Budget staff told the York City budget hearing that roughly $5.7 million in American Rescue Plan Act (ARPA) funds used in 2025 to pay health-insurance costs will not be available in 2026, resulting in a substantially higher allocation charged to department budgets.

City staff said the shift raises the per-full-time-employee health-insurance allocation from about $23,415 in 2025 to about $39,152 for 2026. Staff presented the change as an accounting reallocation rather than a new health-insurance policy.

Why it matters: departments will see larger expense allocations because the one-time ARPA subsidy that reduced the citywide health-insurance burden in 2025 was not replaced. That change affects operating budgets across nearly every department and was repeatedly cited during department presentations.

At the hearing, budget staff summarized how the allocation is calculated: total plan costs minus employee contributions and offsets, divided across the number of full-time employees, producing the per-employee allocation that is then applied to departmental budgets. Staff said the city remains self-insured and continues to seek plan design and prescription-program changes to control costs.

City officials said the higher allocations do not reflect a new benefit or a higher per-claim payment; rather, they said, the calculation reflects that one-time federal ARPA support is no longer available to absorb a portion of costs.

Budget team and council members asked how the change will show up in department line items and whether it will be possible to smooth the effect through reserves or other one-time revenue. Staff said the shift will appear in the risk-management allocation line and in each department's insurance allocation; they repeated that the underlying health plan remains self-insured.

The hearing heard questions from members of the public asking for detail on the allocation line and where the dollars appear in the ledger. Budget staff walked through the methodology and said they would provide supporting breakout figures with the draft budget materials.

Looking ahead: staff said the city will continue annual plan reviews and broker-supported procurement to seek cost-saving measures, but also warned that delays in federal or state reimbursements could affect timing of department cash flow.

Ending: Council and staff agreed to include the full allocation breakout with the published draft budget so council members and the public can see how the change affects specific departments.