Special Board of Aldermen Public Hearing Page 4
the Fire Department. He is now making $140,000 a year. His highest pay when he left the city was
$124,000. Former Chief of Police Seusing is now getting $139,000 a year. His highest pay when he
left the city compensation was $131,000. Both of these individuals are making more retirement than
the highest paid in the highest year just before they retire. We have sitting alderman he retired and
his money was $93,000 when he retired. That was his highest pay. He is now earning $121,000 a
year. You said thank you. | don’t thank him. We have to pay for it. | have to pay for that. Do you
know what his severance pay was? You can accumulate sick leave. You can accumulate vacation
time. Fire Chief Soucy left with $84,000 cash. That’s in addition to his retirement. Chief of Police
Seusing left with $81,000 cash and said thank you. He left with $65,000 in cash. These are
unacceptable conditions. These are union contracts negotiated and approved by you the Mayor and
approved by the aldermen. They are unacceptable. You say well we have nothing to do with it. You
have a lot to do with it.
Now | want to talk about page 21 the benefits which was also mentioned. That’s my first question
because the question wasn’t really answered. The benefits went up from $23,662,000 — by the way
that number does not match the 2007 budget book number. It’s off by $6,700. You may want to
check that. | don’t know why that number is in 2007 into 08. The proposed budget book don’t match
the numbers in the adopted budget book that you may want to look at line item 52300. But now that
line item reads $27,301,000. Almost a $4 million increase. The first question is why did the benefits
in this city go up by $4 million?
Mayor Donchess
Mr. Teeboom the city is self-insured. So we do not pay any insurance company to provide benefits.
The city pays the medical costs for all city employees. Now the city does pay two different insurance
carriers in order to administer the benefits but that is a very small number — like $500,000 or
something compared to the total amount of benefits which we’re budgeting here $27 million. The
estimated amount of health costs which we will pay out based upon the experience we’ve had over
the last few years is based upon the opinion of the expert that we have is that we will pay out in fiscal
18 $27 million for health benefits for the employees that we have. So it is important | think that we
give as close to an accurate number as we possibly can and that is the number that we’ve come up.
Fred Teeboom
That was not the question.
Mayor Donchess
You said why are they up | thought.
Fred Teeboom
Yeah | can read $27 million just like you can which you just did. The question is why did it go up $4
million? What's the reason for that?
Mayor Donchess
One think | think for the last couple of years, the city was optimistic. Now these are always just
projections because it’s not like an insurance company sends you a bill with a specific number and
agrees to cover everything. These are projections or estimates. The city was optimistic over the last
couple of years and as a result actually paid out more in health benefits than was budgeted. It had to
draw on the healthcare reserves. In order to avoid doing that again, the most conservative approach
is to not be so optimistic and budget what we expect we will have to pay out.
