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2/25/2011
Clark proposes to cut 5% option on county pension plan fro new employees; Kovach & Weiner: Good start, but more is needed - News Journal

Council President Tom Kovach and Councilman Bob Weiner, two of the three Republicans on the 13-member council, applauded the proposal, each calling it "a good first step." Weiner said there is too much duplication of services in county government and said "more draconian measures need to be considered."

Kovach noted the projected shortfalls and that personnel costs make up 75 percent of the county's budget. "We need to spend less, and employee benefits has to be a part of that," Kovach said. "This is a drop in the bucket, but doing something with future employees is a good place to start."


Clark wants to cut New Castle County pension plan
New hires would be affected by move projected to save $1 million

Written by ADAM TAYLOR 

New Castle County Executive Paul Clark wants to eliminate one of two pension plans for new county workers, a move that would save the government $1 million over the next decade if approved, he said Thursday.

It's the second week in a row Clark has taken steps to cut costs right away. Last week, Clark terminated a lobbyist's contract, extended a tougher policy on workers who don't show up on snow days and told department leaders to cut a total of $1 million.

The county is facing an estimated $5 million shortfall for the current fiscal year and a projected $10 million shortfall for next year, county spokeswoman Angie Basiouny said. 
Clark makes his budget address March 22 for the fiscal year that begins July 1.

Clark wants to eliminate the option for new employees to put 5 percent of their salary into a pension plan. They would be allowed to put only 3 percent into a plan, which would save the county money. Current employees have a choice of the 3 percent or 5 percent plans. The proposed elimination of the 5 percent plan would not affect the 1,421 current full-time employees.

"We're seeing governments and private-sector businesses all across the country struggling with pension costs and making decisions about whether to continue this benefit," Clark said. "It's a tough decision because I think we have terrific employees who deserve good benefits. But I also have a responsibility to spend public money as wisely as possible, and this pension plan is not financially sustainable."

County acting Chief Financial Officer Ed Milowicki said the estimate that the measure would save $100,000 a year for 10 years was based on 25 new full-time hires a year. The county's share of the 5 percent pension plan nearly tripled in the last decade, going from $3.7 million in 2001 to $12 million this year.

Union leaders for county workers didn't criticize the plan Thursday -- but were upset they weren't consulted about it.

"The best suggestions to run operations more efficiently usually come from people who directly do those jobs, not from those who wield calculators," said Richard Krett, president of the union for managers and professional employees.

Ken Dunn, president of the union that represents emergency-response personnel, called the proposal a surprise.

"I don't know if we're against it or for it because we haven't been provided with any information about it," Dunn said. "It's sad that we didn't even get the news release."

The proposal requires council approval, which could occur as early as next month.
Council President Tom Kovach and Councilman Bob Weiner, two of the three Republicans on the 13-member council, applauded the proposal, each calling it "a good first step."

Weiner said there is too much duplication of services in county government and said "more draconian measures need to be considered."

Kovach noted the projected shortfalls and that personnel costs make up 75 percent of the county's budget.

"We need to spend less, and employee benefits has to be a part of that," Kovach said. 
 
"This is a drop in the bucket, but doing something with future employees is a good place to start."

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