Using a state law allowing cities to provide insurance to retiring city employees who meet the age and length of service, City Council members approved an ordinance to provide city insurance to retiring city employees by paying those employees.
The members of the council refused to provide the insurance money saying that it is not a good management of the city’s finances and most of the people they contacted do not agree with it.
Outgoing Mayor Jackie Crabtree, who announced her retirement earlier this year and did not seek re-election, asked the council to consider paying her share of the bill in addition to her retirement. He had said that he would pay his wife’s expenses.
State law requires the city to pay a retirement benefit of half the mayor’s current salary for the rest of his life. Since the mayor earns $50,000, the city pays him $25,000 a year.
The insurance premium is about $500 according to city officials.
Meeting an hour before the city council’s regular meeting on Tuesday in the committee of the whole meeting, council members said they heard from people in the city who objected to the city paying the insurance premiums.
“The overwhelming consensus is that this is not something they’ve ever been offered through their business center,” said Cody Keene, a council member. “I’ve met many people, many retirees, who said it was too much and we shouldn’t have to pay insurance on top of retirement.”
Several people were present and spoke.
“I’m a retired teacher,” said Margaret Cheek, adding that her husband is a retired teacher. “We all pay for our insurance out of our monthly retirement check. We’re lucky to have the insurance we have. We pay for ours … every month out of our paychecks.”
He said the plan to rest teachers is a government agency.
“The thing that some people are missing,” said Merrill White, “is that the mayor can participate in the town’s insurance and blessing. That’s already there as a provision.”
Arkansas Act 644 of 1995 allows any employee 55 years of age or older who has completed 20 years of public service and is receiving a retirement application from the Arkansas Local Police and Fire Retirement System, the Arkansas Public Employees Retirement System or a local pension fund may continue to receive participate in the municipal health system. In 2009, Act 1279 required municipalities to establish retirement eligibility criteria.
The question Pea Ridge City Council members faced was whether to pay the mayor’s insurance premium. City Attorney Shane Perry said any decision made would affect all retired city employees who have met the requirements and the city’s budget.
“If you do it for one, you have to do it for all,” Perry advised the board.
“When you retired from Walmart, how much insurance did you get,” Cindy Putzier asked the mayor, saying she received 18 months of insurance after retiring from Walmart. “We have other needs in the city. That’s what our last tax increase should have been.”
“My problem is that I feel like it’s a benefit to be a long-term employee, whether it’s the city or the administration,” said Ginger Larsen, a council member. “We have to look at how our benefit system looks like. We want people to work in the city where they want to work in the city; therefore, for me personally, I have no problem with the law allowing people to be on the municipal insurance, but they will pay for it themselves.”
“If you have put in 20 years of service, there is something to gain. We should be grateful for this, whether we agree with the politics, and if we agree with the administration,” he said. “As mayor, you were elected many times by the same people who live out here. My opinion doesn’t matter. Going forward, we want this city to be a place where people want to work.”
He said: “I don’t think we should have an insurance bill, and from the responses I’ve received, a lot of people don’t want that anymore.”
Leslie Vest, a volunteer at the Pea Ridge Community Library, said she worked in insurance before becoming a stay-at-home mom.
“Is this yours or are we setting a precedent,” Vest asked, asking if funding has been done for other eligible employees and the city’s cost. “I don’t see how this is economically viable.”
Nadine Telgemeier asked what would happen if the city council did not follow the law.
Perry said that workers who are eligible cannot continue to participate in the insurance plan even if they are willing to pay 100% of their wages. He explained that if the law is passed, the members of the council have two options. The employee can pay his own costs or the city can pay the costs to the employee.
At the City Council meeting, Keene asked to approve the ordinance with the first option, verifying the insurance and the employee paying the money. It was seconded by White and approved unanimously without an emergency clause.