Council Votes 4-3 To Reform Employee Compensation

OCEAN CITY – Eleven motions to reduce newly hired town employee pay and health benefits moved closer to reality at this week’s Mayor and City Council meeting, contrary to the best wishes of the mayor and three council members.

Earlier in the meeting in discussing the future of the police commission, Council President Jim Hall’s wish to remand the issue to a work session was granted with no opposition.

However, Mayor Rick Meehan and Council members Doug Cymek, Mary Knight, and Lloyd Martin did not receive the same courtesy in their wishes to have certain proposed ordinances involving the reduction or elimination of new town employee pay and benefits be discussed and studied further before passing them through first reading.

Five out of the eleven motions were passed without discussion mostly in a 4-3 vote, with the majority of the council –Joe Hall, Brent Ashley, Jim Hall and Margaret Pillas – winning every time.

Those five motions included pay grade changes requiring notification from the city manager; the elimination of Achievement Compensation for Excellence Awards; automatic anniversary, COLA and step raises eliminated and granted with council’s approval at budget time; the elimination of the fifth week of vacation for current employees; elimination of dependent life insurance; the change to ICMA match from $500 to $200; the reduction of holidays from 12 to 11; and the retiree health coverage to be eliminated for new hires.

There were six other motions that came with discussions on the negative impacts they will cause the city’s future employees.

The fifth motion discussed was the salary for new hires to be based off of the 2005 Hendrick’s Study Chart, and there will be no movement in cap without the approval of the council. The change in salary will cause an 8.8 percent decrease for all new hires, no matter what position.

On Nov. 30, the council was presented with different options of pay grade decreases. Some of the options offered different percentage decreases to compare to the level of the employee position.

“I think there were some proposals in that packet … that had a graduated scale … instead of having a 8.8 percent decrease across the board,” Meehan said.

In thinking that a graduated scale of pay rates would benefit future employees, especially the lower level employees, Meehan asked the council to remand the motion back for discussion so that more options regarding salary decreases could be explored.

“I think all of us up here want to do what’s right in regard to what we should do in 2010, as opposed to what we did in 2005 or 2006,” Meehan said.

Council President Jim Hall said the council felt it had to come up with a plan that was equal to everybody, and the 2005 Hendricks example did just that.

Councilman Joe Hall put the motion to a vote, and it passed in a 4-3 vote with the minority of the council in opposition.

The next proposed ordinance was to allow 10 days for personal, sick or bereavement leave for new hires. A maximum accrual of 20 days and unused accrued days are not permitted to retirement enhancement.

“Basically what this does is it creates 10 days, or 10 paid days off … I hope everybody understands that,” Meehan said. “It is a significant change.”

Cymek agreed and also asked for the motion to be tabled and remanded to discussion.

Pillas pushed the motion to a vote, and it was passed in a vote of 4-3, with the minority of the council in opposition.

Another motion discussed was to allow one week of vacation every five years, reaching a maximum of three weeks of vacation earned for new hires.

“You want your employees to re-energize, you want your employees to be able to spend time with their family,” Meehan said. “A lot of these things don’t just effect the employee but it effects their families.”

Meehan added “ram-rodding” all the motions through are going to cumulatively effect the employee.  

Finance Officer Martha Bennett Lucey added that the motion also goes against the city philosophy based in the concept of family vacations.

“I cannot recommend this policy for administrative fiscal clerical workers, accounting, or employees responsible for inventory or their assets,” Bennett said. “Best practices in my industry provides that officers and employees be absent from their duties for a least two weeks.”

Lucey reminded the council the city runs 24 hours, seven days a week, and the town employees deserve that rest time, and she did not agree that an employee should have to wait five years to receive their second week of vacation.

Once again, voiced concerns were ignored by the majority of the council because Ashley placed the motion into a vote, and it passed in a vote of 4-3, with the minority of the council in opposition.

The next motion discussed is to eliminate the ICMA 457 deferred compensation match for new hires. It was stated that the town spends about $70,000 on the match.

“This is a way to encourage those who work for you and give a benefit that encourages them to save,” Meehan said.

Joe Hall responded that with the progress of the new contribution plan for retirees being worked on, it is not actually being eliminated but just taking a different “avenue”.

Meehan rebutted that a good time to discuss the matter would be when the parameters of the new contribution plan are settled, not now.

Joe Hall placed the motion into a vote anyhow and it passed in a vote of 4-3, with the minority of the council in opposition.

Another proposed ordinance that came up in first reading was that the retirement plan for new hires would be a defined contribution plan.

Meehan read aloud a line from the proposed ordinance, “level of contributions and other contributions to be created after consultation with financial advisors and actuaries.”

At last week’s meeting, the council concluded to have an actuarial study preformed in order to set up a 401(a) retirement pension plan. This action will not be completed until October 2011.

“Were basically passing an open ended ordinances that doesn’t tell anybody anything,” Meehan said.

Ashley pushed the motion to a vote, and it passed 4-3, with the minority of the council in opposition.

The last motion discussed pertained to establishing a cost-sharing ratio for new employee health insurance.

“Actually I understand the need to look at health care coverage cost because I think that it is one thing particularly that is going up universally,” Meehan said.

On the other hand, he added, “When you put it together with all of the other changes it becomes cumulative and excessive.”

Ashley placed the motion into vote, and it passed 4-3, once again with the minority of the council in opposition.

“Individually they may seem that they won’t effect our work force but when you start to add up, cumulatively what each one of these do, those dollars start to add up significantly and the impact it will have on the lives of those that work for us,” Meehan said. “I do hope the council president grants my Christmas wish, and put a couple of these items I have requested to go on work session for the discussion.”