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Published On: 4/24/14

Berlin Officials Weigh Pay Increase for Town Employees

By: DispatchAdmin via Maryland Coast Dispatch

BERLIN- An employee pay raise in Berlin is definitely on the table, but no hard numbers have been discussed this early in the budget process.

During their first budget work session this week the council reviewed general fund revenues as well as departmental budget requests. In the current budget there is no mention of a salary increase for employees. However, Councilmember Paula Lynch was curious as to why no numbers were included.

“If it’s not in the budget then we have not projected this,” answered Natalie Saleh, director of Finance. “It has been left up to you to your decision.”

There is support on the council for some kind of raise this year. While there was a dry spell following the national recession in 2008, in recent years the council has gotten back into the habit of considering annual raises. Two years ago, employees received a one-time $500 bonus and last year a two-percent raise was granted. The big question, according to Mayor Gee Williams, was not whether raises were deserved but where the money would come from.

“I guess that what we’ll have to do is now that we’ve gotten this much information, we’ll have to see what we’re going to do and what potential there is,” he said. “If I understand the budget, if we add any additional increases to what is proposed it would come from reserves, right?”

The council does have the option of generating money for a pay increase either by cutting expenses or increasing revenue through a tax jump. However, Williams’ indication of looking at reserves seemed to be the most popular with the council, who have been emphatic this year about not wanting to hike property taxes.

The reserves continue to be in a good spot and could manage an employee raise, according to Saleh. A two-percent raise to the town’s roughly $3 million pay roll would represent about $60,000. Lynch noted that the council shouldn’t jump to any decisions as the budget process is just starting and proprietary funds still need to be examined.

“I’m just throwing it out there that there are pieces to this puzzle that we haven’t put into it yet,” she said.

The mayor felt the same.

“Again, we’ll keep looking and fine-tuning this and fine-tuning that. I would say at this point we certainly want to be able to consider some level of increase,” said Williams. “If we can find the money and feel secure about it. I don’t think there’s anybody here who is against it. We’ve just got to budget it and be confident in the figures we’re budgeting as accurate as we can get.”

Also to be considered is how employee health care will change this year. A shifting market and other factors mean that the town would be hard-pressed to stick to its current plan.

“When it went out for bid it came back with a 17-percent increase with all things being equal,” said Jeff Fleetwood, director of Human Resources. “I expected, to be very blunt, about a four- or five-percent increase. When it came back at a 17-percent increase I was very shocked.”

This leaves the town the option of eating the increase, which would bump costs up for health care from about $41,000 per month to $45,000 or finding a new provider. Switching over to a pure HMO system would reduce the increase from 17-percent to 3.8-percent but Fleetwood cautioned the council about the downsides of going HMO when employees are used to open access.

Instead, he proposed completely swapping providers and signing the town up with Cigna Healthcare. That provider would actually save the town a small amount of money but there are always risks with jumping ship to a new agency.

“The biggest fear when we change networks is forcing the employees to stop using the doctor or provider that they’re comfortable with,” said Fleetwood.

Luckily, the majority of doctors and health care professionals currently used will also be in network with Cigna.

 

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