By Walker County News Today staff
The Huntsville City Council on Tuesday agreed to postpone until tonight action that would change the benefits of city retirees to address the looming threat of an unfunded liability, something City Manager Matt Benoit told council had troubled the two previous city managers.
But former city employees, including former police chief Hank Eckhardt and former Director of Public Works Glen Isbell, urged council to rethink the fairness of the city’s proposal, which would reduce the city’s contribution for purchasing health care for retirees age 65 and over with at least 20 years’ of service from $400 per month to $250. The policy also says retirees would lose city benefits if they are hired after they retire from the city by a company that also provides health coverage and the covered spouses of city retirees will lose benefits once the eligible retiree dies.
The new policy would go into effect Jan. 1, 2016.
Ward 3 City Council member Ronnie Allen had put an item on the council’s Tuesday night agenda asking council to reconsider the change to these retiree benefits, which Benoit authorized in September, following review by a council committee composed of Mayor Mac Woodward, and council members Joe Emmett, Don Johnson and Lydia Montgomery. Allen made a motion that only city employees hired after Jan. 1, 2016 would be affected by the change in the policy and that current city retirees would be able to keep existing benefits.
“We need to honor the policies that current retirees worked and retired under, and that the current employees have been working under, some for many years,” said Allen, who represents Ward 3. If the changes go into effect for employees hired after Jan. 1, 2016, he said, that still allows the city “to address the long-term financial impact” of funding retiree benefits. Woodward seconded the motion.
The city’s director of human resources, Julie O’Connell, recommended council take no action on the matter, however, saying even slight adjustments to the policy would have unpredictable financial consequences for the city and council has had ample time, since directing city staff to come up with a health care policy for retirees that was financially sound for the city in 2014, to review and make adjustments to the policy before it was implemented.
The current unfunded liability the city carries on retiree healthcare costs is $19.5 million, which means the city should be investing $1.3 million a year to maintain these benefits. The city is only investing about $625,000 a year, however, leaving the remainder unfunded.
But former city employees said they felt the city should maintain the current level of benefits to honor the hard work and loyalty of current generations of former city employees. They also warned current city employees to pay attention — that the city’s promises to them might not be honored once they retire.
“For years, we worked under the concept of trust, of team, of partnerships, of respect, of honesty, unity and integrity. These were all the words we used very strongly here, and we lived our lives and worked as employees with those concepts in mind. And at the same time, we…worked with the idea that we were partners working with the council and with the citizens of the community,” and we worked with the understanding that “there were certain things we would receive as a result of our…successful employment and retirement from the city,” Eckhardt said. “All of a sudden…in the last two months, we started getting told that no, things were going to change.”
Eckhardt said at the city’s meetings with retirees about potential changes in health care benefits, city officials told retirees over age 65 that their benefits were a liability to the city, which the city could no longer afford. But, he said, while these same city employees were working for the city, they were expected to do their best and the city promised to take care of them when they retired. “When an organization said they were going to do something…we counted on them to do what they said they were going to do,” he said. “[This] seems pretty unfriendly on the city’s part.”
Isbell said the benefits proposed is not enough to cover all costs of prescription drugs and increases in premium health care coverage and noted that many important specifics about the new policy are not in writing.
“The bottom line is that the outcome is not what we were promised,” Isbell said, and echoed Eckhardt’s request that council take the time to review the policy changes again.
“I would remind council as I come into City Hall there’s a vision statement posted in front. Most of us sitting here tonight helped prepare that vision statement,” Isbell said. “And it begins by honesty, H for Huntsville, honesty in all our actions. And the I in ‘Huntsville’ is integrity demonstrated in our treatment of our co-workers and those we serve and protect. So I would ask that the council consider reversing this policy to live up to the values stated in those promises that were made to those retirees.”
Benoit defended the changes in policy and said he believed that addressing the threat of an unfunded liability to the city was also a show of integrity.
City retiree David Langley, after listening to Benoit, said: “You all have a responsibility to these men. These men [were] the old way. They ran this city with integrity. Better than it’s being run now…You all need to stand up for retirees because that’s what you promised us.”
Langley said some of the future funding for retiree benefits could come from tax incentives council had previously approved.
After questioning Benoit and O’Connell about policy changes, council had a heated discussion about the specifics of the plan and because it could not reach a decision, council opted to meet again tonight at 6 p.m.