Friday, August 24, 2012

City's Secret Health Insurance Kitty

Interim City Manager and Chief Financial Officer Michael Dane spoke to using health insurance funds for other purposes for the first time in the budget cycle.

Dane said health insurance money may be available for other uses like raises in the coming budget.

Excess funds arose from the City's health insurance strategies the last two years.  Their first move charged employees, retirees and dependents more for health insurance. Council socked dependents with massive increases.  Passing the lion's share of increases on resulted in the self insurance fund having over $950,000 at year end.

The second move required employees, retirees and dependents to utilize San Angelo Community Medical Center and its affiliated physicians.   Keeping the lion's share of savings enabled the City to spend $925,000 less than budgeted YTD.

Add these two figures and nearly $1.9 million in health insurance money could be available.  That's not counting nearly $350,000 in federal ERRP money, which city leaders plan to use in the current fiscal year.

For the coming year the city will budget $1 million less than the current budget.  It still results in an excess of $415,000.  Adding ERRP and the 2012-13 excess and that's an excess $2.65 million in a category repeatedly dubbed "a beast" by City leaders.

City Council previously stated they would publicly vote on moving any funds from this account.  I expect them to live up to that commitment.

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