Homer City Council member Kevin Hogan has proposed asking city employees to shoulder some of the cost for their health insurance, for which they currently pay no premium, as a way to help the city balance its budget.

Meanwhile, council members Bryan Zak and David Lewis and Mayor James Hornaday have recommended drawing down the city's general reserve funds to avoid popular program cuts.

At Monday's council meeting, Hogan suggested that city employees contribute $250 a month toward their health insurance, rather than the city shouldering the entire cost. His plan also would raise the deductible to $250 for each employee and family member. The current deductible is $100 per person and $300 per family regardless of the number of individuals in the family.

According to Hogan's numbers, that could save the city $189,000.

"I think it's not onerous, but it puts some responsibility on the people receiving the benefits," said Hogan.

One concern with Hogan's proposal is that employees would opt out of city health care. If the pool of employees on the city health care plan is reduced too drastically, the premiums may go up for the city.

Council member Francie Roberts believed that $250 was too high, but did think that having a closer look at employees paying into health care would be worth the work.

"I'd be flabbergasted if we had a mass exodus of employees because of a $250 a month premium on health insurance rates. I'd love to be able to get that rate for my employees," said Hogan.

City Manager Walt Wrede said that if the council wanted to change the benefits package the council should come up with a dollar figure and let city staff work out the details.

One issue is that employees have different numbers of dependents and family members enrolled freely in the program, and it would be unfair to charge the same premium across the board, Wrede said.

Wrede also suggested his own plan for saving some money by shuffling around the coordinator of Community Schools and the parks maintenance coordinator positions and combining many of their duties.

Both positions are currently full time, but through Wrede's plan, the coordinator of Community Schools would be full time for nine months and part time in the summer months while the parks maintenance coordinator would pick up the slack in the summer months.

On the other side, the parks maintenance coordinator would be full time for seven months and part time for five months during the cooler months while the Community Schools coordinator took over half the duties.

According to Wrede, the change could save the parks budget $15,000, the Community Schools budget $10,000 and the general fund $5,000.

Wrede's plan would not just lead to a temporary fix, but would be the first step toward a true Homer parks and recreation department.

As with past budget discussions, the council chambers buzzed with demands from the public that the city continue to fund the Community Schools program, keep the library open on Mondays and refrain from evicting the Boys and Girls Club from the former Homer Intermediate School.

About 50 citizens attended the meeting.

Using the city's general fund reserves to fill in the budget gaps raised some concerns.

The reserve account is there for the city to fall back on in hard economic times or to cover major catastrophes or to pay for new equipment if there is an unexpected need.

Typically, the reserve account is equal to about half the overall budget. At the end of 2008 the total in the general fund reserve fund was $4.4 million.

The numbers for 2009 will not be in until the end of the year, but projections in the 2009 budget show the reserve account should have grown by $662,455 this year. According to the 2010 budget, the reserve should grow yet again by a total of $454,530 bringing the total predicted reserve up to about $5.5 million by the end of next year.

In the past, the reserve account has been drawn down to about $1 million by councils that also tried to balance the budget by dipping into savings.

Such a small backup fund put Homer in dangerous financial straits, said Finance Director Regina Harville.

Council member Beth Wythe agreed that drawing on reserves is not the road to a balanced budget.

"We have to look at what we need today and try to do it with the money we have access to and not draw down our reserves," said Wythe.

Zak, who attended the meeting telephonically, also weighed in on the issue.

"In these economic times, I would put a greater emphasis on maintaining our community and quality of life, than preserving our reserve," said Zak.

The final reading on the budget will be Dec. 14. The 2010 budget must be passed by the end of the year.