The East Ridge City Council met Thursday in a Called Meeting and wrestled with the issue of employee compensation.
Much of the meeting was dominated by discussions of the City’s “Leave Buy Back” program for employees. The Council adopted Ordinance 918 in 2012 which essentially did away with the program for employees hired after June 2012.
The City’s “Leave Buy Back” policy allows an employee to be compensated for time built up above 320 hours. At the end of the year if an employee has more than 320 hours of time on the books, the city will write them a check on the anniversary of their hiring date.
Mayor Brent Lambert said that the issue of paying employees for time they have accrued during their career with the city came up a month ago when Andrew Hyatt resigned his position as City Manager to take a job in Florida.
“The intent at the time when we changed (adopting Ordinance 918) was never to deny a senior staff member their leave,” Mayor Lambert said. “It was not, ‘thanks for your service but you’re not getting anything from us.'”
Interim City Manager Mike Williams, who is also the city’s Fire Chief and a participant in the “leave buy back” program, told the Council that employees hired after June 2012 don’t qualify for the program. But, there is no cap on the amount of hours an employee can accrue. He said if an employee hired after 2012 never touches their leave time and they work for the city for 25 years, they could be eligible to retire and they would have built up five years of accumulated leave. The employee would continue to be officially on the books and the city would not be able to hire a replacement for the five years in which that employee would be drawing pay from the city for accumulated leave.
Interim City Manager Williams referred to a 1994 Municipal Technical Advisory Service study done for East Ridge which stated that the “leave buy back” program saved the City just under $100,000 a year. Mayor Lambert said a similar study was done when Tim Gobble was City Manager, perhaps in 2012.
“If some (employees) get leave buy back, all should,” Williams said.
Councilman Larry Sewell, who said he has never understood leave buy back, asked if MTAS officials, at some point in the past, cautioned East Ridge officials that the program could bankrupt the city.
Mayor Lambert said that he believed the MTAS caution was in regard to the city passing a resolution giving several employees insurance coverage for life _ beyond the age of 65 when an employee is eligible for Medicare.
City Attorney Hal North said the City’s policies regarding paying employees for unused vacation or leave is a potential liability that may not be funded or budgeted. He said the city could potentially have three different categories of employees, in terms of the leave buy back plan, calling it “a potential administrative nightmare.”
“I beg you to take a consistent approach so you won’t have three different classes of employees,” North said.
Vice Mayor Marc Gravitt suggested that staff gather information from surrounding similar-sized municipalities for comparison of employee compensation. “Unless I’m missing something, we are the only city that has this leave buy back.”
Responding to Councilman Denny Manning’s statement that “we need to treat everybody equal,” Gravitt said, “I agree. I think everybody up here wants to be fair. New hires need to be treated just like veteran employees.”
Councilman Jacky Cagle provided some background saying that former Mayor Fred Pruett had hired Chris Williams from TVA to reform the city’s compensation plan.
Cagle said the four employees hired after 2012 are “using their hours, not banking them.” He suggested that the Council go back to the old program where everyone gets leave buy back.
Councilman Manning made a motion to do just that, seconded for discussion by Councilman Sewell.
At this point, Attorney North attempted to clarify. He asked if what Manning wanted was to rescind Ordinance 918 and go back and “recodify” Ordinance 760 (the ordinance 918 replaced) without any changes?
“I encourage the Council to get this right and do it once,” North said.
Vice Mayor Gravitt asked City Treasurer Thad Jablonski how rescinding Ordinance 918 might impact the city’s bottom line. Jablonski said he would prepare the figures. He also said that the budget currently includes money earmarked for leave buy back.
North told the Council that if the City has numerous employees who reach retirement age at the same time the City could be in for a financial hit.
Lambert then suggested Manning withdraw his motion to allow the Council to receive financial information from Jablonski and comparisons be made of other municipalities’ policies. “We need to make sure that whatever we do we can live with for a good while,” he said.
Manning withdrew the motion.
The Council briefly discussed a draft of a new Employee Handbook that was submitted by former City Manager Hyatt. Cagle pointed out that in this iteration of the handbook, East Ridge employees fall under the category of “at will.” He said that it was his understanding that city employees were now categorized as “for cause,” essentially meaning that the City can’t terminate an employee without documented specific reasons. Cagle said this “for cause” status conflicts with City Ordinance 879.
Mayor Lambert suggested the discussions be resumed at the next regularly scheduled meeting in September, and that perhaps more workshops or called meetings may be in order to address “leave buy back” and other employee compensation issues.
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