Unexpected savings in health care costs helped reduce the city's budget deficit from a projected $1.1 million down to $750,000.
The savings is largely thanks to Alliant Inc, the city's new health insurance broker, which has done an "excellent job" in helping to reduce health care costs for the city, said City Manager Dan Rich in a staff report presented in a City Council study session Tuesday, June 5.
The city has also budgeted $60,000 for a new wellness program that gives employees incentives to receive biometric screenings to find health problems early. "We do think it's worthwhile," Rich said, adding in an email: "Our hope, and expectation, is that this program will lead to healthier employees and lower insurance costs over time."
The previous deficit projection was based on a 12 percent increase in health insurance rates, but instead officials saw a 4.75 percent increase from Kaiser and a 10.75 percent increase from HealthNet, which caused the revision.
Council members had no comments about the city's general fund budget on Tuesday, except to thank city staff. A final budget is set for approval on June 12.
To balance the budget, Rich still plans to implement the same strategy proposed for the $1.1 million deficit, including $600,000 reduction in employee compensation costs. Rich said the remaining balance would go to reserve funds used to balance previous budgets.
The city has made $6.9 million in budget cuts over the last four years but expenditures continue to outpace growth. This year, sales taxes were down by 3.7 percent because the city lost the Mini car dealership and a third of the San Antonio Shopping Center is under redevelopment. Tax revenue may be better next year, but it is unlikely that city staffing levels will return to pre-Recession levels, Rich writes, so there will have to be "realistic" expectations of city staff.
Members of the City Council came to a consensus Tuesday that fully funding a teen center inside the former Rock Church is more important than rebuilding a new median on Shoreline Boulevard.
While funded with $1.1 million, the new Escuela Avenue teen center needs an additional $800,000 to allow "full use" of both the interior and exterior of the church building, city staff members reported.
Council member Ronit Bryant proposed to split the costs of completing the center between two sources: $5.9 million in uncommitted park land funds and money that may have gone to a $437,000 rebuild of the Shoreline Boulevard median between El Camino Real and Villa Street.
"Let's put all the money that needs to be put into it and let's have it complete," said Bryant of the teen center. "We've been working on it for years."
Council members Margaret Abe-Koga and Mike Kasperzak said they agreed. Council member Laura Macias said teens should be asked how they wanted to spend the money, much of which could go toward repaving the parking lot.
Bryant said a vegetable garden at the teen center would be an appropriate use of the park land money, and would allow teens to grow food for the cooking classes many said they wanted.