Fuel costs hitting city’s slim budget
Rising fuel and health insurance costs are taking a bite out of an already-slim city budget.
Nearly every department manager learned Friday that they hadn’t set aside enough for fuel costs in the 2006 budget.
The police dep–artment will have to do the most scrambling. It budgeted to spend $25,000 for fuel. Road and Bridge Department Director Randy Call estimated that at current prices, the department will need $39,419, which doesn’t include adding another patrol officer.
“There are things we’re exploring to cut fuel costs,” police Chief Walt Vanatta said.
Options include making officers park their vehicles for 15 minutes of every hour and walking or doing paperwork, not allowing officers to warm their cars unless it’s a certain temperature or finding alternative transportation for officers.
Parks and Recreation Department Supervisor Dave Pike isn’t off by too much in the budget of $13,500. Call thinks the actual cost will be closer to $16,000.
Call budgeted $46,000, 10.71 percent more than last year’s budget.
City Manager Jim Ferree said he expects department leaders to find the difference in their budgets. The city maintains a $1.9 million reserve, which will cover the city’s operating costs for about three months. The 2006 budget left $2,155,273 in reserves, but Ferree expects the difference to be used for additional personnel or cost of living wage increases for employees.
The price of health insurance also has increased more than 31 percent across the board. The city’s health insurance plan is partially self-funded, which means the city pays into a fund and that money is used to pay employee medical claims up to a certain amount. At that point, the re-insurance kicks in. Self insurance allows the city to pay lower premiums, save money on years of low claims and earn interest on the money set aside to pay claims.
Although this year, the benefit to the city isn’t as evident.
At an estimated $1,120,000, claims paid for 2005 will be about $235,000 to $270,000 higher than the past two years.
The city’s premiums have increased 10.81 percent, and its contribution to the medical fund will increase 28 percent to ensure there’s enough to cover a higher number of claims.
Call said a partial solution might be to better educate employees about how a partially self-funded program works. They understand their benefits, he said, but not necessarily what those benefits cost the city.
He said employees might not know that what the city pays into the medical benefits fund could be an employee’s raise.
“Educating employees might save us a little money,” Councilor Tom Gilchrist said.
City staff members will also be evaluating employee benefits and deductibles to see whether changes could keep costs down.
City staff will present a proposed budget to the city council in November.
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