A potential snag has developed in plans to give City of Platteville employees raises or one-time bonuses.

The snag is the increased costs in those employees’ health insurance, provided by Dean Health and Medical Associates.

Health insurance costs for 2013 are projected to increase 8.9 percent for employees on Dean plans and 4.2 percent on Medical Associates plans. Dental insurance plans are projected to increase 6.9 percent.

The resulting $13,353 increase in costs turns the 2013 budget’s $9,010 surplus, estimated in late October, into a $4,343 deficit. That assumes coverage plans don’t change to reduce city costs, such as increasing deductibles.

Common Council members had sought estimates of the costs of various options to increase employee pay, both percentage-based increases or one-year-only bonuses, in late October.

The least expensive option would be to give $100 bonuses to hourly employees ($3,212) or non-union employees ($7,513). A more expensive option would be to increase pay of hourly employees by 1 percent ($12,261) or 2 percent ($24,577).

City Manager Larry Bierke also added the cost of adding hours for employees whose hours were cut from 40 to 37 one year ago — $33,033 to go to 38 hours per week, $64,848 to go to 39 hours per week, and $97,919 to go to 40 hours per week.

The council also has the option of increasing the tax levy by $50,847 and still remaining within state expenditure limits. Versions of the 2013 budget so far have included no mil rate increase from last year’s $7.2262 per $1,000 assessed valuation.

The council could also rescind some of the spending increases or restored cuts in the version of the budget between its Oct. 18 budget work session and its Oct. 23 council meeting. On Oct. 18, the council restored $12,000 in proposed cuts to three economic development organizations — Platteville Main Street, the Grant County Economic Development Corp. and the Platteville Area Industrial Development Corp. — and added $5,000 for a part-time position for the Platteville Housing Authority. On Oct. 23, the council restored an $11,000 library information technology cut and a $5,762 cut in pay for Bierke, and added $7,500 to paint the City Park gazebo.

The 2013 budget includes $250,000 more in capital spending from the 2012 budget. The budget also includes $15,000 for a study of combining emergency service dispatch with Grant County.

The Common Council will hold a public hearing and vote on the 2013 budget at its meeting Tuesday.