FAIRHOPE, Ala. - By a one-vote margin, the City Council voted Monday to end the city’s health benefit program for retired workers hired after Sept. 30 this year, and to reduce by 10 percent the amount the city contributes to premiums for family coverage of current and future city employees.

The ordinance adopted Monday will also end city contributions to employee dental health insurance as of Jan. 1, 2011.

The reduction in premium contributions for family coverage becomes effective Oct. 1 next year.

“We still have over a year before these changes go into effect,” said Councilman Rick Kingrea, regarding the 10 percent reduction in the city’s contribution toward family coverage.

He said the reason for the change in health care coverage was “to save jobs” of city employees.

“The alternative is to lay people off,” he said, adding that there is time during the next year to consider alternatives to the new plan and that he would welcome any ideas suggested by the administration or others.

Mayor Tim Kant spoke against the ordinance during the meeting. After the meeting, he said he planned veto the new law.

Kant said Tuesday morning he had not yet done so but would be doing so after he put his concerns about the new ordinance in writing and his reasons for vetoing it.

“I do plan to veto it,” he said Tuesday morning.

He said he thought some suggestions at the council meeting to delay the vote were reasonable, as well as to consider some changes in the ordinance’s language, which were among the reasons for his planned veto.

“The mayor has 10 days to veto it,” City Clerk Lisa Hanks said. “The council would then consider an override at the next regular meeting, or they could call a special meeting to do so.”

For the council to override the veto requires a 4-1 vote, instead of a simple majority as for most actions.

At the Oct. 11 meeting, the vote split 3-2, with Kingrea, Council President Lonnie Mixon and Councilman Dan Stankoski voting to adopt the ordinance.

Council members Mike Ford and Debbie Quinn voted against the measure in front of an audience that included a number of city employees, many of whom clapped or jeered during the council’s deliberations.

Numerous seats were available throughout council chambers, but part of the back and side walls of the room were lined with men standing shoulder to shoulder, apparently all city employees, most of whom left immediately after the council’s action to adopt the ordinance, some muttering loudly as they departed.

Only one person spoke against the ordinance prior to the council’s vote. That person said he was a city employee and urged the council not to adopt the ordinance.

Prior to Monday’s action regarding family health insurance, the city had provided 100 percent of city employee premiums for that coverage.

Out of nearly 80 nearby municipalities, only six pay the total premium for family coverage, according to the city, based on a study it did while developing the ordinance.

However, most of those cities do pay 100 percent of premiums for individual coverage.

That coverage for individuals was not changed by the new ordinance.

The ordinance also ended the city’s health insurance benefit program for retired employees, which covers between the time of their time of retirement and their eligibility for Medicare. The new ordinance eliminates that coverage, but only for new employees hired after Sept. 30 this year.

Current employees are not affected by that provision of the new law.

The change in retirement health insurance benefits for new employees when they retire is driven by an increasing “contingent liability” owed to current employees when they retire of more than $2 million, according to Chuck Zunk, chairman of the city’s Financial Advisory Committee, as stated in media reports.

New federal accounting procedures require that liability to be funded, and the city’s new budget has set aside $600,000 for the coming year for that purpose, he said.

“I plan to veto (the ordinance) in the morning because (the council) hasn’t resolved some of the issues with Medicare,” Kant said after the meeting Monday night.