Health Insurance Coverage for Elected Officials

There have been many questions recently regarding the City’s long-standing practice of offering health insurance benefits to the mayor and council members, so I thought I’d share my understanding of what has happened and what may happen going forward.

The Gist

Elected officials in Ashland have been receiving health care insurance since sometime between 1954 and 1966.

The City Charter limits compensation for elected officials to $500/year for the mayor and $350/year for councilors.

Changes to these figures can only be made by a vote of the people.

Council passed budget cuts earlier this year that required elected officials to pay 10% of the cost of their health care premiums.

Implementing that decision raised questions regarding these benefits and staff researched to see what led to the insurance being offered originally.

That effort has not turned up any documentation of the decision to offer health care benefits.

That leaves us with the Charter as the authority for compensation for elected officials and it limits compensation to $500 for the mayor and $350 for councilors annually.

To direct staff to continue to offer health care insurance to Ashland’s elected officials would likely be a misappropriation of public funds for private benefit.

I won’t be part of any effort that even hints at misappropriating public funds.

Council will soon take up the question of whether or not to put a charter amendment proposal before the people of Ashland in the May election.

The Details

Background

Earlier this year, Council approved a number of cost cutting measures ahead of the new fiscal year, which began on July 1, 2022. One of those measures reduced the budget amount needed for Council by requiring the elected officials in Ashland pay 10% of their monthly health care premiums. This matched a similar requirement that was being included in the union contracts for city employees. This element is what created the cost savings in the budget, but the budget still included the City paying for 90% of the health care coverage of elected officials.

When it was time to implement the 10% payment, a question came up about whether there was anything in the official roles of elected officials that might impact implementation of this new requirement. It was this process that led to the conclusion that there is not a clear authority for the City to continue to offer these benefits.

A few things to know:

Article 3, Section 3 of the City Charter requires a public vote on changes to the Mayor and Council Members’ compensation. The last time public official compensation was voted on was in the 1960’s when they set compensation at $500/year for the mayor and $350/year for each councilor.

The practice of the City covering health benefits for elected officials began somewhere between 1954 and 1966.

Efforts by staff to locate documents related to the decision to start offering health benefits have not turned up any record of the decision.

What I expect got us where we are today:

Sometime between 1954 and 1966, the City began offering health care benefits to elected officials as part of the employee pool. I expect the decision was an administrative decision made by the staff at the time, rather than a formal decision by Council. It has been suggested that it may have even been a financial benefit to the City to increase the pool size for the health care plan.

The Charter reads:

“Section 3. Salaries Any change in the amount of the present compensation received by elective officers, except for the Recorder and Municipal Judge, shall be submitted to the vote of the people;….”

It is interesting that this section heading is “Salary.” This leads me to think that the intention was for the figures passed by the voters to indicate only how much money an elected official was to receive and was silent on the issue of other benefits. It’s hard to tell what they considered “compensation” at the time and whether that included the benefits that were starting to become more mainstream.

In any event, in 1960, the annual health care cost per person in the U.S. was $150 versus $12,530 per person in 2020 (https://www.thebalancemoney.com/causes-of-rising-healthcare-costs-4064878), so we can imagine that when it was put in place, this health insurance was significantly smaller than the $350/$500 figures in the Charter. I can also see how it might have been seen as different than the “compensation” identified in the Charter’s “Salary” section.

Fast forward 60 or 70 years and we can see that much has changed in the world of employee compensation. Health care coverage is now a significant part of a compensation package and the modern use of the word “compensation” clearly includes salary and benefits. So, if we read the charter with a modern understanding of “compensation,” we are left with the difficult reality that the City does not have a legal basis to continue providing health care benefits unless the people of Ashland vote for that to be offered to elected officials.

Moving Forward

Some have suggested that the City Council could simply direct staff to maintain the health care benefits while we work to put a charter change proposal on the May ballot. Doing so without a legal authorization to do so puts elected officials in the position of potentially misappropriating public money for personal benefit and opens them up to financial liability for the funds that would be used to pay those health care premiums.

I will not support any effort that even hints at misappropriating public funds.

This issue will be taken up by Council in the early part of 2023 in order to make the deadline for the May ballot should Council decide to put a charter amendment proposal before Ashland voters. Whether such a proposal, if it is put forward, is about a larger stipend or offering health care insurance will be up to the Council.

There are interesting arguments for providing more compensation than $350/$500 per year in terms of social equity and whether the current limits prevent low-income people from running for office. Engagement with the community will help the Council come to a decision about what, if any, changes might be proposed to the voters in May.

Thank you for reading this post. If you have any questions, please contact me at my council email: tonya@council.ashland.or.us