New health care laws lead city to make budget amendments

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Tecumseh City Manager Kevin Welch asked for city council approval on Monday, Sept. 16, to set aside funds in each department to help cover reinsurance fees that will be coming in January of 2014.

In his city manager’s report on September 3, Welch informed council members that city officials had met with Blue Cross and Blue Shield regarding the potential impact of health care reform, noting that on January 1, 2014, employers would be required to pay a reinsurance fee for each person insured on the city’s policy. He said the cost would equal between 4-6 percent of its premium, or an estimated $35,000. On July 1, the city will also be required to pay a premium tax of 2.5 percent, and in subsequent years, 3-4 percent.

Welch said those costs had not been taken into consideration in the present budget and there were still unanswered questions about the impact.

“We wanted to address possible concerns with new taxes we will have to pay as a result of health care reform,” Welch informed the council members. “We’re not 100 percent sure what the tax will be but it could be as much as $52,000-$53,000. We thought it would be important to adjust the budget now to account for that.”

Welch said each city department head has been asked to identify 1 percent of their budget to be earmarked and reserved until after January 1, moving funds to a contingency line item and not spent.

“No department is actually losing the money, but these would be restricted funds,” said Welch. “After January 1, city council can reduce the amounts to offset the cost of the new fees after we know what they are.”

Several of the agenda items Monday night involved approvals of recommendations by the Tecumseh Planning Commission for property at 828 N. Evans Street. Council member Troy Wright abstained from the voting on these items, as he is the owner of the property which he proposes will house a convenience store, Curves gymnasium, and recreational practice areas in a business called The Zone Elite Performance Center.

The council members approved a first reading of an ordinance to rezone the property from RA-1 (One Family Residential) to B-3 (General Business), subject to conditions by the owner and McKenna Associates, the city planner. Approval was also given for the city manager and city attorney to draft an easement use agreement between the city and the property owner of 828 N. Evans St. to resolve a right of way issue.

Brad Raymond, Director of the city’s Building Services Department, said that the addition of a store actually fits in with what planners had in mind in 2011 when a Master Plan was developed when a neighborhood commercial land use category complementary to residential neighborhoods was created.

In other business, council:

• Held a public hearing for DiggyPod regarding a P.A. 198 Industrial Facilities Tax Exemption, and later approved the 50-percent tax abatement for 12 years, beginning December 31. Welch said the city is pleased that the company is already making business investments in the city.

• Approved closure of the parking lot in the rear of Bad Hair Day’s shop, 109 W. Chicago, for a Spa-A-Thon fundraiser on Sunday, Oct. 6.

• Approved the closure of the city’s northeast parking lot to hold the 13th annual Crop Walk. Event coordinator Spencer Ruffner said proceeds help the Tecumseh Service Club.

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