The Hays City Commission at Thursday’s meeting expressed relief and appreciation at the news employee health insurance costs actually will see a slight decrease next year.
The city’s provider, Blue Cross Blue Shield, initially had warned expenses could surge by as much as 21 percent next year due to increasing medical costs. But due to the city’s low utilization, renewing the policy showed a .67-percent cost decrease.
Employees will have the same coverage as last year, when the city opted for a triple-option plan offering high deductible, premium and base policies. The city often switches insurance providers every year in efforts to secure the best price.
“I really appreciate that the employees have been willing to change plans year after year in the past,” Vice-Mayor James Meier said. “This is the first year ... that we’ve actually kept the same plan. I know how annoying that can be to have deductibles changed on you and co-pays changed on you. … We have good employees that have been willing to do that to try to keep costs down for the city.”
The city’s annual cost for the policy will be approximately $1.7 million. An additional $100,000 has been allocated to provide matching funds for health savings accounts. The HSAs have proven popular, with employees contributing nearly $144,000 into the accounts so far this year with a city match of approximately $66,000.
The city in 2010 implemented a $9,500 average per employee spending cap for health insurance. An employee committee has been tasked with identifying health insurance policies within that spending limit.
Employees had requested the addition of a high-deductible plan last year, and that is the plan 60 percent of staff members have selected. In order to keep health insurance costs within budget, employees are required to pay a portion of their premiums.
“I was pretty certain two years ago when I came on here that we were going to have to bump up our city’s share, or I was going to request it because of insurance on the rise,” commissioner Lance Jones said. “But I think you guys have done an excellent job of keeping the costs down so employees don’t have to pay a tremendous amount.”
In other business, commissioners approved a project to replace the carbon dioxide tank and feeding system at the city’s water treatment plant. The project came in $40,000 above the budgeted amount of $300,000, but is necessary in part to help spare future expenses to maintain the current system, which is 50 years old and frequently needs repair, said Jeff Crispin, director of water resources. The system is old enough that sourcing replacement parts has become difficult.
The new holding tank will be significantly larger, which will result in the city needing fewer chemical deliveries and possibly more competitive bids as a result, Crispin said, noting more companies prefer to deliver a full load of chemical and the city cannot currently hold that much.
“A new, larger tank would save us money on transportation and hazmat fees that we currently pay per load of bringing C02 to the plant, also the maintenance costs that we’ve incurred with this current tank,” Crispin said. “Roughly $5,000 would be saved just in transportation and hazmat fees.”
The low bid in the amount of $312,000 was accepted from Smoky Hill LLC in Salina, which had indicated a willingness to begin work as soon as today. The project is expected to take 100 work days for completion, with a finish date in April. A cost overrun of $28,000 also was experienced during the project’s design phase.
Commissioners questioned the cost overrun, which resulted from an outdated cost estimate, but noted costs for the repair were likely to keep escalating if the city did nothing. There are available funds in the water capital budget to cover the entire cost.
Because the new tank is bigger, it will be relocated to the other side of the treatment plant. That also will help alleviate potential safety issues by putting more distance between the chemical and city employees, Crispin said.