SAFFORD — Employee costs are always the greatest part of any business and Safford City Manager John Cassella was looking from direction for the City Council on how to deal with rising costs in the coming budget.
At issue specifically is the city’s contribution for employee insurance. The city’s plan is increasing by nearly $200,000 and, with the city already contributing $1.5 million for employee insurance, the question Cassella asked is how much of a percentage should the city be contributing.
Staff presented three options: the city paying 80 percent of the employees’ premiums, 85 percent and 90 percent.
Staff also proposed a 1 percent salary increase for every employee and informed the council that the IRS has increased the maximum allowable contribution to a health savings account. With the city matching up to half an employee’s contribution to an HSA, the increase will add another $32,725 to the city’s costs.
“If we were to do the 85/15 scenario, the 1 percent base, the HSA and the step program — you don’t really have a whole lot of money left in the budget to do anything else at that point,” Cassella said.
Despite Cassella’s statement, the council favored the city contributing 85 percent for insurance costs, which will add another $648,163 to the city’s budget.
A 1 percent increase in salary would increase the city’s costs by $114,559; however, the council favored a 1.5 salary increase, which would increase the city’s costs by about $171,839. Cassella said staff would have to review that proposal to determine if the city could afford the higher increase, and bring that determination back to the council for additional discussion.
Five members of the council were on hand for Monday’s meeting, with Councilman Gene Seale and Mayor Jason Kouts absent. Kouts announced on social media that Monday was the first day of six weeks of chemotherapy and radiation treatment.
“I’m feeling anxious and nervous,” Kouts wrote. “I’m so thankful to have my wife, kids, family and church family with me through this! Appreciate all your prayers.”
