City health costs soar

City Manager Ray Beck recommended a salary and benefits package for city employees that includes a 20 percent increase in the cost of health insurance before turning to a discussion of proposed tax increases at the City Council’s Monday night work session.

“This is the biggest hit since I have been city manager,” Beck said about the increased cost to the city and employees.

The city pays the full cost of health insurance for city employees, but workers are responsible for extra coverage for their family members.

Beck and Finance Director Lori Fleming attributed the increases largely to rising costs for prescription drugs — the city pays more than other comparable municipalities — and the cost of fully funding the pension paid to city employees. They said other cities are experiencing similar surges.

“The increases we’re seeing in our health care costs are not above what others are seeing,” Fleming said. The city has hired a consultant to review its health care plan to identify areas where costs can be reduced.

The payroll recommendations also included an increase of 3 percent or 38 cents per hour to employee pay, whichever is greater.

The council members also returned to the $15 million public safety portion of a proposed $100 million tax package they are preparing.

The council showed support for a revision to the $13.6 million proposed fire budget that includes the construction of two fire stations by 2015, instead of one as Beck had suggested at a previous meeting. Based on population trends for the city, at least one, and potentially both stations would likely be built north of Interstate 70.

The remaining $1.4 million of the public safety budget will include $1 million for a police firing range and $400,000 for the replacement of 21 warning sirens.

The full $100 million package includes new taxes and extensions or increases to existing taxes that would pay for roads, public safety and parks projects for the next five to 10 years. The council plans to present the projects to voters in November, when they must be approved in order to take effect.

Two information sessions about the proposed tax package will be held this week: 4:30 to 7:30 p.m. Wednesday in the Shepherd Boulevard Elementary School gymnasium and 4:30 to 7:30 p.m. Thursday at the Smithton Middle School cafeteria.