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Mayor Chris Beutler wants to use more than $1 million a year in savings from the city’s health insurance program to pay for more street work.

Just one day before Lincoln City Council members were to offer their ideas for the city’s proposed two-year budget, Beutler announced the city will have an additional $1.3 million in the first year of the biennium and $1.5 million in the second year because the city’s health insurance costs are not rising as fast as expected.

The mayor wants to earmark that money for a flexible street program, money to be used for street construction or maintenance work, said Rick Hoppe, the mayor's chief of staff.

The city would put the money in a new fund, with very broad parameters, so it could be used for residential street maintenance, arterial maintenance or new arterials, he said.

This will allow money to be used in the areas of greatest need, after a discussion with the council, Hoppe said. 

That discussion will include recommendations from the mayor’s 25-member transportation coalition, said Hoppe. The group was appointed by Beutler to study transportation problems and recommend solutions.

Beutler believes it is better to leave this money flexible, but dedicate it to streets, Hoppe said. 

Council members, who will turn in their proposed changes in Beutler's budget plan Wednesday, may have other ideas. 

The city spends about $65 million a year on transportation-related costs, money that comes primarily from the city wheel tax, the state gas tax, city impact fees and federal funds.

Council members will discuss their proposed changes to the Beutler plan at a 3 p.m. meeting Thursday and will vote on changes at Monday's 3 p.m. council meeting. 

A public hearing on the proposed budget — a $205 million tax-funded budget in the first year and $212 million the second year — is planned for July 30, at 2:30 p.m. and continuing at 6:30 p.m. 

When Beutler developed his two-year budget proposal, staff believed the city’s $32 million in health insurance costs might rise by 10 percent a year, based on national trends.

The city changed health insurance carriers in November from Blue Cross Blue Shield to Aetna, and claims have been lower than projected, said Brandon Kauffman, finance director.

It now looks as if costs will rise by just 3 percent the first year of the two-year budget.

The second year is still estimated to rise at the higher 10 percent rate, but the savings generated during the first year carry through to the second year, Kauffman said.

The city has 1,986 employees, plus dependents, enrolled in the health insurance program.

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Reach the writer at 402-473-7250 or nhicks@journalstar.com

On Twitter @LJSNancyHicks.

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Reporter

Nancy Hicks reports on Lincoln city government, but she’s been following the leaders of local and state government for more than 40 years.

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