Budget cuts » Council takes cutting employee benefits off the table.

SOUTH JORDAN • Few things pack City Hall like the suggestion that city employees should pay for a larger percentage of their health care benefits.

It was standing room only on Saturday when the South Jordan City Council held a special session to consider how to save up to $3 million in annual operating expenses.

About three hours into the discussion, Councilman Brian Butters moved to take employee benefits off the table and leave them untouched in the 2013 budget. It had become evident how unpopular such changes would be, and all five council members supported the motion, which drew hearty applause from the crowd.

“I think we just saved the heart of the city — the employees, morale, continued service to every person in the city,” Butters, who has served on the council for six years, said afterward. “That’s what we’re for, the service.”

The fast-growing city of 55,067 residents, positioned in the southwest quadrant of the Salt Lake Valley, is faring remarkably well.

According to City Council minutes, South Jordan’s population increased 51 percent between 1999 and 2009, while its retail sales ballooned from $49 million to $649 milllion. And from 2009 to the present, annual retail sales swelled to almost $1 billion.

At present, South Jordan has a robust sales tax base and enjoys $1.8 million in surplus revenues. Its rainy day fund sits at 18 percent of the city’s $28.8 million general fund, which is the maximum allowed savings under state law.

However, recently-appointed Mayor Scott Osborne fears those favorable circumstances are unsustainable. Council members Steve Barnes, Chuck Newton and Mark Seethaler shared his desire to identify ways to cut spending by about 10 percent and funnel the savings into a yet-to-be-determined fund.

During a May 15 City Council meeting, Osborne suggested that the city “in the middle of this period of plenty, put some financial resources away for the future . . . and live well below our current income.”

One cost-saving suggestion was to ask the city’s 307 full-time employees to shoulder a larger percentage of their health care premiums. Those hired before 2005 pay nothing toward that benefit; those hired post-2005 pay 10 percent.

If all employees paid 5 percent more of their premium costs, it would save a projected $204,048. If workers took on 25 percent, the city could save $741,678. South Jordan’s premium costs will rise only one-quarter of one percent in the coming year.

Employee wages were frozen between 2007 and 2011. In the 2011-2012 budget, a 2 percent cost of living increase was given. For 2013, $400,000 is set aside to bring underpaid positions up to par and to give merit increases to those who have earned them. The city pays out about $22 million in wages and benefits.

Councilman Chuck Newton advocated for employees paying a higher percentage of their premiums in order to appreciate the benefit more and also to offset expected increases in retirement costs mandated by the state.

“(Employees) see the increasing costs, and they use it when it’s just to do so” — rather than running to the doctor with a cold, Newton said.

Councilman Larry Short was applauded when he said the city should uphold its contract with workers.

“To actually say that we’re going to take money away from you so we can afford your retirement is ridiculous,” Short said.

Jackie Nageli, a South Jordan resident for nine years, scoffed at the goal of slashing the budget.

“Cities are not in the business to make money. They’re in business for service,” Nageli said. “I love South Jordan, and the way these guys are trying to do it, it’s making me crazy.”

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