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Leesburg proposes $2 million boost to health-insurance fund and flags workers' comp and fleet cost pressures
Summary
Staff warned of multi-year high claims in the health-insurance fund and proposed increasing the city's employer contribution by 29% and adding $2,000,000 to stabilize FY27; workers' comp reserves and rising fleet costs were also highlighted as near-term budget risks.
City staff (S2 and S1) told commissioners the health-insurance fund has experienced elevated claims for the past two to three years and proposed corrective funding in FY27. "In '27, we did increase the city's contribution by 29%" S2 said, and staff proposed adding $2,000,000 to the health-insurance fund to avoid repeated transfers from other reserves.
S1 said staff expects to present a FY26 true-up around $1,000,000 at the end of the fiscal year and emphasized the city has cash to absorb near‑term adjustments without immediate payment failures.
On workers' compensation, S2 said the city pulled money from that reserve the past two years and recommended limiting further transfers to preserve the fund. "So now we would say we need to hold tight for a little bit and just let this fund be," S2 said.
Fleet also drew discussion: S2 reported 14 vehicles planned for FY27 and noted rising vehicle acquisition costs have stressed fleet leasing amortization assumptions. S1 and others said typical vehicle prices have climbed (examples cited: police cruisers and bucket trucks), and staff suggested recalibrating lease amortization in future years to reflect current replacement costs.
Why it matters: internal service funds support employee benefits and essential city operations. Staff warned that continuing high claims or repeated transfers could force tougher choices in future budgets (benefit changes, rate increases or tapping reserves).
Next steps: staff will monitor claims, present any FY26 true-ups, and return with refined proposals for fleet amortization and fund transfer policies.
