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Insurance spike forces Salem to make cuts

SALEM - News of a potential 18 percent increase in health insurance costs for 2013 left selectmen scrambling to adjust the budget Monday evening.

The town had estimated a 10-percent premium increase but learned from Cigna that the tentative rate was an 18-percent hike.

'Overall, we felt 10 percent was conservative for our 2013 rates,' said Town Manager Keith Hickey.

The increased Cigna premiums add $282,000 to the general fund budget, $14,749 to the water budget, and $3,147 to the sewer budget.

The town's broker is trying to identify unique claims in 2012 that should not be included in the 2013 estimates, Hickey said. Negotiating out some of the one-time claims could bring the expected premium increased down to 14 or 15 percent, Hickey said.

In the meantime, selectmen began searching for savings in the budget currently being reviewed by the Budget Committee.

The first cuts made were $25,000 to each of the police and fire overtime and replacement pay budgets and the reduction of a server room capital project from $90,000 to $75,000.

Selectman Jim Keller later proposed cutting the project entirely because, he said, $75,000 was not enough to properly build a server room in Town Hall. The Board decided to leave the $75,000 in the budget and meet with the IT contractor to review options.

The board also agreed to restore $15,000 to the assessing department and reduced police and fire department overtime by an additional $10,000 each to cover the cost.

The community contributions warrant article was reduced by $15,000, the amount intended for the Rockingham County Community Action Program.

About $33,000 in highway block grant funding the town expects to receive in 2013 was added into the budget.

The budget originally presented to the Budget Committee by selectmen reduced the town portion of the tax rate by 1 percent. If passed as presented, the town portion of the tax rate would have been $6.99 per $1,000 of property valuation. With the most recent changes the proposed budget would keep the tax rate at the current level of $7.06 per $1,000.

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