Rumors that Osage Beach officials might reduce employee benefits and cut a dispatcher position in the communications department resulted in a standing-room-only special board of aldermen meeting Tuesday night.

Rumors that Osage Beach officials might reduce employee benefits and cut a dispatcher position in the communications department resulted in a standing-room-only special board of aldermen meeting Tuesday night.

The meeting was part of a regular quarterly budget update, but police and fire department personnel, city employees and a handful of families crowded into a conference room in the lower level of the city hall to hear what the board and city staff planned.

City Administrator Nancy Viselli said the meeting was being held to get a general consensus from aldermen on several budget-related issues, but assured those in attendance that “we’re not cutting a dispatcher.” She said there were rumors, but “it’s not being considered.”

According to a review of the Nov. 18, 2013, Budget Workshop meeting during a discussion between staff and Board members about employee wages and benefits, Alderman Kevin Rucker asked staff to research this issue and report back at the first quarter budget review with details about the percent of the budget spent on wages and benefits, as well as ideas on benefits which could be cut if at some time in the future sales tax revenues required budget cuts. The other aldermen concurred that they wanted this information brought to them in April. Alderman Kahrs was not present at this budget workshop.

Staff then compiled the information using a five-year average of wages and other benefits which our employees received and looked at areas where cuts might be made. The Human Resources Generalist’s memorandum stated “Recommendations for future benefit modifications, if needed.” Staff did as instructed by the board, according to Viselli.

Her comments were a prelude to a 90-minute meeting that included a review of employee benefits and other budget issues. City staff offered several recommendations that could impact employees relative to health insurance, life insurance, a retirement plan, dental and vision insurance and disability pay.

Board President Ron Schmitt was quick to react, saying he feels other areas should be cut first.

“It’s not a good policy to put cuts on the backs of our employees,” he said. “There are other areas that can be cut instead of employee benefits. Let’s not look at personnel, let’s look at projects.”

An analysis by city staff shows that personnel costs average 26 percent of city expenses. Assistant City Administrator Jeana Woods said that has changed little since 2009.

Among the recommendations is a change in how overtime is approved and paid. Currently, overtime is paid for hours worked over 40 per week, accept police officers who are paid overtime based on 42 hours per week. work 36 hours one week and 48 hours the next, so the overtime kicks in once they exceed 84 hours in a two-week period.

A Flex Time Policy allows supervisors to alter schedules to lower overtime. managers would use “flex time” whenever feasible rather than overtime. If employees are brought in early, or stay late, they would be allowed to leave early another day to avoid overtime.

Aldermen also reacted to proposed changes in holiday pay. The city is recommending a reduction in hours that would be paid out for holiday pay in 2015, and in 2016 those employees would take their holiday pay as a paid day off during the next pay period.

Currently, holiday hours (eight for all employees except 12 for police officers) are placed in a leave bank which can be used throughout the year as a paid day off such as vacation, personal time and comp time. Any hours that employees do not use in their holiday bank leave are paid in a separate payroll in December, costing the city about $65,000 a year.

Alderman Steve Kahrs took exception with that recommendation.

“I don’t remember any boards asking for city staff to look at this,” he said. “Our current policy is a policy to retain officers. If this is something we’re looking at to make cuts, it’s a pretty poor step. There are other things we can tackle rather than going after these guys, who rely on this as an incentive to stay here.”

Alderman Kevin Rucker said he recalls asking city staff to bring back some ideas for reducing expenses, but went on record as wanting to leave holiday pay as it is.

“There should be something extra for people who work holidays,” he said.

To help reduce costs, staff recommendations include:

•Raise the health insurance deductible for employees 65 and older who do not opt out of Medicare and who continue with the city’s insurance.

•Currently, the city contributes 100 percent of life insurance for employees, their spouses and dependents. could pay a portion of the cost for spouses and dependents. 

•For new hires only, decrease the amount the city pays to employee 401 plans and increase the amount matched by employees. Change the effective date to start after six months (upon successful completion of their probation), and change the vesting schedule. Current employees would not be affected.

•Health insurance premiums will increase 3 percent. The recommendation is that the employee pay 2 percent and the city 1 percent. The city currently pays 100 percent of the employee only.

“There are a lot of employees who want to know they have good benefits and that those benefits will be stable,” Kahrs said.

The answer is to increase sales tax revenue, he said.

“If not, then we’re going to run into problems. It’s just like running a business. The city has to be run that way. Holiday pay is a drop in the bucket compared to sales tax.”

The board is expected to formally address the benefits issues at a future regular meeting.