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Presentation of 2025 Other Fund Results and Fund Balance Policy and consideration of issuance of an employee health insurance dividend
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Submitted by:
John Ruggini
Department:
Finance Department
A. Issue
The Finance Department has finished closing the 2025 fiscal year and the preliminary and unaudited results are available for discussion.
B. Background/Options
At the close of each fiscal year, the Finance Department presents the preliminary financial results. At this time, those results have not been audited. The final audited financial statements are expected in June.
Other Funds
The ending balance, net change and performance against the fund balance policy where applicable for each fund is included as an attachment. The draft fund balance policy is also attached. A few significant changes are described below.
Health Insurance Fund
The Health Insurance program ran at 90.0% of the premium equivalent as claims were 4.4% lower than the prior year and $487,000 under budget (6%). Also notably, high cost claimants were down 6 from the prior year representing a $1.5 million decrease in claims costs from the prior year. In total, year-to-date plan costs decreased 0.2% with a 1.8% decrease in enrollment.
This resulted in a $955,973 surplus prior to a $410,180 prior year dividend shared with employees and transferring $750,000 to the Workers Compensation Fund to offset deficits.
The fund is at 133% of the policy benchmark (30% of 3-year claims expense average plus the accrued sick leave liability) which equates to $1.8M over the target balance. Given that the year-end surplus (prior to the Worker Comp transfer) was a direct result of employees making healthy choices, participating in wellness programing and continuing to utilize Tier 1 providers, I recommend a $205,973 dividend be issued to employees which equates to approximately $500 per employee on the health plan.
General Liability
The City had another low-claim year for general liability...
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