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Home My WebLink About1981-12-17 Council Minutes - Special MeetingAGENDA SPECIAL MEETING, DEC. 17, 19II1, 7:00 Pt4 A. ROLL CALL B- Ordinance 737-81 - Repealing & Re-enacting KMC to Provide for City to Match Employees' Contributions for Benefits in 'Lieu of the Federal Social Security System I. Amendment #1 2- Amendment #2 C. Resolution 81-128 - Rescinding Notice of Withdrawal from the Federal Social Security System D. Resolution 81-129 - Electing to Become a Participating Employer in the Employee Benefits Program Under Alaska Statutes E. Resolution 81-130 - Request Termination Date of Participation in Social Security by Eutended for One Year F. Resolution 81-131 - Provide for Work Sessions to Study Possible Alternative Benefit Plans on Withdrawal from Social Security G. Ordinance 743-81 - Repealing KMC to Make City Ordinances Consistent with Withdrawal of City From Social Security System H. Related Issues ADJOURNMENT i w R � . - 1 �' KENAI CITY COUNCIL - SPECIAL MEETING - MINUTES DECEMBER 17, 1981 - 7:00 PM KENAI CITY ADMINISTRATION BUILDING MAYOR VINCENT O'REILLY PRESIDING A. ROLL CALL Present: John Wise, Ray Measles, Betty Glick, Tom Wagoner, Ron Malston, Vincent O'Reilly Absents Dick Mueller (excused) AGENDA APPROVAL Agenda was approved as submitted. B. Ordinance 737-81 - Repealing & Re-enacting KMC to Provide for City to Match Employees' Contributions for Benefits in Lieu of the Federal Social Security System 1. Amendment #1 2. Amendment #2 MOTION: Councilman Wise moved for adoption of the ordinance. Motion died for lack of a second. C. Resolution 81-128 - Rescinding Notice of Withdrawal from the Federal Social Security System MOTION: Councilman Wise moved for adoption of the resolution. Motion failed for lack of a second. D. Resolution 81-129 - Electing to Become a Participating Employer in the Employee Benefits Program Under Alaska Statutes MOTION: Councilman Wise moved for adoption of the resolution. Motion failed for lack of a second. E. Resolution 81-130 - Request Termination Date of Participation in Social Security be Extended for One Year MOTIONS Councilman Fwasles moved, seconded by Councilman Wagoner, to adopt the resolution. PUBLIC COMMENTs 1. Willian► Furlong, Fire Dept. If we wait one year to get out of Social Security, we would be paying an- other year for nothing. We will be getting out in 1983 anyhow. Mayor O'Reilly asked, if this resolution is approved while Social Security is re-examined by Congress, does he think the resolution follows the results of the poll? Mr. Furlong replied, not one bit. If Congress says everyone in the Country has to get back in, okay. But let us be out for at least one year. He added he voted to have work sessions to discuss a feasible plan. 2. Lillian Hakkinen, Administration. As long as we have gone this far, she would just as soon we wait another year to help the older people. If they don't, let them keep their 6% and the City keep their share. J 4 KENAI CITY COUNCIL DEC. 17, 1981 Page 2 Lorrain Orsatti, Dispatcher. Are the employees who voted not to got out of Social Security losing any- thing? Councilman Wagoner left at this time. Nxs. Hakkinen replied the Social Security representative j had said they would lose something. II 3. Lorraine Orsatti, Dispatcher. The Kenai Penin- sula Borough has voted to get out because that is j what the employees wanted. She didn't understand why the Council does not want to do what most of the employees want. Mayor O'Reilly explained they are trying to balance: i a. The minority vote, in fairness to all employees b. The effects on the City Ms. Orsatti said she didn't understand "b." Mayor ' O'Reilly explained, there apparently is a precedent ' where groups have pulled out, the employer's share f went to the employees. The necessity to pay taxes is no longer there, therefore the City taxpayers = should not have to pay the same amount. 4. Charles Bailey, Police Dept. we have been discussing this for 2 years, he doesn't believe it - will chance. When he went in to vote, he thought it was just staying in or not. He did not know about the alternatives. When the speakers came to discuss the issue, there were none that said Social Security was not good. Social Security will probably not be • around when we retire. On the 2nd part of the vote, he wished to discuss the options later. Regarding the difficulty of getting qualified persons if we do not have Social Security, he did not see any difficulty 6' in recruiting whether we have Social Security or not. i The taxpayers will not lose no matter which program f we go on. 5. Vesta Leigh, Dispatcher. Delaying will further antagonize the various factions. 6. Ben Conaway, Fire Dept. He voted for the City to keep their share, he would like to have both, but he didn't want to jeopardize his share. The employees that work for Social Security do not pay Social Security. He cannot justify paying for a program where the admin- istration does not pay for the retirement program. We are not getting out to keep the money, but to put it - - in to PERS, which is a better program. As for adminis- tering this, it would have to be handled individually. 7. Ron Walden, Police Dept. He feels Social Security is the poorest value in the U.S. today. At this time Anchorage is discussing pulling out also. The State of Alaska employees have already withdrawn. PERS is the only program that allows individuals to make d „n changes in their program every year. He would like to go with PERS. Mayor O'Reilly asked him about the one year delay. Mr. Walden replied we have waited lit ' 2 years, one more year will be spinning of wheels. ' 8. Howard Hackney, Administration. The City should keep their portion and the employees keep theirs. Social Security is not a sound program. We will not gain by _- 5._ waiting another year. 9. David Burnett, Fire Dept. Age is not a factor, the City has hired responsible people, it is their KENAI CITY COUNCIL DEC. 17, 1981 Page 3 prerogative if they should get in or stay out. One year extension is a waste of time. Social Security is not a secure investment. 10. Keith Kornelis, Administration. Council and the employees are not on opposing sides, they have already passed by the one that would keep us in Social Security. He is against waiting a year. If we don't have Social Security it will improve our chances of hiring good employees. They will be getting $2,000 more. Social Security is in trouble. If we wait another year, we may be sucked into their problems. They might put a ban on getting out. There are other retirement programs, as of Jan. 1, 1982, everybody can get in the IRA program. He can invest his money and make more than any program. 11. Kim Hammock, Fire Dept. She heard before she was hired that the City may get out of Social Security. She still came to work here. One year will not change the issue. What we do with the money should be decided later. Councilman Wagoner returned at this time. 12. Atty. Ben Delahay, Administration. He presented all the alternatives so Council could choose: a. What is best for the City b. What is best for the employees He went into Social Security in 1955, and he objected - — at that time. The reason States are allowed out is because the Federal Govt. said employees who did not _ have adequate retirement could contribute. The Federal employees have an adequate retirement program. He . would gain $29,000 if he stayed in one more year. He voted to stay in, but he does not agree with Social Security. If would be unfair to stay in after 88% of the employees voted out. The City has been forced to match the Social Security benefits, that is part of -" the employee package. The taxpayer will not lose any- thing lie did not expect to pay for employees. Socialistic programs are always idealistic, but they don't work. Our individual rights made us great, not our raw materials. PERS has individual programs, that is better than Social _ Security. He would like to recommend: - - a. This should be put on the floor and postponed -- till Jan. 20, 1982. This would give time for work sessions. The amendments could be discussed at the work sessions. (Ordinance 737-81) - b. Resolution 81-128 should be left off. C. Resolution 81-129 should be discussed at work sessions. d. Resolution 81-130 should be defeated. e. Resolution 81-131 should be adopted. -. f. Ordinance 743-81 should be adopted. This would mean the City would be out of Social Security by Dec. 31, 1981 and will be going into work sessions to discuss the options. He didn't think the Council had much choice in view of the employee vote. William Furlong, Fire Dept. He did not know what benefits were available in Ord. 737-81. Atty. Delahay replied a representative from Juneau would # `4 4 -C n _ -- � - ._ ..s=� ��—,� -- :��—ems.. e._..� - •+ �.�rc�.,�+ao..+�J�' .. _� .�+.�f�+e• -. KENAI CITY COUNCIL DEC. 17, 1981 Page 4 _. come to Kenai and talk to the employees if they are interested. Ron Walden, Police Dept. Mr. Delahay's $29,000 will be made up in the State program. If we j get out of Social Security we have till the end of Jan. to decide what we will do with the money. He would like to see both portions held till action is i taken, then the money could be paid retroactively. Councilman Wagoner asked Atty. Delahay if there was any date that the City had a certain period of time i to go under State retirement. Atty. Delahay replied f they can go at any time. VOTE, Adoption of Resolution 81-130: Motion failed unanimously by roll call vote. { MOTION: y _ ! Councilman Wagoner moved, seconded by Councilwoman Glick, that the City Council vote to reaffirm r Resolution 79-109 and direct the Finance Dept. to e . j direct the City share of matching funds for employee Social Security benefits into a reserve account. The 1 City Council should arrive at a system whereby final dispensation of these funds will be acted upon on or before March 31, 1982. Councilman taguner explained this resolution is the original requesting employees be removed from Social �•'' i Security. If we take no action tonight (12-17-81) they ? I are out of Social Security. The employees will receive ' their 6.6% and this would allow the City to consider --_ alternatives for the City share. There are some areas where we could increase employee benefits, such as medical insurance. Finance Director Brown noted the i City share does not have to go into a reserve account, it will be in City funds. � f Mayor O'Reilly said he will have to abstain as he is receiving Social Security benefits from the City. VOTE: Motion passed, with Councilmen Measles, Wagoner, Malston, Councilwoman Glick voting yes; Councilman Wise voting no; Mayor O'Reilly abstaining. F. Resolution 81-131 - Provide for Work Sessions to r, Study Possible Alternative Benefit Plans on Withdrawal from Social Security -- - 1, There was no motion made on this item. G. Ordinance 743-81 - Repealing KMC to Make City Ordinances Consistent with Withdrawal of City From Social Security System MOTION: Councilman Measles moved, seconded by Councilman Malston, to approve the ordinance. "! There was no public comment. $�}' Motion passed unanimously by roll call vote. ADJOURNMENT: ^1 1 Meeting adjourned at 8:55 PM. V �0 e et Whelant City Clerk