Pasco council delays vote on $6.5 million loan to stabilize city health plan

At the Oct. 6 Pasco City Council meeting, staff asked the council to authorize an interfund loan of $6,500,000 from the Economic Development Fund to the city’s self‑funded medical and dental insurance fund to shore up a shortfall and restore state‑required reserves. Council members asked questions and ultimately delayed a final vote so staff could provide additional detail before the council’s next regular meeting.

City Finance staff presented the loan request as a stabilizing measure after the medical plan began running a deficit this year. Director Garcia told the council that “the premiums haven't been adjusted since 2014,” and that the plan’s composite premium structure and rising claims have strained the fund. Garcia said the fund is running at an approximate deficit of about $2.5 million and that state rules require roughly 16 weeks of average claims on hand — about $4.1 million — to maintain a self‑funded plan’s reserve target.

The nut graf: the council’s decision matters because the loan would use city economic development resources to preserve the employee health plan’s status as self‑funded, a move staff says would limit immediate cost increases for the city and employees. If the council does not approve the loan, staff said the city would likely have to switch to a fully insured plan, which staff estimated would raise total city costs by roughly…