September 15, 2015

Another year of positive results of

operations builds on our history of strong financial management.

Revenues: slightly above budget

Expenditures: slightly below budget

Positive results of operations: $1.6M

09/15/15 FY15 Preliminary Financial Results - Subject to Audit Stafford County: Responsible, Accountable Government 2

Good News

Empowerhouse 50,000 Capital contribution requested during the FY16 budget process

Library 50,000 Books & materials requested during the FY16 budget process

Fredericksburg Regional Alliance 71,000 Full funding request for FY16

Station 14 planning/design 400,000 CIP shows planning in FY16, construction in FY17. Could be reimbursed with bond proceeds when total funding is in place.

09/15/15 FY15 Preliminary Financial Results - Subject to Audit Stafford County:

Responsible, Accountable Government 3

Recommended Set-Asides

FY2014 year end Capital Projects Reserve $4,786,081 Embrey Mill: ($2,153,600) Mt. View HS turf field: ( 850,000) Woodstream Trail: ( 600,000) Leeland Proffers (SHS turf fields) 400,000 FY15 technology fees 169,801 FY15 PRO (after set-asides) 1,001,599

FY2015 year end Capital Projects Reserve $2,753,881 Policy Minimum (1,500,000)

Available Balance $1,253,881

09/15/15 FY15 Preliminary Financial Results - Subject to Audit Stafford County:

Responsible, Accountable Government

4

Capital Projects Reserve

• Staff recommends holding this balance as a contingency for $40M parks/road projects under construction and/or FY16 health insurance expenditures.

• Capital Projects Reserve receivables: $2M in proffers for artificial turf fields.

Standard & Poor’s upgraded the County’s rating to AAA, citing: Strong budgetary performance, with operating surpluses

in the general fund Very strong financial management, with strong financial

policies and practices Very strong budgetary flexibility and fund balances

What could make the rating go down? Reduced reserves, failure to maintain financial policies

09/15/15 FY15 Preliminary Financial Results - Subject to Audit Stafford County: Responsible, Accountable Government 5

Board’s Bond Enhancement Strategy

Moody’s upgraded the County’s rating to Aa1 citing: Healthy financial position evidenced by strong reserve

levels, strong financial management, conservative budgeting, and ample flexibility and liquidity

What could make the rating go up? Substantial tax base growth, material increases to

reserves and liquidity

What could make the rating go down? Large increases in debt burden, significant declines in

reserves and liquidity

09/15/15 FY15 Preliminary Financial Results - Subject to Audit Stafford County: Responsible, Accountable Government 6

Board’s Bond Enhancement Strategy

Fitch upgraded the rating outlook from stable to positive, citing: Economic vibrancy, sound fiscal management, strong

demographics, and manageable debt profile. Well managed finances, with longstanding policy

guidelines, strong reserves, detailed planning for capital and operating needs, and conservative budgeting practices.

What could make the rating go up? Continued positive operating results, compliance with fund

balance policies, sustained economic strength and debt metrics

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Board’s Bond Enhancement Strategy

Subject to audit adjustments:

09/15/15 FY15 Preliminary Financial Results - Subject to Audit Stafford County: Responsible, Accountable Government 8

FY2015 Preliminary Results

($ millions)Revenues $1.0 above budget

Expenditures* $1.4 below budget$2.4

Required, policy-driven changes to reserves including:allocation to reserves ($0.8) ·12% unassigned fund balance

to Capital Projects Reserve $1.6 · Revenue Stabilization Reserve·Claims Fluctuation Reserve for health insurance·Purchase of Development Rights

*Expenditure savings are net of expenditures, encumbrances, and commitments.

Note: $260K in unspent FY15 cash capital has been set aside for capital projects. Project details will be presented for the Board’s consideration at a future meeting.

Net County cost for the CSA program was $730k below

adopted budget:

continual analysis of high-cost placements, collaborative work with human service agencies to provide

community based services, purposeful child-directed service planning to support and

maintain youth within our community.

Staff is taking a conservative approach in monitoring the budget for next year. As we have seen in recent years, the needs of children and families fluctuate, often resulting in an impact to the overall budget.

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Comprehensive Services Act

Health Insurance expenditures exceeded budget by $1.3M (11.0%) in FY15 due to high claims experience. Average budget increase over the last five years has been

3.2%. National trend over the last five years has been 9.4%.

We will continue to watch health insurance very closely in FY16.

Joint County/Schools RFP is in the works with implementation planned for FY17.

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Health Insurance Budget/Actual

For the seventh year in a

row, Stafford County is the lowest among peers in both General Government and General Government Administration spending

Under the Board’s direction, the County continues to provide first rate services to its residents at a good value.

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Stafford Value Index

All numbers are subject to audit adjustments.

Schools are still working on preliminary year-end numbers.

This presentation assumes all Schools’ savings will be allocated for Schools’ one time expenses and/or reserves.

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FY15 Financial Results: More to Come

The audit is underway.

Audit results and final numbers will be presented to the Board at the conclusion of the audit.

Questions?

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Conclusion

To: Finance, Audit and Budget Committee

From: Shannon Wagner Human Resources Manager Subject: Shared Services/FY2017 Health Insurance Plan RFP

Date: September 15, 2015

CC: Anthony Romanello Cathy Vollbrecht The cost of providing health insurance for employees continues to increase and we have been exploring options to manage those costs and mitigate future increases. The Affordable Care Act has contributed to overall cost increases for employers in recent years on top of traditional inflationary cost increases. In addition, last year the County had an above average number of large claimants (total claims exceeding $75,000) that contributed to exceeding our health insurance budget in FY2015 and the significant premium increase in FY2016.

The County’s contract with Anthem for health insurance expires in 2017 and, as a result of the Shared Services Study with Stafford County Public Schools (SCPS) and a desire to work towards aligning our benefits, we have spearheaded a joint RFP process with SCPS.

In order to facilitate a strategic shared health insurance contract that creates opportunities to enhance efficiencies and reduce costs while maintaining a quality plan for all of our employees, a joint committee of representatives from the County’s Human Resources Department and the School’s Financial Services Department (Payroll and Benefits Office) selected Aon as our consultant. Aon has 70 years of experience in health and welfare consulting, including extensive experience with joint contracts for local governments and schools.

On September 2, 2015, a meeting was held with Aon and the County Administrator, the Superintendent of the Schools, and the health insurance evaluation committee to begin discussions of strategy and expectations for a joint purchase of health insurance. The evaluation committee then met with Aon on September 9, 2015 to continue discussions and begin exploring opportunities for efficiency and competitive value.

Memorandum Human Resources

Page 2: Shared Services/FY2017 Health Insurance Plan RFP

September 15, 2015

Aon’s role over the next few months will be to assist our joint committee in preparing the RFP for health insurance, to include medical, pharmacy, vision, reinsurance, wellness and dental programs, and work with us throughout the bid solicitation and evaluation. We have also asked them to provide us with information that will enable us to make effective decisions in developing an overall Employee Benefits Program that is comprehensive and meets established objectives with respect to cost and competitiveness with the goal of attracting and retaining employees. Together, we will look at alternative plan designs and cost sharing strategies that will address our health insurance costs and quality issues while also providing the best value to our employees.

Prior to public release, our intent is to have the health insurance RFP complete and available for review by the Finance, Audit and Budget Committee on October 20, 2015. Aon will be available for information and discussion as necessary. Our working timeline follows:

• Present RFP to FAB – October 20 • Present RFP to SCPS Board – October 27 • RFP Released – November 2 • Review of RFP Responses – December 2015 • Finalist Interviews – January 2016 • Final Contract/Budget Calculations – February 2016 • Presentation to Board and School Board – March 2016

The new health insurance plan selected through this RFP will go into effect for Fiscal Year 2017. Communication is an important part of this process and we will provide regular updates to the Finance, Audit and Budget Committee and to our employees throughout the process. Both the County and SCPS will also utilize employee committees who will assist us in educating our employees about potential changes to our health insurance. We plan to explore every opportunity for delivering competitive and valuable benefit plans for our employees while leveraging resources in a fiscally responsible way.

1300 Courthouse Road, P. O. Box 339, Stafford, VA 22555‐0339 Phone: (540) 658.8603 Fax: (540) 658.7643 www.staffordcountyva.gov

 

 

 

 

To: Stafford County Employees Stafford County Public Schools Employees From: Dr. Bruce Benson, SCPS Superintendent

Anthony Romanello, County Administrator, ICMA-CM Date: September 4, 2015 Re: Consultant for Health Insurance RFP

Shared services are a priority of both the Board of Supervisors and the School Board, and a joint health insurance RFP was identified as a recommendation through the shared services study conducted in 2014/2015. As mentioned by Dr. Benson in his “Back To School” address and discussed during the most recent renewal process at the County Government, the timing is now right for us to examine our current health insurance program. Adding further momentum for this joint RFP is the fact that the County’s contract with Anthem for health insurance expires in 2017. Selecting our future health insurance provider and plan design is a massive undertaking, especially as we continue to work toward aligning the County’s and the Schools’ benefits.

In order to facilitate a strategic shared health insurance contract that creates opportunities to enhance efficiencies and reduce costs while maintaining a quality plan for all of our employees, a joint committee of representatives from the County’s Human Resources Department and the School’s Financial Services Department (Payroll and Benefits Office) selected Aon as our consultant. Aon has 70 years of experience in health and welfare consulting, including extensive experience with joint contracts for local governments and schools. As this is our first foray into a joint approach, we felt this was one of their biggest strengths.

Aon’s role over the next few months will be to assist our joint committee in preparing the RFP for health insurance, to include medical, pharmacy, vision, reinsurance, wellness and dental programs, and working with us throughout the bid solicitation and evaluation. We have also asked them to provide us with information that will enable us to make effective decisions in developing an overall Employee Benefits Program that is comprehensive and meets established objectives with respect to cost and competitiveness with the goal of attracting and retaining employees. Together we will look at alternative plan designs and cost sharing strategies that will address our health insurance costs and quality issues, all with a goal to provide the best value to our employees.

Our goal is to have the health insurance RFP ready for both of our Boards to review in late October and to release it to the public in November. We would like to have a potential vendor selected for the Boards to consider in March, 2016. The health insurance cost would have to be included in the FY 2017 budget. The new health insurance plan will go into effect for Fiscal Year 2017 and you will have the opportunity to make choices regarding your health insurance coverage during open enrollment next year. Communication is an important part of this process and we will keep you informed as much as possible over the next few months. Once a health insurance contract is approved by both of our Boards, we plan to send out regular communications and hold employee meetings so that you can plan appropriately for you and your family’s health care needs.

We thank you for all you do.

COUNTY OF STAFFORD

Stafford Government Administration

1300 Courthouse Road Stafford, VA 22554

Stafford County Public Schools

31 Stafford Avenue Stafford, VA 22554

1300 Courthouse Road, P. O. Box 339, Stafford, VA 22555‐0339 Phone: (540) 658.8600 Fax: (540) 658‐7643 www.staffordcountyva.gov

Board of Supervisors Gary F. Snellings, Chairman Laura A. Sellers, Vice Chairman Meg Bohmke Jack R. Cavalier Paul V. Milde, III Cord A. Sterling Robert “Bob” Thomas, Jr.

Anthony J. Romanello, ICMA‐CM

County Administrator

MEMORANDUM

Parks, Recreation, and Community Facilities Date: September 8, 2015 Re: Shared Services Implementation; Grounds Maintenance

Stafford County (PRCF) and Public School (SCPS) staff initiated discussions regarding study findings and opportunities for savings through landscaping and grounds maintenance. We have begun laying the foundation for what will be a long term partnership of resource sharing, efficiency identification, and teamwork. A draft Shared Services Pilot Charter was developed and sent to Scott Horan with the Stafford County Public Schools for review and feedback. Preparing for the beginning of the school year, SCPS determined that they could reengage the week of September 21st. The team is initially focused on operations and maintenance of grounds and facilities at school sites. The 2015 Shared Services Study identified that the per acre cost of grounds maintenance for SCPS is high. The Shared Services Study, Parks Utilization Assessment and SCPS Efficiency Study indicate that there is the potential for savings where both agencies are currently duplicating services, in some instances providing grounds maintenance at the same site. However, PRCF’s cost for these services is significantly less. Currently, three school sites use a landscaping contractor. The remaining schools have multiple maintenance staff on site for facilities and grounds in most instances. All sites have a contractor for annual pesticide treatments. PRCF performs all grounds and facility maintenance at all parks sites and have staff state certified to perform pesticide, fertilization, and playground inspections. Both entities use the same software system for work orders. The team will draft an agreement for PRCF to perform grounds maintenance on behalf of Stafford County to identify savings in FY2016 for each entity. The agreement will include levels of service or standards, transfer of staff required and/or transfer of the annual cost for the services to be performed and the basis for any increases in costs. The order of implementation shall be based on ease of implementation, greatest rate of return in cost or staff time, availability of required resources, and the greatest opportunity for success to lay a strong foundation moving forward. The next phase of our shared services engagement will include drafting an update to the Facility Use Agreement between Stafford County and Stafford County Public Schools, last updated October 3, 2006.

1300 Courthouse Road, P. O. Box 339, Stafford, VA 22555‐0339 Phone: (540) 658.8600 Fax: (540) 658‐7643 www.staffordcountyva.gov

Shared Services Implementation; Grounds Maintenance September 8, 2015 Page 2 This agreement identifies joint use of school and park facilities to maximize educational and recreational opportunities of Stafford citizens by providing access and utilization of school buildings, athletic facilities, and park areas without duplicating services. Shared Services; Grounds Maintenance Implementation Team: Name Title Jamie Porter Director, PRCF Brion Southall Assistant Director, PRCF Chris Stevens Parks Superintendent, PRCF Scott Horan Assistant Superintendent for Operations, SCPS Michael Justice Coordinator of Health, Physical & Drivers Education, SCPS Stacy Gentry Supervisor Operations & Maintenance, SCPS Robert Adams Director, Operations & Maintenance , SCPS Resources:

• Draft Pilot Grounds Maintenance Charter • Shared Services Study • Parks Utilization Assessment • SCPS Efficiency Study • Agency Budgets • Agency Contracts • 2006 Use Agreement

Cc: Tim Baroody