County finance staff explain employee-benefits mill-levy cut, projected fund balance declines and future risks

Douglas County finance staff summarized the county’s employee-benefits fund and the effect of a mill-levy reduction at the July 10 budget hearing, telling commissioners the 2025 mill-levy decrease is reducing a previously elevated fund balance but that the county may need to rebuild levy support in future years if claims, KPERS, or plan-design changes increase costs.

Finance staff said the employee-benefits fund had an unusually high fund balance (about 62.4% at one point) and that the county reduced the mill levy for that fund from 7.708 to 5.805 mills. Staff presented projections showing the fund balance declining roughly 19.6% in 2026 and another projected decline of 22.1% in 2027 given the lower levy, moving the fund toward a target reserve level of roughly 20%.

Staff cautioned that multiple variables — including health-insurance premium increases, large individual claims (stop-loss triggers), KPERS and KP&F employer contribution changes, and plan-design choices — could alter the picture. A recent plan-year dashboard showed 2024–25 came in about 103% of the projected budget for health claims, meaning the fund ran slightly over budget for that plan year.

Commissioners discussed the potential timing and scale of any future mill-levy changes and asked staff to continue monitoring claims, unemployment and KPERS obligations and to bring options if the fund requires additional tax support in 2027 or beyond. Staff said they would return with more detailed projections and the historical numbers behind the one-month dashboard figures discussed at the hearing.

Ending: Commissioners were advised the current mill-levy reduction is deliberate and intentional to draw down reserve levels; staff will continue to monitor and report back if plan-year experience or statutory contribution rates drive the need for additional levy support.