Tube City Almanac

December 06, 2012

Health Care Takes Big Bite from City Budget

Category: News || By

Health insurance and related costs for the city's more than 160 employees will eat up about 15 percent of next year's budget.

That portion of McKeesport's $17.99 million 2013 budget --- $2.7 million --- is more than the fire department's total $2.4 million appropriation and about what the city will spend on property and street maintenance combined.

The problem isn't unique to McKeesport --- nationally, health care and related costs consume about 18 percent of the U.S. gross domestic product, the highest percentage in the world, and private and public employers in the U.S. spend on average $8,047 per person for health insurance for their employees.

But the "spiraling cost of medical benefits" represents a threat to the city's future "financial stability," Mayor Mike Cherepko said Wednesday in his first budget message to city council since taking office.

Council approved the budget unanimously, with Councilman A.J. Tedesco Jr. praising both his colleagues and the administration for the amicable process.

"Our budget meeting last week was the first civil budget meeting I've been in since I've been council," Tedesco said. "Hopefully, we can continue on that path in the new year."

. . .

The city spends upwards of $7,500 annually, per person, for employees without dependents, and more than $20,000 annually, per person, for employees with families, officials told the Almanac.

According to Cherepko, who is eligible for city-paid health insurance but said he is not on the plan, the administration will work with the Teamsters' union and the International Association of Fire Fighters to find ways to reduce health care costs.

The problem "in all likelihood will need to be addressed by us before any federal or state insurance assistance becomes available," the mayor said.

. . .

In other budget news, city officials expect revenue from property taxes in 2013 to remain relatively unchanged from 2012, though a high number of appeals still waiting to be decided by Allegheny County "make (the) total difficult to anticipate," Cherepko said.

McKeesport officials plan a new focus on recycling in the new year. Collection of recyclables has been spotty, council members have complained, and the amount of glass, paper and aluminum being sent to landfills has been blamed for the increased amount of trash collected in McKeesport.

In 2013, recycling collection will be shifted from the city's public-works department to Nickolich Sanitation, McKeesport's contracted trash collector, Cherepko said. Employees who handled recycling will be shifted to other duties in the public works department.

. . .

A tentative agreement has been reached with Greenstar Recycling to open a collection hub in McKeesport which will also accept recyclables from other municipalities, Cherepko said. City officials are hopeful the recycling hub will both decrease garbage landfill costs and generate a modest amount of income.

In capital improvements, the city will use more than $100,000 in grant money to complete the reconstruction of the Great Allegheny Passage biking and hiking trail through McKeesport to remove bikes and pedestrians from Lysle Boulevard. The trail, Cherepko said, is "one of the most vital catalysts" to making McKeesport a destination point for visitors.

Two other destination points --- the city-owned Palisades ballroom and McKees' Point Marina --- will get new oversight boards in 2013, Cherepko said.

. . .

In public safety, the city will continue providing contracted police service to Dravosburg Borough and is negotiating an agreement to provide armed police protection to the UPMC McKeesport hospital campus as well, Cherepko said.

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