City finance committee agrees to recommend health insurance, pickup changes

On a wet Saturday morning at a time when many Monday through Friday work week folks are not even out of bed, the Ironton City Council Finance Committee declined what the 2012 budget will look like.

Fee increases? Staff cuts? Changes in benefits?

It was all on the table.

The meeting was not without fireworks.

At one point, committee member (and former mayor and mayoral candidate) Bob Cleary asked Mayor Rich Blankenship “where we’re at” on union negotiations (all three unions and the city are negotiating new contracts this year) and Blankenship declined to answer, saying the city had gotten into trouble in the past discussing negotiations in public before an agreement is reached.

Cleary responded to Blankenship by saying, “Tell us how we got in this shape?”

Blankenship jumped to his feet, and with a raised voice, replied, “You tell me, Bob.”

Committee Chairman Mike Lutz ended the argument with a gavel and an admonition to get back on subject.

Several proposals discussed at earlier meetings were changed and recommended to the full council for approval. Other proposals were debated as well.

 

Benefits — Proposed

savings almost $372,000

The finance committee agreed to recommend to the full council a proposal to require all non-union employees to begin paying seven and a half percent toward their retirement pickup. The city and each of its employees should pay a total of 15 percent, per state law; however, the city had years ago agreed to pay the employees’ contribution for them in lieu of pay raises.

In this recommendation, employees would also be required to pay 10 percent of the cost of their health insurance premium. Right now they only pay 5 percent.

The change came after Finance Director Kristen Martin pointed out that in some cases, employees would see their paychecks cut by hundreds of dollars a month if the city went with an earlier proposal to require them to pay 20 percent of their health insurance and the full 10 percent of their retirement pickup.

“I’m having a hard time with this,” committee chairman Mike Lutz admitted as he studied the numbers.

Cleary likened it to buying a new car and not getting the car.

“I still think they need to contribute more,” Martin said.

“Incrementally,” Lutz agreed.

Under the 20 percent contribution plan, an employee on a single (health insurance) plan would have immediately begun paying $119.80 a month and a person on a family plan would have begun paying $272.51 a month.

Under the 10 percent plan, a single plan employee premium would be $59.90 and a family plan would be $136.26. Requiring employees to pay 10 percent of their premiums would save the city nearly $72,000 a year.

Changing the retirement pickup will, if the whole council approves it, save the city nearly $300,000 a year. Health insurance is a huge chunk of the city budget: $1.4 million in 2012 will be paid for 110 employees.

 

The service worker fee — $6,000 in new revenues

The finance committee agreed to recommend raising the service worker fee to $100 a year and eliminating a provision that allows those purchasing a license halfway through the year to get a 50 percent reduction in cost.

The mayor had proposed last month to raise the fee to $250 a year.

“That might hurt local guys,” Code Enforcement Officer John Willis said.

Willis said he sold 118 licenses last year and these totaled approximately $6,000. The license is $50 now. Doubling it would double the revenues.

However, those who have already purchased their license will not have to pay more than they already have; this change is not retroactive.

 

Debt reduction — $20,000 savings

Martin came with facts and figures as the committee sat discussing budget cuts and benefits reductions: she said she has spoken to two companies, PNC and Cruz and Associates, which want to re-fund two of the city’s old bonds and this would allow the city to take advantage of the new interest rates.

Martin said one company would take the fire station bond from 2003 and the other company would take the city center bond from 1997, pay them off and turn them into new re-funded bonds.

“Looking annually, this could save the city $20,000 on both,” Martin said.

 

Cutting jobs

Police Chief Jim Carey said he and Blankenship have met with the Lawrence County Commission and Sheriff Jeff Lawless about either the sheriff’s office or the county’s 911 dispatch center taking over dispatch duties, thus eliminating city police dispatch.

Talks are continuing.

 

Reciprocity and municipal fee

Lutz said reciprocity will be on Thursday’s council agenda, as will the municipal fee.

The idea of hiking the municipal fee from $8 to $10 was one issue that divided the committee.

“There’s no way we can continue with the path we’re on,” committee member Kevin Waldo said. He had proposed the hike.

But others said they could not support a fee increase at this time.

“I’m not for a municipal fee increase until we cut,” committee member Aaron Bollinger said. “In my opinion we would amend it (the proposal) to $8. We need that but until we cut I can’t go for an increase at all.”

“We nickel and dime people to death,” council member Beth Rist said.

As for reciprocity, a straw poll taken showed Lutz, Bollinger and Waldo would support repealing it, Rist and Cleary said they would decide Thursday; Dave Frazier, who is on council but not on the finance committee, did not attend the finance committee meeting.

 

Other ideas

Lutz said he would like to study the tax code. Right now the city’s payroll tax is exactly that: A tax on people who work.

It is not paid by people who draw a retirement income, disability, unemployment or any other form of government assistance.

“The other day I went on the road (patrol),” Carey said. “I went to six houses and none of them worked. Over 75 percent of the people who need my services don’t pay a dime for it.”

Martin said changing the city’s earnings tax into a true income tax “would be a beast to tackle.”

But she pointed out right now 85 percent of the city’s population does not pay the payroll tax.

“So in other words, the beast is worth tackling,” Lutz surmised.

 

What now?

The city budget must be in place by March 31.