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Budget cuts hit council

Elected officials health insurance on chopping block

POSTED June 18, 2010 9:29 p.m.

During a fireworks-laden special meeting Thursday night the Turlock City Council agreed, in principle, to cut health insurance for elected officials but retain some other council expenditures, saving the city $90,000 annually.

The compromise solution will see the city continue its memberships in the League of California Cities and the U.S. Conference of Mayors at an annual cost of approximately $24,000 and retain a $1,000 annual council travel budget.

The council will formally vote on the cessation of health benefits for elected officials during their Tuesday night meeting.

The agreement was a compromise between Budget Subcommittee members Mayor John Lazar and Councilman Ted Howze, who had disagreed during subcommittee meetings over cuts to the City Council budget. Howze had proposed cutting health benefits, travel budget, and expenditures on outside organizations, while Lazar opposed all three.

Howze said the cuts were necessary to bridge the $4.3 million deficit the city’s budget faces this year. He also suggested that council would set an example for city unions by agreeing to cut their own budget.

“We have a tremendous budget hole in this city,” Howze said. “People want to stick their heads in the sand.”

Lazar opposed the cut to health benefits for “philosophical” reasons, saying that council members are worth the small compensation provided — $500 per month and health benefits.

But Lazar was more vociferous in his opposition to the proposed League and Conference membership cuts.

“I think it’s putting your head in the sand like an ostrich to not participate in that organization,” Lazar said. “… Irrespective of what you think Mr. Howze, those organizations are useful to this community.”

Lazar has travelled to Washington, D.C. twice this year, both trips paid for out of his own pocket, as a result of his U.S. Conference of Mayors and League of California Cities contacts. He directly credits those trips with $1.7 million in stimulus money the city will receive to construct a new transit hub.

Lazar went on to say that city staff didn’t want to oppose cutting membership in those organizations because of council intimidation. He also said that without those memberships Turlock would be considered a second-tier city, compared to Riverbank and Hughson.

Councilman Kurt Spycher argued that the proposed cuts, while hefty, were necessary for the good of the city budget.

“This isn’t a personal thing,” Spycher said.

“Oh, I take it personally,” Lazar responded.

The two went back and forth a bit, with Spycher attributing his support of the cuts to fiscal responsibility. Council healthcare costs have risen 100 percent in the last four years, he said.

“That looks and sounds and plays good,” Lazar said.

Michael Weston, a Turlock attorney and the only public speaker at Thursday’s meeting, sided with Lazar.

“This is just a mean spirited personal attack,” Weston said. “I suspect that the people that are saying lets just give (health insurance) up aren’t getting it.”

Spycher said that he was benefitting from the city-provided insurance, but that he simply didn’t see how the city could bear the costs going forward.

“I just don’t see how we can maintain that in the future,” Spycher said. “It’s too much money.”

Howze proposed a compromise solution of cutting health insurance but keeping the city’s membership in the League of California Cities and the U.S. Conference of Mayors.

“If you want to bleed, I’ll bleed there,” Lazar said. “But I draw the line on participation in the state and national organizations.”

Councilmember Mary Jackson agreed with the compromise plan, saying it was a “good sign to the community” that the council agreed to give up health benefits in tough times. She also lauded the city’s continued participation in the League and Conference, remaining hopeful of possible budget solutions that could be developed through those memberships.

Councilmember Amy Bublak, characterized by Lazar as the deciding vote in cutting health care and the organization memberships before compromise was reached, opted not to speak during Thursday’s meeting. She instead will comment during the overall budget discussion scheduled for Tuesday’s meeting.

“Stay tuned,” Bublak said.

 

The Turlock City Council also agreed to renew and alter several insurance polices during their Thursday meeting, saving $624,990.

The city will continue insurance for bonding of public officials and master bond coverage of all employees for dishonesty with The Hartford Insurance Company for $3,447, an increase of $62 from a year ago.

The city’s property and physical damage coverage will continue with Travelers Insurance Group at a cost of $109,690. That’s in increase from $99,800 a year ago, but insures $8 million more in property — including a communications vehicle, a command vehicle, and two buildings — at a lower cost per dollar insured.

Workers Compensation Insurance will continue with York Insurances Group at a savings of between $6,000 and $9,000 from a year ago, as the contract remains to be finalized.

The city will shift life insurance and long term disability insurance from Symetra and Assurant, respectively, to Hartford. The life insurance policy will improve from a $175,000 cap to a $500,000 cap while saving the city $35,000. The long term disability insurance will also improve, with the maximum monthly benefit increasing from $5,000 to $10,000 while cutting $57,000 in city costs.

A slew of changes to the city health insurance plan were also on the docket, but were not approved as the unions have yet to agree to the new plan. More details on the city health insurance plan changes will be available when the council approves the plan.

The health insurance plan changes will total the majority of the $624,990 in proposed savings, should the unions agree to the shift.

 To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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