March 29, 2005
Scottsdale health benefits are too good for a pair of council members who want to raise the cost of insurance for city employees.
"The city is paying what I consider is a disproportionate share," said Councilman Ron McCullagh.
While other cities pay 70 percent to 80 percent of the monthly premiums for the health insurance for employees’ family members, Scottsdale typically pays 85 percent to 90 percent, officials said. The city pays 100 percent of the cost for employees themselves.
McCullagh and Councilman Jim Lane said bringing the city’s benefits in line with other local governments would not affect Scottsdale’s ability to recruit and retain employees. The city covers 2,182 people under the plan, including retirees who would be affected by changes.
"The job market does not support that imbalance in the distribution of health insurance costs between the employer and employee," McCullagh said in a written statement. "And, I am not certain that the Scottsdale taxpayer wants to bear that financial burden, especially when the cost of health care is increasing at the annual rate of over 12 (percent)."
On Tuesday, the council voted to maintain the same employee health and dental plans for fiscal 2005-06.
But next year, the city will have a new pool of employees — Scottsdale’s new fire department will add about 250 workers — and can reconsider its health plan and premium rates, assistant city manager Neal Shearer said.
McCullagh said he is looking for a "gradual rebalancing" where the workers pay a larger share for their spouses and relatives. During the past few months that McCullagh has served on the budget subcommittee he has learned how dramatically health costs are rising.
For next fiscal year, which begins July 1, the city is projected to spend $16.7 million on health insurance. By Mc Cullagh’s calculation, $7.2 million of that will go for family members’ health insurance.
"You look for things that stand out and $16 million is a pretty big hunk of a $215 million (spending) budget," McCullagh said. City Manager Jan Dolan’s budget proposal calls for $215.5 million in spending from the General Fund.
Councilman Bob Littlefield said that when health insurance costs are coupled with salaries, the current package is fair.
Littlefield said his council colleagues are looking at employee health insurance as a subsidy rather than as part of the workers’ compensation.
Lane said he understands that, politically speaking, cutting health benefits could be "a potentially volatile area."
"I think it’s worth mentioning because staff should know the council is looking at these things," he said.