JAMESTOWN – The Jamestown City Council has nixed the idea of switching retired city employees over to a new healthcare provider in an effort to save $1.1 million in the 2021 city budget.
The council held a virtual budget work session on Monday night and discussed various amendments to the $34.9 million spending plan that was presented by mayor Eddie Sundquist in October. Part of his plan included switching retirees over the age of 65 from the City’s self-funded healthcare program to a medicare supplemental plan, which Sundquist said would result in $1.1 million in savings. Since then the mayor has also proposed switching the retirees over to another private carrier that would offer a reduced cost to the city.
However, both current and retired union members spoke against the proposal and picketed in front of City Hall last week. The proposal also drew some concern from city council members when they discussed it later that evening.
On Monday night, Councilwoman and Finance Committee chair Kim Ecklund said that while she doesn’t disagree with the proposal, she also felt it was something that needed to be negotiated with the retirees in order to avoid a lawsuit.
“While I don’t want to say that we shouldn’t look into these cost-saving measures, we shouldn’t investigate things, and we shouldn’t do a correct form of an RFP (Request For Proposal) and get health insurance looked at for lower costs, cramming it down and voiding union contracts is not the way to do it,” Ecklund said. “I feel this $1.1 million is going to end up in court and we’re going to end up paying it and we’re also going to have legal fees on the backs of taxpayers.”
Ecklund’s thoughts were echoed by several other council members, including Marie Carrubba, who explained she’s received negative feedback on the idea since it was first proposed.
“I’ve received more phone calls on this one item probably during the past several weeks than I have on almost anything else while I’ve been on city council. Some of what I’ve heard made a lot of sense from the retirees based on what they gave up in terms of salary. That when benefits were very low, the council and mayor at that time gave them [these] benefits,” Carrubba said.
COUNCIL BALANCES BUDGET WITH FUND BALANCE, REVENUE AND COST ADJUSTMENTS
Because the proposal isn’t going to move forward, the council had to restore $1.1 million in costs to the city budget – meaning they had to identify ways to offset it in order to balance the budget.
The largest decision involves using an estimated $500,000 from the city’s $3.9 million fund balance. The council also boosted sales tax revenue by another $200,000 above what Sundquist was proposing and based that decision on higher-than-expected sales tax this year, based on internet sales.
And the council also moved way from a slight cut in property taxes and decided to keep the tax levy the same as this year, resulting in another $115,000 in revenue.
Other measures to offset the retiree insurance matter included not adding proposed new positions for next year, including an administrative grant writing position.
Meanwhile, it also appears the council won’t proceed with the recommendation to boost downtown parking fees, nor the proposal to eliminate the 2-hour free parking zone for downtown – saying now is not the time to discourage people from patronizing downtown businesses.
The council didn’t approach the issue of laying off any members of the current workforce, with president Tony Dolce saying that could create a whole other set of challenges for the city.
“The only other options in this budget are to lay off employees. Then you’re looking at impact payments to departments. You’re looking at loss of services. You’re looking at all sorts of contractual and legal situations,” Dolce said.
The changes that were discussed during last night’s virtual budget work session will be formally submitted as amendments during next week’s voting session, which will be held on Monday, Nov. 30 at 7:30 p.m.