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HomeMy WebLinkAboutCommunicationsOctober 8, 2010 The City of Oshkosh Common Council 215 Church Ave P.O. Box 1130 Oshkosh, WI 54903 -1130 I OCT 7 2 20'G Dear Council Members CITY CLE�K�S -- In a recent newspaper article *, it was reported that The City of Oshkosh was OFFICE planning to use approximately $800,000 of the health insurance reserve fund, to help cover the cost of wage increases in employee contracts for 2011. There was also an editorial describing this idea as "creative budgeting ". I would call it something very different. I wish to bring to your attention, why I feel using the health insurance fund for any alternate purpose would create a serious injustice, and is a very bad idea for many reasons. On October V I contacted Mr. John Fitzpatrick (Director of Administrative Services), who verified the article and the intent to use some of the health insurance reserve funds to cover wages. He also indicated that he anticipated the insurance premiums for next year would go up about 8 %. As a retiree who is paying 100% of the insurance premiums, it is very disappointing to hear, within the same breath, that we have a fund surplus to spend on wages and benefits for active employees, but will now have to charge retirees a higher premium. I hope you can see why I fear there is a direct link between the amount of wage and premium increases. I do not know how many retirees are affected by this situation. Those who retire prior to qualifying for Medicare, such as police and firefighters would be the predominate group. All of the years I was an active employee, health insurance premiums were negotiated as part of a total package, and that portion paid by the employer is considered "a benefit in lieu of wages ". From the time the City of Oshkosh started the self funded health insurance program, we were told that each year the premiums were established at least in part to the funds performance. The so called "surplus" was then substantially built up over the years; the now affected retirees were still active employees. Therefore, raiding this fund, is stealing from the same group of individuals who you will now ask to help replace it! The only correct use of surplus in this fund would be to freeze or reduce premiums. Otherwise, any user incentive to conserve costs would also be lost. In case you or the community wishes to know, as a retired firefighter, I have paid 100% of the insurance premiums from when I first began retirement in January 2006. Currently, my premium is $1027.55 per month for the husband/wife EPO. There have been significant reductions in the State (ETF) pensions for the last 2 years, which will continue in future years due to "smoothening ". Although this is not -2— October 8, 2010 part of the City's concern, it does make it even harder to "swallow", to see money from the fund used for raises. I do not know the current position of the represented employees in regard to this matter. I do remember that a similar plan to raid the insurance fund was considered many years ago, but was abandoned due to objections by the represented employees. I do not know if the issue was resolved as part of any agreement or ruling, but I do think it should be researched before any budget is finalized. Finally, using the health insurance reserves as an alternate revenue source is a very slippery slope. Once the lions taste the meat, you won't be able get them to stop eating. There is nothing new or creative about using a large fund for purposes other than intended. We have all heard about the problems Medicare and Social Security are facing due to these same slush fund practices. I am aware of the difficult job you all have, especially now, with creating a budget. Mr. Fitzpatrick informed me that you all expect next year to be even worse. Why then, would you this year deplete the insurance reserves, in order to inflate personnel costs? Are you not thereby compounding the problems anticipated for next year? I feel raiding the insurance fund this year is being done as an "easy fix", but that may leave you with no solutions next year. Thank you so very much for your time and consideration. I am eternally grateful for my career with the City of Oshkosh. As your employee, I have always tried to do what I thought was "right and just". I am hoping that the Council members can find a way to do the same, while considering the budget in regard to this matter. Sincerely, Vince Straus, OFD retired 5166 Southwind Drive Winneconne, WI 54986 *Northwesten September 5, 2010 by Jeff Bollier