Wednesday, September 18, 2013

ERRP Help: Too Little, Too Late?

San Angelo's number of early retirees covered under the city's health insurance plan plummeted from 280 to an expected 215 for the coming fiscal year.  The 65 person decrease amounts to a 23% drop.  Ironically, during this time the city had access to hundreds of thousands of dollars to keep early retiree health care affordable. 

The City of San Angelo qualified for federal Early Retiree Reimbursement Program funds three years ago.  The city received $343,000, an amount less than originally projected, but a significant sum.  The first two years the city spent zero ERRP funds.  City leaders, staff and elected officials, painted ERRP money as uncertain in November 2010.  Council refused to use any expected funds to ease the pain of back breaking premium increases foisted on the city's employee and early retiree dependents.   

Only recently did the city tap these funds.

Council approved the use of $142,000 for this fiscal year in order to keep premiums flat from 2012 through 2013.  $201,000 ERRP funds remain, and I will likely ask Council to approve use of those funds for the upcoming premium calculations.
Council instructed City leaders to spend ERRP money in early 2012 to avoid "federal strings."  There is only one string associated with ERRP money, one which staff and council fail to understand.  The City cannot displace local money with federal.   It remains to be seen if the City can comply with this requirement and utilize the $201,000 in remaining ERRP funds.

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