AMSTERDAM — Mayor Michael Villa did not submit his 2019-20 budget plan to the Common Council Tuesday night, citing his need for more time to gather data about the potential liabilities awaiting the city’s self-insured health insurance program.
Amsterdam’s city charter prescribes April 1 as the deadline for the mayor to submit his budget plan to the council. Villa has requested and received council approval to extend the deadline until April 8.
Amsterdam faces one of its most difficult budget processes in recent memory as the city grapples with an estimated $9 million accumulated budget deficit. Its consultant, Municipal Solutions, has recommended the city increase its property tax levy by at least 10 percent as part of a strategy to avoid a possible takeover by a state control board.
While Villa said the city’s longstanding practice of being self-insured rather than paying annually adjusted insurance rates to insurance brokers has helped the city save money in the past, it doesn’t always. Villa said for the 2017-18 budget the city had to deal with $800,000 in health insurance cost overruns from what was budgeted.
“The argument against going to a fixed rate is that [insurance brokers] would take you to your highest level [of cost] and you’d never get a break,” he said. “Two years ago, we saved money. Last year, we got cremated. You just don’t know.”
“We’re trying to come up with a number that’s as accurate as possible for health insurance. Insurance is the hardest thing for us to determine — because we’re self insured — we can’t plan on who is going to get sick,” Villa said.
Villa said he and City Controller Matt Agresta are going through detailed health insurance usage data in an attempt to anticipate what expensive diseases and treatments the city may be on the hook for. He said the city is obligated to provide health insurance benefits to many elderly retired city employees, some with very costly illnesses.
“We’re seeing what illnesses are out there, how long are they going to go on for. What prescriptions are required,” he said.
Villa said he’s also going over all of his department budget requests looking for unnecessary spending.
“We don’t want any fat in this budget,” he said.
Tuesday night the common council voted 5-0 to approve three-year contract extensions for the city’s Department of Public Works employees, represented by AFSCME, and for the city police chief.
Deputy Mayor James Martucello, who represents the 5th Ward, said the new contracts contained changes to the employees’ health insurance copay obligations with respect to emergency room visits, a change to a direct deposit bi-weekly paycheck, and 1 percent annual raises for three years for the city’s DPW workers.
“It’s not the savings we’re going to get in the short term that matter in these contracts; it’s the long-term savings,” Martucello said.
Villa said he’s been working to settle new contracts for the city’s seven different public employee unions, with an eye toward updating the contracts to have more contemporary language with respect to health insurance copays.
“We have had some unions that haven’t had copay increases in ten years. We have some health insurance plans that don’t even exist anymore. You couldn’t buy these plans if you were a millionaire. We had hospital stays, zero copay. Emergency room visits, zero copays,” Villa said.
Martucello said the only contract the city still needs to approve is a new Fire Department union contract.
Villa said New York state’s Triborough Amendment to the Taylor Law makes contract renegotiations for the city very difficult. The Triborough Amendment mandates that all of the provisions of a union contract remain in place until a new deal is agreed to by both sides, or else the contract is decided by binding arbitration.
“It’s hard to get anything in these contracts, when you’re offering very little in return,” Villa said.
Villa credited the city’s Employee Relations Director Patricia Beck, the former publisher of the Leader-Herald, with helping the city negotiate better contracts with its unions. Villa said he was once the city’s Police Union President, and he knows that negotiating better copay percentages for the city will reap savings for taxpayers in the long-run.
Villa said he not only remains committed to raising taxes in the 2019-20 budget, but is also prepared to veto any budget the council returns to him that does not tackle the city’s deficit.
“We’re not going to wave a magic wand,” he said. “We’re not going to get rid of the fire department. We’re not going to get rid of the police department, tomorrow, so, unless you’re doing that, they only way to increase revenue is to increase taxes.”