Saturday, September 21, 2013

Human Resources Changes Face on Health Insurance

City employees have had raises eaten up by health insurance cost increases in the past.  This prospect looms again.

This budget year comes with a twist, albeit one hard to discern.  Lisa Marley, City of San Angelo Human Resources Manager, gave a convoluted, complicated presentation that mixed employee raises and health insurance, when each item should have been considered separately.

After presenting three scenarios to City Council at their September 17 meeting Marley threw health insurance into the pay scenarios:

This is a drastically different story than Marley told Council in an August 13 budget workshop.  She said she expected significant savings in health insurance for the coming budget year and Council approved a budget with $471,277 fewer dollars for health coverage.  Now she says an increase of $448,000 is needed and suggests that employees need to share in paying this increase.

If the City budgeted the same amount as 2012-2013, there would be no discussion whatsoever.  This looks like administrative sleight of hand to shift more of the cost of health insurance to the employee/retiree.  How would you feel if you got a 2.5% raise and had to pay 3.4% more in health insurance premiums?  Worse, how would you feel about no pay increase as a retiree and having to pay 3.4% more?

I believed the City was being irresponsible in cutting their health insurance budget by nearly $500,000 for the coming budget year and asked about staff's budget assumptions.  Marley had this to say in the budget workshop in mid-August.

"In our budget what we proposed was a 10% increase for the city's portion and a 6% increase for the employees' premiums...   I'm expecting they'll come in much less than that.  We meet next week to go over the new numbers." - Lisa Marley 8-13-13

City Council approved the budget with almost $500,000 less for health insurance on September 3, 2013.  The next council meeting found expected savings to have evaporated.

"But I think we need to be realistic about the costs that are going up with insurance " - Lisa Marley on 9-17-13
The man who ruled the 2013-2014 budget chimed in

"Mayor, I'd like to express special appreciation for HR for looking ahead on this issue.  They didn't want to just blow the raises by you without giving you a head's up on insurance and they worked the weekend in order to work those scenarios up.  So, a special thanks to them for going the extra mile" - Michael Dane, Assistant City Manager/Chief Financial Officer.

I didn't know Lisa Marley would confess to their error so quickly and Michael Dane would refer to this quick flip-flop as "looking ahead."  Oddly, there was no mention of the $201,000 in ERRP money which needs to be used prior to 1-1-14.

I look forward to the day when paid staff can tell a straight story on health insurance.

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