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Hike in health insurance will alter county budget

WILLMAR -- The Kandiyohi County Board of Commissioners was all set to approve a slim and trim budget and levy on Tuesday, but the bill the county received on Monday for the 2010 employee health insurance coverage changed that.

The county had budgeted a 10 percent increase for insurance rates for next year, said Administrator Larry Kleindl. Instead, insurance coverage is increasing 12 percent. That increase is a difference of $60,000.

Most years the county could absorb the extra cost. But with unallotment, cuts already implemented and the reserve funds tapped, Kleindl said there's little left to tweak. With a budget "that's this tight," it will be hard to "eat" the extra cost.

He said the levy may have to be increased more than originally planned to cover the last-minute insurance rate.

The proposed $28.8 million levy represented a 1.7 percent increase from 2009.

Even if it is adjusted, the levy increase would likely be about 1.8 percent, said Kleindl.

Commissioner Richard Falk said the late notification from the insurance cooperative "kind of throws a monkey wrench" into the county's budgeting process. He balked at the idea of increasing the levy more to cover the higher-than-expected rates. He said the overage should be taken from reserves and efforts be undertaken to resolve the insurance problem on a long-term basis.

Kleindl said he's already taken money out of reserves to cover unallotment, including $438,000 in 2008 and $371,000 in 2010.

"You don't want to do that on an ongoing basis because it'll hurt your credit rating," said Kleindl.

He said he'd prepare two options for the board to consider -- using reserves or nudging up the levy.

The adjustment will have to be made quickly. The state requires certification of the budget and levy by Sept. 15.

In other action:

- The commissioners agreed Tuesday to exercise their option to sell two buildings on the former Willmar Regional Treatment Center campus by offering them to MinnWest Technology for a combined price of $138,921. If MinnWest accepts, which Kleindl said was likely, the state would receive the money. The county would be reimbursed by MinnWest for infrastructure work on the two buildings.

- A one-year contract for police service with the city of New London was approved, with the city requesting a decrease in hours. The change will mean a decrease of $12,495 in revenue for the county. The hourly rate is the same as in 2009.

- The commissioners approved a 10-year lease agreement with the Humane Society for maintenance and operation costs of the new building that's under construction.


Carolyn Lange

A reporter for 35 years, Carolyn Lange covers regional news with the West Central Tribune.

(320) 894-9750