The Denison City Council continued to progress in setting a 2014-2015 budget on Tuesday night as it held the first public hearing for the proposed budget.The Council focused its conversation on setting the budget for insurance coverage for city employees as insurance rates are estimated to increase for the city by 18 percent in 2015.
In the last meeting, the Council accepted a tentative cap of $458 per month for each employee in contributions towards health care by the city.
“This is a major cultural shift when we start to freeze the amount the city pays for health insurance,” Denison Mayor Jared Johnson said, commenting that health care costs are on the rise throughout the country in all lines of industry. “The city and municipalities have been somewhat sheltered from that.”
City Manager Robert Hanna said city staff is currently looking at modifying its health care options offered to city employees.
“We are still working with (the Texas Municipal League) to identify what those plans may look like, but will have that available before the effective date of the budget,” said Hanna.
Hanna said the staff is exploring options in reducing its eight offered plans to four or five offered plans. While the city currently offers a plan at no cost to the employee, this plan will have reduced benefits come 2015. Other options the city is exploring include Health Savings Account and Health Reimbursement plans, said Hanna. The city is also expected to allow employees to pay into Preferred Provider Organization plans similar to what is offered now.
“The bottom line is if the employees want to maintain their current level of benefits they receive today, they are going to end up paying about $50 more per month,” said Hanna.
To help offset the increase in health care costs to employees, Hanna proposed a 3 percent increase in employee compensation starting in the 2015 fiscal year. Both Johnson and Council Member Matt Hanley voiced their support for the increase.
“I think 3 percent is probably a little higher than most industries are giving in 2014,” said Johnson, commenting that the average is about 2 to 2.5 percent. “But with the changes we are making in health care, I would certainly support 3 percent.”
“It is never a situation we want our employees to be in, but unfortunately we have to evolve,” said Hanley, voicing his support for the increase in compensation.
In another matter, the Council held the first public hearing for the proposed 2014-2015 tax rate. The proposed rate will stay at $0.65 for every $100 of property value assessed. This comes as property values have increased in the past year, resulting in an increase of tax revenue by 4.4 percent. In past meetings Hanna has proposed the $270,000 increase be used to fund projects that currently remain unfunded including additional street repair.
Both the budget and tax rate are expected to be approved during the next City Council meeting on Sept. 8.
In another action, the Council approved a request for a conditional use permit that would allow for a private club and restaurant in the new Hilton Garden Inn and Texoma Event Center. The center has already put in an application for alcohol sales on the premises with the Texas Alcoholic Beverage Commission.
The hotel and event center are expected to open in November.