Hey Bub, I Meant Gimme $177 Million – not $167 million!

The Sun Beam Times reported yesterday that the City of St. Petersburg has a $167 million in unfunded liabilities for health benefits for retired workers. Oops.  Turns out that the latest numbers are even higher…by another $10 million!   The latest city report on retiree health benefits was obtained by the Sun Beam Times today and reveals an even deeper hole for the taxpayers – not a penny saved for these required future expenses.  It also shows that over 1,400 people are receiving monthly checks totaling anywhere from $194.99 to $545.93 to pay for health insurance they and their family members receive after they stop working.  How long can the taxpayers bear this?  It turns out that the 2012 report shows that the annual total obligation for the City of St. Petersburg is actually just over $40 million.


OPEBHealthbenefitobligation2012The annual obligation for the City for retired worker health insurance just keeps getting bigger and bigger  Over $40 million in 2012 and we have saved not a penny of the $177 million required to cover the costs over the entire plan future.


The Actual cost to the city and taxpayers may not be the full $177 million, since employees do contribute to the cost of their insurance premiums based on the cost of the plan they select (the Sun Beam Times has an information request to the city to clarify this point). But retired workers receive a defined benefit plan as a pension. Thus the workers pay the rest of their premium out of their pension and – in effect – the city is still paying for the full cost of the retiree health insurance plan as well. Thankfully, for now, the pension funds are about 85-95% funded but that could change with a major stock market crash which is increasingly likely.   If the pension plan suffers in a bad economy, you can bet that the retired workers will be looking for a bailout from the politicians.

Another interesting fact is that even for Medicare eligible patients, the city funds the full cost of the Medicare Advantage plan for the retired employee and family member!  The total number of workers receiving these health benefits in the latest report is 1026. 604 are age 65 and over (Medicare age).  There are 448 spouses receiving these benefits. In addition the City doubled the lifetime maximum benefit for these retirees in 2006 from $50,000 to $100,000 – a number that has never been reached!

The subsidy is the same as for all retired workers as indicated in the table below.   While some may argue that this is a small price to pay for government workers, it is important to compare this to the private citizens who are supporting them.  How many private citizens have health insurance benefits for them, their spouses and family members after they retire until they receive Medicare?  Or better yet, how many get a free Medicare advantage plan (with its greater benefits) for life?  It is time for to change the health benefits received by current and retired employees of the City before we enter the bankruptcy rolls like so many other cities. Practical ideas on change were posted in yesterday’s piece.

City of St. Petersburg

Group Health Insurance Rates – Retirees

Effective April 1, 2011

 

TOTAL

COST

CITY CONTRIBUTION

RETIREE

COST

 

Benefit Plan                             

Monthly

Monthly

Monthly

 

UNITED NETWORK OPEN ACCESS

 

Single

$444.56

$194.99

$249.57

 

Two person

$955.83

$393.86

$561.97

 

Family

$1,258.13

$545.93

$712.20

 

UNITED OPEN ACCESS PLUS

 

Single

$533.56

$194.99

$338.57

 

Two person

$1,077.83

$393.86

$683.97

 

Family

$1,494.03

$545.93

$948.10

 

UNITED OPEN ACCESS PLUS – BASE OPTION

 

Single

$259.98

$194.99

$64.99

 

Two person

$525.14

$393.86

$131.28

 

Family

$727.91

$545.93

$181.98

 

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2 Replies:

  1. Frank Michaels

    The residents of St.Petersburg pay the highest taxes in Pinellas County,this must be the reason why.St.Pete is beholden to the union (SEIU),and thats why there service’s suck.Police dont respond when called,( safest place in St.Pete is dunkin doughnuts),Sunstar arrives before SPFD leaves the station.paramedics have no clue.The whole city is just a half ass attempt at governing.The new mayor has had no impact,except to enrich his cronies.The Library system is the biggest joke,the people in charge of that place have there heads placed firmly up there butts.And the new pier designs leave alot to be desired.There is no imagination in those designs,its just overkill.But when you look at the clowns that sit on city council you understand why this city is so screwed up.I have removed myself and my family from St.Pete and have never looked backed,my suggestion to you is to do the same and donate your taxes to a better municpality with better services and police protection…

  2. David McKalip

    Frank, I agree that there are major problems with financing and corporate cronyism. The politicians are definitely out of touch with the actual taxpayers who are not connected to some special interest.

    I will offer a different perspective on the police. I have needed their services a few times and must say they are ALWAYS professional, they are effective and they get the job done well. I will also so that, in my experience, they come quickly once they get the call. The area for improvment may be in dispatch, but these people are also inundated.

    Let’s work to change the City of St. Petersburg so that the priroties are on the basics of government first: Police, Fire, Utilities, road, libraries. If we have sensible budget managment that prioritize service to taxpayers first, we will do fine. Right now, the priority is on making St. Petersburg a Jobs program.

    The economy, general welfare and grand visions of the elite (piers, museums, light rail, rapid bus transit) and the likes) can take a back seat or be left in the hands of the private economy.

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