LIMA — One Lima administrator says hiring employees who have retired saves the city money and permits the hiring of additional people.
One city elected official openly voices his objection to that line of thinking, favoring the advancement of employees who deserve a promotion. The city councilors along with two others also object to using temporary employment services in favor of hiring full-time employees.
Lima Finance Director Steve Cleaves said an analysis by city Auditor Randy Bartels shows the city saved about $450,000 by rehiring retired employees directly in their former position or indirectly through a temporary employment services.
“This process saves the city money and there is a benefit there for the city,” Cleaves said. “The savings are generally split depending on the terms of the employee being rehired with part of the savings attributed to reducing the costs to the city in health insurance and other benefits and the other part is the money to the rehire. The person being rehired typically is hired in at a lower salary.”
Cleaves said municipalities and schools have different retire-rehire policies, but typically the government entity receives a 10 percent savings or more in salary.
He also defended using temporary employment services where the city rehires the retired employee through a temporary agency and no longer has to pay the health insurance.
“If we run off all these temporary employees, then the work they are doing doesn’t get done, which you can’t really do because they are doing essential jobs and if you bring someone in to work those jobs through Civil Service then they are going to be full-time and if they are not full-time they are still going to get benefits,” Cleaves said. “The cost increase would be unacceptable. We would have to learn to do with less because we just couldn’t afford to replace those people with regular employees.”
Bartels confirmed if a city employee retires and is rehired in the same position then the savings is only through salary, about 5 percent, and they still must pay health insurance. He said the city only rehired four people as city employees who had retired.
He said the city realizes additional savings when it rehires former employees through the temporary employment agency, even if they pay more on a per-hour basis, because of the additional reduction in health care benefits, which can cost between $10,000 and $20,000 per year. The average health care cost in Lima for 2013 was $14,389.
Lima 3rd Ward Councilor Jesse Lowe II said rehiring a recently retired person for the same position can dampen people’s ambition because they can no longer advance in the workplace.
“I want to see individuals be able to climb the ladder of success and I don’t think it is fair that if you have done the job and retired that you would take that slot from someone else,” Lowe said. “It leaves no room for advancement and we want individuals to be put into that position. At the same time, we need to be training the qualified people to be ready for the responsibilities of that position.”
Most city employees give ample notice before they retire so adequate training can be arranged, Lowe said.
Lowe, who chairs City Council’s Human Resources Committee, also objects to the rehires receiving merit pay raises, realizing it is still legal but calling the move “morally wrong.”
The key to righting city policy rests with support.
“If the union does not stand up for its people then why is there a union,” Lowe said. “They need to come to the meetings, they need to speak up. The union reps need to attend the meetings and have their voices heard. If I am standing there and fighting for what is right and I turn around and there is nothing but a shadow, it is not right because it is more difficult for me to get things changed.”
Lowe finds his stance on hiring temporary employees supported by 1st Ward Councilor Todd Gordon and 6th Ward Councilor Derry Glenn, who recently voted against two ordinances to use temporary employment services.
In regard to using temporary employment agencies, Lowe would rather reduce the pay scale and the cost of benefits to be equal to or about the same as they are paying the agency. He favors having the Civil Service Commission, which is a longer process, identify the best and most qualified candidates than having someone “hand pick them.”
“We have heard for the past year how great our budget has been, but they constantly want to use temp services because we have the money,” Lowe said. “I am tired of them lying to the citizens of Lima. If they want to continue to save money, my idea is you hire an individual into the city, they know they have a guaranteed job and don’t have to worry about 90 or 120 days and I believe they will be more willing to work for you and will work harder because they have an assurance they have a job the next day.”