City council compensation proposal: Reinstate health coverage

Health benefits would replace salary increases

The Moab City Council weighed potential salary increases this budget season and has instead proposed to redirect the spending toward health benefits, meaning no salary increase. Photo by Carter Pape

After an emotional and at times personal debate Tuesday, May 28, over what their own compensation should be, Moab City Council members settled on proposing a 2% pay increase to track with the local cost of living and reinstating health benefits that the council and mayor lost in recent years.

City Council Member Karen Guzman-Newton pitched the idea, which would implement what Moab Mayor Emily Niehaus had originally requested: To add back benefits for elected officials.

Due to the relatively high cost of health insurance compared to elected city officials’ salaries, the total budgeted spending on the mayor and council under Guzman-Newton’s proposal would be about 3.5 times the amount currently spent.

Nearly all of this increase would go toward elected benefits like retirement and health coverage. This is spending on the behalf of each council member or they mayor that each elected official can optionally decline, in which case, the money would remain in the city’s accounts.

Any change to benefits and compensation must be approved following a public hearing on the topic. One is currently scheduled for the council’s next meeting June 11. The council could implement changes after that public hearing, as late as its June 25 meeting, although the new budget goes into effect July 1.

Error in previous proposal

According to Niehaus, what was included in the proposed budget as compensation for elected officials was not what she had originally proposed. Niehaus said she instead wanted to reinstate health benefits, which had gone away in recent years, for all elected city officials.

The cost of covering health benefits for each member of the city council and mayor is about $25,000, according to the city.

However, instead of sending this money to the city’s health insurance provider, city staff budgeted this cost to be given directly to council members and the mayor in their salaries. Not only that; the $25,000 would have replaced their existing salaries in the budget proposal rather than going on top of the council and mayors’ existing, base salaries.

That budget was first prepared by former City Manager David Everitt, informed by instruction from council members and the mayor. Everitt later handed budget information to current City Finance Director Rachel Stenta after he took a job as the San Juan County Administrator and left Moab sooner than expected. He was originally set to depart in August.

How elected officials lost their health benefits

Prior to 2015, both the mayor and city council members received health coverage through the city. In 2014, while the City of Moab was still providing employee health benefits through Blue Cross and Blue Shield, it put out a request for bids from health insurance providers.

Among the proposals it received back was one from Salt Lake City-based health benefit provider PEHP. The city took that bid.

As a result of the change, city council members lost their ability to get health coverage through the city. The mayor did not, at that time, lose eligibility. The position’s eligibility did later lapse in January 2018.

The city is now providing health benefits through CIGNA. The plans are high-deductible, self-funded plans, which have grown in number following the passage of the federal government’s Affordable Care Act in 2010.

Through CIGNA, the city is once again able to provide health coverage to elected officials, leading the mayor to advocate that it do so.

Guzman-Newton proposal

Under the plan proposed by Guzman-Newton at the May 28 city council meeting, the city would reinstate health coverage for elected officials and keep salaries comparable to what they currently are, adding only a 2% cost of living adjustment that was approved for all other city salaries this budget.

If the mayor or a council member were to decline that health coverage, the city could instead put the money that it would have spent on covering the health benefits into a health reimbursement account (HRA) for that individual.

HRA funds can be spent by the account holder on qualifying medical expenses throughout each calendar year. At the end of the year, any unspent funds remaining in HRAs would go back to the city.

City council members and the mayor would have the option to decline all health benefits, including the HRA.