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Medical expenses are forcing the city of Athens to make budget adjustments just one month into the new year

By: David Forster
Posted on: Thursday, February 5, 2026

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ATHENS, Ohio (WOUB) — One month into the new year, the city of Athens is finding it needs to make some budget adjustments.

The main culprit once again is medical costs.

It’s looking like the city won’t have the cash on hand it needs to meet the medical expenses projected in the 2026 budget adopted in December, said Andy Stone, the city’s service-safety director.

This doesn’t mean the city is unable to pay its medical bills right now, Stone said. But it doesn’t want to end up not having enough money to at least cover what was budgeted for medical expenses this year.

These expenses could end up being less than what was budgeted. But recent experience suggests that’s probably not a safe bet.

In November, the city had to transfer $750,000 out of the general fund to cover medical expenses that soared well above what was budgeted for last year. A $300,000 transfer was made in early 2024 to cover excess medical bills from the year before.

Stone said the amount budgeted for medical expenses is based on previous years’ experience. But medical costs are a wildcard. It just takes a few city employees coming down with a serious illness or suffering a serious injury to break the budget.

At its meeting Monday night, the City Council took up an ordinance that would give the city auditor authority to review the budget and make revisions.

A request like this is not unusual. As the city gets a better sense of whether revenue and expenses are meeting budget projections, it’s not unusual that adjustments need to be made.

But this usually happens much later in the year, not six weeks or so after the budget was approved.

This caught council members by surprise.

“Less than seven weeks ago we approved a budget. And supposedly a lot of time and effort went into the preparation of that budget. And the message that I’m getting now is maybe that budget wasn’t so solid,” Councilmember Alan Swank said.

A motion was made to fast-track the ordinance so it could be passed on the first reading instead of the usual three, but it failed.

Councilmember Michael Wood said he understood it may be necessary to make adjustments to the budget this early but wanted to get a better sense of what cuts might be made.

No one from the city’s administration in a position to answer council members’ questions about the budget situation was at the meeting.

Stone explained later to WOUB that when the council approves the budget in the first half of December, it’s based on the best revenue and expense projections the city has at that time. But this can change even in the last two weeks of the year.

In this case, there was less money than expected left over in the medical fund at the end of the year to carry over into the new year. This combined with updated projections for how much new money will come into the fund this year led to the conclusion the fund will fall short of what was budgeted for the year, Stone said.

What the city’s auditor wants to do is go into the budget and reduce the amounts appropriated for medical expenses to better reflect how much money it looks like the city will have to spend this year. The auditor needs the council’s permission to do this.

But even then, all the auditor can do is reduce what was budgeted to spend on medical bills. She doesn’t have the authority to increase the amount of revenue in the medical fund to meet the projected expenses. The council would have to approve a change like that.

Of course, the risk in simply reducing budget appropriations to match projected revenue is that medical expenses this year will again exceed what was budgeted and what is available in the medical fund to spend.

Stone is crossing his fingers for a healthier year for city employees. But he also plans to take more proactive action by offering a retirement incentive program.

“It’s not always the case, but people that are older generally are sicker and cost more,” he said. “Even though they’re great employees, because in a lot of cases they’re the most experienced, but just the fiscal reality is that … all things being equal they’re a bigger cost on the insurance than a younger employee.”

The program would be offered to employees who are already at retirement age but are still working, perhaps because they want the health insurance benefits, Stone said. Those who opt to take advantage of the program would be paid a stipend for a few years to help cover their health care costs in retirement. This may be attractive for employees who are eligible to retire but not yet old enough to receive full Medicare benefits.

Stone said he plans to bring this proposed retirement program up at Monday’s council meeting.