Since 2008, the city of Ravenna's general fund has lost more than $4.9 million in potential revenue, a figure Mayor Joseph Bica calls "just staggering."
Despite deep budget cuts over the last few years, including personnel changes and initiatives, such as the city's dispatch center, designed to bring more funds into the city coffers, the city tends to finish each year by dipping into its reserve funds to make ends meet.
But now, the city is planning big changes to its health care plan, and for the first time, the city's three labor unions are being asked to participate in the measures.
If the unions don't agree to the changes, Finance Director Kim Cecora said the city might have to consider "something more draconian" -- namely, layoffs.
"We cannot cut any more without cutting bodies at this point," Bica recently told Ravenna City Council. "Operationally we cannot cut any more without significant changes to services."
Other measures, including some form of consolidation of the city's health department with Portage County, could ultimately whittle the shortfall in the general fund to around $106,000 by the end of 2014, Cecora said.
"That's sure better than $929,000," he said.
Cecora said 2007 was "probably the last decent year we had." Interest income "fell off the table" in 2008, and only now is starting to approach 2007 levels. But local government fund cuts and falling estate taxes put deep dents in the city's general fund.
The city started cutting spending, slashing $4.2 million from the budget over four years. But since the city lost $4.9 million in potential revenue, the shortfall in the general fund tends to approach nearly $1 million annually.
The city is looking for help in something that has already been its salvation in recent years -- health care.
A healthy savings
For Ravenna, health care has proven to be both a significant expense and a source of savings.
The city is self-funded, meaning that it must budget for its "maximum exposure." But in recent years, the amount spent on health care claims has dropped, allowing the city to add about $200,000 per year back into its budget and reducing the year-end shortfall.
Ravenna also looked to cut expenditures by implementing "spousal language" to its plan. The clause required spouses of city employees to take their employer's insurance if it is available. But the language applied only to non-union employees. Those covered by the labor unions didn't agree to the language and were exempt.
In January, Bica plans to ask unions to accept the spousal language, plus other changes to the plan. They include "employee contributions," or premiums, something Ravenna workers would pay for the first time.
Traditionally, city employees have paid no premiums for their health care, though they did pay co-pays and for prescriptions. That's something the city has been looking at for years, but officials were previously told that any changes to the plan would make the city subject to the Affordable Care Act.
Instituting premiums will have another added benefit -- allowing people who really don't need the insurance to opt out of the plan. Previously, because employees paid no premiums, they were not able to decline the coverage.
But now, opting out will not only be allowed but possibly encouraged. Bica noted that the city might institute some sort of incentive to encourage people who have insurance elsewhere to opt out of the city's plan.
"The cost savings is bodies off the plan," Bica said.
Those savings, Cecora said, could add up to $332,000 annually -- more than the city would save if it implemented major staffing reductions.
When added to the potential $200,000 in savings from reduced claims and other administrative payroll changes, that would slash the city's general-fund shortfall to $273,468 in 2013.
In 2014, the city is projecting an even brighter picture, partly due to changes in its health department.
Eyeing a merger
In recent years, the city of Ravenna has been considering some sort of consolidation of its health department with the Portage County Health Department. Kent, which has its own health department, was once part of the talks but is not interested at this time, Service Director Kelly Engelhart said.
The city is using an $82,000 grant from the Local Government Innovation Fund from the Ohio Department of Development to study consolidation. The city is applying for more grant money that would go to Kent State University to further study the consolidation.
Engelhart said the city spends $105,000 per year on its health department. If the city were to contract with the county, it would still have to pay $50,000 per year for the contract, resulting in a savings of about $50,000 in 2014.
That's also the year the city's debt for improvements to the dispatch center will be paid off, resulting in $100,000 in income to the city's general fund. That brings the city's general fund shortfall down to $106,000.
Engelhart said the two full-time and one part-time employees in the city health department would not lose their jobs, as they would be necessary to provide the contractual services.
"They would probably become employees of the county," she said. "We need more public health workers in this county, not less."
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The leadership in Ravenna is about to fall off.............into a hole
Well here we go again; it was just a few months ago that the City of Ravenna gave everyone a raise and agreed to pay hospitalization for the city council.
Do we really need Captains and Lieutenants in the police and fire department or are they just a gimmick to get a bigger check?
NO MORE TAXES AND NO MORE FEES PERIOD.
Maybe if city government did not stick its nose into everybodys business you would not need so many on the city payroll.
Obamanomics starting to kick in?
OMG, you started out so well. Especially the part about smelling cooking meth and cop cars in the driveways. Had the Newtown Massacre happened in Watts or inner city Chicago it would have been a particularly heinous instance of how "those people" behave. But this time it happened to the upper classes so it's all so horrible and something needs done. .... But then you spiral into nonsense (put mildly), your line about " I use to smile when I seen them giving what for to some undesirable", really? The Jack Boot Rubber Hose treatment isn't so amusing when you're the subject, todays Whining about Civil Rights Republicans starting their whining during a traffic stop would find out about the sand filled rubber hose treatment, specially if they started their spewing in "Traditional America". And thats just one instance of what you wrote being BS, yeah OMG, yous statrted out so well before driving it over the cliff, crashing and burning.
Here we go again. Paul Jones must be on the phone consulting. Labor unions in contract talks again, city is poor.Labor unions gave in and froze contracts 4 yrs ago.Ya I look around things are not great, But the mayor gets all he wants. Got himself full time job in PERS system, free health care. Lets not forget the city council does not pay for healthcare either. How much time do they put in to get a free ride? Will they be subject to pay also?? What has the mayor done to prevent a newtown incident in this city. Looking around on the sidewalks it looks like we are high risk. I pick up my kids and all the doors are open in the schools. OH laddie dah.
Ya lets layoff some police and fire people like everyone threatens. Ya we can afford this. How about making slumlords pay to keep up their property? Or make them pay for the how many times the cops gotta show up to their rentals for renting to people that do not make good neighbors. Seems like we also read way before that the labor unions gave concessions 3-4 years ago and froze contracts. But the mayor still hiring and spending. Whats the real story here. Where is the money hidden if we can still afford to spend. Wonder if the mayors neighbors have police cars in an out of their driveway as mine do. Wonder if he smells meth cooking? I hate politics!! Like the saying goes make them pay for healthcare and take away their pay to 15 bucks an hour, and see how fast they would fix whats wrong. People ask why Newtown happened. Its because of politics that we do not have any values here anymore. No religion, no paddling, all kids get trophies for coming out. Happy Holidays vs. Merry Christmas. Someone might get affended.
Politics let business take our jobs out of country. No one puts a leash on EPA. But they wanna have studies on everything that they think I need to do with my life. Or my kids cannot eat a pizzaburger at school. Or how about making the kids get out an play and be kids. Without the fear of being sued. How about the parents taking control and actually being parents instead of waiting on the teachers,police, neighbors raisig their kids. How about my high taxes paying for everyone elses food, medical, rent, tv, govt cell, soon probably a car.
I dont mind paying taxes for city services that I can see. I dont see cops like use to in this city doing what they use too. I use to smile when I seen them giving what for to some undesirable. Fireman that took pride in their job. City workers plowing sidewalks with little tractors. NO gotta watch some morons climb the flagpole to waste tax dollars for police and fire, to get down. Yea lay off, then maybe they wont climb anymore and fall down. Bet they wnot do again. By the way what punishment did we hand out to those morons? I rest my case. I think I will open up a drive thru or little store. Beer and cigarettes, lottery. Gross products of Ravenna. Oh their not made here, but morons are!!
Two obvious points: "for the first time, the city's three labor unions are being asked to participate" and "any changes to the plan would make the city subject to the Affordable Care Act." So we needed SB5, and Obamacare is a disaster, just as I and other sensible people predicted.