Borough sets $1.4 million Greencastle budget, changes insurance coverage
Greencastle borough council members weren't happy, but realized hard times wouldn't disappear in 2012, and borough employees would have to bite the same bullet many residents already had. In reviewing next year's proposed budget at a special meeting Nov. 15, president Charles Eckstine, Duane Kinzer, Matt Smith, James Farley, Paul Schemel and Harry Foley allowed a one percent raise, but agreed that the employees would have to make changes to their healthcare coverage. Craig Myers was absent.
"The backbreaker has been healthcare costs," said borough manager Kenneth Womack, who compiled the $1.4 million budget. It kept the tax rate steady at 11 mills.
He recommended the borough no longer offer health insurance to spouses of employees who could get coverage at their own jobs. Plus, if the employee joined the spouse's policy, the borough would pay him/her half the single employee insurance rate. That equaled about $3,600 per person.
Womack acknowledged that an employee's expenses could go up $250 to $300 a month, and the raise might not cover it. "While I regret that, we have to do something."
In 2011 the borough anticipated spending about $17,000 per any employee on a family plan. However, each reimbursed the borough 25 percent of the cost for dependent coverage, bringing back $26,000 to city coffers. Womack had already met with the staff and said they understood the need for a change in practice, that "it's hard for everyone else out there (the taxpayers)." They would continue to receive reimbursement for up to $2,000 in out-of-pocket medical expenses.
As for an increase in salary, Smith noted that most companies were still not giving merit raises. Eckstine didn't believe residents would favor paying for a significant raise when they themselves weren't getting any. As well, the employees had job security, and no one could ever recall a layoff.
"I have mixed feelings," added Foley. "Something is better than nothing."
Schemel said most employers used the Consumer Price Index as a guide, and the borough had to live within its means.
Farley wanted to do what made sense and was affordable.
For 2012, Greencastle expected to shell out $252,938 in healthcare benefits, with $100,270 assigned to general fund group health insurance. The rest would come out of sewer and other line item accounts, based on employee responsibilities. In 2011 the insurance premiums were $84,850.
The collective bargaining agreement for the police officers, already signed by both sides, was good for three years. The negotiated raises will be, respectively, one percent, two percent, and finally three percent in 2014. The uniformed employees also agreed to accept the same healthcare plan available to non-uniformed employees.
Next year's expected revenue and expenses for Greencastle were down significantly from the 2011 budget of $1.67 million, which was a small increase from 2010. Part of the reason was the completion of major public works projects, specifically storm sewer construction, engineering fees, and curb and sidewalk construction. Major capital purchases included in the new budget were a truck for $42,000 and a police car for $31,000.
The $1.78 million proposed sewer budget exceeds the 2011 figure of $1.5 million. The borough is upgrading the wastewater treatment plant with a mandated Biological Nutrient Reduction program, to the tune of $800,000. The work must be completed by next October. To help the fund balance, customer rates were scheduled to go up one dollar per thousand gallons. A minimum user rate would increase from $45 to $54 per quarter. That would add $138,000 to what was collected this year.
Womack noted that real estate and local taxes were expected to be higher in 2012, but the general fund would still require a $248,000 transfer from capital reserves.
"The key is our revenues are down, but we've been budgeting for that," he said.
Operating expenses would not be covered if employees received a raise, he added. As a result, there was no consideration of awarding raises above the one percent. The police department accounted for 40 percent of the budget, though salaries were down because the bargaining agreement cut fulltime officer hours from 43 to 40 per week.
The decision to pass the amended preliminary budget, with the salary and benefit numbers adjusted, passed 5-0. Kinzer was not present for the vote.