'Wide-ranging changes' possible for Metro employee benefits

Thursday, August 18, 2011 at 6:38pm
Richard Riebeling.jpg
Richard Riebeling 

Spurred by the not-so-simple task of curbing costs while retaining strong employee benefits, Metro is hiring a consultant firm to advise on matters ranging from the future of city workers’ retirement pension plans to their health insurance.

Metro’s five-member Study and Formulating Committee, appointed earlier this year by Mayor Karl Dean, unanimously voted to issue a request for proposals in search of a third-party consultant to advise on potentially far-reaching changes to Metro’s employee benefit system. The firm could be hired within the next 30 to 60 days.

The committee, which the mayor is required to appoint every five years by Metro Charter, has been tasked to provide recommendations at a time when municipalities across the nation are coming to grips with higher costs to maintain employee benefits during a slumping economy.

In a memo delivered to committee members Thursday, Metro Finance Director Rich Riebeling asked members to take a “broader view” than it has in the past to “explore whether it is appropriate to propose wide-ranging changes that are more financially sustainable” for Metro and its taxpayers.

Any changes the committee recommends would ultimately be subject to Metro Council approval and Dean’s signature. Tackling the financial strains of employee benefits costs figures to be one of Dean’s most strenuous second-term challenges. 

Riebeling stressed he “fully supports” a strong system of benefits for employees. Nonetheless, his message seemed to paint a dire picture in terms of sustainability.

“I have come to realize that government cannot continue operating as it has in the past,” he wrote. “It’s difficult for me to anticipate revenue growth in future years continuing at levels we’ve seen in the past.”

The finance director concluded his memo by citing three areas that warrant examination: the costs of pensions, health insurance and compensation for injuries while employees are on duty.

One controversial item on the table is whether to change Metro’s current five-year vesting period to receive pensions to 10 years. Another option — among many — could be changing the pension plans of Nashville Electric Service and Metro General Hospital workers from defined benefit plans to defined contribution plans, Riebeling said.

Steve Farner, a committee member who works as an assistant regional manager for the Laborers’ International Union of North America, said it’s important the interests of employees are considered and factored into all calculations. Still, he acknowledged the ongoing employee-benefit discussion is different than in past years.

“Because of the setting we find ourselves in and the economy and the tax revenues, it may cause this particular committee to have to look more seriously at it,” Farner said.

In an interview with The City Paper, Riebeling said a consultant firm would allow committee members to analyze approaches undertaken by other city governments. He said the hope is to strike a “balance” by factoring in declining revenues while still providing quality benefits to employees.  

“It’s fair to say that costs aren’t going down,” Riebeling said of the city’s employee benefit system. “It seems to be rising at higher levels than most other parts of government.

“We’re sort of in this period where the new normal of revenues is going to be pretty modest growth,” he added. “You’re not going to see the type of growth in revenues in local governments or state governments that we saw in the ’90s and 2000s. So, you have to take a hard look of where your resources are.”

9 Comments on this post:

By: T-BONE on 8/18/11 at 6:18

TORRENCE & SONS CONSULTING is "On the case" Plus they have "hired" John Arriola to help. So be assured taxpayers; we are looking after your money (LOL) !!!

By: bfra on 8/19/11 at 3:17

T-Bone - That pretty well sums up Metro Gov. these days!

By: Kosh III on 8/19/11 at 6:54

Why a consulting firm? Can't they do it themselves? I guess it's somebody's buddy who needs a few extra hundred thousands.

Employees can look forward to being screwed over--again.

By: govskeptic on 8/19/11 at 6:59

This is long overdue, but better late than never. Many Cities are near bankruptcy
over this same issue because they didn't attend to business until it came time to
start paying for all the promising and kicking the issue down the road for too many years. The selection of which Consulting firms on this issue will be interesting.
There are those that give clean-straight unbiased opinions and suggestions based
of the info collected, and then there are those that provide the suggestions the
payer wants them to provide. Let's hope Metro winds up with the former!

By: morpheus120 on 8/19/11 at 7:26

Once again, Steve Farner with the Laborers Union jumps into the media spotlight to carry the Mayor's water and undercut organized labor just like he did with the Convention Center (which has already gone overbudget halfway through construction).

I wonder does Mr. Farner even know that Metro employees haven't gotten a raise in four years?

I wonder if he knows that their counterparts in the private sector actually make more money and that decent benefits are why most people go work for Metro in the first place?

If Mr. Farner is just going to parrot the Mayor's talking points instead of getting the facts, he should resign from this committee or face sanction from the local labor organizations for yet another betrayal of his union brothers and sisters.

By: morpheus120 on 8/19/11 at 7:43

Hey GS, we appreciate you being in lockstep with the Mayor's lackeys on this one, but this has nothing to do with "kicking the issue down the road".

The fact is that Metro's pension fund is stable and sound. There is no "crisis" and you will learn that when this Committee actually decides to do its work. It is what it is - working people have to pay the price so that the Chamber crowd gets more corporate welfare (Sounds stadium, Convention Center, Hotel, unknown project at the Fairgrounds, etc etc).

It's funny that someone whose screen name is "govskeptic" is taking the word of a bunch of government officials - in this case, Rich Riebeling - who have already been caught lying about convention center costs and projections to get their way.

Remember, if you hear it from Team Dean, it's probably a lie.

By: san r on 8/19/11 at 9:01

these people need to be institutionalized along with the 50K who voted them back in.

By: stickman56 on 8/19/11 at 3:20

Metro government does not seem to be able to control or be accountable for all of the fines and fees that go uncollected(for decades),so, now it's the responsibility of Metro employees to make up the shortfall of the finance committee? Employees have tried to identify waste,only to find themselves being retaliated against. Revenue enhancements and options are available,but if it hurts a political career
,they are discarded. WAKE UP!

By: bfra on 8/20/11 at 10:35

If elected officials have to hire consulting firms to do the work they were elected to do, get rid of them and get someone that is capable. But 50,300 people had that chance and voted to keep most of the incompetants & do nothings in office.