Budget Committee Raises Questions Over Benefits

Posted on 28 August 2009

On Friday, August 21, the Southampton Town board and members of the budget and finance committee were slated to discuss a half-year town budget report at a work session, but the conversation soon took a turn.

As committee members pored over the dozens of pages showing revenues, expenses and deficits, some said they were astonished by the percentage of the budget allotted to employee salaries and benefits. Of the overall $83.8 million budget for 2009-2010, almost $56.5 million is reserved for employee costs.

“I would offer that if there is any message this committee has been trying to give you is that nothing is sacrosanct,” remarked budget and finance committee member David Ryan, a certified public accountant. “I appreciate that we are trying to figure out all the remedies to survive this year, but we have a huge problem both in fixing the past and the future and that can’t be accomplished without dramatically altering our employee contracts.”

Ryan added that in the private sector many companies are going to the table with employees and renegotiating benefits as a way to continue operations. Ryan further stated that current town employee benefits, like being paid for unused sick time, isn’t common practice in the private sector. Many budget and finance committee members draw their experience from working for private companies and financial institutions.

Ryan specifically mentioned the annual payments the town makes to cover retired town employee medical benefits. Southampton Town comptroller Tamara Wright reported that the town pays almost $1.2 million annually for retiree medical benefits for the police fund and $650,000 is taken from the general fund to pay other retiree medical benefits.

However, Wright argued that the town cannot make a cut in this area as it is obligated to pay these benefits.

“I think it is important to point out that government employees are paid much less than jobs they can get in private industry. Some of that deferred compensation is through post retirement benefits. If you take that future payment away from them then you may find yourself having to raise current compensation to attract quality talent,” added Wright.

But Ryan disagreed that present town employees were under-compensated.

“We are a service enterprise,” argued councilwoman Anna Throne-Holst. “And in a service enterprise, that [employee costs] is where you do see your costs and your biggest expenditures and I think, for us to have a meaningful discussion on that, we need to look at comparisons to surrounding towns, look at comparisons with the cost of living and we need to look at ways of moving forward.”

“For us to have this as a parenthesis to this discussion, particularly with a number of our town employees sitting [in the audience] here and without the facts and figures, is inappropriate,” she added.

Members of the board and committee agreed to carry on the discussion of the six-month budget report, but said they would meet in public at a later date to discuss town employee contracts.

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