‘Several large’ health insurance claims lead to ‘worrying’ shortfall in City of Cedar Falls fund | New Policies


CEDAR FALLS – Several large health insurance claims have led the city administration to recommend that approximately half of the general fund year-end surplus be used to cover the resulting loss in its insurance fund .

City Council will consider approving a resolution Tuesday evening at its 7 p.m. meeting inside the Community Center, 528 Main Street, transferring $900,000 from its approximately $2.2 million surplus to help make up for a loss of $1.3 million and “keep strong reserves” in the city’s auto-health insurance fund.

“A major concern continues to be the fund balance of the city’s self-insured health insurance fund,” Finance and Business Operations Director Jennifer Rodenbeck said in an Aug. 23 memo to council regarding the fund established by the employer assuming a financial risk to provide health care benefits to its employees.

The nonprofit’s first-ever director, Kathryn Sogard, resigned on April 19, and the plan is not to actively seek one just yet.

City finance staff are in the process of closing the general ledger for the fiscal year ending June 30, 2022 and hope to “maintain a viable health insurance benefit program,” according to the resolution.

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The surplus of $2.2 million was consistent with the surplus of $2.3 million from the previous year.

“We were fortunate in fiscal year 2022 to have revenues that exceeded budgeted amounts. These included hotel/motel taxes, COVID relief grant, and receipt of replacement funds” Rodenbeck said, “Additionally, we had areas where we were spending less than budgeted amounts. Significant areas included recreation, engineering, parks, and public safety.”

The $900,000 transferred to the health insurance fund leaves about $1.3 million in surplus, $328,333 from a grant from the Iowa Fitness Center relief program of federal COVID relief funds .

The resolution would authorize those funds to be transferred to the recreation fund to help pay for projects at the aquatic center or others involving recreation, according to Rodenbeck’s memo.

Another $595,874 is the city’s annual landfill payment.

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A “redesigned” application launched this summer. And a more user-friendly website is now set to launch on Thursday.

These payments offset revenue lost by cities, counties and schools when the state cut commercial and industrial property taxes in 2013.

This money is being phased out and the council had previously requested that it be set aside for one-time capital projects.

Similarly, Rodenbeck’s memo states that the remaining approximately $300,000 of the surplus will be transferred to the capital projects fund to “help offset any project that experiences increased costs due to inflation, or to be used for a project identified as using the General Fund Savings (GFS) on the CIP.

“This remaining amount will be used for a project that will be specifically designated by City Council as part of the target setting and capital improvements process,” the resolution reads.

This process begins at the end of the year.

In addition, at its Tuesday meeting at 7:00 p.m., the board will consider several other resolutions:

  • Acceptance of a surface transportation block grant of up to $2.9 million for the reconstruction of Main Street.
  • Execution of lease agreements for $1,000 each for a maximum of three years, for the use of eight foot by four foot murals, to be installed on the underpass of the bridge at the intersection of Main and East streets First.
  • To allow the demolition of the existing dwelling at 1224 W. 20th St. and the construction of a new duplex in its place.
  • Acceptance of a $49,143 offer from Iowa Flatworks Inc. for the city’s annual sidewalk assessment program.

The meeting begins at 5:15 p.m. at the Community Center.

The Community Development Committee will learn about applying for a Destination Iowa grant to help fund projects in and around the Cedar River in Cedar Falls and Waterloo.

The Public Safety Committee will hear from Fire Chief John Bostwick about the August 18 response to a structure fire on Orchard Hill Drive.


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