I don't neccessarily agree with this but I can see the reasoning behind it. If the city is providing health insurance for its workers, it does stand to reason that they would be able to negotiate lower rates if they had a no-smoking policy for new hiring. I would think, however, that a better alternative would be simply to deny insurance to smokers or require them to pay a higher portion than non-smokers. To simply deny them a job not only hurts the smokers but also the city. Being a smoker really isn't an indication of performance and to rule smokers out would limit the number of potentailly excellent workers available in the area.