Dependent health insurance contributions and premiums for retirees for future employees were dropped Monday by Poplar Bluff City Council members in a split vote.
The changes will apply only to employees hired as of Sept. 1, or later. The vote does not impact current employees.
“Ultimately, we’ve got to look out for what’s best for the future of the city financially,” said Mayor pro tem Steve Davis, after the vote. “Our city manager has said for quite some time that we can’t sustain the current situation.”
The change was approved on a 5-1 decision, with council member Ed DeGaris casting the sole ‘no’ vote. Council member Barbara Horton was absent.
“I think (it) contributes to the quality of employees we get and are able to keep,” DeGaris, a retired Poplar Bluff police officer, said after the meeting. “When I first started, the pay was so low, we were pretty much training for other departments.
“I’m afraid we may go back to that.”
All changes will impact employees hired Sept. 1, or later.
The city currently pays approximately 66% of the health insurance premiums for dependents, including spouse, child or family coverage. This will be eliminated under the new plan. The city will continue to pay 100 percent of the employee-only health insurance premium.
Health insurance premiums for retirees are currently paid in full between the ages of 55-65. When the new policy takes effect, the city will not cover premiums for retirees.
The matter has been discussed at previous council meetings, said city manager Mark Massingham, who presented a list of benefits offered by about a dozen cities in the area or of a similar size.
Of the cities that responded with information, nine of 11 do not offer these benefits, said council member at-large Ron Black, prior to the vote.
“I think they’re kind of in the position we are, they can’t afford to do it anymore,” said Massingham, who does not believe the city will see much change in its costs for a few years.
The city has a fiduciary responsibility to take care of the taxpayers, said Black.
The annual cost for the general fund and the utility department is just under $2.9 million currently, for employee health insurance, family benefits and retirees, Massingham has said previously.
The general fund pays about $1.9 million of that, according to figures he provided. This includes the police, street, fire and other city departments.
It pays for health insurance for 48 employees at a cost of $390,000 a year. Single and spouse, and single and child for a total of 59 employees costs about $740,000 a year.
Retiree insurance is almost $283,000 annually.
The utility pays just under $1 million in total health insurance costs for all tiers, for almost 80 current employees.