Posted At Duluth Superior

BY : Scott Thistle

A task force formed to find a solution to Duluth's projected $280 million retiree health-care debt grabbed the City Council's unanimous endorsement Monday. Calling the task force report, "A model that works and a model we should go back to time and time again," Council President Donny Ness again thanked task force members and those who supported their efforts. Ness, 4th District Councilor Neill Atkins and 2nd District Councilor Greg Gilbert were responsible for creating the task force. Task force members included Don Bye, David Lindstrom, John Nys, Allan Winters and Arend Sandbulte. They offered their time in the best interests of the entire city, Ness said. The resolution accepting the task force's 15 recommendations and its report on the problem also asks Duluth Mayor Herb Bergson to join in the endorsement. The resolution calls on Bergson to report monthly to the council on the progress being made on each resolution. To ensure that happens, At Large Councilor Roger Reinert said the city needs to hire somebody to "shepherd" the task force recommendations to real- ity. He suggested the position would be temporary. "Some have suggested that this is not as significant as it is being made out to be," Reinert said. "In this case, I would rather overreact than underreact." He also said he dismissed those who had criticized the task force as a campaign tactic and a political ploy. Bergson was not at the council meeting Monday, but his interim chief administrative officer, Julio Almanza, was. The mayor is analyzing the task force report and recommendations. A city committee on health insurance would take up the report in January, Almanza said. Last week, Almanza told the News Tribune many task force suggestions are the same as what Bergson was trying to accomplish in a recent deal with the City of Duluth Supervisory Association. That deal would have ended lifetime health-care benefits for supervisors hired after Jan. 1, 2006, and would have reduced plan options and increased costs for current employees. If ratified, it would have cut about $1.75 million from the city's long-term debt. But the offer was withdrawn by the supervisors after the City Council tabled ratification of the agreement in November. Monday, the council sent the agreement back to the administration. The agreement with the supervisors was a move toward a defined-contribution plan, where the city's costs per employee are fixed, as opposed to a defined-benefit plan, in which the city's costs per employee are unknown -- another key task force recommendation. "(This administration) raised the issue that this is something we need to address and actually tried to address with that supplemental agreement," Almanza said. Offering support to the task force recommendations Monday were representatives from the unions that represent city workers and the Minnesota Citizens Federation-Northeast, an organization that advocates for lower-cost prescription drugs. One task force recommendation is that the city set up a program to reimport prescription drugs from Canada to save money. Prescription drugs in Canada are generally less expensive than in the United States. Federal law bars reimportation of Canadian drugs but several states, including Minnesota, have set up programs challenging those laws. "Our organization has repeatedly asked Congress to either control wholesale drug prices or allow pharmacies to import their inventories," said Marlene Hart, the federation's executive vice president. The Minnesota Legislature will have to change state law to allow the city to set up an irrevocable trust in which health-care money could be set aside and invested to help pay for the debt. Changing the contracts for city workers so that they pay a larger portion of their post-employment health-care costs is an important step to solving the problem. Ken Loeffler-Kemp, with AFSCME Minnesota Council 5, said his union, which represents the largest number of city employees, was pleased with the task force recommendations. Those recommendations, including the drug reimportation program and an effort to streamline the number of health-care plans offered, were previously suggested by the union, Loeffler-Kemp said. Tom Maida, vice president of the Duluth Police officers union, said the task force had offered a "fair, balanced and realistic way" to solve the retire health-care problem. Maida also urged the administration to endorse the panel's findings. "This is a step -- a big step," said At Large Councilor Tim Little. "And I am confident that we will come to some sort of workable solution." Councilor Russ Stewart said the resolution was the first time the council had officially addressed the issue, which has been haunting the city for at least 20 years. In other action Monday, the council: • Approved a supplemental budget for 2005 allowing the administration to spend an additional $600,000. Voting against the measure were Little, Atkins and At Large Councilor Jim Stauber. • Approved a $100,000 2005 subsidy to the Great Lakes Aquarium and a new annual subsidy of $170,000. The money will be paid from the city's tourism tax. Opposed were Little, Gilbert and 5th District Councilor Russ Stover. • Set the city's 2006 property tax levy at $11.1 million, a 3.5 percent increase from 2005. Stauber voted in opposition. • Approved the city's budget for 2006 calling for $75 million in general fund spending. Stauber and Little were opposed.