City mulls mill reduction

A $1 million health liability may be cut

BY BENJAMIN GOHS

 The Boyne City Commission, led by commissioner Dan Adkison’s call to reduce the millage rate, began the 2011-2012 budget work session on Tuesday, March 22.

The meeting was highlighted by a contentious conversation on just where the proposed .25 mills in savings would come from.

“I’d like to see at least a quarter of a mill reduction,” Adkison said. “And, I’m not micromanaging the staff’s budget.”

While the proposed $9.7 million Boyne City budget is down from $10.8 million last year due to the completion of several large infrastructure projects, the commission ultimately directed staff to find an additional quarter mill in savings.

Adkison said the people of Boyne City are struggling under the current economy and could use some relief.

The major focus on cuts surrounded the post-retirement health insurance stipend which costs $264 per employee, per month for up to 10 years.

“I would propose we get rid of that program,” said Boyne City Mayor Chuck Vondra. “It’s $1.1 million in maximum exposure.”

Vondra said the proposal should not affect current, but future retirees.

“I think we have to fund it for the people that are there now,” Vondra said. “I know this isn’t a popular discussion, but how do we react when we print our benefits in the newspaper – what would the response be?”

Boyne City Manager Michael Cain said the salary and benefits package is higher on average than those in Boyne City’s private sector.

“If we have somebody who is getting close to retirement that anticipated this coming forward should they just be cut off and it just disappears?” he said. “I can see some type of a transition period. This was a controversial program when it went in, but the fact is the city put it in for right or wrong.”

The program was instead before Cain became city manager.

“We have a big bubble of people ready to retire and to just yank that out … doesn’t strike me as quite being fair,” Cain said. “I can see the long-term implications, and doing something to be proactive, but our financial house is in order.”

Adkison said the city should have no liability to pay this sort of thing once an employee retires.

Vondra said at some point the commission will be forced to choose either retiree health benefits or a new department of public works building.

“I know the employees in general don’t like to hear that, but at some point we still have to run and maintain this city,” he said. “I think we’re hampering ourselves and walking down that path other people have – and and I don’t think we have to do that …I don’t think we can do both.”

Cain argued that the city is in no position to have to choose one over the other due to careful planning and use of tax funds.

“We’ve gone down about 25 percent in our millage rate,” Cain said. “We’re so strong we’ve paid off debts in cash and not incurred additional interest payments.”

Currently, nearly 30 employees could be eligible for the benefit once they retire at a total cost of $29,000 each.

“Let’s ask the citizens if they want the millage to support these non-comparable benefits,” Vondra said. “How does that vote go?”

Cain said the vote would likely “go down in flames” and added, that the city has a moral obligation to follow through with what has been promised them.

“Our employees have gotten raises when nobody else has; Our employees get benefits that nobody else gets; We haven’t laid anybody off,” Vondra said. “I think we’re doing our part and I don’t think anybody sitting here begrudges them those things – but that’s a huge, huge, huge dollar amount.”

He added, “I question whether we can hold our heads high in the community when people look at this and say, ‘Was this the right decision or the wrong decision?’”

Cain said there is a case to be made that Boyne City, compared to other municipalities, is financially stable and doesn’t need to make cuts at this time.

“Which five employees do you want to lay off?” Vondra responded. “We’re in a position where we’re going to get hammered with the decision we make here today out there in public.”

Boyne City Commissioner Laura Sansom said one of the city’s goals is job retention and creation.

“These are good paying jobs,” shes said. “But, I think we’re kind of proud to know we can offer good paying jobs in this community.”

Cain added that five or six employees would be affected by this over the next several years.

“It’s been in their contracts and it’s been in their handbooks since the city instated it,” he said.

Vondra said millage cuts and high financial liabilities cannot both be attained.

Cain was directed to check with the city’s labor attorney to ensure they could end the benefit without fear of litigation.

Other items of discussion in the budget included mention that there is a zero percent wage increases in the budget for employees across the board. Some roof work and bathroom upgrades are slated in the budget as well as $26,000 for a new police vehicle and $3,000 for Tasers for the police department.

The next Boyne City Commission meeting is scheduled for 7 p.m. on Tuesday, April 12.

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