This article originally appeared in the Friday Aug. 16, 2019 issue of the Progress Times.
The city of Mission is aiming to trim their budget as much as possible.
This Tues. Aug. 14, the city held a budget workshop so the council and mayor could get an updated look at the preliminary 2019-2020 budget. While it does look like the city will be raising taxes (by about four cents), City Manager Randy Perez said they are looking into every possible avenue to save money on existing expenditures and bring in more revenue.
One change that the council was in agreement on had to do with the city’s workers’ compensation insurance plan. Risk Management Director Robert D. Hinojosa presented information about how it may be financially beneficial to the city in the long run if they changed their per occurrence (accident) retention from a $25,000 deductible to a $50,000 deductible.
“I’m proposing that we’re budgeting $1.23 million for workers’ comp., which is a little high,” Hinojosa said. “But the idea is that we might be able to save based on a different type of plan we’re going to go with through TML [Texas Municipal League].”
The deductible is what the city is responsible for paying for each claim that comes in. By changing to a $50,000 deductible, the city is able to make staggered payments toward workers’ comp. throughout the fiscal year rather than one lump sum payment of $1.19 million, usually paid on Oct. 1.
“In this case, where we pay our workers’ comp. right up front, whatever incurs throughout the year is taken care of by TML, there’s no further payment needed,” Hinojosa said. “This is what we’ve been doing forever.”
The plan council agreed on means the contribution at the beginning of the year will be approx. $249,000 (as of Oct. 1), and the city will be expected to pay another $74,000 each quarter.
“$479,000 will be divided into four quarters,” Hinojosa said. “It could end up being a wash, we still may end up paying that $1.1 million at the end of the year, however, it helps with cash flow.”
Hinojosa explained that spreading out the cost will aide in that effort.
“Most claims are not $25,000, most range anywhere between $5,000 to $8,000,” Hinojosa said. “However we do have injuries that do require surgery and time off.”
The rest of the funds required for a workers’ comp. claim after the deductible are covered by TML from the city’s contribution.
This change is being made administratively with approval from the council. Hinojosa said that if the city is having a good year with few claims, they won’t have to pay the same amount every quarter.
“Even if we do these deductibles there’s a chance that we don’t save money, that we would spend exactly what we would if we did it up front,” Hinojosa said. “But it allows us the opportunity to have that cash flow and spread it out.”
Council agreed to the change. The city will be holding another workshop with a focus on the tax rate next Wed. Aug. 21 before finalizing the 2019-2020 preliminary budget.