Sparks are expected to fly when Sarnia councillors begin tapping at the divisive issue of staff benefits next month.
Faced with a dismal budget forecast, senior administrators have recommending cutting health benefits of employees who retire early after Aug. 1 of 2016.
Early retirees and their spouses are currently eligible to have 100% of their medical, dental and travel insurance expenses covered to age 65, costing the city about $7,000 a year per eligible retiree.
The proposed cap, which wouldn’t touch police or fire personnel, triggered a spirited debate at city hall last week before the issue was tabled to Dec. 7 to give employees and the public more time to comment.
Councillors were deeply divided.
“There are people who have been living on fixed incomes for years and years and who don’t have the resources to keep paying increased taxes,” said Coun. Bev MacDougall.
“If we don’t find the ways and means to cut our costs in this corporation, we’ll be left with cutting jobs.”
Sarnia heads into next week’s budget talks with a $1.7 million operating deficit and a proposed property tax increase of 8%.
“Last year I sat and watched this council say clearly and loudly that they had to do something about the benefits because, over time, things were out of control,” said Coun. Cindy Scholten.
“There’s so much in this budget that we don’t have control over. Being on council is certainly no popularity contest and we’ve got to make a really tough decision.”
Some 39 of 250 unionized employees are eligible for early retirement next year and could be impacted. The options include employee co-payments, scrapping the coverage altogether or creating a capped health care spending account.
Coun. Andy Bruziewicz said the move is unfair because it excludes police and fire staff, who are protected by their collective agreements.
“Police and fire. They are the best compensated in terms of the monies that go through the budget,” he said. “It should be applied consistently and fairly across the whole spectrum.”
Sarnia has an unfunded liability associated with the benefit of nearly $17 million, according to a recent financial statement.
Few people in the private sector still get benefits covering 100% of health and dental costs, said Coun. Mike Kelch, who suggested the postponement.
“After this difficult decision gets made I want to be able to look back and say that everyone had enough time to make their case,” he said.
Mayor Mike Bradley was upset the “top-down” proposal came before council without prior consultation with union groups or the public.
“What is going to happen from here on in is you will see less co-operation, more grievances, more arbitrations,” he said.
“By passing this motion … you (would) effectively disenfranchise the employees from being part of the solution to this budget crisis.”