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Ballwin considers possible early retirement changes

For the most part, Denise Keller’s staff report was highly predictable considering how the year 2020 has unfolded or unraveled depending on your point of view.  But there was somewhat of a hot button issue in the Ballwin finance officer’s presentation at the Sept. 14 Board of Aldermen meeting.

The title of the presentation was “Employee Compensation – Budget Assumptions.”

The only real bone of contention of the two-page report came in the very last sentence of the final subtopic, titled Employee Retirement. That sentence reads: “To keep this program affordable, we recommend increasing the age requirement from 60 years to 62 years, effective January 1, 2021.” It refers to the early retirement of employees with 15 years of service to Ballwin.

Keller said it varies from person-to-person and year-to-year as to whether or not the city actually saves money with its early retirement program. She said that six staff members retired in 2020 and exactly half of those saved the city money.

“For 2021, thus far, we’ve have three who have announced their retirement,” Keller said. “Two will save us money and another will add to the expense. We have 14 more employees who will meet the (current) criteria next year who may or may not participate.”

Regarding expenses, Keller noted the costs of health, dental and life insurance. She also mentioned that some employees around this age still do their job well while others may be struggling through theirs.

“If you don’t have any objections to that, we’ll bring a resolution to you for your approval, modifying the age requirement when the budget is presented to you for your approval,” Keller said to the board.

This is when a good deal of opposition appeared. Alderman Kevin Roach (Ward 2) was quick to contend that this would not allow much time for those in that age range to make changes to decisions they may have already considered or actually made.

Noting that he recognized the circumstances of the action, alderman Frank Fleming (Ward 3) said, “We want it to be good for the employees, but it also has to be good for the city.  If we have to tweak it, we’ll tweak it.”

Keller said she’s flexible in making the start of the propsed requirement change later than Jan. 1, 2021, even if it would start a full year from now.  Mayor Tim Pogue nodded in agreement with that assessment.

“I’d like to get some feedback from the employees that this may affect before we move on with this,” Pogue said.

Earlier in the evening, Keller mentioned that the city’s employee budget will also increase in several other areas. Per her report, “A step increase of 3% is required under the police officer’s collective bargaining agreement, unless the city’s sales tax revenue would fall below 90% of the budgeted amount in calendar year 2019.” She noted that sales taxes for the first seven months of 2020 are down just 6.5% from the previous year. So, that 3% pay increase is guaranteed.

“Revenues are some $1.4 million down from the previous year … primarily recreation revenues,” Keller said. “But we didn’t foresee anything like this (COVID-19) during negotiations and the collective bargaining agreement.”

Extra monies are also being paid out due to the federal minimum wage increase. Affecting mostly the parks and recreation department, the five-year federal plan increased the minimum wage to $8.60 in 2019, $9.45 in 2020 and $10.30 in 2021 with stepped increases also occurring in 2022 and 2023.

City Administrator Eric Sterman responded to a comment that Ballwin has had a hiring freeze due to COVID-19.

“It’s not out and out that we’re not hiring anybody,” Sterman said. “There are some positions that are being left vacant because, at least at this point, until the world goes back to normal and we know where our finances are going to be, we can get by without.  There are other positions that, for various reasons, we need to replace immediately, and we’re doing so. 

“We’re just kind of taking it case by case for now. In the meantime, it is allowing us to capture some savings to offset, as Denise mentioned, pretty big revenue decline this year.”

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