Pay and benefit increases for city employees will cost the City of Andalusia an additional $376,000 in the 2012 fiscal year, despite council action Tuesday to require some employees to begin shouldering more of their insurance costs.

The council agreed to:

• Fund employees’ annual merit raises, which average 3 percent per year for those who have been employed 16 years or less.

• Grant a one-time cost of living (COLA) raise of 3 percent.

• To continue fully funding employee retirement contributions.

• To continue to fully fund health insurance for those employees who have single coverage; to reduce by one-third the amount the city contributes to family coverage; to reward those employees who opt out of the city’s insurance by paying them a cash bonus equal to one-third of what the city would pay for their insurance; and to make it mandatory for those covered by city health insurance to participate in an annual health screening.

Mayor Earl Johnson said that annual step raises and a 2 percent COLA raise last year mean that employees have received 14 percent increases in pay over the last four years.

“Our unemployment insurance rates and workman’s comp insurance have gone up,” he said. “We continue to make retirement and Social Security contributions every year.”

This year’s COLA will cost the city $160,000; step raises will cost $129,000; and one-time longevity pay bonuses will be $21,000. Legislation passed this year would allow the city to require employees to make a portion of their retirement contribution; however, the city agreed to continue to do that, which will cost $110,000. Reducing the amount paid by the city for family health care will reduce those costs by $44,000, for a net increase of $376,000.