BY BRYNA ZUMER, firstname.lastname@example.org
9:31 AM EDT, October 6, 2011
Despite the objections of one member, the Havre de Grace City Council approved step and longevity increases for city employees during the current fiscal year.
The raises were not planned when the budget was approved in June; however, the city actually saved money on its health insurance costs, and some of the savings is being passed back to the employees in the form of step raises.
During Monday night’s council meeting, council members except Randy Craig voted for the employee increases. Mayor Wayne Dougherty explained the increases would be possible because the city was able to reduce health care costs by 7 percent earlier this year.
Those savings took effect in July and amounted to a savings of $45,000 for employees, finance director George DeHority said.
“The employees did receive a lower per paycheck cost [for insurance] starting in July but it amounts to only $3 [to] $10 per pay depending on the employee’s coverage,” DeHority wrote in an e-mail. “The great majority of the health care savings goes to the City.”
DeHority said the city originally expected health care costs to increase by 12 percent and considered a reality of increases of up to 15 percent.
The staff instead negotiated a 7 percent reduction, he said.
The step and longevity increases will go into effect Oct. 15 and will be retroactive to the start of the fiscal year on July 1. City officials said the step raises average 4 percent for general city employees.
Craig expressed reluctance to approve the increases before the council receives the city audit next month.
“I think it would be prudent to wait at least a little longer until we are more secure in our fiscal year,” he said, explaining the step increases are being based on a one-time saving.
“Hopefully not many people are looking at a 7 percent savings over the year before [in the future],” he said. “That is a one-time savings and what we are proposing here is a [recurring] cost.”
Craig proposed putting the savings instead toward the employee pension program, as “employee pensions have been under siege,” and toward a reduction in taxes.
He said he would be willing to consider the step increases in the future once he has a better financial picture for the city.
Councilmen Bill Martin and Fred Cullum, however, both spoke for the proposal, and Mayor Wayne Dougherty made a speech praising city employees, which got a burst of applause from city workers in the audience.
Dougherty said he has the best job in the world because he gets to work with the most dedicated people every day.
“I thank you every day for what you do,” he said.
Martin said he is confident the city will be able to handle its financial future, alluding to the city’s ability to overcome the recent natural disasters of earthquake, flooding and tropical storms.
“In Havre de Grace, we take it all in stride. We have seen it all. I believe [the public works department] is preparing for locusts, or whatever biblical plague is next,” he said. “We don’t know what the health care costs will be next year, but we will be prepared for it. I believe this [plan] is clean, I believe that we can do it, I believe that we can do it, I believe it’s not reckless.”
Cullum agreed, saying the city’s employees “are our best investments.”