State-Journal.com - Longevity pay to be eliminated

A last minute change of heart didn’t happen.

As expected, the City Commission voted 3-2 to reduce and phase out city employees’ longevity pay over the next three years – then eliminate it.

The commission members voted Monday as they had said they would in two previous meetings where the controversial issue was discussed at length.

Mayor Gippy Graham and Commissioners Kathy Carter and Rodney Williams voted to phase out the benefit and Commissioners

Sellus Wilder and Bill May voted “no,” preferring to use reserve funds to balance the budget.

The commission also approved 3-2 the new $29.7 million general fund budget, and a $60 per year garbage collection fee for residences, which is projected to bring in $600,000 in revenue. May and Wilder voted “no” on both of those as well.

Near the end of Monday’s meeting, Wilder made a motion to reduce the city commissioners’ annual $14,600 pay by 2 percent – to make a sacrifice as city employees are being required to do.

City Solicitor Robert Moore said the reduction couldn’t legally occur in the current term. So Wilder agreed to have it take effect at the start of the January 2011 term.

Williams suggested making it 10 percent instead of 2, but after a long discussion, the motion failed 3-2 with Graham, May and Carter voting “no.”

Carter initially indicated she would vote “yes,” but later changed her mind.

In a special meeting last week, firefighter Gary Gebhart praised Wilder for spending a lot of time at the last commission meeting going through line items of the budget looking for other ways to cut expenses and save the longevity benefit.

Monday, Eric Burke, of the Holmes Street neighborhood, criticized Wilder. Burke said he shouldn’t be voting on budget issues because his wife, Jessie Bessinger, is an employee of the city sewer department, which is a conflict of interest.

Burke wanted the city solicitor to investigate the matter.

Wilder said his wife was hired before he was elected to office.

“She has spoken to her boss (Director Bill Scalf) at the sewer department to make it clear that she would prefer not to receive any raise in the future, and frankly we don’t need them,” Wilder said.

“We don’t make a lot of money but we balance our household budget not by seeking new revenue but by reducing expenses.”

Full-time city employees had received a 3 percent longevity pay increase after one year, six years and every three years thereafter. That was in addition to their annual cost-of-living increases when they’re available.

Now a 1 percent increase will be given to all employees due longevity pay over the next three years. Then the benefit will end.

Before the vote, several city employees spoke to try to save the longevity benefit. But unlike the last two meetings, there wasn’t a packed room of employees.

Police Officer Steve Sutton, president of the local Fraternal Order of Police, said, “We have over $8 million in surplus. The rainy day fund is supposed to be used for extreme situations.

“What better cause is there than keeping your employees financially alive. Times are tough and revenue is down, but not because of longevity pay.”

Sutton said the money problems stem from bad decisions by the City Commission – going $6.5 million over budget on the city’s Public Safety Facility, and spending $400,000 to build a parking lot and $1 million on a condemned parking garage.

“Now because of the economy and spending issues like these you are placing the entire issue of the reserve fund being drawn down squarely on the back of (city) employees,” Sutton said. “So if you vote ‘yes’ tonight then you in fact have taken the easy way out and turned your back on every employee…

“Why can’t we afford $90,000 for employees, but last year and again this year gave away $190,000 to charity or a golf course that lost over $302,000 last year? Stop robbing my piggy bank to stuff the city’s.”

Police Officer Travis Curtsinger said no city employee is asking to get rich off the longevity benefit.

He said he read in The State Journal recently where Commissioner Carter said the decision to phase out longevity pay has been heart wrenching.

Curtsinger said he has a young daughter with a serious illness, and he talked about a problem with the city’s health insurance.

“I went to three doctors’ appointments today with my daughter,” he said. “One was a cardiologist and we had to ask how long she could live before she had surgery. To me that’s heart wrenching.

“Walk a day in my shoes and go to some of my doctors’ appointments and see what I go through.”

Glenn Mathews, a city payroll employee, talked about the forgotten 51 part-time employees who don’t get longevity pay or health insurance. In the new budget full-time employees are getting what amounts to a $250 annual raise by decreasing the amount they pay on insurance premiums.

Mathews said more than 200 seasonal employees will receive an increase of 70 cents per hour in July because of an increase in the federal minimum wage.

The reduced longevity pay will cost the city $46,000 for the next three years, and have an immediate savings of $91,000 to the general fund in the next fiscal year beginning July 1.

In an interview Friday in City Hall, Commissioner Williams said his recent proposal to eliminate longevity pay didn’t come without “a lot of thought and homework.”

Williams said he’s been asked why he would propose something that would have such a negative impact on employee morale, which would save only $140,000 in the new $29.7 million budget.

And his answer is, “That’s not the whole story.”

Williams said the new budget is actually $4.1 million less than the budget from two years ago and “close to 75 percent of that is tied up in payroll and benefits.

“If you play the numbers or percentages, as some have suggested I’m doing, then you would also have to suggest that we should have laid off 44 people, or 14 percent of the full-time workforce.

“And what I know I haven’t done is to suggest to the board to lay off 44 employees.”

Regarding the economy, Williams – president of Citizens Commerce National Bank’s Frankfort office – said on Friday he doesn’t see any reasons for “immediate” optimism.

If the economy gets worse, layoffs are possible, he said, “but that’s the case with every employer, public or private.”

Looking at the city budget from a business standpoint, Williams said, “The commonwealth is our number one provider of revenue. After all the cuts the state has made, after all the retirements and not replacing people – 3,000 last fiscal year and about 1,400 this year – after all that reduction in payroll, they’re still dealing with a $1 billion shortfall.”

In past years the city had been collecting about $16 million in occupational tax – its biggest revenue stream – and $8 million was coming from state government.

But with the state reducing its employment through retirements and attrition, the city’s occupational tax from the state is down about 7.5 percent or $600,000 from two years ago.

Also, the state hasn’t given significant cost of living raises in the last few years. A 5 percent state pay raise is equal to $400,000 annually in occupational revenues to the city, said city Finance Director Steve Dawson on Friday.
Dawson said the last 5 percent state pay raise was in 2002.

In last week’s special meeting Graham said he believes it’s a good time to start looking at structural changes so when the economy bounces back, “there will hopefully be some funds to reward employees who excel.”

Graham said he’s an optimist, “but I know we cannot continue like we’re going. We cannot continue to spend more than we have.”

Monday Graham said he wants a new compensation plan to be put in place, “and I feel very confident that it will.” He said the process would start at the July 13 City Commission work session.

“It should be one that rewards employees and maintains services and is sustainable, and in my mind the one we have now cannot remain sustainable.”

He said the budget has been out of balance the last four years: $1 million in 2006, about $400,000 in 2007, $1.5 million last year and about $3 million this year.

Graham said the general fund reserve has done down from $14.5 million five years ago to $8.3 million today. About 74 percent of the budget goes for personnel, including salaries, insurance and retirement benefits.

44.	Posted by grosslyunderestimated June 24, 2009
	I fully understand the impact that the sagging economy is having on the private sector employers and employees. I sympathize with these people. But government services have to performed. Its a decision that our forefathers and leaders made many years ago to uphold our society's high standard of living. Frankfort and every other small city across the country has invested our taxdollars in providing these public services. So, don't tell me that the public sector and the private sectors should suffer equally. The city employees provide services that have to be provided for, otherwise, fire and police protection, sanitation, and the maintanence of our local infrastucture would not exist, however tough times might be. I like the poster who asked, where are these people that suppport the elimination of the longevity pay? Why haven't they come forward to suppport the mayor and the commissioners who voted it down? Do these people really exist? Are they figments of Kathy Carter's imagination? Why don't they come forward and take some of the heat off their favorite commissioners? Sellus Wilder can run for mayor. But he must first be taken seriously by his fellow board members. There must be a way to put legs under his ideas and get them off the ground. Until this happens, we are stuck with a commission that keeps its collective head buried in the sand. To get through the revenue crunch, there has to be inventive ways to save money and Sellus has a few. So, let us all insist that he be given an equal voice on the commission. Finally, I'm certain that for once in his murky lifetime, Bill May is happy to be out of the spotlight. Afterall, it was on his mayorial watch that our local government began bailing out commercial real estate investors, re: the St. Clair Parking garage. Well, it was his family that received the bailout on that one. He has played us all through the years and now he wants to play employee advocate. Holy BS, Batman! He is to blame for the majority of what ills the city, yet he sits there like its no one's fault. Thank God for term limits. When times do get tough, our city employees will still be dealing with the sickest, the nastiest, the most criminal, the drunkest and the highest people around. They will continue to patch our roads, salt our streets, dig our sewer lines, mow our parks, pick up our garbage and enforce our municipal codes. You can count on that. And if a disaster of some type hits our community, they will leave their families behind to help save and protect yours. You can count on that, too.

43.	Posted by tiredofthecomplaining June 24, 2009
	With regards to my previous post.....let's fast forward a few weeks or months ahead. According to Gippy, Carter and Williams the longevity pay MUST be eliminated in order to SAVE money. According to them this city is in dire financial shape. If this is true, than there should be NO decisions made by these commissioners to spend ANY money except to pay off the debt that has caused us to be in a financial crisis. However, I predict, in a few months when things have cooled down, you will slowly see them attempt to promote ideas and negotiate issues that will cost this city money. Perhaps a new parking garage? If I was a commissioner, and I was truly concerned about the budget, I would be willing to listen and investigate any ideas for cost savings and increased revenue that were brought to my attention. Gippy, Carter and Williams were so concerned with the budget that they turned a deaf ear to any other ideas brought to the table. This is not about money, a concern for the citizens or a concern for Frankfort as a whole, this is about a political agenda. I'll do for you if you do for me. So for all of you who have locked yourself in a box just sit back and wait. You are so closed minded to think that this is all about a few people complaining about loosing a raise. This is about the fact that political figures in this town think they can be financially irresponsible and then vote to make the citizens and employees of the city pay for thier irresponsible acts. This is about Commissioners who state the city is in bad financial shape, but is not willing to take the lead and give up any of their benefits...benefits that other part time employees don't receive. This is about asking direct questions with regards to agendas and city dollars spent and getting no response. This is about the citizens of this town needing to wake up and smell the coffee. Quit voting for the good ol boy. Vote for someone who is actually going to try and make a difference, someone who truly has the citizens as their first concern. This is about Carter not having a backbone or an opinion that she can call her own. Why would you vote to put someone on a Commission that has no ideas or opinions of her own. She rides on Gippy's coat tails as evidenced by her change in vote following Gippy. However, she will give you a shout out if you have a baby, get married, or some other life changing event....sounds like a reason to vote for her to me. Williams and Carter have been on this commission for too long, it's time for a change. So just sit back and wait, see what happens. Mark my words, the money that we are so desperately in need of will be spent by this same bunch who just ****** on all the employees and citizens of this town.