Councilwoman Kim Learnard seeks answers; pension costs are disputed
Peachtree City Councilwoman Kim Learnard’s request to have a council discussion on the recently-adopted Condrey and Associates pay and classification study is finally on the council’s Nov. 20 agenda.
The council on a 3-2 vote adopted the provisions of the recent classification and compensation study at a cost of more than $900,000 on Oct. 2. Of that amount, more than $640,000 was not included in the budget adopted the previous month.
The vote came with Mayor Vanessa Fleisch and councilmen Terry Ernst and Mike King in favor of the adoption and council members Kim Learnard and Eric Imker strongly opposed.
Contacted Monday, City Manager Jim Pennington said there would be no prepared document to be used at the council meeting, adding that he would answer council’s questions. (At right above, Peachtree City Manager James Pennington at a Nov. 6, 2014 council meeting. Photo/Ben Nelms.)
The answers pertaining to Learnard’s original Oct. 5 request were not included on the Nov. 6 agenda, though Pennington did respond to the request with an Oct. 27 letter.
Learnard in her information request took the position that she would like to discuss “some of the information that has not yet been presented. Since the taxpayers will be footing the bill this must be made public in the form of a ‘discussion’ item.”
One of the questions posed by Learnard asked for the total cost of the pay increase and where the money to fund it would come from.
Pennington in his Oct. 27 response said the total cost is the $910,425 previously reported. Of that amount, $270,071 came from the previously-approved inverse pay plan which was not implemented on Oct. 1 due to the Condrey study while the remaining $640,354 was projected to come from unappropriated reserves.
Following up on future costs, Learnard asked about the long-term impact on the retirement fund in the next several years.
At left, Peachtree City Councilwoman Kim Learnard at the Nov. 6, 2014 council meeting. Photo/Ben Nelms.
Pennington said prudent funding for a pension plan assumes anticipated raises as one of the assumptions used in the actuarial computation of annual contributions.
“Our actuary was provided the figures we used to implement the new pay plan and was asked to run some calculations to determine the impact. He concluded that by 2015 the relative cost of the pension plan would be $20,714 less than what was expected/planned for 2015 and that by 2016 the relative cost would be $504 less than what was expected/planned for 2016,” said Pennington. “In short, the pay increases that were approved by the council were no more (and slightly less) than those already anticipated by the defined benefit pension plan through the use of prudent assumptions used for funding calculations.”
Looking further out in time, Learnard asked for a five-year budget projection containing the new pay rates and all related benefit costs. She asked that Pennington provide an example of how the new plan could be implemented without a tax increase or using reserves.
“Could it be done (without a tax increase or using reserves), yes, but not without short- and long-term consequences,” Pennington said.
Pennington said looking at the city’s organizational structure and the ability to meet citizens needs and concerns, he would be hard-pressed to recommend any cuts other than maintaining current personnel controls in terms of filling vacant staff positions.
Pennington said the issue of no tax increases in the future would have to be premised on a significant increase in property values and local option sales tax revenues.
On another issue, the Condrey and Associates study indicated that it did not include benefit costs, Learnard said, referencing remarks by Human Resources Director Ellece Brown during the Condrey study presentation that the figures do include benefit costs. Learnard asked which is correct.
Pennington in his Oct. 27 response said Brown stated that the cost figures in the study did not include benefit costs and the cost projections were only accurate at the point in time when human resources provided consultants with the then-current list of employees, job titles and salaries.
“Of course, both titles and salaries have now changed in accordance with the Condrey recommendations. Also, the Condrey spreadsheet where the total implementation costs were derived included some duplicate positions which were removed. The duplicate positions were included in the Condrey spreadsheet because we had filled some of these with new hires, but Condrey had no way of knowing that,” Pennington said. “In other words, Human Resources ‘scrubbed’ Condrey’s spreadsheet and Finance added benefits costs for the Oct. 2 meeting. As you may recall, (Brown) explained that our memo to council at that meeting was correct. (Finance Director) Paul Salvatore also explained to council in the meeting how the correct total implementation costs were derived.”
Imker in a Nov. 13 email to Fayette County Administrator Steve Rapson advised that commissioners use caution when considering a salary study for county employees.
“Peachtree City screwed up big time in allowing the contractor who did their study to use clear higher cost-of-living areas in determining pay under the guise that’s where the PTC labor market came from,” Imker said. “Before executing any pay raise that may be forthcoming you must understand that the lowest paid positions are always the hardest to fill. Don’t be mislead by your staff when information is brought to you indicating the inability to fill a position for ‘x’ amount of time. It will be self-serving data.”
At left, PTC Councilman Eric Imker at the Nov. 6 council meeting. Photo/Ben Nelms.
Fayette County commissioners at the Nov. 13 voted 3-2 not to undertake the salary study. Commissioners Steve Brown, Randy Ognio and Allen McCarty were opposed to conducting the study while commissioners Chuck Oddo and David Barlow supported it.
