Board weighs switching employee premium reimbursements to a stipend, directs salary update

A council member said the board should shift from reimbursing employees for health insurance premiums toward a fixed stipend to simplify tax reporting and ensure employees receive an equivalent after-tax benefit. "Let's pick a number that we think is comfortable that covers taxes," the council member said, arguing a flat stipend would avoid variable tax outcomes under a reimbursement model.

A finance staff member cautioned that reimbursements for premiums paid through another employer are taxable and likely must be reported on payroll because they do not meet Section 125 plan requirements: "It's taxable. So, we need to show it on the payroll," the staff member said, urging the board to account for payroll withholding when choosing a stipend amount.

Board members discussed using a 12% adjustment as a working rule to make the stipend dollar-equivalent to current reimbursements. "If we can come up with a number, then we can make it work," a council member said, adding the group should settle on one amount everyone is comfortable with.

Separately, the board agreed to update a salary figure in the town's ordinance—changing the referenced salary from 64 to 66—and to authorize an end-of-year Christmas bonus of $200. One member said they would update the ordinance language and return the amended item at the February meeting.

The board assigned staff to draft stipend language that shows payroll reporting implications and to return with a proposed stipend figure and ordinance updates at the next meeting.