Even though the premium will increase by 181⁄2 percent, City Administrator Larry Paine told the Hillsboro City Council at its June 4 meeting that the city got a comparatively “good rate” for its employee health insurance plan for 2014.
After reviewing packages from three other companies, Paine said he notified Midwest Public Risk that the city would be renewing its current policy even though the premium will cost about $45,400 more than it did last year.
The total premium for the coming term will be $290,729, compared to $245,340 for the current policy.
Premiums for the other companies came in as follows: $392,204 from Blue Cross/Blue Shield, which is almost 60 percent higher than the city is currently paying; $376,820 from Preferred Health Systems, nearly 54 percent higher; and $339,108 from United Healthcare, just over 38 percent higher.
Paine said the key reason for MPR’s lower premium is that it operates as a non-profit insurer that bases its rates on a large pool of public employees rather than an individual city/client.
Though it generates sufficient revenue to ensure sufficient financial assets, Paine said MPR doesn’t need to make a larger profit for stockholders.
Another advantage for Hillsboro, which has a significant percentage of employees over age 55, so that being part of the larger and generally younger MPR pool helps to mitigate the higher premiums generally assessed for older workers.
The council approved a change order for the street-replacement project on Cedar Street. Original plans called for a 148-foot section of the street to remain as asphalt rather than replacing it with concrete.
“This would have looked weird in the middle of newly paved concrete street,” Paine said. “One objective we are working toward is to reduce the amount of asphalt since we have a small street maintenance crew.”
Paine said city engineer Darrin Neufeld, of Evans Bierly Hutchison & Associates, estimated the cost of replacing the asphalt section at $12,101, which the city will pay from its capital improvement budget.
“Besides the fact that the original plan would have made the street look funky, and its replacement would look like we approached the reconstruction with some forethought, the price is reasonable,” Paine said.
The council agreed and approved the change order.
In a related action, the council approved a payment of $91,465 to Barkley Construction for work completed to this point on the street project, which includes Date, Cedar and Birch.
Also approved was a $2,000 payment to Ranson Financial Consultants, LLC, which administers the Community Development Block Grant that is funding the project.
Paine said work on the project is about half complete. The original contract for the project was $391,000. With the change order approved at the meeting, the cost will increase to $403,102.
In other action, the council was updated by Paine about preliminary work he has done in preparing the city’s budget for 2014.
As part of that review, Paine went through a list of 21 ideas for capital improvement projects for the coming year. The ideas had surfaced over the past year or so, Paine said, and the council will need to decide which projects should be included in the 2014 budget.