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Panel: Now wrong time to ask city workers to pay more

Health premiums raised as budget issue

Oct. 21, 2009

Alderwoman Jacqueline Jay is determined to knock another $300,000 off Wauwatosa's 2009 tax levy to keep it at last year's level, but a committee decided Tuesday that asking employees to pay higher health care costs is not the answer.

Jay, who sits on the Budget Committee, floated the idea of seeking increased employee contributions toward health insurance coverage to better reflect what is going on in the private sector.

The average Wauwatosa resident pays 25 percent of the cost of their health insurance coverage, according to the Tosa Taxpayer Alliance. City employees contribute 5 percent, with the option of dropping their contribution to 2.5 percent by taking part in a wellness program.

Increasing employee contributions to 10 percent and maintaining a wellness discount would result in a $318,000 savings to taxpayers. To achieve the change, however, union negotiations would have to be opened mid-contract and the ordinance regarding nonrepresented employees' benefits would need to be amended.

"I don't think it would be asking too much to ask our employees to pay more of their health costs," Jay said.

Other committee members suggested it is best to wait until the city begins bargaining new contracts with its five unions in September. The current contracts expire at the end of 2010.

Many committee members agreed with the sentiment of Jay's request, but noted even if negotiations begin now, discussions likely would not end in time for the Nov. 3 budget hearing.

Strides already made

City Administrator James Archambo said Wauwatosa has made strides in decreasing health and life insurance costs. For 2010, he expects to spend 7 percent less than what was allocated in 2006. This comes at a time when most municipalities and private companies are seeing increasing health care costs.

In the bargaining sessions for the 2008-10 contract, the city was able to get union employees to contribute to their health care costs for the first time. The wellness program already has resulted in the early detection of diseases and the warding-off of health problems that could have resulted in huge medical bills later, he said.

Unions need to trust that management is bargaining in good faith, pressing for what is best for the city while being fair to the employees, Alderwoman Cheryl Berdan said. If the city is not in dire straits - Wauwatosa is in a better financial position than many government entities - then it is not in the council's interest to ask for concessions at this time, she added.

Using surplus undesirable

Jay also looked for other ways to achieve a $300,000 reduction. She asked about using some of the city's $6 million surplus, but Finance Director Ron Braier cautioned against tapping into those funds.

The city has the economy and lack of growth counting against it, and using too much of the surplus could prove another factor that hurts the city's bond rating, he said. An accounting rule of thumb calls for a municipality to keep at least 10 percent of its operating budget in surplus.

In addition, if planned rolling vacancies do not work out, the money may be needed to make up shortfalls, Braier said.

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