Committees approve 2025 permanent appropriations; health insurance shortfall flagged

The Community Development and Finance committees approved the city's 2025 permanent appropriations ordinance after administration staff outlined changes since their prior meeting, including increased funding for the employees health-insurance internal service fund and modest reductions in police and fire operating requests.

Finance staff said the city is carrying roughly $15 million in cash reserves and that the permanent appropriations total about $206 million for all funds. Officials reported that employee health-care claims through the first two months of 2025 exceeded revenues for the health-insurance fund by about $500,000; consultants project health-claim costs could increase about 12% this year. To cover anticipated claims, committees increased transfers into the health-insurance fund by approximately $1,025,000 across funds, with the general fund bearing about $558,000 of that increase.

Committee members and staff discussed steps already taken to limit spending, including removing some capital items from the capital plan, delaying hiring of several budgeted positions and reviewing each vacancy before filling. The committees' approval sends the appropriations to full council for adoption; finance staff and the mayor said council would continue to monitor revenues and healthcare claims through 2025.

Officials noted year-to-date income-tax receipts for the first two months were about 5% higher than the same period in 2024, but staff warned timing of collections can affect short-term comparisons. The administration said it will meet with the health-insurance oversight committee to consider plan changes and remain prepared to revisit appropriations if weekly Medical Mutual claim invoices continue at elevated levels.

The ordinance authorizing the permanent appropriations passed in committee and advanced to full council.