3.5 percent wage increase included in budget
By Bert Lehman
At a special meeting on Monday, Nov. 2, the Clintonville Finance Committee recommended a 2015-16 city budget that would include a tax increase, a 3.5 percent wage increase for city employees, and require city employees to contribute more to their health insurance.
City Administrator Chuck Kell presented three budget scenarios to the committee. Each scenario contained a 3.5 percent salary increase for city employees. Each also included employees to begin contributing towards their health insurance. This included a $500 contribution to the HRA portion of the health insurance plan, and a $500 employee contribution towards the heath savings account portion of the insurance.
Kell told the committee if the upfront amount was increased from a $500 contribution by employees to $750 it would save the city $6,250.
Committee member Mary-Beth Kuester asked Kell his opinion on what would be fair.
Kell said he thought the original proposal that included the $500 contribution was fair, but added that he wasn’t against increasing it to $750 on the front end.
Having employees contribute more to their health insurance is something the city will probably have to require of its employees every year, Kell told the committee.
“This is probably something that should have been done five years ago already, and you didn’t do it for whatever reason,” Kell said. “It’s time for people to start having some skin in the game as far as using health insurance. It’s very unusual for a city to pay for all of the deductible.”
The city isn’t considering joining the state health insurance plan, but if it were, Kell said the minimum family deductible is $1,000 for employees.
“I think this is the year we really need to start something and then look at it seriously over the next couple years,” Kell said.
Of the deductible, Kell said he hoped it would eliminate go to the emergency room visits for minor issues.
“When it’s coming out of your own pocket, you’ll have to change your habits,” Kell said. “You look for cheaper alternatives to take care of the problem you have, not just go to the most expensive one.”
Committee member Lois Bressette asked how prescriptions are paid for in the plan.
Clintonville Clerk Treasurer said the cost of prescriptions is applied to the deductible.
“Employees never had to pay for prescriptions because the city funded the HSA and the HRA,” Johnson said.
Kell confirmed that the city currently pays for all prescription costs for city employees.
Committee member Amy Steenbock said where she works her deductible is a lot higher than $500.
Council member Julie Stumbris also shared with the committee that where she works, she pays a lot more for health insurance.
Kuester made a motion that the committee recommend employees pay $750 of the deductible.
Bressette said she was concerned about a large increasing in one year in the amount employees have to contribute.
“We are going to have to explain to the taxpayers, the tax rate, so whether we explain it to the employees that they’re going to get hit a little harder, or all the taxpayers are going to see a higher tax rate, so we have to explain it to one or the other,” Kuester said.
Kuesters original motion did not receive a second.
When presenting the three budget scenarios, Kell said the final CPI Index number came in lower than the number the city had already used for its budgets. This meant additional cuts were made to the budget. He said the amount that needed to be cut was taken out of the contingency fund in the budget.
He also told the committee that the city’s assessor had informed the city last week that the city should expect the city’s value to decrease by $500,000 for the 2015-16 budget. The finalized decrease in the city’s value is $1.4 million.
“That means that expending the same amount of money is going to have a higher tax impact,” Kell said.
The first budget scenario used $57,981 from the undesignated fund balance, and included a tax rate of $8.90 per thousand, which is a 28 cent increase over the last budget. This equals an increase of $22.51 on an $80,000 home.
The second budget scenario didn’t use any funds from the fund balance, and included a tax rate of $9.16 per thousand, which is a 54 cent increase over the last budget. This equals an increase of $43.30 for an $80,000 home.
The third budget scenario used $44,481 from fund balance, and included a tax rate of $8.81 per thousand, which is a 22 cent increase over the last budget. This equals an increase of $17.67 for an $80,000 home. This scenario also included leaving an administrative assistant vacancy and a vacancy in the Park and Recreation Department open until February.
Kell told the committee any decreases in spending beyond the presented scenarios would require a decrease in the 3.5 percent proposed wage increase for city employees.
Johnson added that the starting point for next year’s expenditure restraint is the previous year’s budget.
“If you reduce our expenses, the starting point for the expenditure restraint is lower,” Johnson said.
In an effort to not lower expenses in the budget, the committee approved the first scenario, with the stipulation that it include leaving an administrative assistant vacancy and a vacancy in the Park and Recreation Department open until February. The stipulation will reduce the amount needed from fund balance.
A public hearing regarding the proposed budget is scheduled during the city council meeting on Tuesday, Nov. 10.