Prescott reinstates vision coverage for employees
Benefit cost generates debate over PSPRS debt
Originally published Wednesday, March 14, 2018 at 05:58a.m.
After eight years of going without vision insurance in their health coverage, city employees will have the benefit again this year, beginning July 1.
The Prescott City Council voted 5-1 on Tuesday, March 13, to devote more than $100,000 toward restoring the coverage, which was eliminated in 2010 in the midst of recession-related budget cuts.
This week’s decision came despite concerns from Councilman Phil Goode that the city should focus its attention on paying down its public-safety pension debt before adding more costs to its general fund.
“Quite frankly, this was one of my concerns when Proposition 443 was passed – that there would be a continuing demand on general-fund dollars,” Goode said, referring to the August 2017 voter-approved ballot measure that raised the city’s sales tax by 0.75 percent to pay down Prescott’s public-safety pension debt, which now stands at $86.4 million.
“I, for one, made a pledge to the voters that I would not support any programs or costs to the general fund other than essential services,” Goode said.
Although referring to vision coverage as “a reasonable benefit,” Goode said, “Until we get the PSPRS (Public Safety Personnel Retirement System) liability paid down to the level that we consider manageable, I do not support any additional claims against general-fund revenues.”
Other council members disagreed, however, stressing that offering the benefit would raise morale among current city employees, and would serve as a recruitment tool for prospective employees.
City Human Resources Director Mary Jacobsen told the council that surveys have indicated that vision coverage is the benefit that is most often requested by city employees. And, she said, the lack of the coverage is often mentioned by departing employees during exit interviews.
Currently, Prescott is the only entity in the four-member Yavapai Combined Trust (including Prescott, Chino Valley, Yavapai County, and Yavapai College) that does not provide the option of vision coverage, Jacobsen said.
Councilman Steve Blair voiced support for the benefit, pointing out that even without the 0.75-percent PSPRS-related sales tax increase, the city’s sales tax revenues have been rising. The increased revenue would more than cover the additional insurance cost, he said.
Budget and Finance Director Mark Woodfill said the city’s sales tax is up by about 5 to 5.5 percent this year (excluding the PSPRS tax, which went into effect Jan. 1) – amounting to about $700,000 in additional revenue.
Jacobsen said the vision insurance would cost about $160,000 per year. Employees would cover $57,000 of that through higher premiums, leaving a net of $103,000 for the city to pay. About half of that would come from the city’s general fund, while the remaining half would come from non-general-fund departments such as water, sewer, and solid waste.
The city’s human resources department is currently preparing open enrollment information for distribution to employees in early May, Jacobsen said.
With the council’s approval, the new coverage is scheduled to take effect at the start of the new fiscal year on July 1.
(Councilman Steve Sischka was absent from the meeting, and Mayor Greg Mengarelli participated through a teleconferencing call).