Waldoboro Town Manager Bill Post told the town’s selectmen on Tuesday night his next year budget goal is to flat fund, “just like last year.”
“I don’t expect to offer a cost increase for the next budget year. My goal is to bring in a budget that is flat funded this year. I don’t know that I can, but I’m going to try,” Post said.
Post also announced he anticipates not offering a pay increase to town employees as well. He anticipates the county tax will also be flat funded, but said the schools are looking at a 1.2 million cut from the state.
Post’s statements grew out of a full board discussion about the escalating cost of town employee’s healthcare benefits. Post estimated costs should increase by approximately $61,000 or “296,000 and change, along with putting in an allowance for cost increase of five percent.”
Post asked for the board’s budget development guidance for employee benefits. “I need guidance developing a budget. At 80 percent funding, the budget will be increased by just $11,000, or it could be funded at 75 percent. It is difficult to judge; I need to build something in there.”
Selectman Ted Wooster said he hoped there would be some healthcare relief coming from Washington. “Don’t hold your breath,” Post responded. “We have to work the best we can.”
“Though I know it is controversial,” Selectman Bob Butler said, “it needs to be said – [the proposed increase of] $61,000 divided by 28 is close to $2800 to raise for each employee.” Butler said some of the employees have a very generous benefit package, and those hired after 2003 contribute 15 percent of the costs, above the “employee only” plan.
Butler wondered if paying a contribution invests employees to have more health awareness. “I get bothered when folks just are not incentivized to look at health more. Some employees smoke. I don’t know where I come down on the contribution at this point.”
Of the 28 employees, eight were hired after 2003 and contribute 15 percent; therefore it costs the town $11,000 for the full benefits for other 20 employees.
Post said though one of his roles is fiscal responsibility, he said he would be “remiss” if long-term employees had to pay 15 percent. He questioned under such circumstances, would some employees opt to seek employment elsewhere? He did not want the board to underestimate the value to the town of long-term employees’ talents, knowledge, and abilities.
Butler said it is possible some employees could take such action, but, “there’s got to be a principle here. This town has been unbelievably generous with the health plan.”
Butler said he would not like to bet if the town would or would not lose employees, and acknowledged people will be upset. “In the school, the teachers pay 20 percent of premiums, we are at 15, and yet, we have a group who are paying zero. It is fair to say that insurance since 2003 has more than doubled. I’m suggesting we initiate the process, maybe not 15 percent, but 20 of our employees need to start paying something.”
Post said he often fields complaints from employees. “I don’t see the cost/benefit of making the employees pay 15 percent for $11,000. I think the detriment to the town is more than a saving of $11,000.”
Post also reminded the board in fiscal year 2009, under Health Trust, the health insurance was at $325,000 for 27 employees, and now in fiscal 2011, even at 80 percent funding, the town pays $280,000 with WHRA.
“We are still $45,000 below what we were paying two years ago,” Post said. “I think we’ve done due diligence, and I’d like to see another year under this plan.
With board support, Post said the discussion would continue at budget time. The board also supported Post using his best budgeting practices for developing a budget. “We are going into the second year of the [healthcare] plan, and I’m probably comfortable with a funding level of 75 percent,” he said.
