DECATUR - The Decatur City Council will decide today whether to approve a budget of nearly $124 million.

Major initiatives in the proposal include $7.4 million for a new water reservoir, $400,000 for rehabilitation of homes on the near westside; $2.25 million in improvements for the West Main Street corridor; $1.06 million for light-emitting diode, or LED, intersection lights; and $150,000 for a geographic information system.

Councilmen say they are committed to tax relief when possible, but City Manager Steve Garman cautioned that the city continues to face surging pension costs.

Pension costs have spiked from nearly $4.8 million in fiscal year 2004 to a projected $7.5 million next fiscal year - a cumulative increase of about 57 percent.

Mayor Paul Osborne said he intends to vote in favor of the financial document.

"I'm ready to move ahead with it," Osborne said. "We've had a step-by-step process in examining the budget, and we started earlier than I can ever remember on it."

The council in a study session also will review an audit of the city's health insurance program.

Councilmen last year approved spending $59,225 for Segal Co. to study the city's health insurance plan. Councilman Dan Caulkins advocated the study to find ways to control surging health insurance costs for city employees.

The report indicates the city should remain self-insured, and Consociate Group, the third-party administrator, has gone above and beyond expected performance.

A 2004 city study showed Decatur pays substantially more on average for city employees' health insurance than do Bloomington, Champaign, Danville, Normal, Quincy, Springfield and Urbana. The city would pay nearly $5,200 more per employee over a year than the average for the seven other Central Illinois municipalities, the study showed.

Garman said a "pressing area of concern" is the contribution of employees toward health care costs. Union employees currently pay nothing per year for single coverage and $276 per year for employee contributions.

Caulkins said the audit still doesn't appear to answer why the city's health care costs are much higher than the costs for surrounding communities. Garman said the council did not ask Segal to address that issue.

Some councilmen thought the high costs were because the plan was self-administered or inefficiently administered, and those were the issues addressed in the report, Garman said.

Mike Frazier can be reached at mfrazier@herald-review.com or 421-7985.