WINDER - Mayor Chip Thompson and city council members were faced with a tough decision in Tuesday night's City Council meeting.
Economic factors have prompted city staff to find any and all measures to save the city money. One cost-saving measure was a proposed increase in retiree contributions to their health care benefits - from 25 percent to 50 percent.
City Administrator Bob Beck said for the city of Winder to offer benefits the city can afford, the increase in retiree contributions is necessary. Insurance premiums have increased dramatically, even for plans with higher participant out-of-pocket expenses. The city hired an actuarial firm, as it does annually, to determine the best solution for all involved.
"These changes are not reviewed or considered lightly," Beck said in response to councilman Mike Mingus's remark that "I have a problem with that radical of a change."
Thompson reminded Mingus and other councilmen that many retiree benefit plans require a 50 percent contribution by participants.
"Our motive here is to get the expenses of the city of Winder down so we won't have to furlough people" or take other measures, Thompson said.
Beck explained to officials that, while the 25 percent increase results in an immediate savings of $37,000 to the city, the long-term impact is well over $1 million. A new regulation requires that retirement benefits offered to employees must be funded well before current employees retire.
"I'm proud of our department heads. They've been asked to cut expenses anywhere possible, and they have," Beck said. Even with other cost-cutting measures in place, changes to employee and retiree insurance contributions and out-of-pocket expenses must be made, according to Beck.
Mingus made a motion Tuesday that no change be made and that the past policy would remain in effect - 25 percent retiree contribution and 75 percent city contribution. The vote was tied, and Thompson voted against the motion to break the tie.
Councilman David Maynard then made a motion to increase the retiree contribution to 50 percent, and the vote was tied. Thompson cast the deciding vote, and the motion passed.
Gym memberships for employees, offered as a benefit also, will be terminated as of Jan. 1. This action will result in a savings of about $20,000 to the city.
Current employees can voluntarily opt to receive long-term disability insurance as of April 2009, and the city will no longer absorb that cost.
These measures will be reviewed annually by the mayor and council.