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HomeMy WebLinkAbout10-24-16 Personnel and FinanceOFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK PERSONNEL & FINANCE OCTOBER 24, 2016 3:35 RDA. Committee Members Present: Karen White, Gavin Ferlic, Regina Williams- Preston, John Voorde, Will Smith (Citizen Member) Committee Members Absent: None Other Council Present: Tim Scott, Randy Kelly, Jo M. Broden, Dr. David Varner, Oliver Davis Others Present: Kareemah Fowler, Joseph Molnar, Kathleen Cekanski - Farrand, Adriana Rodriguez Agenda: Bill No. 61 -16: Proposed Teamster Salary Bill No. 63 -16: Fixing salaries and wages for non - bargaining City Employees for 2017 Bill No. 44 -16: Appropriating monies for defraying Departmental expenses and Civil City funds for the fiscal year ending 12 -31 -17 Bill No. 45 -16: Appropriating monies for defraying the expenses of Enterprise Funds for the fiscal year ending 12 -31 -17 Committee Chair Karen White called the meeting to order with four (4) items on the agenda. Bill No. 61 -16: Proposed Teamster Salary Councilmember Gavin Ferlic made a motion to accept the Substitute Bin 61 -16 on file with the City Clerk's Office. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. Michael Schmidt, Assistant City Attorney with offices on the 12th Floor of the County -City Building, served as the petitioner and presenter of this bill. This is an agreement we believe is fiscally responsible and also very generous. We put in about eight (8) weeks of effort on this and this is an agreement that could not be presented without the help of a number of the Council's colleagues and City employees. He thanked Councilmember Jo M. Broden for her work, Council Attorney Cekanski - Farrand, Eric Horvath and Aaron Perri as Department Heads, Jennifer 455 County -City Building • 227 W. Jefferson Boulevard • South Bend, Indiana 46601 Phone 574- 235 -9221 • Fax 574- 235 -9173 • TDD 574- 235 -5567 • www.SouthBendIN.gov JENNIFER M. COFFMAN ALKEYNA M. ALDRIDGE JOSEPH MOLNAR CHIEF DEPUTY/ CHIEF OF STAFF DEPUTY/ DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK Hockenhull for providing financial support and guidance, John Martinez, and other people for providing additional insight. We came in with the goal of trying to find the best agreement for the City and best agreement for the Teamsters. These are men and women of the City who provide a valuable resource day in and day out. We fully understand the value of the work that the Teamsters provide for the City. This is a four (4) year agreement which was a priority for all involved. It provides stability both with what wages will be for the Teamsters and also in the City's management of having stability of what our expenses are going to be. The union really wanted stability and we did too. This is important as we get closer and closer to that much talked about 2020 fiscal curb. We are providing a wage increase over the four (4) years of one percent (1 %), point seventy -five percent (.75 %), point seventy -five percent (.75 %), and one percent (1 %). Supplementing that wage increase will also be additional funding of one and half percent (1.5 %) through the state mandatory PERF funding. This is a unique thing that the City has never done before. The City has also instituted the Activate Health Clinic and this agreement here is the first opportunity for the Teamsters to have it specifically recognized that they have time to participate in this clinic. They will be afforded eight (8) hours to spend time at the clinic, to implement health plans, and this of course is great to the City as it provides a healthy work environment. There are also longevity bonuses in place in this agreement that recognize the dedicated service of so many employees in the union. Some of these employees have been with the City for thirty (30) plus years. For each year, those long -term employees will receive a bonus and with each year that number will increase. What we did was find a financial way to reward this service and dedication to the City. The highest bonus is $400 for those who have worked for the City and dedicated so much of their life to South Bend. We also wanted to come up with concepts that made our union team feel good about being part of the City of South Bend. Committeemember Jo M. Broden stated it was a lengthy but well run process. Each and every one of these negotiated items was well documented and well - founded to everyone's benefit. She stated she appreciates the work that both the union reps and the City Administration staff put in. Councilmember Dr. David Varner asked what is the normal standard contribution for PERF. Mr. Schmidt responded the City normally contributes eleven percent (11 %) and the employee contributes three percent (3 %). Going forward for the Teamsters, the City will contribute twelve and a half percent (12.5) and the employee will contribute one point five percent (1.5 %). Councilmember Oliver Davis asked if this is enough money to try to attract and retain top talent to South Bend. Mr. Schmidt responded he believes it is. The union ratified this agreement in overwhelming support which suggests they are happy with the financial support. When we got into the details, we found out our total compensation package is equal to if not greater than our sister cities. There were some specific incidences where we increased specific positions where it was shown we were not equal to some of the neighboring cities and we were losing some employees to them. Hopefully those increases will halt that problem. There were particular ways where we 2 could reward people who received certain certifications with extra pay. That was a way to keep people here and encourage people to go and gain even more skills. Jim Szucs, 2405 East Edison South Bend, stated he is the business agent for the work groups. By virtue of the vote overwhelming in favor of the agreement, that demonstrates the workers are pleased the agreement will be attractive new hires. Councilmember Davis asked what does he think was the overriding benefit that pushed this deal over the edge. Mr. Szucs responded there are things such as double time on holidays and Sundays that are attractive as well as a work readiness program which provides a clothing allowance for the employees. Those things along with the wage, PERF, and longevity really add up. The incidental increases really are what sets this negotiation apart. There is more to a negotiation than economics. The Administration did a great job listening as well as the union did a great job listening to the Administration. All sides did what had to be done to make an open and favorable agreement. By listening to each other and being respectful, we accomplished a good agreement and the vote exemplifies that. Councilmember Davis stated he agrees that it is more than just economics, it is the tone as well. Council Attorney Cekanski - Farrand stated the dialogue was very supportive this time which added to the tone of the agreement. Councilmember Davis stated he agrees and that is why it is impressive that this is a four (4) year agreement. Committee Chair White stated she really believes those incidental increases are really impressive and add to the goodwill of the agreement. Mr. Szues stated he agrees and that you cannot just look at the base line salary increase. In some instances people will receive really over a five percent (5 %) increase when the whole package is considered. Councilmember Jo M. Broden stated the ability to be creative with benefits really was important for all sides to listen to each other and come up with some creative options to develop an overall package that everyone can be happy with. No one from the public spoke either in favor of or in opposition to the bill. Councilmember Gavin Ferlic made a motion to send Substitute Bill 61 -16 to the full Council with a favorable recommendation. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. Bill No. 63 -16: Fixing salaries and wages for non - bargaining City Employees for 2017 Councilmember Gavin Ferlic made a motion to accept the Substitute Bill 63 -16 on file with the City Clerk's Office. Councilmember Regina Williams- Preston seconded the motion which carried by a voice vote of four (4) ayes. John Murphy, City Controller with offices on the 12t' Floor of the County -City Building, served as the presenter and petitioner of this bill. Mr. Murphy provided a handout to the Committee, which is on file with the City Clerk's Office, that is a summary of all changes made to the budget since the initial department presentations. The summary has references so that a reader can see exactly where in the budget that budget item is listed. Mr. Murphy detailed the changes on the budget since the department presentations which are all listed on the handout. The major highlight is the minimum wage increase to $10.10 for the lowest paid employees. Our key funds, such as the General Fund, COIT, and LOIT funds, are balanced and revenue equals expenditures. Mr. Murphy stated there has been a lot of discussion surrounding the salary ordinance. The total non - bargaining wages are estimated to increase two point four percent (2.4 %) with the typical increase being two percent (2 %). Certain positions are at a higher or lower level than the two percent and are outlined in the ordinance itself. The ordinance shows the history of a position from 2011 to 2017. We are trying to be transparent in that process. Councilmember Davis asked when did we start using TIF dollars to pay for employee salaries. Mr. Murphy responded that for a few years we have been reimbursing some legal costs to the Legal Department through TIF but that is it. Our Legal Department has been doing research on this issue and has determined that under certain conditions it is appropriate to use TIF dollars to pay for salaries. We budgeted out the Engineering Department which would be reimbursed as we do inter -fund transfers. Essentially, after the project we would pay the bill to ourselves. Councilmember Davis asked if that is a system that would be used for other departments. Mr. Murphy stated only, when the employee specifically works on a TIF project. Councilmember Davis stated this is different because we have spoken over the last nine (9) years it has never been brought to the Council to utilize TIF funds in these ways. Mr. Murphy stated we were doing a couple of things differently with TIF in this budget. One (1) of our Assistant City Attorneys researched the statute and came to this conclusion. We have to look case by case for some of the broader employees. Councilmember Davis asked for the reasoning to be.given to the Council before tonight because there could be a tremendous amount of employees who you could refund from TIF who work in TIF areas. He stated this opens up the discussion and widens the scope. Councilmember White stated the question was posed at one (1) of our Committee meetings where the Council asked the Administration to look into ways of using TIF monies in an 2 expanded capacity. We also asked if there are other means where TIF can be used and we were looking from a public safety standpoint. Councilmember Dr. David Varner stated there should be a memorandum or legal brief that explains this new opinion of using TIF dollars to reimburse a City employee which is brand new. If research has been done, the legal basis for that in the form of a memorandum needs to be shared with the Council. We need to have it in a more formal capacity by tonight. If it is subject to change, we have nothing to refer back to. Mr. Murphy stated that makes sense and we can get it to the Council before this evening's meeting. Councilmember Davis stated we understand the use for professional services but this reimbursement of departments is brand new. If it is this broad then we should look at other departments where we can provide assistance through TIF. Council President Scott stated he loves that the Administration is listening and doing creative things but we just need to know the process behind those decisions. Committeemember Williams- Preston stated she doesn't want it to go without saying that the budget for sidewalks has not actually been increased but just returned to the level that it was last year. She stated the Council made it fairly clear we wanted to see an increase in that budget and it remaining flat is disappointing because this is something that the public is constantly asking for. She stated that she hears so much from people the need to improve our sidewalks and she would have really appreciated seeing that reflected in the budget. Mr. Murphy responded that when we originally did these estimates we weren't sure where the LOIT was going and when we found out that LOIT increased ten percent (10 %) we restored the money. The sidewalk program is funded out of the LOIT fund. Committee Chair White stated she believes we need to have more discussion on the sidewalk program because we had to fight just to get it to be level for this year and the Councilmembers have expressed that it is a priority of theirs. Councilmember Randy Kelly asked if the entire sum was utilized this year for the sidewalk program. Jitin Cain, Public Works with offices on the 13th Floor, responded that all of it was utilized. No one from the public spoke either in favor of or in opposition to the bill. Councilmember Gavin Ferlic made a motion to send Substitute Bill 63 -16 to the full Council with a favorable recommendation. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. Bill No. 44 -16: Appropriating monies for defraying Departmental expenses and Civil City funds for the fiscal year ending 12 -31 -17 5 Bill No. 45 -16: Appropriating monies for defraying the expenses of Enterprise Funds for the fiscal year ending 12 -31 -17 Councilmember Gavin Ferlic made a motion to hear Bills 44 -16 and 45 -16 together for purposes of public hearing. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. Councilmember Gavin Ferlic made a motion to accept the Substitute Bill 44 -16 on file with the City Clerk's Office. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. Councilmember Gavin Ferlic made a motion to accept the Substitute Bill 45 -16 on file with the City Clerk's Office. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. John Murphy, City Controller with offices on the 12th Floor of the County -City Building, served as the presenter for these bills. He stated we feel good about the budget. For each of the funds we track revenues versus expenditures and make sure everything is in balance. There is spending for capital expenditures which is normal. There is a slight budget decrease but most of that is just simple accounting changes. We feel good about all the funds and their balances. The health insurance fund has seen some decrease in claims due to the clinic and we will have a good report finished after January when the clinic has been open for a one (1) full year. We are pleased with how this came out in the end. Councilmember Dr. David Varner asked if we would have a miscellaneous questions period after these two (2) bills because we missed the opportunity to speak about the large raises since we got stuck on the TIF funding mechanism. Committee Chair White responded we can have that discussion after these two (2) bills are voted on. No one from the public spoke either in favor of or in opposition to either bill. Councilmember Gavin Ferlic made a motion to send Substitute Bills 44 -16 and 45 -16 to the full Council with favorable recommendations. Councilmember John Voorde seconded the motion which carried by a voice vote of four (4) ayes. Committee Chair White stated we do have approximately fifteen (15) minutes to continue to speak on these issues. Councilmember John Voorde made a motion to revisit and have discussion on Substitute Bill 63- 16. Councilmember Gavin Ferlic seconded the motion which carried by a voice vote of four (4) ayes. on Councilmember Dr. David Varner stated he would like to preface his remarks by saying that we have a lot of hard working employees and we do a good job trying to pay them well. We are not a private business that has large increases in revenue on an annual basis. We have a lot of good employees who may be working for a good deal less than they could in the private sector. But we don't lay people off or fire people frequently and we have a good pension program. In a time when the standard across the board raises seems to be two percent (2 %) to four percent (4 %), it is hard to justify raises over ten percent (10 %) even if they are deserved. If in fact these raises are necessary, we can take this at an annual basis a little bit at a time. Despite the fact that these employees may be worth it, it is difficult to justify these raises at this time. It is not necessarily proper to compare public to private sector salaries. He stated he doesn't know what the exact answer is but he cannot support extraordinary raises of this nature is not something he can support. This has nothing to do with the hard work of those employees because all of our employees work very hard. Councilmember Davis asked Councilmember Dr. Varner if he will propose any changes to this bill. Councilmember Dr. Varner stated he has some thoughts that he may make in a motion this evening. Committee Chair White stated she feels it is Councilmember Dr. Varner's right to make such a motion if he wishes this evening but we as a Committee have already sent the bill forward with a favorable recommendation. Councilmember Dr. Varner stated he will consider doing so where the raises are dialed back but still given to those positions at a smaller increase. We can look at the numbers and see what happens. If we are trying to do extraordinary raises for some of these positions we should do a little bit better than routine for the other positions. He stated we only received the salary ordinance two (2) weeks ago so we did not receive a lot of advanced warning on this. Councilmember Williams- Preston asked if Councilmember Dr. Varner's proposal would also affect the positions that are receive a title change and change in responsibilities. Councilmember Dr. David Varner stated we have to look at this in totality and maybe there are some who do justify those raises but it would still be tricky to give someone a twenty percent (20 %) raise in his view regardless of title changes. Councilmember Scott stated just to reiterate we can only subtract from the budget and not add to the budget. When any proposal comes to the Council it has to be the same or lower than the budget the Administration provided. Committeemember Williams- Preston stated she was unclear as to what the Deputy Code Enforcement Director would do. It is a position that we are adding with a salary of $75,000. She stated she is unclear how that will provide support or help the department. That is a big number. 7 With no further business before the Committee, Committee Chair Karen White adjourned the meeting at 4:26 p.m. Respectfully Submitted� =�C��' Karen White, Committee Chair