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Gainesville plans for ‘new normal’ for economy

POSTED: February 5, 2009 11:46 p.m.

Gainesville City Manager Kip Padgett told members of the City Council Thursday that it may be a while before the economy returns to normal. And when that happens, there is likely to be a new measure of normal.

Padgett’s remarks came at the opening day of a two-day retreat for council members. In a nod to austerity, the retreat is being held at the Fair Street Community Center rather than out of town.

“How long is it going to take for the recovery?” Padgett asked. “It’s not going to be overnight. It took us a long time to get here.”

But Padgett said even the recovery may not signal a return to boom times.

“In FY ’07, we were rocking and rolling with permits,” he said. “Is back to normal FY ’07? I don’t think so. It may be closer to 2002 or 2003. We may have a new normal.”

Padgett said the city must begin to gear up for what normal will be.

City finance director Melody Marlowe said the city will end the budget year in June at a break-even point, despite 5 percent across-the-board budget cuts by city departments.

However, a number of capital projects have been placed on hold, and Padgett said many of those cannot wait.

Marlowe said property tax collections were running only slightly behind projections. However, local option sales taxes collections are projected to be down by $669,000.

Revenues are also down for business licenses and building permits.

Also on Thursday, the city’s human resources director and a representative of the city’s agent for employee health insurance told council members that the average health insurance claim was up more than $100 per month over 2008.

The average claim per employee was $662.91 per month for the first six months of the current fiscal year, according to Rob Fowler of Turner, Wood and Smith Insurance.

Fowler said that 18 claims have been paid for more than $25,000 for a total of $1.2 million, or 44 percent of the total claims paid.

Fowler proposed the city look at a consumer directed health care program, which would allow employees to choose between the current co-pay system and a high deductible at a significantly lower cost.

“One of positives of consumer directed health care is employees who go to the doctor once a year and get one prescription could keep their costs down,” Fowler said. “They shouldn’t have to pay for something they are not using.”

Joan Sheffield, director of human resources, said the city was also considering an audit to verify eligibility of dependents covered under the city’s health plan.

She said such audits have resulted in a 17 percent reduction by eliminated ineligible persons.

Sheffield said that employees would be offered an amnesty program to voluntarily remove ineligible participants prior to an audit.

The two-day session continues today when council members are to be presented with some options for maintaining services while reducing operating costs.

Also on the agenda is a discussion regarding the Chattahoochee Golf Course.



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