West Hartford Forums

“A candle is enough to light the world”

$600,000 Gone from the Budget. What Do We Cut Next?

Posted by whforums on October 15, 2008

What. You think you could do better?

The Courant reports that Adler and Visconti promised a 3.3 million dollar cut, presented a 2.6 million dollar cut, discovered they had cut a whole bunch of services twice (a great way to save money!) and ultimately presented a 1.4 million dollar cut before voting unanimously with the group to approve the $600,000 cut.

Proposed in the Adler/Visconti plan were $500,000 more from the schools and the removal of an undercover narcotics unit from New Britain Ave./Prospect/Boulevard and Park. I can see the justification for asking for $500,000 from the schools (though I don’t agree with it) — but cutting community policing? In the context of the summer we just had (remember that “spike” in crime?) in what way does this possibly sound like a good idea?

*hangs head and slowly shakes it*

So, what now West Hartford? Slifka said last night:

“In the clear light of day, we’re going to have to assess all of these things, but we need to hear from the community.”

So, community, be heard. Where do we start making cuts in town services beyond these $600,000?

I’ll start. As a town of 60,000 people, do we really need two senior centers? Could we move all of Town Hall, with the exception of emergency services, to a 4 day work week? Should we commission a study re: the efficacy of moving some schools to a 4 day school week (I don’t like this idea terribly, but if I’m going to throw that bomb out there about senior centers, I might as well go after the kids, too)?  As for leaf-pickup, time to give that up, folks.

Posts later this week about the “Problem with Property Taxes” and the Larson/Visconti/Fournier race.

Advertisements

26 Responses to “$600,000 Gone from the Budget. What Do We Cut Next?”

  1. WHTaxpayer said

    Let’s start with vacation. In the private sector, a typical vacation arrangement is 1 week paid vacation in the first year, 2 weeks in years 2-5, 3 weeks in years 5-9, and 4 weeks after 10 years service. Vacation is a “Use it or lose it” deal with no year-to-year carryover of unused vacation permitted except by request of the company. Some companies allow an employee to sell back up to 2 weeks of unused vacation per year but with a maximum of 4 weeks to work with, most folks opt not to sell any back.

    In West Hartford, employees start with 4 weeks paid vacation in years 1-4, 6 weeks in years 5-9 and 7 weeks after 10 years service. They can sell back up to 4 weeks vacation per year and “bank” or carry over any unused or unsold vacation days. These count toward a bank of up to 50 unused vacation days which can be cashed in at retirement at the rate of 1/260th of the employee’s final annual salary per day. Clearly, when public sector wages were lower than private sector wages for equivalent positions, providing additional vacation was a means of attracting and retaining employees. By providing more vacation than was typical and allowing public-sector employees to sell back more vacation than their private-sector counterparts enjoyed in the first place, the vacation scheme became a back door salary increase of nearly 8%. The banking of up to 50 unused vacation days, paid out at retirement at the employee’s final salary (as opposed to the salary at which they were earned) is nothing more than an unfunded pension down-payment. When former Town Manager “retired” this summer, his vacation days were worth $557.70 each, or up to $27,885 to ease him into his new situation.

    Next let’s discuss sick days. Sick days in both the public and private sectors are paid days-off due to illness. Over time the definition of illness has expanded from employee illness to illness affecting the employee (child, spouse, etc.) Responsible companies voluntarily provide paid time off for illness and many states are moving toward mandating this. Due to abuses however, some companies have placed limits and restrictions on paid sick days. Some require proof of the claimed illness. Others have limited the cumulative number of days an employee may take in total or without medical proof. Understand, we are not discussing long-term disability here. Sick days are intended to address occasional short-term illnesses.

    No doubt, West Hartford started out with a system like the one described above. Over time, however, sick days became an alternate form of vacation days and instead of protecting the employee’s income during short-term illness, they became an entitlement of fifteen days per year whether one was actually ill or not. They became “bankable” and up to 150 can be carried over and cashed in at retirement under the same conditions as unused vacation days. Over a 25 year career, one had only to bank 6 days per year to achieve the maximum “bank” leaving the other 9 days per year to serve as alternative vacation. Sick days can’t be sold back so it became prudent for employees to use their sick days and sell their excess vacation days. Again referring to the former Town Manager’s recent “retirement”, his unused sick days were worth up to $83,655 above and beyond the $27,885 in unused vacation days for a total of $111,540 or 77% of his final salary.

    Now, let’s turn our attention to pensions. A pension is a steady income given to a person upon retirement, typically in the form of a guaranteed annuity. Pensions have lost popularity in the private sector in favor of 401(k) defined contribution plans. Defined benefit pensions, of the type enjoyed by West Hartford employees, have all but disappeared in the private sector because these plans pay the employee a fixed or escalating annual amount for life following retirement without regard to the amount contributed by the employee or the performance of the pension fund. Any shortfall is made up by the employer providing the pension – the Town of West Hartford in this case. The pension value is generally a percentage of the employee’s salary during his highest earning years, which typically are the last years before retirement.

    All pension plans have eligibility restrictions regarding years of service before retirement, including West Hartford’s. Unlike West Hartford’s, many have a graduated payout schedule depending on age at retirement. For example, one might qualify for a 100% pension at age 65 with minimum 25 years’ service but would receive a lesser amount if one retired at age 62 with 25 years and less still if one achieved 25 years’ service at a younger age. Theoretically, one could achieve 25 years’ service as early as age 43, if one started right out of high school. This graduated pension arrangement addresses two issues. First, it recognizes that the younger one is at retirement, the longer one will be collecting the pension payment. If one is going to be collecting over a longer period of time, one should be paid a lesser amount per year. The graduated arrangement also encourages employees to stay with their employer as long as possible to increase the final average pay upon which their pension amount is based. In this way also the employer gets the benefit of the employee’s accumulated experience.

    West Hartford’s pension plan has no such age restriction and no limitations on post-retirement activities. It encourages employees to put in their 25 years and then seek other employment at the earliest possible moment. Whether the Town manager was 58, 73 or 43 at retirement, he will draw the same amount per year for the rest of his life. The former Town Manager had 28 years of experience, has stated that he intends to work for another 7 or more years and doesn’t require either employee or spouse healthcare or post-retirement benefits as these have been generously provided for life by the taxpayers of West Hartford. This made him highly desirable to a new employer and his departure cost him nothing.

    In a September 11, 2008 article entitled “Pension Time Bomb”, columnist George Will described the benefits that are driving municipalities all over the country to ruin. Unfortunately, some the benefits he listed are the same as those described above. The situation he describes in Jefferson County, AL is identical to West Hartford’s where the Fire Chief was recently quoted in the Hartford Courant saying, “For each person we have [on payroll], there is an added built-in cost of $4 to $5 million” over the long term, for pension, healthcare and other fringe-benefit costs.” West Hartford firefighters can retire with 25 years regardless of age with lifetime post-retirement healthcare and draw a pension equal to 85% of their salary in their highest earning years. That amount will be escalated annually through a Cost Of Living Adjustment that was added to their plan in 2005. These “retirees” are free to seek employment elsewhere while still in their 40’s but the taxpayers of West Hartford are obligated to pay their escalating pensions and full “post-retirement” healthcare for 30 or more years to come.

    So is there anything West Hartford can do to prevent the calamity which befell Vallejo, CA, a town forced into bankruptcy by out-of-control pensions? Yes, the Town Council and BOE must take a firm and resolute stand to return benefits to sustainable levels. The following steps should be taken:

    1. Reduce the maximum number of paid vacation days to the 4 weeks typical in the private sector.
    2. Eliminate the “banking” of vacation days.
    3. Require that sick days be used for illness of the employee or dependent
    4. Eliminate the “banking” of unused sick days.
    5. Limit vacation buyback to a maximum of 2 weeks
    6. Impose a graduated defined-benefit pension which reduces the annual pension payment for each year of retirement prior to age 65.
    7. Enforce a policy preventing “retirees” from being rehired by the Town as “consultants”

    If these steps were taken, the Town would immediately enjoy the following benefits:

    1. Wage expenses would be reduced by up to 3.85% annually through the elimination of vacation buyback.
    2. Payments to employees for unused vacation and sick days at retirement would be reduced by an amount roughly equal to 3/4 of each employee’s final salary, resulting in another 3.1% annual average saving.
    3. Productivity would increase 12% due to employees’ reduced time away from work for vacation and sick days. Assuming most employees eligible to retire would do so rather than accept reduced benefits, headcount would be expected to drop dramatically. However, this productivity enhancement could offset the loss of these higher-cost employees and dramatically reduce wage expense.
    4. Additional future productivity gains would result from the most-experienced employee’s remaining in the Town’s service longer rather than “retiring” to second careers as soon as they reach 25 years service.

    Ultimately, the Town must gradually replace the current defined benefit plan with a defined contribution plan. Even a very generous matching contribution plan of this type would cost the Town a great deal less than a defined benefit plan incorporating the changes described above.

  2. Lucy said

    “Better the occasional faults of a government that lives in a spirit of charity than the constant omission of a government frozen in the ice of its own indifference.”

    FDR

  3. Bluemaggy said

    These are very sane and pragmatic suggestions. I voted no on the referendum because I wanted to send the message to our elected officials enough is enough. It is time to change the way we do business in town. We have put band aids on bleeding arteries and they are saturated. Unless we drive to the root cause- the pension and benefit programs- this town will not be sustainable. You must call or write your council and BOE member today and demand that they start with these changes. Teacher contracts are in negotiations right now, make certain you voice is heard. Here is the link to email the BOE members. Time to start NOW!
    http://www.whps.org/whps/primary-offices/boe-page

  4. Lucy said

    On the reduction of town employee benefits:

    Surely, there are some adjustments that make sense.

    But consider this as food for thought:

    In most European countries, public and private sector benefits far outstrip those in the public and private sectors of the United States (West Hartford included). It seems that Europeans place a very high value on finding the best balance between work life and family life.

    Now, our first reactions to this point might be things like:

    > But everyone pays huge taxes in Europe, right??
    > But we’re in an economic crisis!
    > But no one can get rich there, I bet!
    > But we’re Americans – we’re different!
    > Those lazy Frenchies . . .

    There are good responses to each of these concerns. For example: Yes, taxes are oftener higher in Europe, but they sure do get what they pay for, like government-financed college educations for all and government-paid health care for life.

    One of my absolute most favorite things in life is life. I want to live a really long time. Here’s a partial list of countries in which people live longer than Americans: Sweden, Switzerland, France, Italy, Spain, Norway, Germany, and England.

    I figure that if a country offers more of that “being alive” benefit, then they must be doing something right.

    So if Europeans have much better employee benefits than people doing the same work in the US, AND they live longer, maybe we’re barking up the wrong tree when we take the axe to benefits here at home . . .

  5. Lucy said

    Post deleted per author’s request.

    FYI, author had a different IP than Lucy, and author states that the post was attributed to “Lucy” in error.

  6. whforums said

    @Bluemaggy:

    If I’m reading you right, you’re talking about town employee pensions and not teacher pensions. But since the two come up in such proximity in your post, I just want to make clear that the state pays out teacher pensions — not the town.

    @Lucy:

    I was with you until your third post.

  7. Lucy said

    Lucy of Post #4, who is (sadly) saddled with a passing knowledge of manners, hereby dissociates herself from the comments of the Lucy of Post #5. But since she is a fellow “Lucy,” I will love her nonetheless.

  8. C.K. Dexter said

    The discussion last night was illuminating — a great look at how our Town Council operates. My take of how things played out is as follows:

    Adler/Visconti: “We would like some additional insight into the budget to investigate other expense reduction opportunities.”
    Mayor Slifka: “Go see Mr. Van Winkle. He’ll give a list of potential areas to consider.”
    A/V: “Thank you. Actually, there’s stuff in here that looks promising. We’d like to consider X,Y and Z.”
    MS: “You fools! You’ve fallen for the oldest trick in Municipal politics! That list had nothing but stupid ideas. Plus, you’re bad at math.”
    A/V: “Uh, all the same, we’d like to discuss a few of these.”
    MS: “Have at it. The rest of us will vote against anything you propose. I still can’t believe how bad you are at math.”

    We could really use some more adult representation on the council.

  9. Rich said

    WHTaxpayer

    Congratulations on spelling out this issue. You are basically correct on vacation except that these are the vacation allowances for director level . For non-director level it is slightly less generous.

    I spent 2 years trying to get Jim Francis to provide an accuarte accounting of vacation buy-backs, and whether the banked vacation and sick day liability was reflected as a liability on the town’s books.

    As you might guess I got partial answers, delays, no answers, etc.etc. etc.

    Keep up the good work

    I previously posted much of this information to several blogs, but, have since given up due to the extreme frustration. If anyone could ever force RVW and the council to publish a simple summary of the costs of vacation buybacks and the banked vacation and sick day liability, people in this town would be shocked.

    Your poimt regarding pensions is right on. I have a pension coming which I could have opted to receive as early as age 50. However, I would have received only 25% of what I will get at age 65

    Jim Francis would have been a fool not to take the offer he got. The problem is that there is no reason for town staff to bring this matter up to the council. This is why the council is to blame and there needs to be an independent review.

    People in WH who think that Moody’s is looking at this type of issue or vacation buybacks and sick days when they give out a AAA ratiung are clueless. Also, no CPA is going to look at these issues when they perform the annual audit.

    Here’s one last point for you.

    Ask RVW to tell you how much is included in the budget for raises for director level positions. Unless they have changed past practices, they will tell you that no specific raises are budgeted , but that the budget as a whole is sufficient.

    In the past when directors reached the max for the position, they gave them bonuses instead, while telling people that their salaries hadn’t changed.

    Oh yeah, how many people in town do you think know that Barry Feldman used to receive a $7,200 car allowance which was converted to a salary increase 3 months before he left. Let me see… salary increase equals pension benefit, car allownace equals no pension benefit… which would you like

    Trust me there is an awful lot more

  10. WHTaxpayer said

    Rich,
    Thanks for your comments. Can you lay out the arrangements for other Town employees including the non-director level, firefighters and police? I will be happy to revise my estimated savings accordingly.

  11. in fighting said

    I know a 13 year employee, he has only earned 3 weeks vaction per year. A far cry from WHtaxpayer’s statement. he has to work 30 year to be eligible for 100% of the benifit. His vacation and sick can not be use toward his pension.

  12. Noah Webstar said

    What makes an intelligent, informed discussion of the budget and the potential cuts to it so difficult is that there is so little clear information and data available to us lay people. Even council members have a tough time getting true numbers and explanations as to what those numbers mean – see Adler and Visconti. It’s like our budget is locked in some crypt, completely written in code – and the only ones who can decipher it are the very ones who stand to lose the most if the information ever bvecame clear. Do you really think they will ever fully cooperate? Until such time as the entire budget process and document are reorganized, we can all expect more double-speak and “sky is falling” threats from town officials.

    One question really sticks out – does Mayor Slifka really understand the budget inside and out, or is he merely the puppet for the conga line of town managers and finance directors we sem to have lately?

  13. whforums said

    And so the speculation swirls. Greater transparency would be a benefit to all.

    As we begin to talk pensions, I’d argue that it’s unethical to rework the pension plans of current employees (who have been made a retirement promise by their employer). Any changes to the current pension system would be best applied to new employees (post hiring-freeze, I suppose) …

  14. Cynic said

    ” whforums Says:
    October 16, 2008 at 8:16 am
    And so the speculation swirls. Greater transparency would be a benefit to all.

    As we begin to talk pensions, I’d argue that it’s unethical to rework the pension plans of current employees (who have been made a retirement promise by their employer). Any changes to the current pension system would be best applied to new employees (post hiring-freeze, I suppose) … ”

    That is probably correct, but what happens to those pension agreements should the Town be forced into bankruptcy, as Vallejo, CA

  15. WHTaxpayer said

    Greater transparency would make everything a lot clearer. I was told by an attorney that any Town labor agreements should be available through a FOI request, but those can take an exceedingly long time and it is difficult to ascertain if one has requested all of the correct documents.

    Regarding pensions, it is not possible to wait 25 years to implement a change. In my experience, when a change is made a future deadline is established at which time the pension plan will be modified. On that date, the existing plan is frozen and employees are entitled to the benefits earned to that point. Those eligible to retire may do so under the old plan. Those not eligible to retire have their then-current pension benefits frozen and they will receive those benefits upon retirement. From that day forward, they will earn additional benefits under the new plan.

  16. turtle said

    Trust me.

    Always sends off alarms.

    It’s like our budget is locked in some crypt, completely written in code – and the only ones who can decipher it are the very ones who stand to lose the most if the information ever bvecame clear.

    Which items in the budget do you find mysterious?

    Greater transparency would make everything a lot clearer.

    Agreed. On the other hand, for example, Harry Captain used to take great pains to present facts on the internet, which were either ignored or feverishly denied, free of evidence, by the likes of Joe Visconti.

  17. WHTaxpayer said

    Turtle,
    I am merely trying to establish what the truth is about Town and BOE employee wages and benefits because these make up three-quarters of the budget and are the fastest growing elements. I hope to calculate potential savings to the taxpayer should these wages and benefits change and would be most appreciative to anyone who can provide accurate information.

  18. turtle said

    WHTaxpayer,

    I appreciate the information you’ve been providing. My skepticism was not directed at you.

  19. Rich said

    WH Taxpayer

    Here is a summary of WH Vacation Policy for Non-union Employees and Department Directors. This is directly from a 3 page summary provided by J. Francis

    Department Directors

    Up to 4 years service = 2 days per month or 24 days per year
    5-9 years service = 2.5 days per month or 30 days per year
    10 years service = 2.9167 days per month or 35 days per year

    A department Director may cash in up to 20 unused vacation days per fiscal year

    Maximum accrual of 50 days of unused vacation days to be paid out at retirement

    Non-Union Employees

    Up to 4 years service = 5/6 days per month or 10 days per year
    5-14 years service = 1.25 days per month or 15 days per year
    15-24 years service = 1.667 days per month or 20 days per year
    More than 25 years = 2.083 days per month or 25 days per year

    A non-union employee may cash in up to 5 unused vacation days per fiscal year

    Maximum accrual of 50 days of unused vacation days to be paid out at retirement

    Daily Rates

    Daily rates are calculated by dividing the annual salary by 260 days

  20. Rich said

    WH Taxpayer

    Forgot to mention that earlier this year Jim Francis proposed and the Council approved a COLA increase for all non-union employees that is equal to what the average union employees get.

    The cost of this is $50K per year.

    More important it also pertains to future years and does not require the town manager to get any approval.

    This is not a merit increase to quote Jim Francis.

  21. Rich said

    whforums Says:
    October 16, 2008 at 8:16 am

    As we begin to talk pensions, I’d argue that it’s unethical to rework the pension plans of current employees (who have been made a retirement promise by their employer). Any changes to the current pension system would be best applied to new employees (post hiring-freeze, I suppose

    It is not at all uncommon for benefit plans to change and for some type of “grandfathering”

    Most often what happens is that existing employees benefits are “capped” at the curent plan rate. They then continue to accrue benefits under the new plan.

    So for example your defined benefit pension gets capped as of 6/30/09. You then get a 401k type plan (it’s different for municipal emplyees) after that.

    This same type of change could be made to annual vacation allowances and buybacks.

    For example existing directors could keep their current annual vacation allowance but there could be a whole new schedule for their replacements when they get hired, perhaps with a maximum of 4 weeks per year

    Also the council could simply decide to eliminate the whole vacation buyback program or reduce it to no more than 5 or 10 days per year

    They could also eliminate or reduce the “banking” of vacation and sick days.

    The banking of days both vacation and sick days)and buyback rates needs to be reviewed as it has enormous costs that most people don’t see.

    RVW and the council should be forced to summarize the annual costs of these benefits and whether the vacation and sick day liability has been funded.

    It’s not that hard to do, unless of course you have a vested interest in not letting the public know about it

  22. WHTaxpayer said

    Rich,
    You seem very knowledgeable on this subject. Of the 401 Town employees paid out of the General Fund, do you know how many are covered by each contract? According to the budget documents, this is the breakdown:
    General Government 17 employees
    Financial Services 23 employees
    Employee Services 4 employees
    Fire 92 employees
    Police 150 employees
    Community Services 29 employees

  23. WHTaxpayer said

    Continuing my earlier post
    Public Works 44 employees
    Library 28 employees
    All other 13 employees

    I believe there are 12 at the director level. What are the contracts covering everyone else? Police, fire and everyone else? Are copies of the current agreements available to the public?

  24. Lucy said

    This is idea is just too great. We challenge the town to provide more detailed information about wages and benefits by “putting our money where our posts are.” Here’s how it would work:

    We all post this information to the blog:

    Name:
    Employer:
    Job Title:
    Years of service:
    Salary:
    Overtime (if any):
    Vacation days/policies:
    Sick days/policies:
    Holidays:
    Health Insurance:
    Pension/retirement:
    Any other benefits:

    Then the moderator gathers all the information together, organizes it, and emails it to the town council and town manager, with our challenge: “We’re not even public servants, but we are STILL willing to show you our wages and benefits. Now YOU do the same for us.” We can shame the town into giving us the information we need and deserve.

    I think if we can get at least 20 people to participate, that’s enough to “take it the town.” We use our OWN transparency to show that “Emperor West Hartford” really has no clothes.

    Mr. Moderator?

  25. Carl said

    I just came across this forum. With all the talk of where to make cuts in the budget, has anyone looked closely at the fire department? Do we need 94 employees? Correct me if I am wrong but it appears there are 41 fire fighters, 33 lieutenants, captains, battalion chiefs, assistant chiefs and chiefs. A third of our force is management? Do drivers (21 of them) fight fires? How many fires have to be fought in WH anyway? Why do they have to respond to every emt call?

    I assume one of the measures for deciding how many police officers we need is “calls for service”. Let’s use that to determine how many fire fighters we need.

  26. Lucy said

    Carl,

    Thanks for the thoughtful response to the points I raised in the previous post. Nothing like a good dialogue to get to the truth!

    To keep the discussion going, I’ll respond to your points, in order:

    1) It was Leeds United that won the FA Cup in 1972, though Manchester United certainly had a season to be proud of.

    2) No, you don’t have to be a member of The Club to order a club sandwich — but members DO get a 10% discount and an extra
    half-sour pickle.

    3) That was a good one: “They should be called HIRE-fighters, not FIRE-fighters.” You crack me up!

    4) I think that’s best discussed off-line.

    5) “Who needs public schools when kids can learn everything they need to know on their own, right here on the Internet!” Very insightful.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: