FY26 Proposed Budget

HEALTH INSURANCE RESERVE The City maintains insurance reserves for permanent employees’ health care coverage. The health insurance plan is partially self-insured, with a stop-loss policy which provides coverage for claims in excess of $125,000 per employee. Operating funds and participating employees are charged premiums which are deposited into the Health Insurance Reserve Fund. The City reimburses a health insurance provider for actual medical costs incurred plus a claims processing/ administrative fee. The State of Iowa requires all public entities which maintain a self-funded health insurance plan file an annual certificate of compliance with the Iowa Insurance Commissioner, along with an independent actuarial opinion and financial statement which demonstrate that the plan continues to meet the requirements of Iowa Code 509A.14-.15 as well as applicable provisions of the Iowa administrative code. In fiscal year 2024, health insurance premiums increased by 8.16%, and in fiscal year 2025, premiums increased by 4.96%. Premiums are budgeted to increase by 10.00% in fiscal year 2026. Increases in employee contributions have been negotiated as shown in the following table:

Health Insurance Plan:

FY2023 FY2024 FY2025 FY2026 FY2027

Single Deductible Family Deductible

$

800 $

800 $

800 $

800 $

800

1,600 1,300 2,600

1,600 1,300 2,600

1,600 1,300 2,600

1,600 1,600 1,300 1,300 2,600 2,600

Single Out-of-Pocket Max Family Out-of-Pocket Max Single Contribution/Month (1) Family Contribution/Month (1)

11% of cost 11% of cost 12% of cost 12% of cost 12% of cost 11% of cost 11% of cost 12% of cost 12% of cost 12% of cost

The fiscal year 2025 estimated ending fund balance is estimated at $21,509,839. This is an increase of $2,095,100 or 10.8% from the fiscal year 2024 ending fund balance of $19,414,739. For fiscal year 2026, the fund balance is expected to increase to $23,008,039 which is an increase of $1,498,200 or 7.0%. Restricted/assigned fund balance represents the City’s Net OPEB Obligation. The City’s Net OPEB obligation at June 30, 2024 was $9,523,167. This increased by $793,074 or 9.1% over the fiscal year 2023 restricted/assigned fund balance due to increases in actual experience, assumptions, interest, and service cost estimates. (1) Police premiums will be 11% of cost for Single & Family Contributions/Month in FY2023 and FY2024; premiums will be 12% of cost in FY2025 and budgeted to be 12% of cost for FY2026 & FY2027. Fire premiums will be 11% of cost for Single & Family Contributions/Month starting in FY2023, FY2024 & FY2025; premiums will be budgeted 11% of cost in FY2026 and FY2027. AFSCME & Non-union premiums will be 11% of cost for Single & Family Contributions/Month in FY2023 and FY2024; premiums will be 12% of cost in FY2025 and budgeted to be 12% of cost for FY2026 & FY2027.

664