Citizens Protest Library Cuts as City Tries to Preserve Employee Healthcare Benefits
By Carl Wagenfohr
CLEARWATER – September 4th marked the the first of two City of Clearwater Budget Hearings, and library supporters came out in force to protest the service cuts that would result from a Council-mandated reduction in the library budget.
The Council's proposed budget included a $400-thousand reduction for the Library System and a mandate that no library branches be closed. Library Director Barbara Pickell explained her response to that mandate; “Basically, we had to cut staff,” she said, and described what that 10.3 headcount reduction meant in terms of library operating hours. As reported in the Gazette last week, the Beach and North Greenwood branches would operate with a consolidated staff and reduced hours. The East and Countryside branches would be cut to a 40-hour week, each closing two days per week.
With the exception of Councilmember Carlen Petersen, who argued “we're cutting what makes our city a great place to live and play,” the Council approved the proposed budget, including the cuts in library service. Councilmember George Cretekos chastised citizens who voted for Amendment 1 earlier this year; “And those of you who voted for it [Amendment 1] are the ones now who are saying 'Don't cut this program, cut that program,'” he said.
But even as the Council and citizens were debating the impact of a $400-thousand reduction in the library budget, city staff were grappling with a $5-million surprise that has not yet been accounted for in the 2008/09 budget – a proposal from Humana that would increase the cost of city employee healthcare by 43%.
Human Resources Director Joe Roseto presented the Council with the bad news during the August 21st budget workshop. “The challenge that we have year-to-year is balancing the cost of healthcare against our employees desires and expectations,” he said. Roseto explained that the city's Employee Benefits Committee has determined to issue a Request for Proposal (RFP), soliciting competitive bids for next year's healthcare that would hopefully beat Humana's price.
Kurt Gehring, the city's benefit consultant, explained that the jump in cost proposed by Humana was influenced by a 15-percent increase in claims made since January 2008. In addition, he said that there were fifteen individual claims made this year that exceeded $50-thousand each.
The healthcare RFP, released on August 27th, solicits competitive proposals with two options: one with benefits comparable to the current fully-insured Humana plan, and one that would have no premium increase over last year by reducing benefit coverage.
The city's current benefit plan is rich by most current measures. The Standard HMO plan has an annual $1500 maximum out-of-pocket limit for individuals, and $3000 per family. There is a $15 co-pay for physician office visits, but no co-pay for CAT scan, MRI, PET scan, X-ray or lab work. Prescription drug coverage is included, with co-pays of $10 for Generic, $30 for Preferred Brand and $50 for Non-preferred Brand.
Employee-only coverage is provided by the city's benefit plan at no cost to the employee, while there is a monthly employee premium of $182.77 for Employee + 1 coverage, and $384.91 for Employee + Family coverage.
In addition to the alternatives being sought in the RFP, Gehring explained that the city is looking at two other ways to provide employee healthcare – self-insuring, or opening a city-funded clinic that would complement a lower-cost high-deductable insurance plan.
The city Employees Benefits Committee is scheduled to evaluate the RFP responses between September 18th and 26th, and to make a recommendation to the City Council on September 29th. The Council is scheduled to made their decision on October 2nd, after the city's 2008/09 budget has been approved.
Should the cost of employee health care exceed what has been budgeted, the excess funds would likely be taken from the undesignated reserves of the city's Central Insurance Fund according to Finance Director Margie Simmons. That fund has a current balance of about $20-million.
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