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Health insurance big part of city’s budget

Jared Felkins jfelkins@lebanondemocrat.com • Updated Jul 26, 2013 at 10:08 PM

With health insurance contracts already signed and in place for city workers for next year, the Lebanon City Council is expected Tuesday to take a third vote on the proposed city budget and property tax increase.

The budget’s inclusion on the agenda, released Friday by Mayor Philip Craighead’s office, came as a surprise to Councilor Lanny Jewell, who helped vote it down on the previous two tries.

“When we left the meeting last Wednesday night, we were told to get some additional information together on alternate plans for the budget,” Jewell said. “I figured we needed to get prepared for another budget work session for Wednesday night. But it appears we have it on the special called meeting agenda to vote on it Tuesday night. Something isn’t right.”

At its last meeting Wednesday, the budget remained in gridlock after a 2-2 vote. Councilors Kathy Warmath and Jewell remained opposed to the budget, due mostly to the proposed property tax increase city leaders said would erase a $2.6 million deficit.

Councilors Tick Bryan and Rob Cesternino voted in favor of the budget both Wednesday and during a June 4 meeting, when it also failed.

With the absence of councilors Fred Burton and Joe Hayes on Wednesday, there were not enough council members present to allow Craighead to break the tie.

Following the meeting, the council immediately moved into a budget work session That started with two proposals from Finance Director Russell Lee via email that would further lessen the burden on taxpayers from the proposed property tax increase.

Taxpayers in Lebanon currently pay 34.56 cents per $100 of assessed property value or $86.40 per $100,000 in assessed value. The last time property taxes were raised was in 1992, when the rate increased by 18 cents.

Lee’s latest budget cuts involve the removal of a $300 bonus full-time city workers would receive on their anniversary start date with the city. That plan would reduce the proposed tax increase by 0.75 cents per $100 of assessed property value.

Lee said another 0.25 cents could be realized with a $20,000 increase in sales tax revenues based on May’s sales tax receipts. Lee said at a previous meeting, projected sales tax revenues would be about $8.7 million, which is the first time it has exceeded 2005-06 figures.

As it stands, the plan before the council following Wednesday’s work session would include a 25.44-cent property tax increase, but would balance the budget next year and erase the deficit without dipping into the city’s reserve fund.

Following the meeting, Jewell said he remained opposed to an all-at-once approach to raising property taxes. He said an incremental approach with some money coming from the city’s reserves would ease the burden a bit on taxpayers.

“We've got some out there who are living paycheck to paycheck, and it's among all types of income brackets,” Jewell said. “If you are stretching your dollar to the limit and if you are living in a bigger house, you are taking more of a lick.”

Warmath also remained opposed to a property tax increase – of any kind – following the work session.

“We do not have to have a budget in place by July 1,” Warmath said. “We have been as late as September some years. July 1 is not a drop-dead date. We have some wiggle room.”

During Wednesday’s work session, Craighead told councilors Lee had signed health insurance contracts for the following year for city workers.

According to figures released by city officials late Thursday from an open records request by The Democrat, the city will spend $5.3 million – a 13-percent increase from this year – of its more than $22 million budget to provide health insurance for city workers next year. That figure doesn’t include provisions for dental or vision insurance for city workers.

Records also show health insurance premiums have nearly doubled over the past year, but rates workers have to pay have remained the same. The rates rose 41.5 percent while single employees paid $40, and those with family coverage paid $160 per month during that time.

Lee has said he negotiated next year’s rates down from a 16.4-percent increase to a 13-percent increase in total cost by increasing copays for city workers from $20 to $30 for standard doctors’ visits. Lee said that saved the city $94,000 in premiums and reduced the amount of the proposed property tax by .75 cents per $100 of assessed property value.

According to records, the amount the city pays per employee for single coverage rose from $477.12 per month in 2009 to $649.57 per month for next year. Family coverage rates per employee rose from $1,312.09 per month in 2009 to $1,786.34 per month for next year. Lebanon has about 320 full-time employees.

Mt. Juliet City Manager Kenny Martin said the amounts city workers there have to pay for health insurance are somewhat higher. He said employees pay between $400-$500 for family coverage, depending on the plan they choose, and about $112 per month for single coverage. He said Mt. Juliet spends about $1.5 million each year on health insurance provisions for employees.

The council will meet Tuesday at 6 p.m. at the Town Meeting Hall inside City Hall on N. Castle Heights Avenue. 

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