The Duncan Banner

February 24, 2013

‘City’ answers often complex

Ed Darling
The Duncan Banner

DUNCAN — Jim Frieda, Duncan’s city manager for the past two-and-a-half years and its city attorney for more than 25 years before that, said the questions, prompted by a week-long series of stories about the city budget in The Banner, were to the point, probing and legitimate.

His responses, shared here today and continued next week, have been equally so. From a straight-shooting professional who cares about our community, they are thoughtful, thorough and informative.

Paraphrased, here is the exchange.

Question: Does the city have a contingency plan in case revenues fall short of expectations?

Frieda: A three-year history helped determine anticipated revenues. Capital improvement requests are prioritized on the basis of most needed first. A quarterly review tracks revenue and expenditures and determines if items should be removed to compensate for shortfalls.

Question: Has the four-day city workweek achieved its goal? Do citizens often complain about customer services being unavailable on Friday?

Frieda: It was implemented in October 2008 with a goal of saving money on utilities, fuel and personnel. Those savings have occurred. There were a number of complaints at first, so the city changed its Friday staffing policy. Customer service and cashiers remain on the compressed schedule, but by rotating employees, downstairs is open from 7 a.m. to 5:30 p.m. each Friday. Our customer service department is now open 50 hours a week. We also have a staff member available to handle building inspections and utility connections or disconnects on Friday while maintaining the four-day workweek.

Question: With a tight budget and an uncertain economy, was a second straight 5 percent employee raise feasible?

Frieda: The second 5 percent increase was intended to make up for periods when employees did not receive a cost of living (COL) raise. It appears COL increases have consistently been in the 2 percent range. As a consequence, durable spending power decreased. Because of that, it was felt the second increase was prudent. It also addressed providing a stable workforce with a pay scale that is competitive with those of the private sector.

Question: Employee benefits are a strong package. Could they lead to decertifying police and fire department unions?

Frieda: Our benefits are intended as an incentive for employees to remain long term with the city. We compete with Halliburton, oilfield companies and big city fire and police departments so we have to be competitive. It is a strong package. New hires in police and fire are not paid as well as in other cities. Probationary (less than one year) officers and firemen, by law, do not benefit from Collective Bargaining Agreements (CBA), which, along with union membership, are governed by state statute and the Public Employee Relations Board (PERB). Rules and regulations, promulgated by the PERB, preclude an employer from requesting decertification of an employee union.

Question: Is it accurate the City of Duncan and the City of Lawton police departments are the same size?

Frieda: Lawton has 170 officers and is authorized to have 180. Duncan has 45.

Question:  What is the salary of the mayor and members of the city council?

Frieda: All spend hours working on city business and helping citizens with problems or complaints. They receive no salary. They receive no benefits. Each is dedicated to our community. Each has a desire to see the city prosper. Saying thanks whenever you get a chance is a great way to pay them for their services.

Question: Is the current employee pension plan a financial concern? Was/is it a generous idea that should be addressed or amended?

Frieda: The pension plan was established in 1963. A recent article in The Houston Chronicle offers good insight, explaining, “when employers sponsored a defined benefit plan, the employer is deferring some of the payments to the employee for the service the employee is rendering. The employer in reality is borrowing money from the employee, taking the employee’s services today in exchange, in part, for a payment in the future. When defined benefits were first developed, the accounting rules did not require the employer to recognize it was incurring a liability for those future promises of compensation,” in essence, creating an unfunded liability.

The problem, an expensive one, was recognized in the late 1980s. Our staff, based on an actuarial study, is addressing the issue. The city has set aside $2.3 million over the past three years.  A $1 million annual payment will satisfy the $18 million unfunded liability by 2040.

The city is examining the possibility of a new plan that, after approval by the council, would impact new employees only.

NEXT: The conversation continues here next week with topics ranging from recreation, to street repairs, the Honeywell project, investments and economic development.

 edarling@duncanbanner.com

580-255-5354, Ext. 130