While it appreciates the work city employees are doing, the Mount Airy Board of Commissioners has vetoed an attempt to increase their benefits at a $96,000 cost to taxpayers.
The mindset behind the board’s 5-0 vote at a budget workshop this week seemed to be that those on the municipal payroll already are treated far better than their counterparts in the private sector.
“The benefits policy as it is, is very generous,” Commissioner Teresa Lewis summed-up before board members voted not to provide a 2-percent 401(k) contribution to rank-and-file city workers in a 2011-2012 budget to be finalized later this month.
Lewis, who is familiar with what various private companies offer through her ownership of Workforce Carolina, said she wasn’t even aware of the full extent of the city benefits package until Tuesday’s budget workshop.
It already includes taxpayers providing 100 percent of the medical-insurance costs (an $833,081 expense), for municipal employees, who are charged only for coverage of dependents. Then there is Mount Airy’s participation in a state retirement program. Through it, a contribution is made by the municipality at the rate of 6.56 percent of every worker’s salary; the employees themselves supply another 6 percent toward their retirement plans.
Given all that, the commissioners said they didn’t want to approve City Manager Barbara Jones’ recommendation for adding the 2-percent 401(k) match for another retirement benefit, especially since there is continuing concern over the economy.
“Adding (that) at this time with a double-dip recession, I don’t think is necessary,” Lewis said, referring to the condition in which a recession is followed by a short-lived recovery, then another recession.
“I concur,” Commissioner Jon Cawley said of the reluctance to hike benefits under the present scenario.
“I think it’s a good compensation plan right now,” he said, “and if we want to give people more, let’s give it to them in their salaries.” Cawley made it known that “I have great respect for what people are doing here.” Although city employees received a small raise in January, in some cases they have lost money due to landing in a higher tax bracket, he said.
Yet along with the concerns about the extra $96,000 expense the 401(k) contribution would have required were several comments from board members about how private-sector workers generally lag behind those on the city payroll.
The fact that municipal workers have all their health coverage paid by the city was called “a huge benefit” by Lewis. “Most companies don’t pay 100 percent.”
Despite the board’s reluctance to provide a 401(k) contribution, that doesn’t stop participation by employees on their own. They are able to set aside up to 10 percent of their pay in a 401(k) plan without any match by the city government.
Lewis said she hopes more people can be encouraged to participate because of the benefits of allowing money to be set aside for retirement which is tax-deferred.
“There’s got to be responsibility, not just from us but the people receiving the benefits,” Commissioner Dean Brown said.
Todd Harris, another board member, said he favored a plan whereby the city would match employee contributions, but not the one proposed that required no such match on the workers’ part.
Police Treated Differently
Jones, the city manager, explained to the commissioners at Tuesday’s budget workshop that her reasoning for including the 2-percent contribution in next year’s budget was to get all 175 employees on an equal footing.
Such a 401(k) benefit was removed two years ago for all personnel except sworn police officers, who are legally required to receive a 5-percent contribution. Jones also had proposed an additional 3 percent for non-police employees in the fiscal year after next.
“My goal for the 401(k) is to eventually get everyone back to the five percent,” the city manager said, and “reward folks for their hard work. That is a piece of my logic in putting that two percent in.”
However, Cawley objected to the idea of the workers as a whole being put on an equal footing with police officers, who have a “difficult” job.
“We’ve got to be careful when we try to make every city employee the same as a police officer,” Cawley said. “I don’t have a problem with a police officer (getting the contribution) because they’re shot at, they have a very difficult job and they have to retire earlier.”
Cawley also said of police: “They put their lives on the line on a daily basis…It’s a more dangerous world than it’s ever been before.”
Tom Joyce can be reached at 719-1924 or firstname.lastname@example.org.