Costs will likely be going up for New Castle employees and city residence as elected officials wrestle with a budget that has grown out of control.

The New Castle City Council approved $3.3 million in new bonds this month – new loans the city will repay over the next 10 years – as a stop-gap measure to make sure the city government could afford to write paychecks and pay its other bills.

The main drain on the city’s budget is the employee health insurance fund. The City of New Castle self-funds its employees’ health insurance plans.

As of Friday morning, the health fund had a negative balance of $9.595 million, according to Clerk-Treasurer Ashley Huffman.

Huffman said there are other budget items that the city government needs to address, but the health fund deficit is so large, it is pulling everything else down.

New Castle citizens shared their concerns about the city’s budget Monday during the city council meeting.

New Castle Mayor Greg York and Council President Rex Peckinpaugh spoke in general terms about the administration’s plan to move toward stable financial ground. The details of the city’s plan were not available Monday evening.

“There’s a lot of moving parts, so I’m not going to throw him (Mayor York) under the bus because he doesn’t have something to give out tonight,” Peckinpaugh said. “I think he is taking some positive steps toward bringing us through this.”

“The mayor and I are friends,” Peckinpaugh said. “We get into it a lot, and we always have. But I feel like he does a good job as mayor. He’s a hard worker. He could have maybe did a little better job of budgeting maybe.... I know the mayor this past week, especially, has been feverishly working with [insurance agent Josh Estelle] along with our HR director to figure out what we need to do.”

“I think he’s got a plan,” Peckinpaugh continued. “I think things are being done. But it’s a process. It just doesn’t happen immediately.”

Peckinpaugh pointed out that the city government, as an employer, has to follow certain steps to protect employee privacy and to respect contracts with the employee unions.

York told the council and community members Monday that the current health insurance plan has created “a huge, huge situation.”

“We have the lowest premium insurance for the best coverage in state. There’s nobody else in the state that pays as little as our employees pay,” York said. He said single employees pay $45 per month and an employee-and-spouse plan is less than $100 each month.

“We are at the point that we have to come in line with the county, with the schools and with the hospital. So that’s exactly where we’re at right now,” York said. “We’re at the point where we’ve got come in line with other insurance policies.”

York said it has been a struggle during the last 12 years to give New Castle’s fire, police and EMS workers competitive raises and bonuses.

“So we’ve tried not to raise our insurance... we’ve tried to use that as an offset,” he said. “We still struggle. We have people leaving every day, making $15,000 more a year than what we are.”

“I’ve hated to raise insurance policies because that takes (from the) bottom line out of every household, also,” York added. “We’re at a point where it has to happen.”

Huffman told The Courier-Times Friday that specifics of the city’s plan will be shared after everything is finalized.

“We’ve stopped the bleeding,” Huffman said. “We have a plan in place. And the plan will be followed.”

Speaking on other aspects of the city’s budget Monday, York noted that the City of New Castle has not raised it’s drinking water utility rates in 18 years, although operating costs have increased over that same time period.

“Can you imagine how good a deal everybody’s been getting for 18 years? There has to be something done there also,” York said.

The city council voted earlier this year to leave the Indiana Utility Regulatory Commission (IURC) as the first step to begin studying the city’s water rates.
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