Bellevue defends decision to pull $2.8M from employee health fund

The city of Bellevue will review a decision to remove $2.8 million from a fund that covers the medical needs of city employees and their families in order to balance its budget.

At least one union representing city employees, the Bellevue Police Support Guild, has filed a grievance over a decision to transfer money from the Health Benefits Fund to the General Fund in order to balance the 2013-2014 budget, a city spokesperson confirmed.

In 2013, employees contributed a total of $5 million to the Health Benefit Fund, with the city contributing an estimated $37 million.

In May, the Police Support Guild raised concerns about why they were not notified or consulted before the transfer. The union wanted to know if the transfer included any employee contributions.

“That is a good question and one that we are looking into further,” City Manager Brad Miyake wrote in an email to all city employees on May 22.

“In response, the city decided to revisit its decision to ensure all relevant factors were considered,” read a separate memo sent to employees on June 18. “Given the complexities of the Health Benefits Fund, we understand employees’ concerns about ensuring a thorough review of how the funds transfer may have impacted employee premiums paid into the fund.”

City spokesperson Emily Christensen told KIRO Radio that the city had already taken significant cost-cutting measures, and that it needed the money to prevent further layoffs and furloughs.

“There were no immediate revenue sources available and additional cuts were viewed as a last resort,” read the June 18 memo.

According to the memo, the city had no intention of paying the money back.

Christensen stressed that the Health Benefit Fund had excess reserves, and at no time were employee health care benefits at risk.

Asked if it was legal to move the money without notifying employees, Christensen said the city did not foresee any legal ramifications, but that the city has decided it will not make such a transfer in the future.

“Staff at the time did not see this transfer as having any particular legal implications, rather the most prudent option to address the budget deficit,” the June 18 memo explained. “Now that the question has been raised, the city is committed to review it further and has hired expert outside counsel to provide the city with an opinion, which the city should receive and review in the coming months.”

The city is concerned that transferring money back into the account could result in personnel, program, and/or service reductions.