Town staff warns of retroactive state health-plan surcharge; unveils interactive budget dashboard

Town staff told the Town Council of Clayton that state legislation increased the town’s employer contribution to the state health plan by about 2.4% of payroll and that the change was retroactive to July 1, 2025, creating a multi-hundred-thousand-dollar liability for the current fiscal year.

A finance staff member briefed council on the change and said the town faces a roughly $540,000 total hit across three funds assuming full staffing, and staff estimates the actual fiscal-year impact will be about $500,000 given current vacancies. The presenter said the legislation was retroactive: "Unfortunately, the legislation is very clear. It was retroactive to 07/01/2025," according to the transcript.

Staff response and mitigation: Finance staff said municipalities that participate in the state health plan are being back-billed and that the town is pursuing mitigation strategies during the mid-year budget review to avoid cutting service levels. Measures include tracking position control and using projected salary savings from vacancies to offset the surcharge. The budget office noted it will meet with department heads in November as part of the mid-year review to get year-end estimates on line items.

Budget transparency tools: The town’s budget office previewed an interactive Power BI budget dashboard that displays fund-level budgets, department spending and encumbrances, and a vacancy report. The dashboard shows the general fund budget (cited in the presentation as about $65,400,000) and a vacancy snapshot of 35 open positions — roughly a 10% vacancy rate — which staff said can be used to estimate lapse and reallocate savings.

What was not decided: The council did not adopt any budget amendments at the meeting. Staff said they will bring potential budget adjustments back after completing the mid-year review and analysis of encumbrances and personnel savings.