Tuesday, November 21, 2017 Elyria 42°


Medical fund needs $800K


LORAIN — The city needs to come up with about $800,000 this year in order to keep the deficit under control.
That’s because the city’s hospitalization fund, which is used to pay medical costs for 478 city employees, saw some unusually large claims this year that depleted about $435,000 from the fund, leaving a balance of $15,000 as of Monday.
The fund is supposed to have at least $400,000 in it at the end of every year so that it covers the first four to six months of medical costs for the following year. If it isn’t replenished and the trend continues, the city could sink deeper into debt trying to pay medical costs in 2008, city Auditor Ron Mantini said.
“We would have sunk deeper into debt this year if we didn’t have that money in it,” Mantini said.
During a midyear budget review Monday, Mayor Craig Foltin, who is tasked with controlling the budget, told City Council his plan to pay off two-thirds of the hospitalization debt, or about $530,000, immediately.
He said it wouldn’t be wise to pay the entire $800,000 now because that figure relies too heavily on assuming the high hospitalization costs will continue over the next six months. Most of the money, Foltin said, will come from cuts in
26 departments and from higher-than-expected revenue that has come in this year, which has so far totaled $176,000. Foltin said he does not expect to make any layoffs to pay off the fund.
“The worst-case scenario, if revenues don’t continue on their upward trend, is that we only have $200,000 in the hospitalization fund instead of $400,000,” Foltin said. “It’s not what I had hoped for, but it’s something we’ll have to deal with.”
Foltin made it clear to the Council that the fund’s decrease was an aberration and not an indication of a poor economic health in the city.
“This was unexpected and unexplainable,” Foltin told Council. “I just want to make it clear that this is not a downturn for the city.”
In fact, he continued, this was one of the first midyear budget reviews in recent memory that the administration had not come asking for an additional money to handle police and fire overtime expenses.
“Our revenues are trending up,” he said.
Contact Adam Wright at 329-7151 or awright@chroniclet.com.

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