Mayor Robert G. Ortt calculates that the city will save tens of thousands of dollars in health insurance costs now that the Common Council has approved two new city employee contracts.
Negotiated changes voted on Tuesday evening for the 38 firefighters and, in June, for 46 officers in the Police Department, will include raises for the next four years and new health insurance limits. Co-pays will go up.
The practice of retirees drawing full, city-funded insurance will end. After 65, they must apply for the government's Medicare plan. Still, they will be eligible a less expensive health insurance supplement from the city.
"We all pay taxes to fund Medicare," Ortt said. "It's kind of a double hit. This was something that really had to be changed."
The mayor said the city faced a steep health insurance premium increase of about $1 million -- to $5.5 million -- for its 200 full-time employees soon after he took office in January 2010.
Contract negotiations were his chance to get the numbers down.
"The city cannot agree to a new contract that doesn't seriously address the health care issue," he said.
While work continues on two union contracts -- for civil service employees and the other for department heads -- changes for police and fire include:
*Replacing $5 insurance co-pays with a three-tiered system that ranges up to $40. Ortt expects the change to lead to about $40,000 in savings for the Fire Department.
*Ending a Police Department plan for families used by four people and that cost about $4,000 a month. He expected police savings from all insurance changes to add up to about $160,000.
Firefighters also agreed to give up a second holiday. Because of an old scheduling quirk, they had been getting paid for two Presidents Day holidays. This change will save about $20,000, Ortt said.
He said he knows ending full insurance for those eligible for Medicare will save more money, but estimating an amount was difficult,
"Those will be future savings," Ortt said. "They won't be realized for a few years."
Police officers and firefighters will get raises, but they are less than the current year's 3 percent increase.
For the firefighters' four-year contract, raises for the first two years will come in two parts: 1.25 percent in January and 1.25 percent in July. By the third and fourth year, raises will be limited to a flat annual 2 percent.
The Police Department will have the same two-step 1.25 percent increase for the first two years. For the second two years, wages will go up by 1.5 percent in January and by the same rate in July.
"The raises are significantly lower," Ortt said.