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City’s insurance costs rise

April 22, 2013

The city’s budget week kicked off Monday with the big guns by, well, talking about purchasing at least one large firearm accessory.  But the biggest across-the-board change for the next fiscal year is far less explosive.

All city departments are facing a jump in the employee insurance premiums, a change that will cost hundreds of thousands of dollars for some of the city’s larger departments.

The increase in premiums, which are going from $500 in the last fiscal year to $600 for this coming fiscal year, reflect an artificially low premium set for the past two years.  The city is self-insured so it can set its own insurance premiums and the premiums that were set leading up to 2010 were creating a surplus fund balance in the city’s self-insurance pool.

To clear the excessive balance the city’s Finance Department dropped premiums from $567.44 in June of 2010 to $500 for the next two years.

The city’s self-insurance fund is now set to an acceptable level – Interim Finance Director Debbie Frazier said the idea of the fund is to just pay the bills, not collect surpluses – and the new insurance premiums reflect that.

So the departments are really only seeing a $33 increase in premiums from 2010, not nearly as drastic as the $100 increase from the previous year.

But that doesn’t mean the increase isn’t playing a role in the budget presentations.  Clarksville Fire Rescue Chief Michael Roberts said the increased premiums will cost his department $500,000 more next year.

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From → Budget

5 Comments
  1. Wow that was unusual. I just wrote an really long comment but after I clicked submit my comment didn’t appear. Grrrr… well I’m not writing
    all that over again. Regardless, just wanted to say great blog!

    • Thanks Bestes, sorry about the technical issues. I’m still working the kinks out on this site as well, so I’m not sure what happened.

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