Council - City needs to get handle on health insurance

The city of Cape Girar-deau needs to rein in rising health insurance costs to avoid serious budget problems in future years, city council members said Tuesday at a work session on the new budget.

"At this point, we have to save expenses," said Councilman Charlie Herbst. "We have to look at what is best for our bottom line."

The $45 million city budget is burdened with a 45 percent increase in health insurance costs for city employees and retirees. Health insurance costs will total more than $1.6 million in the coming fiscal year which begins July 1, city officials said.

The city council is expected to give final approval to the fiscal 2004 budget when it meets Monday night.

Doug Leslie, who took over as interim city manager just over a week ago after the council fired city manager Michael Miller, said the city plans to seek more affordable health insurance when it seeks bids for future insurance coverage later this year or next.

Leslie met with the council in the city manager's office at city hall.

Partnerships considered

Councilmen Jay Purcell and Matt Hopkins suggested the city look at the possibility of partnering with Cape Girardeau County government and the city of Jackson to secure more affordable group health insurance.

John Richbourg, city finance director, said personnel costs are budgeted to increase in the new fiscal year, mainly as a result of increased health insurance costs for employees and retirees.

The increase alone is expected to total more than half a million dollars and account for much of the $950,000 projected increase in operating expenses at a time when the city is struggling to make ends meet, budget documents show.

Councilwoman Marcia Ritter said Cape Girardeau city government can't continue to absorb million-dollar increases in operating expenses while revenue remains flat.

Council members said city administrators need to look at affordable health insurance first rather than what employees might want.

Mayor Jay Knudtson suggested the city seek out advice from financial staff at Cape Girardeau's two hospitals or other major employers as to health insurance options.

mbliss@semissourian.com

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