Lake County kicks budget cuts down the road
BY CARRIE NAPOLEON Post-Tribune correspondent September 16, 2013 5:38PM
Updated: October 18, 2013 6:12AM
CROWN POINT — Lake County officials plan take a dip into the self-insurance pool to help balance the 2014 budget.
In a special budget workshop Monday, the Lake County Council voted 4-1 to reduce the county’s self-insurance pool by the $3.5 million needed to bring the 2014 budget in line. Councilwoman Christine Cid, D-East Chicago, voted against the plan. Council members Elsie Franklin, D-Gary, and Jerome Prince, D-Gary, were absent.
The first reading of the final budget and a public hearing takes place at 4 p.m. Wednesday in the commissioners’ courtroom.
Officials described the move as a “calculated risk.”
In 2012, county employees began seeing collection notices from their healthcare providers after the county fell behind by 120 days or even more in paying employee claims. Typical payment is 30 to 90 days.
So officials took steps last year and this year to ease the pressure on the insurance pool, transferring $1 million from unused utility payments in the commissioners’ budget into the self-insurance pool.
This year, $2.4 million for the insurance pool was raised during the surplus tax sale; $1.7 million from the borrowing committee also went into the pool.
Councilman David Hamm, D-Hammond, said the county is now paying most claims in 70 to 80 days. He said it costs about $1 million per pay period to fund the self-insurance pool. County officials will have until the last six weeks of 2014 to figure out where to find the $3.5 million the self-insurance fund will be short for the years.
“Call it kicking the can down the road,” Hamm said, adding officials should be able to find enough in cuts to make up that difference in time.
Cid said she would not support shorting the self-insurance pool. Cid, who also works in the county treasurer’s office, said the county has increased employee contributions for the health plan and reduced their benefits and still struggles to pay claims on time. She has received collection notices this year and has heard from other employees experiencing the same.
“It’s not just me. Everybody is getting collection letters,” Cid said.
Council President Ted Bilski, D-Hobart, said moving money from the self-insurance fund to balance the budget will give the council and commissioners’ financial consultants the time to find the cuts elsewhere.
“The insurance oversight committee has taken some positive steps forward,” Bilski said.
He said the committee expects to see a reduction in costs for healthcare with the implementation of the Affordable Care Act next year. Bilski said he also expects the county will get a bump in revenues from the Circuit Breaker tax cap credits, but that figure will not be known until May.
Dante Rondelli, the council’s financial planner, said it is a risk to underfund the self-insurance pool but it is manageable. He expects county officials should be able to offset the difference before the money is needed. However, if the cuts are not made or new revenues not received, the county always has the last-ditch option of borrowing.
“It’s a risk. It’s a calculated risk. But it’s not a blind willy-nilly risk,” Rondelli said.