Lockport looking into self-insurance system - The Buffalo News

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Lockport looking into self-insurance system

LOCKPORT – The Lockport Common Council is considering switching to a self-insurance system for employee health insurance as part of the 2014 budget.

It’s hoped the move might produce some savings, but Mayor Michael W. Tucker said Wednesday that layoffs are still almost certain under the spending plan.

“All I can say is, there will be some,” Tucker said. “You look at our budget, most of the money is in police and fire, so there will be some in those departments, but I don’t think any department or union is out of the picture.”

The Council voted Wednesday to postpone the public hearing on the budget from Oct. 23 to Nov. 13. The adoption vote is expected Nov. 20.

Tucker said the need for accurate health insurance figures is driving the postponement, along with the presence of auditors from the state Comptroller’s Office because of Lockport’s status as a financially stressed city in the comptroller’s rating system.

City Clerk Richelle J. Pasceri said the Council won’t even get budget figures until early November.

John Schiavone, the private auditor drawing up the city budget, has been meeting with department heads, Pasceri said.

The Council hired Lawley Insurance Agency as its new insurance broker at its Oct. 2 meeting, and Council President Anne E. McCaffrey said, “We’re waiting for Lawley to come up with an analysis.”

Tucker said, “We’re not going to have our health care numbers until Oct. 28. We want those to be accurate.”

The issue is whether the city can save money on a tax on high-value insurance policies, imposed under the terms of Obamacare.

Pasceri said the city would have to pay an assessment of about 2 percent on a self-insured plan, as opposed to about 4 percent on a plan managed outside.

She said that the last two years, the city’s employees have collected less in claims than the city paid in premiums.

“The last few years, we’ve left a lot of money on the table,” the mayor said.

Figures in tentative budget charts show the city spent $5.5 million on health premiums in 2011 and $5.6 million in 2012.

Tucker said the city’s “real” tax cap this year is 1.6 percent. The Council and Tucker have said they want to avoid any tax increase, but Tucker said Wednesday, “Maybe, at the end of the day, we’ll have to take it to the cap and have some combination of layoffs and tax cuts.”

But he said any tax increase will not override the cap.

The mayor said the city will continue to search for health care savings after the budget is adopted, which may eliminate some layoffs in the spending plan the Council eventually approves.

email: tprohaska@buffnews.com

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