City of Pocatello | minutes | meeting 2026-07-02 | City Council Budget Development Meeting Agenda (9:00 AM) source: https://pocatello.gov/AgendaCenter/ViewFile/Minutes/_07022026-1926 CITY OF CITY OF POCATELLO, IDAHO : y. SPECIAL CITY COUNCIL MEETING BUDGET DEVELOPMENT MEETING JULY 2, 2026 —_— OOOO OC Oe AGENDA ITEMNO. 1: ROLL CALL Mayor Mark Dahlquist called the City Council Special Budget Development meeting to order at 9:01 a.m. Council members present were Dakota Bates, Corey Mangum, Brent Nichols, Hayden Paulsen, Stacy Satterfield and Ann Swanson. AGENDA ITEM NO: 2: FISCAL YEAR 2027 BENEFITS PRESENTATION: Jay Seedall, Human Resources Director, Holli Harnsberger, Benefits Coordinator and AJ Argyle, GBS Benefits, were in attendance to give a presentation regarding the proposed 2027 Medical Plan Mr. Seedall explained that staff had completed its evaluation of available medical insurance options and was seeking Council direction in order to finalize plan preparations within the required timeframe. Mr. Argyle reviewed the renewal process, noting that rising claims experience had significantly impacted renewal pricing. He explained that PacificSource and Select Health proposals were evaluated through a detailed repricing analysis, comparing provider discounts, projected claims costs, network coverage and long-term rate stability. Mr. Argyle summarized the proposals presented by current provider, PacificSource and Select Health. While PacificSource continued to offer a strong provider network and favorable discounts, it did not include a guaranteed second-year rate cap. Select Health's recommended option included an approximately 8% premium increase for Fiscal Year 2027 and provided a guaranteed maximum second-year increase of 12.9%, offering greater long-term budget certainty. Council members discussed the proposed changes to employee coverage, including provider network differences, access to University of Utah facilities, prescription drug coverage, out-of- network costs and potential impacts to employees currently receiving specialized care. Mr. Argyle explained that Huntsman Cancer Institute and Primary Children's Hospital would remain in-network under Select Health, while certain University of Utah facilities would become out-of-network. He also discussed prescription formulary changes affecting medications such as Ozempic and the transition process available for affected employees. Council members discussed network flexibility, secondary insurance coordination, employee education and transition assistance. Ms. Harnsberger explained that Human Resources would conduct employee education sessions and provide ‘individualized assistance during enrollment to help employees understand the changes. She reported that dental insurance premiums would increase approximately 8%, while all other employee benefit programs would remain unchanged. SPECIAL CITY COUNCIL MEETING BUDGET DEVELOPMENT MEETING JULY 2, 2026 Mayor Dahlquist noted that City staff had worked extensively with GBS Benefits to review the available options and confirmed that the recommendation to move the employee medical benefit plan to Select Health represented the best balance of employee benefits, long-term financial stability and budget predictability. Council members expressed general support to switch medical providers to Select Health and acknowledged the importance of the second-year rate guarantee in managing future healthcare costs. AGENDA ITEM NO. 3: FISCAL YEAR 2027 BUDGET PRESENTATION: Rich Morgan, Chief Financial Officer, and Chantelle Macy, Budget Manager, presented the proposed Fiscal Year 2027 Budget. Mr. Morgan explained that the proposed budget was developed using a budgeting methodology that began with conservative revenue estimates before building expenditures around available resources. This approach differed from prior years, when expenditures were established first and revenues were adjusted to balance the budget. He reported that several significant financial challenges had been addressed during budget development, including correcting an approximate $1 million overestimation of interest revenue from the previous year while also absorbing substantial increases in employee benefit costs. Through careful management of personnel costs, operational expenditures and salary savings, staff presented a balanced budget totaling approximately $185 million. Mr. Morgan highlighted several initiatives underway to improve operational efficiency and long-term financial sustainability, including increased public access to City information, evaluation of future public safety facilities, development of a long-term capital improvement and deferred maintenance plan, expanded grant opportunities and establishment of additional funding partnerships such as the cemetery trust. Council members discussed strategies used to balance the budget, such as delaying hiring to capture salary savings, funding street equipment through departmental resources while minimizing reductions to essential City services. Mr. Morgan emphasized that departments had made significant operational adjustments and efficiencies to maintain service levels while remaining within available revenue resources. Council discussion included the topic to reallocate interest earnings back to the individual funds that generated those earnings in accordance with applicable accounting standards and state law. Mr. Morgan explained that the proposed accounting practice would more accurately allocate interest revenues among governmental and enterprise funds, although it would create challenges for departments that do not generate significant interest income. Jared Johnson, City Attorney, advised that while the City's current practice was permissible, aligning interest earnings with the originating funds represented the stronger legal and accounting approach. Council members expressed appreciation for the extensive work completed by department directors and staff in balancing the budget without major service reductions. Council members emphasized that describing the budget as "flat" understated the significant effort required to SPECIAL CITY COUNCIL MEETING BUDGET DEVELOPMENT MEETING JULY 2, 2026 absorb inflationary pressures, rising benefit costs and operational demands while maintaining services. Council discussion supported ongoing budget management throughout the fiscal year, including periodic reviews of salary savings, potential budget amendments to address unfunded priorities and continued pursuit of grant funding and other outside resources. Significant Council discussion ensued regarding the following topics: Developing a long-term staffing or right-sizing study to evaluate service levels and departmental workloads; continuing conversations regarding compensation, operational spending and structural budget challenges; funding priorities for beautification projects and strategic plan initiatives; community agency funding requests and whether future appropriations should remain level or be redirected toward City strategic priorities; and opportunities to support neighborhood associations and community improvement projects through future budget adjustments if resources become available. Mr. Morgan explained the remaining steps in the budget adoption process, including publication of the tentative budget, the upcoming public hearing to be held during the August 6, 2026 Regular City Council meeting, consideration of public testimony during the August 13, 2026 Work Session and Council consideration for final adoption at the August 20, 2026 Regular City Council meeting. A motion was made by Mr. Mangum, seconded by Ms. Swanson, to direct staff to publish the tentative FY2027 budget, fee schedule and notice of intent to use 1% forgone balance and to publish the proposed budget in the Idaho State Journal in the amount of $185,600,000. Upon roll call, those voting in favor were Mangum, Swanson, Bates, Nichols, Paulsen and Satterfield. Mayor Dahlquist thanked City staff for their considerable work in preparing the proposed Fiscal Year 2027 Budget and the supporting presentations AGENDAITEMNO: 4: ADJOURN There being no further business, Mayor Dahlquist adjourned the meeting at 10:30 a.m. APPROVED: Yu. Ob MARK DAHLQUIST, MAYOR PREPARED AND ATTESTED BY: