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Ruling forces city to continue retiree benefits
HUNTINGTON -- A judge has ordered that the city of Huntington continue to pay more expensive health benefits for retired police and firefighters, putting the city's budget into a deeper hole, the city attorney said Tuesday.
The court order issued this week by Cabell Circuit Judge John Cummings stems from a lawsuit filed in June by the city's police and firefighters unions, according to McClure. The lawsuit sought to block Mayor David Felinton from implementing a new health insurance plan that would require city employees to pay more starting July 1.
Cummings ruled in late June that the city could implement the new insurance plan for its 360 active employees. But he also ordered the city to continue providing the old insurance coverage to retired police officers and firefighters for four months or until the city and the unions came up with an agreement. That period ended in October, without any settlement. The city has about 160 retirees on its self-insured plan.
City Attorney Scott McClure said the city administration was disappointed with the decision. The ruling, McClure said, will effectively cost city residents an additional $2 million of unbudgeted expenditures this fiscal year and likely more in the future.
"This decision will impair this and future administrations' ability to provide essential services to its residents," McClure said. "The city is sympathetic to its retirees and appreciates their years of service.
"However, in an era of burgeoning health cares costs across the country, the inability to defray these costs through modification of the current health care plan will no doubt have a negative impact on providing services in the future."
John Angle, president of International Association of Firefighters Local 289, said the union's attorney had not yet received a copy of the ruling and would not comment on the court decision. The unions have criticized Felinton of negotiating in bad faith, citing the health insurance change and a budget that provides for no pay raises this year.
McClure said as more municipalities move away from providing retiree health benefits altogether, the City of Huntington is stuck with providing extraordinary benefits at a price unaffordable to its residents.
McClure said the city administration will review the decision with its legal representatives and determine its next step.
In this year's city budget, health insurance costs for employees and retirees were capped at $5.6 million by the City Council. In June, while contract talks between the city and its three unions were at a stalemate and a June 30 deadline approaching, the mayor announced that he would continue the city's health plan and implement a new one.
Under that new plan, active city employees' premiums are about six times higher than the $12 or $25 a month they pay now for single or family coverage.
Health insurance and other personnel expenditures have eaten away at the city's budget. Health insurance and police and firefighter pensions are projected to account for 41 percent of this year's $38.5 million budget. Those personnel expenditures far outweigh salaries, which take up 29 percent of the budget.
All told, personnel costs make up 72 percent of the budget, which leaves about $10.7 million for public services.
