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City officials are asking their unionized employees to contribute $12 from each paycheck to their health insurance to help offset the cost of that benefit.

In addition, the city wants the health insurance policies to carry a $1,000 deductible --- $2,000 for families --- and wants all of its 160 employees to enroll in a "wellness plan."

The requests, designed to help lower the city's insurance premiums, have come as McKeesport officials attempt to close a revenue shortfall that city Controller Ray Malinchak estimates at $40,000 per week.

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Faced with rising costs and declining income, city officials last week said they will likely have to layoff some employees in 2009 and have asked eligible workers to accept early retirements.

Although unionized firefighters have accepted the new health insurance program, the proposals are reportedly facing stiff opposition from some rank-and-file employees. The city is negotiating new contracts for blue-collar and clerical employees represented by Teamsters Local 205.

Unionized city employees in the past were not required to contribute to their health insurance premiums.

City Administrator Dennis Pittman said all of the costs paid by employees would be reimbursable at the end of each calendar year if those employees enrolled in the so-called wellness plan, called Lifestyle Returns.

The plan would require employees to complete an annual physical and answer questions about their medical history and eating habits.

Pittman said that Highmark, the city's Blue Cross-Blue Shield provider, has agreed to lower McKeesport's premiums if the city can prove that most of its workforce is at low risk for serious health problems.

"The net cost to each employee is zero," he said, and the surveys --- which can be done at any computer connected to the Internet --- can be completed while employees are at the office.

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Last week, city council by 4-0 vote approved a 2009 budget of $20.3 million. The budget --- about a half-million dollars lower than the 2008 spending plan --- includes no tax increase.

But the budget was balanced only after council agreed to withdraw $1 million from the city's fund balance --- or surplus --- which leaves McKeesport with no financial safety net for the following year.

City property taxes are 4.26 mills on buildings and 16.5 mills on vacant land. Property tax is expected to generate about $2.4 million of the city's revenue next year. Each so-called "blended mill" generates approximately $75,000.

In addition, the city assesses a 1.7 percent wage tax, of which 0.5 percent is collected for McKeesport Area School District, and a $52 annual local services, or "occupation," tax.

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In Other Business: City council has voted to extend McKeesport's deal with Lamar Advertising to maintain bus shelters on local streets. The deal allows Lamar to sell advertising on the shelters and will generate $25,000 per year for the next five years.

A similar deal was signed in 1999 with Chancellor Media, a predecessor of Lamar.

In addition, city council approved taking over maintenance of two stretches of road inside the RIDC industrial park on the old National Works site.

The streets include about 385 feet of Locust Street north of the CSX railroad tracks as well 871 feet of a newly created street called McKeesport Commons Drive.

Acceptance of the streets came after approval by Senate Engineering. In a separate 4-0 vote, city council extended Senate's appointment as the city's engineering firm. Based in Harmar Township, Senate also maintains an office at the municipal building on Fifth Avenue.