Passions ran high Monday during the Athens City Council meeting as Council members and City of Athens employees debated a potential change to the retirement plan.

The Council has gone over multiple issues for months, addressing things like the public safety pay plan and a cost-of-living adjustment for city employees. The focus shifted Monday to the retirement plan, as it was the final meeting and last chance for the Council to vote on a decision before the Retirement System of Alabama’s deadline.

RSA allowed municipalities to take Tier II employees and move them to Tier I, which would mean better benefits to the workers but a higher cost for their employers. A move would necessitate some kind of adjustment to fund the extra $300,000 annual cost that the City of Athens would incur, and one potential method is raising employee contributions to their retirement by about 2%.

While consensus among Tier II employees was to make the move, employees already at Tier I had little incentive to have to pay more money into their retirement for what was perceived as no added benefit.

“We know you guys are taking steps to fix the salary,” Athens Fire & Rescue firefighter Jeff Jones said. “This 2% is a big deal for anybody. There are 400-plus (municipalities) in the state that have taken this on. I’m not going to pretend that I know more about the finances than you guys, because I don’t, but what I do know is there are probably 10 guys that are going to leave. These are guys the city has invested money in already, and they are going to go to a city that has invested nothing in them.”

Athens firefighter Lee Marker said those among his fellow employees who would leave if the retirement plan was not changed would not have to go far to find work. He said Decatur, Madison, Muscle Shoals and Huntsville had already voted to convert employees back to Tier I and absorbed the cost.

Fire Chief Albert Hogan said Decatur’s fire department was offering Athens firefighters lateral transfers to their department. He said if they had five years of experience, Decatur would start them out at that level on its pay scale.

“I’ve heard a lot said about cost up front if we make this conversion,” Hogan said. “But we have to worry about the cost on the back end if we don’t. With everyone around us going to Tier 1, retaining employees is going to be difficult.”

Hogan said the cost to train a new city firefighter is one year and a little more than $70,000.

“If I lose somebody today, it will be one year before I can get somebody to take his place,” he said. “They are out for a year, they get some experience and we get them about where they need to be, and they go somewhere else. Then, we are starting over.”

Jones and Hogan told the Council that retaining four or five employees a year across city departments would in itself pay for the conversion to Tier I just by not having to train new recruits. Hogan said he went through a similar predicament during his time working for a previous employer.

Debate heats up

Councilman Harold Wales disagreed with Hogan, saying the numbers did not support that the city was losing employees to the retirement issue.

“The records do not support you are losing people,” Wales said. “The City of Athens is losing very few people, and losing them for money, that’s what we need to address.”

Wales used his own experience as an example of what could happen to city employees if an issue in funding came up down the road. He said his employer cut his retirement plan, cut his insurance and cut “every dime” of his life insurance, something he said he didn’t want future City of Athens retirees to face themselves.

“This (issue) has been in front of us about two years,” Wales said. “Now it’s the last twilight, and here we are. We should have been having this discussion about insurance, but we never looked at it. It’s our fault for not doing that.”

Wales said he wore out his phone and computer looking, talking with other cities and financial heads to get more information on the situation, but he said he found “no clear-cut example to go by.”

“Tier I is a great thing for the employee — it will put money in your pocket in the long run,” Wales said. “But, here is the catch you cannot escape: If you hire in out of high school or (as a) young college guy, you can hit the street at about 43 or 45. You can stay on this Athens city-paid insurance until Medicare kicks in.”

Wales said the city will not be able to withstand paying that for long. He also said he believe firefighters had the best job in the city and were well compensated for their work.

“If you get a letter (lowering your benefits) 15 years from now — and hopefully it will never happen — just remember this conversation,” he said.

Wales asked Hogan if his employees would support paying 2% more into their retirement plans to pay for the conversion, and Hogan said he believed 100% of his department would be willing to do that.

While the potential change in the retirement plan was a key issue for city firefighters, most city departments would be affected.

Athens Gas Department Manager Steve Carter spoke after Hogan, saying he had polled his workers, and 100% said they supported a Tier I conversion even if it meant paying 2% more to their retirements.

Marker would eventually ask how many people from his department on Tier II in attendance would leave if the conversion wasn’t passed. Several raised their hands, indicating they would find jobs elsewhere.

Financial standpoint

City Treasurer Annette Threet read a statement saying she was not in favor of the move from a financial standpoint, including what insurance costs would be for retired city employees if the measure passed.

Mayor Ronnie Marks said he felt issues were being mixed, saying retaining employees with a Tier I plan and retiree insurance could be handled separately.

“We talk every budget year about issues regarding insurance, and yet we have never brought anything to you as a Council member as a plan,” he said “I agree with the charge that we bring something to you to look at insurance and other issues.”

Marks said 411 other entities in the retirement system had already voted to convert to Tier I, and “I know we are financially stronger than probably 75% of those folks.”

“Those 411 other entities in the retirement system can’t be that stupid and us that smart,” Marks said. “We have to find a way to try to work through this. Let’s separate these issues. Hopefully, we can deal with this, and we can deal with the other issues as they come up.”

Council member Frank Travis agreed with Marks, saying he had the utmost respect for the city’s financial department.

“I believe that whatever the decision is, if we go to Tier I, I think we are intelligent enough to do the work to make sure the contributions are made so this program can be sustained for a long period of time,” Travis said. “It will be a challenge, but I think it’s a challenge we can overcome with work and the understanding that everybody will have to put some skin in the game. I think if we work together, that won’t be too painful for us.”

Debate over the retirement plan eventually had to be stopped by Council President Wayne Harper so the meeting could continue.

Time for a vote

When it came to the Tier I/Tier II issue, each member of the Council had thoughts to share on the subject.

Chris Seibert said it was an emotional issue, and there were no “heroes or villains” sitting in front of the audience.

“From our position, we got objective facts,” Seibert said. “We also got a lot of subjective stuff that we had to try and filter and muddle through in order to make a decision and gauge the impact on whether or not we did this. I would just ask that you respect people’s decision on this, because we all have to come to our own conclusion on what we think. We appreciate all the input from all of you guys and the department heads from trying to gauge the impact — just respect that it is a very difficult decision.”

Dana Henry thanked the department heads who polled their employees for their thoughts on the matter, saying that information was helpful. Henry said she even enjoyed “hearing from some of the firemen’s mommas,” though she said it was “a little overkill.”

“This is a really rough decision, and I am usually a person who makes decisions quickly and pretty much sticks to them,” she said. “The idea I have been back and forth so much is disturbing to me. Nothing is more important to people than their livelihoods. The vilification of people is disturbing, as well as the idea that we are trying to keep something from someone.”

She said some people had taken the debate too far, but whatever the decision was, the City would still have to figure out “how we are going to educate all these kids who are coming, how we are going to build that new fire department that is desperately needed on the north side of town and how we are going to maintain our services and expand them.”

Harper asked all city employees in the room to raise their hands if they were in favor of the move to Tier I, then asked who would be opposed. The number in favor of the switch far exceeded those against.

“I think I have lost more sleep and worried about this particular decision more than anything I have done in the past on the Council,” Harper said. “That’s because I know so many of you folks personally. I can see both sides of the story. I think this will be great if we do this, and I also think, like Mr. Travis said, we are going to have to look at other issues.”

Harper said it was unfair to ask employees already at Tier I to chip in extra money, and he also thanked all the city’s workers for the jobs they do.

“I hope we can all be friends after tonight,” he said.

With that, Harper called for the vote. Seibert and Travis had given a first and second to the motion, meaning they had already signaled their support in favor of a switch.

Henry voted “yes,” followed by a “no” vote from Wales.

When asked for his vote, Harper paused, even though the motion would already carry.

“I can see both sides of the story,” he said. “I’m going to vote yes and hope I haven’t made a mistake.”

Aftermath

Once the Tier I conversion was officially passed, many employees in the room, especially among the firefighters, broke out in applause of the decision, with Marker seen pumping his fist in agreement.

“It will be interesting to see if they still applaud us come budget time,” Harper said once the noise had subsided. “I do appreciate everyone coming out. It’s good that you are interested in the city and our finances. I hope that we can work this out to where it will be to everyone’s advantage, because when the city has problems, our employees have problems.”

“We are extremely excited about their decision,” Marker said. “I think it’s important for the whole city, not just the firefighters.”

Hogan said he does believe he would have lost experienced firefighters from his department had the measure not passed.

“This will go a long way in keeping our core group of firefighters and enable us to recruit against other fire departments that have this,” he said. “They (firefighters) were the ones who wanted me to come up and say they are willing to put in whatever they have to to get back to Tier I. They realize the importance of it for retention.”

Carter said he felt the decision was the best for the city.

“It was a tough decision to make, but I think it was a good decision,” he said. “I spend probably $70,000 to $80,000 on my gas employees before they are qualified. If someone else gets them, it’s like we have become a training ground, and I think this will stop some of that.”

The switch of Tier II employees to Tier I will occur at the beginning of the next fiscal year.