Monday, June 28, 2010

$100,000+ Annual Cost of Christmas Bonuses Burdens North Canton’s Budget

Prepared Comments Made to
June 28, 2010

“In January 2008, the City of North Canton requested a performance audit to assess its Administration and City management; safety services; street operations; and civic center. The City also requested the audit include the development of a five-year financial forecast. The administration and City Council requested the performance audit to help identify cost savings and opportunities to optimize efficiency.”

These words come from the first paragraph of the cover letter of the performance audit completed by Mary Taylor, Auditor of State for Ohio, dated January 6, 2009.

Recommendation 2.15 of the Performance Audit states: “The City should attempt to renegotiate provisions within its employee bargaining agreements that exceed peers or industry standards. These provisions are costly to the City, and successful renegotiations could result in significant savings.”

The audit finding further states that “The City’s collective bargaining agreement for Patrolmen, Fire and Paramedic, and Clerical and Service employees are comparable to peer cities in some areas, but more [emphasis added] generous than peers or recommended practices in other areas.”

The audit listed seven areas where North Canton’s agreements exceed those of peers or recommended practices. These areas were 1) Maximum number of sick-leave days accrued and sick-leave payout; 2) Vacation leave; 3) Sunday overtime; 4) Personal leave with pay; 5) Personal time with holiday; 6) Uniform allowance and stipends; and 7) Holiday counts as overtime.

Unfortunately, the performance audit failed to identify another contract benefit that by all probability exceeds peers or recommended practices. This is the annual practice of providing Christmas bonuses to city employees. ” I refer to it as a Christmas Bonus as it comes just before the Christmas holiday season.

These annual payments are titled “Longevity Pay” in labor contracts with seven unions representing city workers as well in a city ordinance for 17 city employees who are classified as exempt.

Language describing “LONGEVITY PAY” for contract and exempt city workers states: “All employees shall receive longevity pay at the pay rate of seventy dollars ($70.00) per year of full-time employment with the employer. Annual longevity payments shall be made during the first half of the month of December to all employees who have completed at least five (5) years of continuous service and who are employed by the employer on November 30th of the year in which the longevity payment is made.”

Five of the union contracts as well as the language for exempt employees further expand the number of city employees who are eligible for the payments with added language stating, “Any employee hired prior to August 1, 2003, shall begin to receive longevity after completion of three (3) years at the above rate.”

How much, one might ask, do these annual Christmas bonuses cost the citizens of North Canton?

According to figures supplied to me earlier this year by Finance Director Alex Zumbar, “Longevity Payments” to all city employees are clearly a significant cost for the city. The annual cost to the city to provide “Longevity Payments” to city employees each December just before Christmas for the past seven years is:

2003 -- $ 81,360; 2004 -- $ 99,190; 2005 -- $106,400; 2006 -- $106,120; 2007 -- $100,730; 2008 -- $99,400; and 2009 -- $102,340.

For as long as I have been involved in North Canton city government, I had no idea city employees received such benefits.

My question to any city official who can answer this is why have these costs not been openly discussed on the floor of council? Surely, an elected body can report to its citizens how tax dollars are spent and the purpose of the expenditures!

Taxpayers should not be kept in the dark about the business of government and deserve to know how their tax dollars are being spent and if those tax dollars are being spent prudently and wisely.

Painting a broad brush on anything and everything related to personnel and cloaking those discussions in executive sessions behind closed doors does not provide accountability to taxpayers. Everyone in government talks a good game about transparency in government but no one works to make it happen.

I say this because the number of Executive Sessions held by the North Canton City Council has multiplied exponentially in the last few years and I think this practice is being abused. When I was on council in the early part of this decade, I do not believe I attended more than a handful of executive sessions in a whole year. Over the last year or two, city council has an executive session every week.

As for the performance audit for which the taxpayers expended over $64,000, city leaders do not appear eager to follow through on areas where significant savings can result.

This December, the estimated cost to provide a Christmas Bonus, or should I say “Longevity Pay” to city
employees is a staggering $102,550.

For Mayor Held, I would like to ask why have you elected to cut manpower and services over the last five years rather than seek elimination of labor benefits that exceed peers or industry standards and further inflate labor costs?

In my entire forty-year working career all I ever saw handed out at Christmas was the choice of a ham or a turkey.

Unfortunately, in North Canton, City officials are turkeys for continuing such a practice. And taxpayers are left not with ham for Christmas but with a lump of coal and growing deficits.

Thank you,
Chuck Osborne
Resident, City of North Canton