By Ray Gronberg

gronberg@heraldsun.com; 419-6648

DURHAM -- City officials appear likely to outsource medical services for their employees now provided by an in-house unit, a move that would save about $308,683 annually at the cost of laying off three workers.

The proposed reorganization of employee health services would replace the in-house medical staff by awarding a services contract to Duke Occupational and Environmental Medicine.

Administrators briefed City Council members on the proposal Thursday, and assured them they're working to help the workers targeted for layoffs find new jobs.

The unit among other things now handles pre-hiring checkups for new employees, and also is the initial stop for workers injured on the job. Doctors and nurses from Duke would pick up those responsibilities if the council approves the contract.

The city's in-house staff now includes a registered nurse, a practical nurse and a receptionist. They work out of an office near Durham Regional Hospital, rather than at City Hall, Deputy City Manager Wanda Page said.

Eliminating the unit would save the city on the bill for leasing the office space, in addition to the salaries of the workers.

Officials plan a transition period, so the savings in fiscal 2009-10 will only amount to about $101,048, Interim Deputy Finance Director Arche McAdoo said. The full savings would kick in starting in fiscal 2010-11.

The city already has to go outside for medical services that require a doctor's attention. Its in-house unit should in theory include a physican's assistant, but McAdoo said it's been about 18 months since that position was last filled.

Officials "just can't pay the $98,000 a year all the candidates have been requesting from us," McAdoo said, adding that they opted to leave the position out of the fiscal 2009-10 budget.

Page said she didn't know when the city started relying on in-house staff for medical services. "I have been with the city for 22 years and we have had medical personnel for as long as I've been here," she added.

The lagging economy and associated revenue shortfalls have prompted officials to try to save money where they can.

City Manager Tom Bonfield's fiscal 2009-10 budget slashed spending by 3.9 percent, and included among other things a somewhat controversial reorganization of recycling that saved hundreds of thousands of dollars by bringing collections in-house.

City policy requires officials to give laid-off workers a chance to find jobs elsewhere in the hierarchy. Bonfield said there are positions for receptionists, but there are no comparable posts available on the city payroll for the nurses.

Administrators have let Duke know the nurses may soon be looking for jobs. Duke officials are "not in a position to commit" to hiring them, but the university's health care system nonetheless is "looking for people all the time," Bonfield said.

Council members seemed inclined to go along with the proposal.

"I must admit, I'm really happy to see this move, except as it relates to losing employees," said Councilwoman Cora Cole-McFadden, a former director of the city's Equal Opportunity/Equity Assurance Department.