Rohnert Park Faces Large Retirement, Health Benefits Payments
The city of Rohnert Park will need an additional $38.5 million over 30 years to pay for its retired and retiring employees' "generous" medical benefits, according to a recent actuarial report, the Santa Rosa Press Democrat reports. Rohnert Park pays all health insurance costs -- as well as vision, dental, and life insurance premiums -- for 68 of the city's 70 retired employees hired before July 1, 1993, and their eligible dependents. Additionally, half of the city's 152 current employees qualify to have all of their benefits paid for by the city. For those employees who were hired after July 1, 1993, the city pays a percentage of health insurance premiums based upon length of service at the time they retire. For example, if an employee has worked for the city for 10 years, Rohnert Park will pay half of his or her health insurance premiums. To pay the expenses and offset inflation, Rohnert Park will need to put aside more than $3.3 million annually for the following 30 years -- about $100 million. The city has budgeted $1.4 million in contributions to the pension fund for fiscal year 2003.
Mayor Armando Flores said that the sum "shocked all of us." Councilman Jack Mackenzie said, "It's been unwise for the city of Rohnert Park to be totally paying for all employees' shares of benefits. Given what everyone knows about health insurance, everyone's worst fears were realized." Mackenzie added that "there will be some major fiscal decisions facing the Rohnert Park City Council in six to nine months time" (Mason, Santa Rosa Press Democrat, 9/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.