Cape Council finds insurance costs skyrocketing in coming year

Cape Girardeau’s City Council held a study session for the city’s 2024-25 proposed budget on Friday, May 3, at City Hall and learned insurance costs are skyrocketing upward.

The City of Cape’s general fund was recapped for council members as the year’s general fund expenditures amounted to 33,269,749. More than two-thirds — 69% — of the fund was categorized as personnel expenditures, with public safety taking up the largest chunk of those expenditures.

Finance director Lisa Mills said that the city employs around 480 full-time workers and factoring in part-time personnel, the number amounts to 1,000.

Mills also broke down the general fund’s operating expenditures for the council members in attendance. One of the highest expenditures listed for the city is insurance cost coming in at $1.2 million. Mills told the council the city’s insurance costs have increased by 33% since last year. City Manager Ken Haskin attributed that increase to lawsuits filed against the city and were settled.

“As of the $1.2 million, the premium $563,000 of that is liability insurance, and it actually increased 40% in last two years,” Mills said.

Haskin likened the increase to what people encounter with their car insurance.

“Let me be frank, you know, it's like your car insurance. Let's say for example, if you are prone to accidents or speeding tickets, what happens?” he said. “I think we can do a better job mitigating the liability. There's no question about that.”

Mills said the city is considering self-insuring as a method to reduce premiums.

Mills also said expenses for the IT department have increased and attributed that to the increasing price in cloud storage.

An $804,453 cost under the general fund operating expenditures labeled “other operating” was up by 76% from the year before and the expenditures were “condemnation, training, damage and dues.” Mills said the cost was because there was much more condemnation of buildings done than the previous year. Haskin said there had been more of an effort to demolish those structures.

Mills also recapped what tax programs factor into special revenue funds. Mills said the Capital Improvement Sales Tax (CIST) Sewer, (CIST) General and Water, Parks and Recreation, Stormwater operating fund, Fire Sales Tax/PST and Transportation Trust Fund amount to an additional 1.75% tax to citizens of Cape Girardeau.

Mills and Haskin spoke about the state of the Casino Fund and its budgeted expenditures. The budgeted part of the fund includes $880,246 worth of expenditures with $78,800 allocated to the community, $600,000 going toward Southeast Missouri State University and $201, 446 to the Riverfront Development Fund. From the fund, there is also funding for one-time departmental needs and priorities, which amounts to $885,000. Haskin told the council members to keep in mind that they just started to tap into this funding last year.

Mills said the fund allows them to “take some pressure off of their general fund.”