The City Council Finance Committee addressed three major issues on Monday evening.

Tuesday, December 12, 2000

The City Council Finance Committee addressed three major issues on Monday evening. Additional insurance costs for city retirees, benefit changes for firefighters and Wescott Field renovations brought excitement to the meeting.

A group of five retirees from the city of Austin voiced their opposition to a proposed insurance rate increase.

For a few years after establishing the city’s self-insured health program in 1991, revenues were up and expenses were down. Yet around 1995, expenses started to rise with the culprits being increased medical costs and increased claims.

The state of the city’s health insurance is such that premium costs must be raised for retirees. Two plans were proposed at the meeting – one that would cost retirees the same premiums as employees currently pay and a two-tiered plan that would increase premiums in January 2001 and again in July 2001.

"Either plan is not sufficient to bring the plan into the red," McGarvey said. "However, at the lesser rate (the second option) the plan will be in the red to an amount over $100,000 at the conclusion of the next fiscal year."

Despite McGarvey’s statement, the second plan was approved after much debate. The plan will increase monthly insurance costs anywhere from $20 to $60 in January and again in July, depending on each retiree’s current medical plan.

Retiree Bob Auer voiced the opposition of the retirees, saying that they find themselves "between a rock and a hard place."

"We are on a fixed income, costs are going up and some of us can’t pick-up and take our medical problems elsewhere," said Auer.

Auer accused the committee of discrimination, since it appears to him that the group that is costing the program the most money is being penalized the most.

Committee chairperson Jeanne Poppe questioned how Auer and the others could claim discrimination when the retirees’ reduced rates thus far have seemed preferential. With the approved option, Poppe said, preferential treatment will still be on the side of the retirees.

During and after the meeting, Auer and the others confirmed that they would be better able to accept the increase if they were informed about what percentage of the total overall insurance costs they have been responsible for.

After the meeting, one man, who asked not to be named, said that his concerns stem from the 1991 rate determination of the retirees and their spouses as two singles, due to no children being present in the home. With the new rate, they will be charged the same rate as employees with families are currently paying.

Finance Director Tom Dankert promised to make the information Auer and the others requested available, excluding sensitive detail information about each individual covered in the insurance plan.

"Right now we only have half of the facts," said Auer. "We need all of the facts before we can decide if this increase is justified."

In other business, Austin firefighters are requesting benefit changes, which are covered by the 2001 budget approved by the City Council last week. Retirement will be increased to $3500 per year for officers who have been on the department for 16 to 20 years.

Currently, employees are vested after 10 years. Firefighters asked the committee for a seven-year vestment at 48 percent. Twenty years of service will bring the full 100 percent.

The hourly rate of compensation when responding to a call will increase to $14.25 from $9.50. The training rate of $9.50 per hour will stand.

City Administrator Pat McGarvey informed the committee that these increases would make the compensation for firefighters competitive, but certainly not the best or worst in the state. The committee approved the changes.

The current plan for Wescott Field was presented by former Austin Mayor John O’Rourke. The renovations are expected to cost $4.2 million.

To date the baseball field has been removed. Yet to be removed is the track, which will be replaced with an Olympic-quality track. Expected construction includes new locker room facilities and "packer plazas," where public restrooms and concession stands will be located.

Refurbishments include an expansion of the tennis court, the widening of the football field and the installation of new scoreboards.

Two hundred shares of Hormel Foods Corp. stock have recently been donated to the renovation, as well as one million dollars each from the Hormel Foundation and Hormel Foods Corp. This means that almost one half of the expected cost has been obtained. Alumni will be solicited for donations as well, O’Rourke said.

Parking for the facility was addressed, since space is clearly limited. O’Rourke stated that people will be encouraged to park at the Sterling Shopping Center. Houses on the east side of the site are settling and residents in that area may be relocated, which will make this area available for parking.