Clintonville staff may have to contribute to health insurance
By Bert Lehman
At the Oct. 12 Finance Committee meeting, Clintonville City Administrator Chuck Kell informed the committee that the city has qualified to receive an expenditure restraint program payment of around $91,000. The city did not receive an expenditure restraint program payment in 2015.
Kell also informed the council that the city is expected to receive $23,000 more in transportation aid.
The committee was told the city’s health insurance will increase around 5 percent. Kell said that increase was manageable. He added that the increase was scheduled to be 15 percent.
Clintonville City Clerk Treasurer Peggy Johnson said she was able to negotiate that increase down to 5 percent based on personnel changes that have taken place in the city.
The 5 percent increase amounts to roughly $29,000.
Last year’s increase in health insurance was 37 percent.
The city did inquire about joining the state health insurance plan, Kell said.
“We’re not too sure that that’s going to be a real benefit to do,” Kell said.
He said the state plan went up around two percent for those already in the program, but since the city would have to pay a surcharge to get into the program, he wasn’t sure it would save the city money.
Kell told the committee that he wanted to include salary increases in the 2016 budget for city employees. He wasn’t sure what percentage increase.
Not using fund balance to balance the budget was a priority, Kell said.
Also at the meeting, Kell said there might be a tax increase, but the city would try to hold that to a minimal amount.
For the 2015 budget, the council had approved the use of fund balance to balance the budget. Johnson told the committee due to some increased revenues and cuts by city department heads the amount of fund balance used is expected to be decreased by $54,000.
Kell said the Chapter 17 complaint attorney fees hurt the city. Those fees amount to around $60,000.
“That was an unbudgeted expense,” Kell said.
He added, “If we wouldn’t have had those bills I think we would have done really well on cutting the use of that fund balance way back.”
Kell relayed much of the same information to the entire council at its meeting on Oct. 13.
He told the council that he thought the city would have to look at having city employees contribute to their health insurance plans. He didn’t have any definite numbers available at the time.
“If we give them a raise we don’t want to take all of it back,” Kell said. “It’s probably an inevitability that the employees are going to have to look at kicking in and the council is really going to have to consider that.”
Kell presented two budget scenarios to the Finance Committee at a special meeting on Monday, Oct. 26.
When addressing the committee Kell said the scenarios presented were not “budget proposals” at this point. He also said he was seeking input from the Finance Committee.
Department heads were still working on their budgets, and the city was still looking for additional revenue, Kell said.
He said both budget scenarios included a salary increase of 3.5% for city employees.
“One of the reasons I am suggesting that is because all of you know they did not get an increase last year,” Kell said.
Both budget scenarios also include employees beginning to contribute towards their health insurance, Kell said. This includes a $500 employee contribution to the HRA portion of the health insurance plan, and a $500 employee contribution towards the health savings account portion of the insurance.
Kell said there is a $12,700 deductible on the health insurance plan.
“In the past the city picks up all of that,” Kell said. “They pay a premium contribution, but once that premium contribution is made, the city picks up all the deductible. Quite frankly that’s pretty highly unusual that I’ve seen in the public sector.”
Kell also informed the committee the city is not considering the state health insurance plan.
Having city employees contribute to their health insurance plan is part of the rationale for suggesting a 3.5 percent wage increase, Kell said.
Kell said the 3.5 percent wage increase could change based on how the rest of the budget comes together. He said one percent in salary and fringe benefits equals $20,000.
The suggested wage increase could be decreased if the city is looking for ways to cut expenses in the budget, Kell said.
“I wanted to start at 3.5 [percent] and see where we end up,” he said.
Kell also addressed the fund balance, which he said was at $1.165 million after the 2014 audit was concluded.
The first budget scenario Kell presented included using $59,000 from fund balance to balance the 2016 budget. This scenario increases the levy by 25 cents per $1,000 of assessed value.
The second budget scenario does not use any money from fund balance. This scenario increases the levy by 50 cents per $1,000.
Kell said the city’s position is that it doesn’t want to use fund balance to balance the budget. He said he anticipated a tax increase somewhere between those two figures.
The Finance Committee will meet again on Monday, Nov. 2 at 5:30 p.m., and again on Monday, Nov. 9 at 5 p.m. to discuss the 2016 budget.