'Several large' health insurance claims lead to 'concerning' Cedar Falls city fund deficit [Waterloo-Cedar Falls Courier, Iowa]

Sep. 4—CEDAR FALLS — Several large health insurance claims have led the city administration to recommend about half the year-end surplus from the general fund be used to cover the resulting loss in its insurance fund.

The City Council will consider approving a resolution Tuesday night at its 7 p.m. meeting inside the Community Center, 528 Main St., transferring $900,000 of its approximately $2.2 million surplus to help offset a $1.3 million loss and "keep strong reserves" in the city's self-insured health insurance fund.

"A major concern continues to be the fund balance in the city's self-insured health insurance fund," said Finance and Business Operations Director Jennifer Rodenbeck in a memo Aug. 23 to the council about the employer-established fund assuming a financial risk for providing health care benefits to its employees.

City finance staff is in the midst of closing out the general ledger for the fiscal year ending June 30, 2022, and hopes to "maintain a viable health insurance benefits program," according to the resolution.

The $2.2 million surplus was in line with the $2.3 million from the previous fiscal year surplus.

"We were fortunate in fiscal year 2022 to have some revenues that exceeded budgeted amounts. These included hotel/motel taxes, COVID relief grant, and the receipt of the backfill funds," Rodenbeck said. "In addition, we had areas where expenditures were less than budgeted amounts. The significant areas included recreation, engineering, parks, and public safety."

The $900,000 transferred to the health insurance fund leaves about $1.3 million in the surplus, $328,333 from an Iowa Fitness Center Relief Program grant of federal COVID relief funds.

The resolution would authorize those funds be transferred to the recreation fund to help pay for projects at the aquatics center or others involving recreation, according to Rodenbeck's memo.

Another $595,874 is the city's annual backfill payment.

These payments make up for the revenue lost by cities, counties and schools when the state cut commercial and industrial property taxes in 2013.

That money is being phased out, and the council previously requested it be set aside for one-time capital projects.

Similarly, Rodenbeck's memo said the remaining approximately $300,000 of the surplus will be transferred to the capital projects fund to "help offset any project that is seeing increased costs due to inflation, or to use for a project identified as using General Fund Savings (GFS) on the CIP."

"This remaining amount will be used for a project to be specifically designated by the City Council through the goal setting and capital improvements process," states the resolution.

That process begins at the end of the year.

Additionally, at its 7 p.m. Tuesday meeting, the council will consider several other resolutions:

* Accepting a Surface Transportation Block Grant for up to $2.9 million for the reconstruction of Main Street.

* Executing $1,000 lease agreements, each for up to three years for usage of eight foot by four foot murals, which will be installed on the underpass of the bridge by the intersection of Main and East First streets.

* Allowing for the demolition of the existing dwelling at 1224 W. 20th St., and the construction of a new duplex in its place.

* Accepting a $49,143 bid from Iowa Flatworks Inc. for the city's annual sidewalk assessment program.

The meeting begins at 5:15 p.m. in the Community Center.

The Community Development Committee will learn more about an application for a Destination Iowa grant to help fund projects in and around the Cedar River in Cedar Falls and Waterloo.

The Public Safety Committee will hear from Fire Chief John Bostwick about the response Aug. 18 to a structure fire on Orchard Hill Drive.

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