Human Resources proposes $38.8M budget; health care and self‑insurance costs drive increases

The Department of Human Resources told the finance committee it is seeking a total FY2026 budget of $38,800,000, with the largest increases concentrated in self‑insurance and employee health care costs. OMB fiscal analyst Robert Jones said the department requests $3,700,000 for personal services, about $7,000,000 for materials and supplies, and $28,100,000 for self‑insurance accounts, which include the city’s employee health plan.

The proposal matters because rising medical and prescription claims and higher insurance premiums are driving the largest year‑over‑year increases in the HR budget. “Self insurance costs increased by a net $1,760,000 following the latest review of claims expenses,” Director of Human Resources Natalie Barnes told council, attributing most of the increase to an 8.7% rise in medical costs and an 11.4% rise in prescription costs. The department asked council to consider those actuarial and utilization trends as part of the city’s larger budget deliberations.

OMB and HR officials emphasized that the $24,500,000 health and welfare fund request — up roughly $1,800,000 — reflects post‑pandemic utilization returning to pre‑COVID levels and higher prescription spending. The HR presentation identified obesity and diabetes as persistent drivers of pharmacy and medical spending and noted the city’s medical stop‑loss coverage triggers at claims above $250,000.

HR also requested increases in the city’s…