‘Several large’ health insurance claims lead to ‘concerning’ deficit in Cedar Falls city fund | Political news

CEDAR FALLS – Several large health insurance claims have led the city administration to recommend that about half of the year-end surplus from the general fund be used to cover resulting losses in the insurance fund.

The City Council will consider approving a resolution Tuesday night at its 7 p.m. meeting at the community center, 528 Main St., transferring $900,000 of an estimated $2.2 million surplus to help offset a $1.3 million loss and “maintains strong reserves” in the city itself – a health insurance fund.

“A major concern continues to be the fund balance in the city’s self-insured health insurance fund,” Director of Finance and Business Operations Jennifer Rodenbeck said in an Aug. 23 memo to the council about the fund, which is created by the employer, which assumes financial risk to provide health benefits to its employees.

The nonprofit’s first director, Kathryn Sogard, resigned on April 19, and the plan is not to actively seek one for now.

City finance officials are in the midst of closing the general ledger for the fiscal year ending June 30, 2022, and hope to “maintain a viable health insurance benefits program,” according to the resolution.

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

“We were fortunate in fiscal year 2022 to have some revenues that exceeded budgeted amounts. These include hotel/motel taxes, the COVID grant and receiving backfill funds,” Rodenbeck said. “Also, we had areas where spending was less than budgeted. Significant areas include recreation, engineering, parks and public safety.

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

The resolution would allow those funds to 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 payments.

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A “refreshed” app launched this summer. A more user-friendly website is also expected to launch on Thursday.

Those payments offset revenue lost to 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 asked that it be earmarked for one-off capital projects.

Similarly, Rodenbeck’s memo said the remaining roughly $300,000 of the surplus would be transferred to the capital projects fund to “help offset any project that sees increased costs due to inflation, or be used for a , identified as using CIP General Fund Savings (GFS).’

“This remaining amount will be used for a project that will be specifically identified by the City Council through the goal setting and capital improvement process,” the resolution states.

This process begins at the end of the year.

In addition, the council will consider several other resolutions at its 7pm meeting on Tuesday:

  • Adoption of a surface transportation block grant of up to $2.9 million for the reconstruction of Main Street.
  • Execution of leases in the amount of $1,000 each for up to three years for the use of eight-foot by four-foot murals to be installed on the bridge underpass near the intersection of Main Street and East First Street.
  • Permits the demolition of the existing residence at 1224 W. 20th St. and building a new duplex in its place.
  • Acceptance of bid of $49,143 from Iowa Flatworks Inc. for the city’s annual sidewalk evaluation program.

The meeting starts at 17:15 at the community center.

The Community Development Committee will learn more about applying for an Iowa Destination 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 Aug. 18 response to a building fire on Orchard Hill Drive.

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