same story every time with the insurance carrier. How much public waste is accrued by whoever was allowing this to occur? He asked if it was legislative or insurance company regulation. He felt to let this go on was disgusting. Mayor Thomas asked how much the City pays the insurance company a year. Mr. McKinney informed him over $500, 000 for all of their carriers not including fully insured. Mayor Thomas felt it might 3 Council Special Meeting February 11, 2014 behoove the City to put that money into a fund and be self-insured. Councilwoman Power was curious about what other cities do. Mr. McKinney explained the City of Edgewater by itself was not big enough to have a Self Insurance Fund. Volusia County was self-insured and also had stop loss GAP insurance that they had excessive coverage insurance so even they had a limit to what they cover. Based on their claims, they have deductibles of anywhere from $1, 000 to $5, 000 . If it was a $4, 500 incident they pay that outright. They may even discuss with the City Manager paying a claim for $6, 000 since the deductible does affect their premium. They are also a part of the PIGOT/PRIA insurance pool that helps keep their rates extremely low since they are extremely competitive. They would probably see their premiums double if not triple if they were to go self-insured. They would have to have an actuarial valuation and set aside reserves based on that valuation. Up front it could cost them a million plus dollars to set up that fund. Their premiums may be cheaper year on year but property casualty was their cheapest portion. Worker' s Comp is an even greater expense. He didn't think Property Casualty was much over $200, 000 and Worker' s Comp was the greater portion of it. City Manager Barlow spoke of being a full service City and the liability associated with that. He also identified that many years ago they were self insured. They determined it certainly was not cost advantageous to continue that route. Councilman Emter asked if anyone had ever explored the possibility of a Co-op Self Insurance . They used to do this in a school system. Mr. McKinney informed Councilman Emter what he had described was what they were a part of with the PIGOT/PRIA insurance pool . Florida League of Cities had one very similar to it. He shops that every year. The one they were currently with had been able to maintain their best cost premiums since he has been here. City Manager Barlow felt where they were at was the best deal but part of having the best deal was they surrender some of the decision control and he understood the frustration of that. Councilwoman Power asked if confidentiality went both ways . City Attorney Wolfe informed her it did. Due to there being no further comment, Mayor Thomas entertained a motion. Councilman Mike Ignasiak moved to approve accepting the deal as is proffered, second by Councilwoman Christine Power. The MOTION CARRIED 3-1-0. Yes Councilman Gene Emter, Councilwoman Christine Power, 4 Council Special Meeting February 11, 2014 Councilman Mike Ignasiak No Mayor Michael Thomas Abstain None City Manager Barlow reminded Council this evening at 5 p.m. at the New Smyrna High School was the public session regarding the Shiloh site for Space Florida. He thought they would hear the Chamber come out and get people to support the process as there was still a lot left to the process . Mayor Thomas asked if there were any other meetings between now and March 3rd. City Manager Barlow informed him not that he was aware of. Mayor Thomas asked when the joint meeting was between Edgewater, New Smyrna and Oak Hill . City Manager Barlow informed him on March 12th was going to be a Special Workshop between the City Council, Economic Development Board and Planning & Zoning Board regarding CRAs and March 18th was going to be the joint meeting between Edgewater, New Smyrna and Oak Hill. 3. ADJOURNMENT There being no further business to discuss, Councilman Emter moved to adjourn. The Special Meeting adjourned at 2 : 31 p.m. Minutes submitted by: Lisa Bloomer, CMC Attest: APPROVED: Cit of Edgewat- , Florida• ALI& - Cyr,z Bonnie Wesel, City Clerk Micha\l L. Thomas, Mayor Jr 1 F r ., r ,(, 5 Council Special Meeting February 11, 2014