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City workers’ health costs may go up; one alderman calls it unfair |
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Tuesday, 17 November 2009 |
In the face of a stagnant economy, Benton is attempting to cut its spending and balance its 2010 budget — but at least once city council member is unhappy with the proposed changes because city employees could be asked to pay more for their health insurance.
The city needs to balance its budget for 2010 because the economy is slowing sales tax revenue and the city has no reserve fund to fall back on, explained Finance Committee Chairman Alderman Jerry Ponder.
“For each of the past two years, the city has had expenditures that exceeded revenues by more than $600,000,” he explained. “If you live that way for extended period of time you eventually can no longer function and can no longer pay all the bills you owe, which is where city was in 2003 when it laid off 19 people.”
In order to avoid having to lay off anyone this year or next, the city is balancing its budget now, Ponder said.
That means cutting expenditures by about $800,000 — and that’s after all capital improvements and raises were already removed from the budget, Ponder said.
To start with, the Finance Committee asked each city department head to submit a 2010 budget reduced from 2009 by 10 percent without impacting personnel. “After that, we still had a deficit of $412,000; that’s where we started (in our meeting) last Thursday,” Ponder explained.
To help come up with that amount, the Finance Committee decided to ask city employees to begin contributing an additional $25 per month toward their health insurance plans; currently, employees pay nothing toward individual policies and $225 per month for family policies.
The change would raise about $51,000 a year toward balancing the budget, officials say.
However, employees of some city departments are considered autonomous, and their governing bodies must decide whether to participate in the plan. Those are the Public Utilities Commission, the Parks Commission and the Advertising and Promotion Commission.
Ponder presented the Finance Committee’s employee contribution proposal to the Public Utilities Commission on Monday night — it voted unanimously to participate — and plans to do the same in the coming weeks with the other two groups, he said.
Whether all city employees are then asked to begin contributing the extra $25 per month will depend upon the actions of those commissions. Ponder said the Finance Committee won’t ask only a portion of the employees to make the change if all employees will not be participating.
“I don’t think that’s fair to ask just some city employees to contribute and not others,” he said. “If the Public Utilities Commission, the Parks Commission or the A&P Commission votes not to implement the $25 per month health plan contribution, then we will need to find another way to come up with $51,000.”
Alderman David Sparks thinks they should anyway, and leave the city employees alone.
“I’m really against them cutting benefits and not giving raises,” he says. “In addition, we’re $145,000 in the black right now. I think this is a little premature to try to balance the budget until we see the (year-end) revenue numbers.
“Individual employees who are already suffering are going to be asked to pay more. … I think it’s the wrong time and the wrong signal — especially with the city not being in the red.”
Sparks noted that city employees also did not receive raises in 2009, and now the additional health plan contribution would amount to a cut in take-home pay, and in very bad economic times, he said — all to save “just $51,000 out of a $10 million budget.”
Ponder agrees that asking for the additional contribution is unpleasant, but he says it’s a necessary evil to avoid an even bleaker potential outcome down the road.
“While it is a difficult thing to ask employees to accept $25 a month additional burden when there are no raises in the 2010 budget — when I draw a comparison there between that and way it was handled in 2003, it’s a lot more palatable now,” he said. “We didn’t have to lay off people this time to make this work.”
And the city’s employees know what’s going on with the economy and the challenges the city is facing, he added.
“They can see companies in the private sector every single day that are decreasing benefits, walking away from pension plans altogether, a whole gamut of things. I don’t think our employees believe we’re immune from these things, but we try every way we can to be as equitable as we can,” Ponder said.
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Razorbacks
