City’s insurance costs rise
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.