Some city commissioners believe the city of Springfield should examine eliminating $750,000 in longevity payments to employees to balance its budget, but city staff and union leaders say it could affect retention in critical areas, such as police and fire services.
Springfield has offered longevity benefits as part of its employees compensation for more than 60 years as a retention tool, Springfield City Manager Jim Bodenmiller said. The annual benefits range from anywhere between $500 to $8,500, depending on years of service and salary.
Nationwide, about 5 percent of local government and 8 percent of state employees receive longevity bonuses, according to a March report from the Bureau of Labor Statistics.
Longevity should be removed from the city’s codified ordinances to help the city eliminate a $600,000 deficit for next year, Springfield City Commissioner Kevin O’Neill said, and not offered to employees after that time. The city will honor longevity for its union contracts, but shouldn’t negotiate the benefit into new contracts, he said. The money should be used for merit-based raises, O’Neill said.
In the short-term, it will save some employees from being laid off, he said. It’s not about what others pay, but what Springfield can afford to pay, he said. City commissioner Dan Martin is also considering eliminating or suspending longevity payments, he said.
“We’re not talking prosperity here, we’re just talking about paying our bills,” O’Neill said. “The city government isn’t supposed to be prosperous, it’s supposed to pay its bills with the money the public gives us to pay them with and you make cuts accordingly.”
The elimination of the longevity pay for non-union employees would save the city’s general fund about $188,000 next year, Bodenmiller said. Union employees receive longevity as part of their current contract and any changes must be negotiated, he said.
“It only closes a fraction of the gap that we need,” he said. “You run the risk of another union forming, which further ties your hand down the road.”
The city isn’t receiving the same number of applicants for jobs as it did in the past and its starting to lose more people to other municipalities who can offer more pay, Bodenmiller said. Longevity helps keep experienced employees in Springfield, he said.
“Now more than ever we need our best and brightest to stay with us to see us through these tough times,” he said.
City staff won’t recommend giving up longevity pay because they would be cutting their own salaries, O’Neill said. Bodenmiller received more than $8,500 in longevity this year, according to public documents.
“(Bodenmiller) hasn’t volunteered to give up anything,” O’Neill said. “Nothing. He’s not going to subject his employees to anything that he’s not going to do. He won’t do it. I know he won’t do it.”
Bodenmiller told the News-Sun he’d be willing to have discussions with commissioners about his longevity payment, but would have a difficult time recommending it for other non-union city employees.
“I don’t think it’s fair to pick on one particular group,” he said.
How it works
Longevity pay was enacted by ordinance in 1952 with each employee receiving a percentage of their salary based on the number of years someone worked with the city.
In 2006, the city changed longevity as a cost control measure, Bodenmiller said. Non-union employees with more than five years of experience receive a percentage based on years of service, starting at 2 percent for five years and 3 percent for 10 years. Employees with 25 or more years of experience receive 6 percent of their salary. For employees starting after 2006, those percentages were cut in half.
The six unions in Springfield receive a dollar per years of service benefit, which range between $50 to $100 per year.
About a third of the city’s employees are covered under the second-tiered system, he said.
Employees receive step increases during the first five years of employment, Springfield Professional Firefighters Local 333 President Andy Rigsbee said — meaning an employee with five years of experience makes the same wage as another employee with 20 years of experience.
“In these professions, years of service means years of experience and that’s a price you can’t really put on anything,” Rigsbee said. “(Longevity) is a way to quantify years of experience and we think that’s critically important.”
The case for longevity
The non-union group has not received wage increases in six of the last eight years, including last year, Bodenmiller said. All union employees went between four and six years without receiving a wage increase, he said.
“We’re falling behind other municipalities,” Bodenmiller said.
By eliminating one benefit from a total compensation package, it can be harmful to employees, he said — many of whom are already starting to leave, Bodenmiller said. Once a seasoned employee leaves, it also takes about three to four year to fully train them, he said.
“It’s very costly to lose people and that’s more and more what we’re starting to see,” he said. “You need good people. Whether people realize it or not, we have a very solid group of employees. Losing them does great harm for years to come.”
In Springfield, police officers who work 20 years for the city will earn about $60,000 per year, including about $2,000 in longevity. Other places such as Vandalia and Kettering don’t offer longevity, but pay about $75,000 and $84,000 annually for 20-year police officers, Bodenmiller said. Springfield has recently lost police officers to both municipalities, he said.
Other municipalities pay extra for employees with degrees and certifications, which Springfield doesn’t, he said.
The unions would likely fight any changes to longevity in court through arbitration, Bodenmiller said.
The case against longevity
O’Neill fought to change longevity benefits to a two-tiered system for employees 10 years ago.
This year, O’Neill recommended several cuts, including suspending about $750,000 in what he calls a “Christmas Bonus.” In the original ordinance in 1952, the payment was legislated to be paid annually between Nov. 2 and Nov. 19.
The city may lose some of its younger employees with the longevity pay, O’Neill said, but its older, more experienced employees will likely be upset. He believes employees should be paid based on merit and not solely on years of service, he said.
“You don’t pay somebody to come to work other than their salary,” O’Neill said. “Why? You don’t have to.”
The city doesn’t have enough money to pay longevity, he said. He’s asked city staff to ask union leaders to give up longevity payments as part of upcoming negotiations, even though it’s unpopular with its unions.
“It’s worth the fight,” O’Neill said. “If they’re not going to accept it, it’s worth the fight.”
O’Neill voted no on the last two proposed budgets, including last year when he proposed cutting the National Trail Parks and Recreation District’s budget by $450,000, including closing the Splash Zone Family Aquatic Center. Since 2000, 11 of the last 16 city budgets have proposed deficit spending, O’Neill said.
“That’s a trend,” O’Neill said. “The bottom line is, you can’t do that.”
O’Neill was told the deficit spending budgets were caused by about $5 million in annual cuts from the state government, including the reduction of local government funds and the elimination of the estate tax, he said.
“Quite frankly, when Kasich got there, the state was in bad shape under the previous administration,” O’Neill said. “We knew those adjustments were coming and we did nothing to alleviate that.”
Springfield city commissioner Dan Martin also voted against this year’s budget. He believes the city should at least discuss longevity with its union employees during upcoming negotiations, he said.
“Given our current economic situation, it makes sense to consider whether it’s sustainable to continue,” Martin said.
He wants to look at a performance-based system for city employees, he said. He’d rather longevity be factored into the rate of pay the city is offering, he said.
“The intent is not to cause pain or hurt people, but it’s just the reality of our current financial situation and looking at other ways of doing things,” Martin said.
Many other cities in the Miami Valley offer longevity benefits to its employees, including Hamilton and Middletown.
The city of Middletown also offers longevity payments based on annual salary, Finance Director Jake Burton said. At 10 years, employees get 1 percent of their salary, which ticks up to 2 percent after 15 years and 3 percent after 20 years, he said.
Middletown spent about $200,000 on longevity this year with about 200 of its 330 employees receiving the benefit, Burton said. It’s paid out in December, he said.
“It’s just any type of incentive pay,” Burton said. “It definitely helps retain, but to what level, I don’t know.”
The city of Hamilton spent about $100,000 on longevity payments in 2015, according to Finance Director Tom Vanderhorst. The payments range from $150 to $650 for an average of about $375 per employee.
About 100 of the city’s 625 employees receive longevity. Some of the labor contracts have negotiated longevity out of contract and included it into a hourly wage, he said. A firefighter/paramedic in Springfield tops out at about $60,000 annually, while the same position tops out at about $67,000 in Hamilton, according to data from the State Employment Relations Board.
Other cities such as Dayton, Troy, Englewood and Beavercreek offer similar longevity payments, according to Springfield data.
Springfield union leaders are against the elimination of longevity pay because it’s part of their overall compensation package.
At the Springfield Fire/Rescue Division, the retention rate has been dwindling with four firefighters leaving for better-paying jobs at other cities each of the last two years – and more expected this year, Rigsbee said. The union represents 124 firefighters in Springfield.
“Over the last 10 years, what we’ve seen is our salary and benefits slipping further and further behind to where we’re getting to the bottom of any other comparable (cities) we could look at and its shows,” Risgbee said.
The fire union lost an arbitration case in 2008 that saw its longevity benefit changed from a percentage to an annual $100 or $50 payment for each year of service, depending on hire date.
A young firefighter will be trained and gain experience based on large call volumes in Springfield before leaving for a higher-paying job elsewhere making up to $20,000 more annually, Rigsbee said. It takes about five to seven years for a young firefighter to become a seasoned veteran, he said.
“It’s a bad deal for (the city),” he said. “Just when we’re starting to get a guy who’s spun up to the point that he’s a really top-notch professional, he takes those skills, experiences and abilities and uses them in another community.”
Springfield police officers have the second-lowest pay in the region, only above London, Springfield Police Patrolman’s Association President Chris Armstrong said. The SPPA unit represents about 90 police officers, he said.
While the union can’t legally strike, it would be willing to strike before it gave up its longevity benefits, Armstrong said.
The police division has lost about seven officers in the past 30 days to retirements and other departures, he said.
“We’re losing people hand over fist,” Armstrong said. “It’s a big problem.”
The unions aren’t asking to be the top-paid in the state; they want a fair wage, he said.
“We are asking for the average police officer to be able to take food to their family, live in decent home and be able to provide for their kids to be able to fund their children to go to school after high school,” Armstrong said. “At today’s rate, it’s a struggle for the majority of our people to do that.”
Officers learn more in a year in Springfield than they do in a career at other municipalities, said Sgt. Doug Pergram, President of the Springfield Command Officers Association, which represents 17 sergeants and 7 lieutenants at the police division. Officers aren’t recognized as seasoned until they hit about five years of service, he said.
“We need to keep people,” Pergram said. “When you have to start all over with a new person because you’ve lost a senior officer, it takes time to build those skills back up.”
Springfield Police Local 52, which represents 11 records clerks and traffic control at the police division, is facing losing 10 people due to budget cuts, President Linda Cooper said. At one point, the union had up to 25 people. They’re losing people due to retirements and jobs are not being filled, she said, which has put more duties on the 11 who remain.
“Our work is not decreasing,” said Cooper, a traffic controller officer. “Our jobs are very important.”
The city is still working to formulate a plan about possible layoffs in their union, Cooper said. They’re expected to know something in January, she said.
“We’re still in limbo,” she said. “We’re just waiting.”
The city has proposed eliminating those jobs and taking police officers from the street to handle their duties, which union leaders say will affect service on the street and efficiency at headquarters.
“Every time we go down below a certain level of protection on the street, there’s a real price to be paid,” Rigsbee said. “It’s not even a money price, it’s a lives price.”
Service calls will have to be prioritized, Pergram said. Some calls, such as property crime, may not receive service until the next day, Armstrong said.
“Obviously, the citizens won’t be happy, but it will be reality,” he said.
Staying with the story
The Springfield News-Sun has written extensively about cuts to the city budget since they were first announced last month, including stories digging into the possible effects on a local tourism agency and debates over what to cut.
By the numbers
$750,000: Amount of money city paid in longevity payments in 2016.
$188,000: Amount of money that could be saved from general fund if longevity is eliminated for non-union employees this year.
5: Percentage of local governments who provide longevity bonuses to employees.