City outlines how workers’ raises, health care costs affect taxpayers

Akron Beacon Journal (OH)

Administrators briefed Akron City Council Monday on the public cost of collective bargaining agreements reached with three employee unions. Negotiations with the fourth union, representing 360 firefighters and first responders, have reached "an impasse," said Randy Briggs, deputy mayor for Labor Relations.Neither Briggs nor Steve Barker, president of the Akron Firefighters Association Local 330, would talk about why a mediator will be needed when the two sides meet later this week."It's amicable and we're excited about the meeting on Friday," Barker said. "We just want to make sure we look at everything before we put it to bed."The firefighters are the last of three unions to settle after filing grievances over 2016 legislation that increased the cost of supplemental health care insurance for retirees and their spouses. The Civil Service Personnel Association and Fraternal Order of Police Lodge No. 7 settled in the past weeks, basically splitting future costs with the city.Seated on a panel with Deputy Finance Director Steve Fricker and Employee Benefits Manager Wendy Weaver, Briggs briefed council on tentative contracts ratified this month by CSPA, the police union and local chapter of American Federation of State, County and Municipal Employees. Pay raises and health care changes negotiated in the contracts will extend to non-union city employees. The net impact for taxpayers is about a $16 million increase to the city budget, which Fricker expects to cover with stronger income tax collections.

A retroactive raise of 2 percent for 2019, another 2.75 percent in 2020 and 3 percent in 2021 will increase payroll by $2.5 million, $6 million and $10 million, respectively, over the life of the three-year contract -- assuming the firefighters take the same terms. The cumulative cost of the raises is $18.5 million, offset slightly by higher health care costs for employees.Weaver presented a four-page explanation of health benefit changes that covered everything from up to 50 percent increases in monthly premiums to a special co-pay for Cialis, an erectile dysfunction pill. Employee premiums will eventually double from the current monthly rates of $30 for single plans and $60. Co-pays at $7.50 and $15 (for single and family plans, respectively) also will climb each year until doubling in 2021.Assuming firefighters agree to these rates, Fricker projected that the city's 1,800 employees will collectively contribute $70,000 more from August until the end of the year for health care, then $900,000 more in 2020 and $1.1 million more in 2021.Health care will put about a $30 million dent in the city's 2019 budget compared to $20 million in 2012, according to documents Fricker provided to council. The city projects annual health care costs to climb higher with the new three-year contracts but not quite reach $40 million as employees picking up more of the tab."In 2016, we had a graph [for health care costs] that showed us going off a cliff," Briggs told council. "If you look now, the graph is level and, hopefully, soon it will be going down."The city's rosier projections assume that, in the next three years, about a third of all staff will opt into a new employer-sponsored health care program. Like Akron Public Schools last year, the city is encouraging employees to go to a clinic run by Paladina Health.The Denver-based company, operating in Ohio for four years now, staffs two Akron clinics with doctors, including one that exclusively serves the school district at the I Promise school on West Market Street. More Paladina clinics are planned in North Canton and Cuyahoga Falls. Employees pay an annual subscription to visit them as often as needed.There's no copay. Patients can keep their specialists but must trade in their primary physician. Clinic doctors see no more than eight patients a day. Visits geared toward preventative care last 45 minutes on average. There's a 24-hour emergency line and no insurance companies involved, meaning no submitting claims for patients or processing paperwork for doctors."The whole purpose is to control and reduce the cost of health care while improving the experience for patients," said Paul Catania, senior vice president and market leader for Oswald Companies, which connected the school system and now city government with Paladina.