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Water/wastewater to adopt city's health plans despite commissioners' objections

The Journal Times - 11/1/2019

Nov. 1--RACINE -- Two members of the city Water/Wastewater utilities' Finance and Personnel Committee, which voted against adopting the city's proposed health insurance plan, were outnumbered when the Water Commission voted Monday to adopt the new plan.

Thomas Bunker and Kathleen DeMatthews, who serve on the Water and Wastewater commissions, voted in a Sept. 11 meeting of the utilities' Finance and Personnel Committee not to adopt the city's proposed healthcare plan, citing the specialized technical expertise of city water employees, a limited labor pool and competition the utility faces for those employees with private industry.

At Monday's Water Commission meeting, Bunker argued that changing the utility's health plan puts the utility's sustainability at risk by driving away experienced employees with institutional knowledge.

"Our most valuable resource is water, fresh water," said Bunker. "Why would we want to sacrifice that?"

But Bunker and DeMatthews were outnumbered by City Administrator Jim Palenick and aldermen Natalia Taft and John Tate II, all of whom voted to adopt the city's health plan with provisions to lessen the financial impact for employees.

Different views

Palenick reiterated that the city's position is that all city employees should receive the same benefits and that it was "offensive to all other employees" that the Water Utility should be exempt.

"Keeping health care plans consistent is very important," said Palenick.

Tate argued the utility should adopt the changes along budgetary lines, stating that the utility's health expenses have not been excessive because of luck.

"The city had one or two bad years," said Tate. "The utility could have one or two bad years and wipe out that line item (for health expenses)."

From 2015 to 2017, the city did maintain health fund reserves at 31% to 35% of healthcare appropriations. In 2018 and 2019, the city's healthcare expenses rose by approximately $2 million, which the city decided to cover using reserves. For 2020, those reserves are down to 9.93%; the city's ordinances state it must maintain 5% of healthcare appropriations in reserves.

Bunker countered that the utility has not faced such issues because of its use of stop-loss plans and basing its healthcare budget off statistics. Overall, Bunker did not express much optimism that the health care changes are going to work out in the city's favor. He referred to the 2006 lawsuit retirees filed against the city over changes to their health benefits, which he thinks could be repeated with this round of cuts.

"My thought is the city's going to lose (a lawsuit) and then your whole budget is turmoil," said Bunker.

Some amendments were made to the changes to minimize the impact to Water Utility employees:

-- General Manager Keith Haas recommended that the utility contribute $2,500 to all current employees' health savings accounts, which was approved.

-- For retirees over age 65, the commission approved a motion by Taft to set the Medicare Advantage premium at 7.5%, which would be reimbursed back to them.

-- For retirees ages 55 to 65, the commission approved the changes and decided it would revisit the issue to approve some kind of stipend. It was unclear on Monday what would try to fit into the utility's budget.

The Wastewater Commission, which met right after the Water Commission adjourned, does not include the aldermen and Palenick, but voted to reflect the changes the Water Commission had made to maintain consistency.

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