LORAIN — A two-tiered benefit and wage system is which new employees would earn less is one of the ideas city officials are exploring to cut costs.
Councilman Dan Given, D-at large, compared the plan to what Chrysler, Ford and General Motors have done with new United Auto Workers employees in the last several years.
“We cannot continue to pay this,” Given said Monday about accrued longevity and sick pay payments that retiring employees receive.
Given’s suggestion was part of a debate by Council members about how Lorain’s nearly destitute city government can function with a shrinking local tax base and cuts in federal and state aid.
“Some of the benefits governments, moving forward, cannot afford to do anymore,” said Mayor Chase Ritenauer, who is proposing a reorganization of the Community Development Department designed to save $130,000 annually.
Under Ritenauer’s plan, the accounting responsibilities of four retiring employees would be picked up by the Auditor’s Office, which would hire two deputy auditors who would earn less than the retiring employees. Council members will be asked to approve the plan Monday.
Ritenauer, who is asking voters to approve a 0.5 percentage point income tax increase in November that would raise an additional $5.3 million annually, said a “hybrid approach” of spending cuts and tax increases was needed for the city, which faces a projected $2 million deficit next year.
Ritenauer said Lorain’s bond rating — near junk status because the city has been under fiscal watch by the state since 2002 — will be affected by its ability to balance its budget and build cash reserves. A low bond rating means taxpayers pay more when the city borrows for infrastructure projects such as road improvements.
Ritenauer said officials from Moody’s Investors Service the credit rating agency that helps determine municipal bond rates, wants to know how Lorain plans to stay solvent, and they don’t care how it’s done.
Ritenauer said cost-cutting measures like the reorganization are needed, but he could be in for a fight with United Steel Workers Local 6621.
Because the Auditor’s Office is run by an elected official, the two new positions would be non-union.
Jack Critelli, Local 6621 president, said the plan violates the union’s collective bargaining agreements and Ohio law. He said he plans to file a grievance with the National Labor Relations Board if it is approved.
Critelli said he was not opposed to the change but wants to keep the positions unionized.
“It’s an erosion of my bargaining unit,” said Critelli, whose union represents all city workers other than firefighters and police. “We have no choice at this point (but) to start going into job protect mode.”
Ritenauer said he was open to compromise on the plan, but if changes aren’t made soon, “we’re all going to be in job protection mode.”
In other business
Regarding proposed changes on severance pay for non-union employees, Law Director Pat Riley said non-union employees should receive the same wages and benefits as union employees. Riley, whose Law Department employees are non-union, said he was speaking as a boss rather than as law director.
“This group is being treated unfairly,” said Riley adding that he wasn’t suggesting non-union employees be given a raise. City workers haven’t received raises since 2007.
Council members approved $5.9 million for new equipment and vehicles for the fire, streets and utilities departments. Some of Lorain’s equipment and vehicles date from the 1970s and 1980s.
Council members approved hiring Norwalk-based Mark Haynes Construction Inc., for the Lower Black River Habitat Restoration project, which is being paid for with $892,300 of federal money through the National Oceanic and Atmospheric Administration.
Contact Evan Goodenow at 329-7129 or email@example.com.