Bradenton to look at hikes for retiree health benefits

BRADENTON – The city will have to take a look at the cost of providing health benefits to retired employees, especially police and fire department retirees, the City Council was told Wednesday.

At a worksession, City Clerk Carl Callahan said the city is paying $7 million per year to provide health coverage to its retirees, and that's more than it pays for health coverage for current workers, around $6 million per year.

"Everybody pretty much handles this on a year-to-year basis, but it is not reflective of what your potential future obligation may be," he said.

Costs have risen dramatically, at a rate of about 10 percent a year, and the city is facing a problem because the average employee age is 46 and the average tenure is 11 years, meaning more retirees will put much more stress on the city's finances in the future. The city has to make sure that retired employees who reach age 65 get onto Medicare Part A and B, Callahan said, and a survey that is one-fourth completed so far has found that all are on the national program.

While costs have gone up, the city is seeing its revenues go down. Bradenton is facing a giant unfunded liability of as much as $100 million. But Callahan said, the county's unfunded liability is $300 million.

It goes into the city's books as a note, but you have to pay that $7 million a year.

There's no doubt the city plan is a good deal for retirees, city officials agreed, but it's just not sustainable in the current economic environment.

"I'm going to ask you to seriously look at our retiree health insurance plan. It has to be looked at," he said. "There are some very easy things to do, which is require (Medicare) A and B."

Whether current retirees are affected will have to be decided, Callahan said, but future retirees will be affected.

See The Bradenton Times on Thursday for the rest of the story, and more about the City Council worksession.