MEMPHIS, TN -

(WMC-TV) - Memphis city employees can expect a sharp rise in health care costs next year.

At the same time, citizens will foot the bill for millions of dollars that were not collected from those city employees this year.

"Like a lot of private businesses, health care costs are going up," said Memphis City CAO, George Little.

But until now, Memphis city employees have notbeen a part of that rise in costs.

"There will be increases," said Little. "The question is how much and when."

Saturday, the city administration announced in a budget hearing that health care costs for city employees could increase up to 12 percent in 2013.

"In addition to that, the Health Care Reform Act that Congress passed could increase costs," said Memphis City Councilman, Jim Strickland.

In the current budget year, the city delayed an increase in health care payments. Leaving a three million dollar shortfall in the 2013 budget.

"Some type of way, we have to find the money to make up that shortfall, said Memphis City Councilman, Harold Collins.

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Memphis residents may foot bill for rise in city health care costs