February 6, 2014
In reading through the Strategic Fiscal and Management Plan for the City of Memphis I keep finding things that amaze me as to the past fiscal mismanagement. It is quite clear that the City is supposed to pay 70% of the health care premiums and the employee is supposed to pay 30%. Look at the attached pages 46 through 49 of the plan. On page 46 the employees paid as low as 23.1% and as high as 26.9%. This cost you, the taxpayers, $9.2 million dollars over these three years. I presume the same was true for the OPEB retirees but I am checking. $9 million here, $5 million there and pretty soon you are talking about real money. On top of this mistake by the City, here is what the report says about the history and direction of health care cost, a huge part of the money problem.
On a fiscal year basis, from FY2008 to FY2012, the City’s General Fund contributions to the Basic and Premier Plans has increased by more 36.6 percent – or $11.5 million. During this period, the City’s FTEs increased by 54 positions, meaning that the City’s cost to provide medical coverage to an average General Fund employee increased by $1,801 – from $5,079 per year in FY2008 to $6,880 per year in FY2012. In FY2013, the City projects it will spend $45.4 million from General Fund on employee health care premiums – further increasing the per employee cost to $7,347 per year and overall spending growth of 44.1 percent since FY2008. By comparison, according to the Kaiser Family Foundation’s 2012 Employer Health Benefits Survey, nationally, large employers (200+ employees) that are self-funded experienced a 22.8 percent growth in premiums from calendar year 2008 through calendar year 2012.
We have to have multiple reforms and pension and health care heads the list. There is more information to come as I plow through this informative document.