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Council approves use of 2024 health-insurance surplus for employee dividend, sick-leave payout and flood reserve
Summary
The council approved a plan to allocate the 2024 health insurance surplus — including a one-time employee dividend — and to earmark funds for sick-leave payouts and flood reimbursement reserves after a failed amendment to redirect the dividend to other city services.
The Wauwatosa Common Council approved a resolution to allocate the 2024 health insurance surplus, including a one-time employee dividend, a sick-leave payout reserve, and a flood reimbursement reserve. The proposal passed after an amendment to reallocate the employee dividend to fund a firefighter position and yard-waste restoration failed.
City staff described the surplus as the result of the 2024 health insurance fund performing better than expected. Under the plan, one-third of the surplus would be distributed as a dividend to employees, one-third would be used to reduce the city’s budget gap, and one-third would be set aside to pay down future sick leave payout liabilities and create a flood reimbursement reserve.
Alder (name) moved an amendment proposing to redirect roughly $425,000 that had been intended as a staff dividend to restore a yard-waste program and fund a firefighter position for roughly two years. The amendment failed on a roll call (the motion to amend failed 9–2–4 according to the transcript). Council then voted on the original allocation and approved it; the transcript shows the item passed as moved.
Supporters, including Alders who noted the plan incentivizes smart use of the city’s health plan, said the dividend is a way to share the plan’s performance with employees and to recognize their role in keeping costs down. Opponents argued the surplus is taxpayer-funded and suggested instead using the funds to shore up city services.
City staff clarified that employees pay a portion of premiums (noted at roughly 30%) and the remainder is covered by the city budget; the surplus stems from overall plan performance. The HR director explained that one-third of the surplus is being proposed as a dividend, another third to reduce the budget gap, and the final third to pay down liabilities.
Next steps: The city will implement the allocations as approved and will continue tracking flood-related FEMA reimbursement claims and other budget impacts.
Why it matters: The allocation affects city finances and employees’ paychecks and reflects choices about whether to direct surplus funds to employees, to short-term service restorations, or to long-term liabilities.
