City - Special Meeting

Special Session Mayor and City Council meeting 10 a.m. Tuesday, June 23rd, 2026. City Hall Council Chambers call this meeting to order. Would you please rise for the pledge of allegiance? Mr. Bonilla, please be honest.

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Thank you. Sorry about that. Item number three, discussion item. One discussion consideration possible actually regarding the possible The proposed employee health insurance premium rate presented by the City of Nogales Employees Benefit Trust for fiscal year 2026-2027. No. Does everybody know what this pertains to? Supposedly we're getting another hike of 25%.

Go ahead. That that is correct. Uh, finance is looking for direction. On putting that increase to be absorbed by the employer. It would facilitate them to get the payroll done. The 1st week of July. Go ahead.

Um, good morning and welcome Mr. Um, so, yeah, I'm in the insurance committee and, uh, if you go back to the public record, because they're also, um, recorded, it was approved. But the only question I have is, um, and said he was here. Thank you. Um, that is to be absorbed by the city, right? Not the individual employer.

That's what we're requesting.

No, but that was already recommended by the insurance committee, which I am a part of. Have you talked to Mr. Batchelor? No, I'm sorry. I think it behoves you to reach out to him. He's the chairperson of the committee. Yeah, so you can get clarification from him because from what I understand, and I apologize not going back to the meeting. I just came back from out of town. So I haven't seen the previous. meetings um that we had the last meeting when this was approved but from what i understand the 25 would be absorbed by the city the city not the employer um themselves so yeah that's why um yeah

To clarify, I think we're looking, the recommendation was to accept the 25% increase. And the question at hand is the employer being the city of Nogales is going to absorb the 25%, not share that increase to the individual employee.

Perfect. That's how I understood it, Mr. Lariva, exactly. And just, is that how you understood it then? Yes.

And we're trying to see, we just got to make sure that it gets approved by.

Okay. So then you asking us to approve that the 25% get absorbed by the city.

Correct.

Yeah. Okay. That makes a lot of sense. Thank you.

Is that the way you understood the motion?

Yes, Mr. Mayor.

Okay. All right. So yes, sir.

He ran off before I could ask. So, is this all it's not going over budget or anything, right? It's it's all within.

This coming budget, or this is that's the reason we asked because we. I had no knowledge of the extra increase that was actually applied for the insurance. Okay, and so the reason that we bring this up is because. I want to make sure that you guys are aware because it was not budgeted for it's in the reserve. So I would have to come out from the reserve. Hey, so that's going to be an extra cost. Correct. And how much are we talking about? It's overall budget wise, not the actual amounts, because we always budget max for every employee. It's about 1.4Million.

So we're going to be over that. We're going to have to get that from the reserve. Correct. Okay. That's what I want to know. Thank you.

Yes. So it's interesting because I always am under the impression that when we have these meetings that it's communicated to the finance department because if anyone needs to know is the finance department. So that's water under the bridge. So do we have the $1.4 million? Yes. We do. Uh-huh. Is that going to put a strain on the overall budget? I know that we are tight in our budget. We're going to have some concerns, and I understand that. But do we have the $1.4 million to cover the 25% cost for each employee increase?

Yes, we do. Because if you remember, we were able to cut down a lot of department expenditures for this budget. So it actually gets cut off out of the department, goes back into the reserve. I trust your... And it doesn't change the bottom line number. All it is is a shift from... So it's still... Yeah, so it's moving one amount from one line item to the other. Yeah. Pretty much it, but it doesn't change the overall budgeted amount.

Yeah. But the fact is it's still costing $1.4 million. Correct.

Budgeted-wise.

Budgeted-wise. No, I got that. Okay, thank you.

Go ahead, Mr. Doe. This is extra besides... The other million, whatever we're gonna put on the reserves from I guess the pay hikes and there was a couple of other things that we had spoken about and it was supposed to fall on the reserves. So how much is falling on the reserves extra that, you know?

That, uh, that we're not that's not being brought to our attention right now as far as I know is this everything else is actually on the budget itself. So, on the final budget that you guys approved and received. It already includes all the money that was. For the 2 dollar increase for the employees. But did we have to get money from the reserve for some of those expenses? Well, it's it becomes part of the whole budgeted amount. And that is a reason that when me and Mr pocket were meeting with all the individual departments, we had to make sure that. And that we are not budgeting amounts that they're not really using. So, in a way, we removed there from the departments, put in the reserve and then took it back to salary. So it's a shift of line items expenditure.

Yeah, because I just hope that we don't put too much of a strain on our reserves. That's what I'm trying to find out.

Yeah, and the 1 thing that I did speak with Mr about it is that. Maybe starting for the next budget, we might consider a portion going to the employee. Just to make sure that it's also not a big cost to the to the city.

Well, percentage.

i don't have a number right now to see you think of a percentage but it's something that we'll definitely go into and make sure that because the as the increase of the the price of the cost of the insurance goes up and it's being taken to by the city the percentage that the the employee normally pays starts going down so we were thinking of looking at the percentage what it used to be for the the cost were incurred and to see maybe going back to the same percentages that they used to So they can take that. Back to the employee, so it can be shared between the employee and the employer, but we have to really look at the whole numbers. See how the actual cost, because this is more budgeted amounts. Because it's actually way less when somebody has single coverage and insurance, but we always budget a family, the highest cost, because we might have an employee that might have a single coverage. For maybe half of the year, and they leave somebody replaces them and has family. So we just got want to make sure that we have that. Budget available in case that happens. So, probably out of this amount of 1.4, it might again, like, as I explained before, normally about 60%, 58% is what really we use. Or the budget, but it's good to have that budget to make sure that we're.

I just want to make sure Mr. are you going to be on top of that working together with finance to make sure that.

Absolutely.

As far as this fiscal year is concerned, I think Sergio has the option to absorb that by the employer, but to look at it for the 27-28 fiscal year would be re-evaluating if there's an increase and how we would go back to the percentage sharing employee and employer. But as far as this fiscal year, I think Sergio has done a great job getting that handled. We just got to keep the The remainder of the budget in line, because that's where the reserves are coming from. So there's, there's less of a buffer as you mentioned on those reserves for any hiccups that may arise. Because we're going to use it right now on the employer's behalf. We'll cover those employees.

There's a good chance that you won't see that until probably late in the fiscal year, because we still also have vacancies and we budget a full amount for the vacancies. And, like, for example, police, they might have, like, I think, like. Around 10 police officers that are in vacant positions. So. If they never fill them throughout the whole year, that's 10, that's a lot of money that we actually just budgeted, but never really use. So we won't get to see the effect until. Maybe the 3rd quarter of the fiscal year.

Well, I guess, as long as you guys are on top of it, because it's those hiccups I'm concerned with.

So isn't the insurance also have like a buffer already that we've been saving in throughout the years?

So my understanding is the buffer that they want to have is kind of having a reserve as well claims. So based on the numbers that I've noticed that they've submitted is that the number of claims is not as much as the number that we actually pay into the insurance. And it's approximately about a million. So let's say they get 3 million for a year of claims, but they're only collecting 2 million. So they had that increase. So now they're receiving 3 million, but now the claims are 4 million. So they just want to make sure that they're not sucking the bank account dry so they can have that buffer.

But they do have a buffer.

Yes, that's the reason they want to do that so they don't.

Yeah, because before Ms. Montiel, I was part of the EBG, and I recall they having the buffer. Okay. Yes, Mr. Doe.

It comes to mind that in something like dealing with healthcare costs, one of the things that could all of a sudden arises an employee that has a real serious condition that needs not only emergency, but long-term care that can run to a million dollars just for one individual. The way costs are nowadays and depending what kind of, whether it be a disease or any kind of a long-term care problem.

uh are we are we you know i mean is that can happen right that's my question pretty sure it can happen it can be uh some of the higher costs can be you know it can be a dependent might not be the cost of the employee themselves but i mean that's what it falls on us yes okay thank you thank you any more questions go ahead this one also just to

That 25% also. Well, the insurance also includes us council members.

Yes.

Yeah. Which we're very fortunate to have. Thank you.

Thank you. More questions. Well, that's it all in favor. All right out of post motion passes. Item number four, orders. One, consideration possible action of order number 2026-06-031, an order of the Mayor and Council of the City of Nogales, Arizona, approving an agreement with the International Association of Firefighters, LOCO 2763. Any discussion? All in favor? Aye. All opposed? Motion passes number 2 consideration possible action of order number 2026. 06. 032. an order of the mayor city and council of the city of Arizona, proving a labor agreement with the gals police officers association. And. In the discussion. All in favor? Aye. All opposed? Motion passes. Number three, consideration possible action of order number 2026-06-033, an order of the Mayor and Council of the City of Nogales, Arizona, approving the purchase of six Stryker Life Pack 35 monitors, defibrillators for Nogales Fire Department And after I seen the use of a 100 to 100 autumn nation grant award. Any discussion all in favor? All right. All the post motion passes move to go to executive session.

Mr Mayor, I would like to restrain from going to executive session. I wasn't here at the last meeting, so I don't know what went on and I have no information at all. So I'd rather not be there this time. Okay.

Thank you. Mayor. I will also be abstaining from joining the executive session.

Okay, we're good. Okay, move to go to executive session. Second. All in favor? Aye. I'm going to take a second session.

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I move to adjourn this meeting.

Second.

All in favor? Aye. Opposed? Meeting adjourned.