Finance committee mulling over more budget proposalsPublished 10:15am Tuesday, January 29, 2013
Board divided over union contract negotiations
Two months into Ironton’s budget talks, the city’s finance committee members remain at odds over creating a definite plan.
However, at its weekly meeting Jan. 23, two thirds of the committee favorably recommended a plan for the general fund, a proposal that could be brought to a vote at the Ironton City Council’s meeting Feb. 14.
The bottom line
When budget discussions first began in December, the finance committee was looking at a more than $56,000 carryover anticipated to start 2013, with about $5.2 million in revenue to fund its 16 departments. Expenses were projected at about $4.89 million.
After the first of the year, finance director Kristen Martin said overtime payout for city workers in understaffed departments ate away at the projected carryover, leaving the city to begin 2013 with a general fund deficit of a little more than $56,000.
Despite starting the year with a deficit, the general fund is expected to have a carryover for 2014 of more than $136,000 — but that’s $221,000 less than originally projected.
“I thought we were in good shape just prior to the beginning of December 2012,” said finance committee member Aaron Bollinger. “I thought, personally, in these meetings, ‘Hey we are on the mark. We are going to have a $60,000 carryover.’ And then all of a sudden, we came up with a deficit and we lost that $60,000. It seemed like in one month, we lost $110,000.”
Bollinger asked Martin if she foresaw the deficit coming.
“I don’t run the police department or fire department,” Martin said. “I can forecast what the payrolls are looking like. Our payrolls used to be down when we first laid people off but then the payrolls started getting higher and higher and higher. When I get the time sheets, it’s earned time. There is nothing I can foresee in that. It’s earned. They have already worked it.”
Layoffs came after council adopted a budget last year that required all city employees to begin paying 7.5 percent of their retirement pickup.
Instead of taking the increase, the AFSCME and FOP unions laid off employees to reflect a 7.5 percent cut from their budgets. AFSCME and police union employees currently do not pay anything towards their retirement pickup, with the city covering the entire 10 percent as well as the standard 14 percent employer share.
In the new proposed budget, non-union workers will continue to pay 7.5 percent of their retirement pickup. For those 19 employees, that is a total savings to the city of about $74,500.
Martin also said collections in the income tax department suffered because one of the two clerks, an AFSCME employee, was laid off.
In an effort to curb the extensive overtime costs, finance committee members requested that the costs of bringing back one income tax clerk, two police officers and one firefighter be added back into the latest general fund budget proposal.
That would increase the income tax department by a little more than $58,000. Each additional police officer would cost the city about$67,000 for an entry-level officer’s salary plus benefits. For a firefighter, the same expense would be about $74,000. If the committee proposed three additional police officers that would total $201,000 and the additional firefighter at $74,000 would negatively impact the carryover by $275,000, Martin said.
In addition, the position of economic development director, left vacant by the retirement of Bill Dickens, will not be filled for the time being, at the request of the Mayor Rich Blankenship.
Blankenship had said he wanted to reevaluate the position and, in the meantime, have part of the department’s expense added to the mayor’s department travel fund to continue the duties that the economic development director would perform. None of that money would be added to the mayor’s salary.
Last year, the department was funded at $15,300. This year, the department’s only expense is $5,000 in payout to Dickens. The mayor requested $10,000 to be placed in his travel fund.
The draft showed no changes in benefits to any employees or their contributions and still included a proposed 6 percent wage increase for all non-union employees. As before, a 5 percent hike in health insurance premium costs, 3.5 percent in worker’s compensation and 3 percent across the board in every other operating account, such as supplies, fuel, utilities and maintenance, was included.
The changes were ones that all three finance committee members agreed to consider for a proposed budget. Member Kevin Waldo moved to favorably recommend the budget for the entire council to vote on at its next meeting. Member Mike Lutz agreed.
“As we saw last year, we had a whole bunch of nice plans, but they didn’t happen,” Lutz said. “I think we lock this thing down and we move on with it.”
Bollinger disagreed with the proposed budget, saying it didn’t included enough cost savings efforts.
“In column A, you see the only difference is you are saving 1.5 percent,” Bollinger said about the budget Waldo and Lutz agreed upon. “Because with a 6 percent raise, keeping the health care as it is, that’s the only savings we are showing we are going to do in 2013, is save 1.5 percent on benefits. That’s not significant.”
“How are you going to do it? Cut anymore than what you’ve cut?” Waldo asked. “I’m 100 percent in agreement with you that that’s something we need to do. We’ve done it and it didn’t work. It actually costs more money than if we hadn’t done it. If everything goes just right, we have plus $136,000 at the end of this year. Now, we all know not everything is going to go right. That’s a given.”
Bollinger asked Martin to prepare another proposed budget that included all the changes committee members agreed upon, plus some additional cuts.
Bollinger said he was in favor of the 6 percent wage increase, but only if retirement pickup was taken to 10 percent — an additional 2.5 percent from the current 7.5 percent — as well as a 5 percent increase on insurance. This was only factored in for the non-union employees.
Bollinger also asked Martin to decrease the finance department’s budget by one employee, about a $61,000 savings in that department. With all Bollinger’s savings suggestions, the finance department would operate at a cost of about $195,000, rather than $264,000.
“Ultimately, I’d like to have every employee back, and have money in the city coffers, but unfortunately, we don’t until we get more revenue sources in. And, until then, I firmly believe we have to tighten our belt. The only thing council can control right now as far as city employees are the non-union folks. If we go this route (the recommended budget) we are just giving in to the union employees, too. And we are not trying to make any savings whatsoever. I thought there were more city councilmen that also agreed with that.”
The projected carryover for 2014 would be about $240,472 if Bollinger’s version went into effect.
“I do agree with what you are saying in theory,” Waldo said. “I just think it’s a futile attempt that we are going to have any kind of effect on the union situation. I think it’s pretty obvious that we don’t.”
Last week at the city council meeting, union contracts for AFSCME and FOP — both which have been in negotiations since January and April of 2012, respectively — were brought to the city council for a vote, but an even split between those for and against the terms of the contracts means the issue remains unresolved.
Council members Waldo, Lutz and Butch Huff voted in favor, while Bollinger, Philip Heald and Dave Frazer voted against. Beth Rist was absent.
Neither the AFSCME nor FOP contracts included any changes from the current contracts in terms of wages or the employees’ share of benefits.
AFSCME is currently operating without a full contract. The police union is under contract with a clause that allows the union to negotiate salaries and benefits.
“When we give this 6 percent raise, or if we give the non-unions any raise, it’s going to negatively affect, in a big way, Rich’s (Blankenship) ability to negotiate with the unions,” Waldo said at the finance committee meeting. “We’ve got to do something to right the ship for the non-union employees. I firmly don’t think it was right, what happened in 2012 with the efforts that we made and they way the unions turned it around to where it was not just a terrible effect it had on the non-unions, but it ended up costing the city’s budget more with the way the unions handled the decreases in the budget.”
The finance committee will meet at 5:30 p.m. tonight in the conference room at the city center to continue budget discussions.