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Financial Impact: <br />The City has a proposed healthcare budget for 2006 at an additional $100,000 over the 2005 amount. <br />This funding is adequate to support several needs. <br />First, through strong negotiations (got medical plan increase reduced from 21 %_$262,900 increase to <br />13% _$162,160 increase), success of our Wellness Program (saved 16,000 after expenses in our health <br />renewal = 2% savings), and by making some slight plan concessions in our health benefit renewals (got <br />total increase down to 3.1 %_$40,750 increase), staff is able to cut City budgeted expenses for 2006 <br />City Staff insurances by 50% or $50,000, half of which ($25,000) is in the tax-supported funds. <br />Staff is therefore requesting a shift in the City's total compensation package this year through the <br />redesign of the benefits package as shown above. This redesign creates more risk for employees but <br />gives the City the advantage of �eing able to reallocate $50,000 of intended budget ($25,000 tax impact) <br />to implement the redesigned compensation plans we have talked to the Council about. Staffs proposed <br />allocation of funds is set forth on the chart attached as Exhibit A. <br />Dental insurance will have no additional impact to the City or staff for 2006. <br />Council Action Requested: <br />This item is on for discussion. However, in order to meet Open Enrollment deadlines, at your <br />next Council Meeting on Monday, October 24, staff will seek a Council Motion approving the <br />insurance program described above, the respective contracts (subject to review and approval by <br />the City Attorney), and the fund allocation on Exhibit A. <br />� — <br />