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Rumor concerns utility payments, health care

June 9, 2013
By KATIE SCHWENDEMAN - Staff Writer (kschwendeman@mojonews.com) , Salem News

COLUMBIANA - Inquiring minds want to know: Is the city paying the health care costs of its employees through residents' utility payments?

East Clark Avenue resident Dan Bekar said a "rumor" is circulating through town the city's health care and its employees are being paid through the money coming in through utility bills, which is about $30 a month per customer.

"I'm wondering if that is true or false," he said. "This doesn't seem right to me. I think the health care costs should be charged through each department the employees work."

He went on to say that while working as athletic director at Columbiana High School he didn't take money from the volleyball account to pay his football coaches, which is basically what the city is doing if it is, indeed, paying the costs through the utility bills.

Councilman Dick McBane said the rumor stems from a post on Councilman Bryan Blakeman's personal website, columbianacitycouncil.com.

The post he was referring to was published on March 7 and titled "Taxation Without Representation," which is what Blakeman has said on numerous occasions is being done by the city when it pays the salary and health care of employees from a fund fed by customer payments for a particular service.

The post was written following that night's council meeting in which Finance Director Mike Harold said the city had always taken most of former City Manager Keith Chamberlin's salary from the electric fund, and the rest from the water and sewer funds.

Service Director Jay Groner's salary also came from the three funds.

Chamberlin and Groner were both employed with the city for more than 20 years before retiring in December, and their accumulated sick and vacation pay (a combined $40,000 roughly) also came from the three funds, according to Harold.

He had explained the salaries came from the funds because the men spent time working in those departments.

At that council meeting Blakeman argued the salaries should have been paid out of the general fund, not funds in which utility rates are a source of revenue.

In the post on his website he said, "Due to the fact that our enterprise funds (utilities) can pay costs related to that utility, the city can and obviously does set rates based on what it needs. There is not enough money brought in on an annual basis with our city income tax to cover our base health insurance expenses for the year, let alone the entire general operation of the city. It has been determined that is an expense of running the utility and therefore those costs are placed into the utility rate we pay each month. The city is not authorized to levy taxes higher than the 1 percent income tax without a vote, but if we raise utility rates to meet our expenses it is justified."

McBane told Bekar Tuesday night that after reading Blakeman's post he "checked into it."

To Blakeman he said, "If it were true, you might have a good point ... what you posted wasn't correct."

He explained that after "going through the numbers" he didn't see a "significant amount" of health care costs going to the utility funds, and if there was, the labor overhead in those funds would be much larger than the general fund.

"It turns out each and every fund has approximately the same amount of overhead," he said.

Blakeman responded he would provide the numbers at the next council meeting for discussion, which prompted Councilman Lowell Schloneger to announce he had them already at his disposal, and had been keeping them handy for such an occasion.

"Ever since that was posted I've been carrying them in my packet every month and I wasn't going to bring it up unless someone did," he said.

Blakeman again said he would like to go over the matter at the next meeting and the discussion ended.

When asked after the meeting if it was true the city was paying its health care costs through the utility bills, City Manager Lance Willard said it was not.

"They are coming out of each individual fund," he said.

He then directed additional questions, including those related to his salary, to Finance Director Mike Harold, who was not present for the meeting.

 
 

 

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