"Health Care costs for the first six months for 2012 have exceeded projections by at least a half million dollars. As Council may know, we are self insured which means that our expenses are largely dependent upon the actual claims. This differs from fully insured traditional insurance where the costs do not fluctuate monthly with the claims. The city has been self insured for quite a while, many larger groups are, but given the state of the budget, we will be asking the Health Insurance Committee to examine a fully insured product which allows us to predict our costs."

"Hopefully we will gain ground during the second half of the year. The Employee health care committee will be meeting at the end of this month to discuss the options for controlling and reducing costs for the balance of this year and next year. We will continue to update council with information as this situation develops."