Palmer council OKs 2007 budget

Employee insurance remains status quo for now

By LEILA KHEIRY

Frontiersman

PALMER - Maybe it was the cookies.

They were brightly frosted, soft and sugary, and perhaps all those carbohydrates put everyone in a good mood.

Whatever it was, though, the atmosphere at Tuesday's Palmer City Council meeting was a little sweet, despite concern expressed by city employees over a proposal that would have charged them $80 a month for health insurance for which they now pay no monthly fee.

The employees detailed why they didn't like the idea, but said they understood the council's tough choice between cutting into staff benefits and balancing the 2007 budget. Council members listened respectfully, explained their position and then decided on an amended plan that would not remove money from their employees' paychecks, but likely would save the city money in the long run.

At issue was a proposal by City Manager Tom Healy that called for city employees to start contributing to their health insurance premiums. His idea would have pulled $80 a month out of each employee's paycheck as a pre-tax deduction, at least until next year, when the city's health insurance company will have a new plan available.

The city health plan now provides employees with a 90/10 copay, which means employees pay 10 percent of the cost of health care up to a certain amount, and the company pays 90 percent. City employees don't contribute to the monthly premium. The new plan would provide an 80/20 copay, which would save the city about $60,000 if the city switched to it as soon as it became available - likely in spring.

During public comment Tuesday, and with abundant pink- and green-frosted sugar cookies sitting at the public comment table for all to enjoy, city employees explained their concerns over paying a monthly premium.

Cindy Larson, who works in the finance department, said the $80 a month would be a burden on employees, especially since there will be no cost-of-living adjustment to salaries this year. She said other expenses, such as gas, have increased, and an $80 reduction in their paychecks would hurt employees and their morale.

&#8220I just want you to be fair to all and think about employees,” Larson said.

She suggested that, if employees had to contribute to the premiums, that the council phase the cost in so it doesn't hurt as much.

Palmer police officer Kelly Turney said the proposed $80-a-month charge would negate his step increase on the city's pay scale. He also said the proposal would hurt employee morale.

&#8220When morale goes, people go,” he said, adding that the plan also would make it tougher for the city to recruit new employees.

Turney suggested that, if the council was concerned about the city's liability from the state-mandated public employee retirement system (PERS), that council members vote to exempt themselves from the retirement benefits.

&#8220If you're going to lead, lead by example,” he said.

Palmer Police Chief George Boatright spoke on behalf of city employees in general, and his officers specifically.

&#8220Employees of the city of Palmer like working here,” he said. &#8220They strive to provide you all and the citizens of Palmer with a superior product.”

He said city employees probably could make more money working elsewhere, but choose to stay in their jobs because they care. He asked the council to consider that when making its decision.

Mayor John Combs had asked the audience in the packed city hall to hold any applause until after everyone had a turn to talk. Boatright was the last to speak during public comment. Combs led the applause in appreciation of everyone's input, and was joined by the council.

During debate of the issue, council member Tony Pippel said switching to the 80/20 plan in spring rather than in 2008 would save about $60,000, and charging employees $80 a month would save about $56,000. He said it made more sense to switch plans earlier, and not charge employees for the premium.

Other council members were reluctant to commit to the 80/20 plan without knowing the details. The plan is not available for perusal, and council member Kathrine Vanover said she would rather wait until the city can evaluate the cost difference and whether there were changes other than the copay.

&#8220To make a decision on this now is stupid, because we don't know any of this,” she said.

Combs agreed that the council should not commit yet, and that the city wait, but seriously consider the 80/20 plan when it is available.

The council voted unanimously against charging employees a premium.

Council member Brad Hanson stressed, however, that budget constraints will continue and that employees have to expect more changes in the future. Expenses in the 2007 budget increased by 13 percent over 2006, he said, and revenue increased only 3 percent. It's important for the council to understand employees' concerns, said Hanson, but it's also important for employees to understand what the city faces. The council isn't cutting costs for enjoyment, he said, it is working toward a reasonable solution.

Also Tuesday, the council voted to cut a new police vehicle from the 2007 budget, but added a part-time clerk position at the Palmer Police Department. Boatright cited an ever-increasing work load, and said he had enough work for a full-time clerk, but could get by with a part-time position.

At the second public comment opportunity following council action on the budget, officer Turney spoke again, thanking the council for its consideration. He asked council members to keep employees involved in decisions that affect staff.

During council comments, council member Richard Best suggested that city employees advocate for annexation, because through annexation the city stands a better chance of increasing its future revenue.

The 2007 budget stands at about $18 million.

Contact Leila Kheiry at 352-2270 or at leila.kheiry@frontiersman.com