December 21, 2011 - Following more than an hour's worth of debate and several failed motions, the Oxford Township Board last week voted 5-2 to approve a new two-year contract for Fire Chief Pete Scholz that increases his annual pay by 8 percent yet eliminates some significant benefits including health insurance after he retires.
In a nutshell, the new employment agreement, which takes effect Jan. 1 and expires Dec. 31, 2013, raises the chief's annual salary from $76,876 to $83,000, while requiring Scholz to begin paying 5 percent of his health insurance and contribute a minimum of 2.5 percent of his total compensation towards his retirement through the Municipal Employees' Retirement System.
The new contract eliminates the hourly wage (equal to that of a senior paid-on-call paramedic/firefighter) that Scholz was paid for after-hours calls he responded to between 6 p.m. and 6 a.m.
Also, eliminated were the 12 leave days (i.e. 96 hours) Scholz had been allotted each year for personal reasons or illness.
But the biggest cut was the township's decision to not pay for any of the chief's health insurance after he retires.
In the previous contract, the township agreed to pay 50 percent of the premiums to cover Scholz, his wife and any dependents at the time of his retirement. When he was old enough to receive Medicare, the township had agreed to pay 50 percent of his supplemental health care coverage including prescription, dental and optical. If the chief ever decided during his retirement to limit his medical coverage to just himself, the township had agreed to pay 100 percent of the cost.
All of this is now gone.
In its place, the township will give Scholz, along with his spouse and dependents, the option to enroll in its medical plan after he retires, but he must pay 100 percent of all premiums.
Scholz, who started with the department as a paid-on-call firefighter in 1976 and became the full-time chief in 2008, expressed his concerns about a number of these changes.
He noted that when his new health and retirement contributions are added together with the loss of the additional income from responding to after-hours calls (about $3,000) and receiving a lump-sum payout for unused leave hours (about $3,500), he's actually receiving a "pay cut" of between $9,000 and $10,000.
And that's not including his loss of retirement health benefits.
"There's not a single township employee that has had that much taken away this year or any other year," Scholz said.
That's part of the reason why township officials agreed to raise his annual salary by $6,124 (8 percent) as opposed to the $2,724 increase (3.5 percent) that was originally proposed.
"I think we're asking the chief to give up a lot," said Treasurer Joe Ferrari. "I'd like to adjust the salary accordingly."
Township Trustee Joe Bunting was particularly adamant about eliminating the after-hours (6 a.m. to 6 p.m.) pay for Scholz because he felt that's just him doing his job as a salaried employee. Paying Scholz extra for these calls basically amounted to paying him "overtime," in Bunting's view.
"I believe that's part of the duty of the chief of a fire department," he said. "If he's needed, he gets a call and he goes in."
Scholz, who's a 1971 Oxford High School graduate, indicated he averages about two after-hours calls per week. "That's about it," he said. "It's pretty slim."
He explained that he's typically called out when there's a large fire, serious accident, multiple calls occurring at the same time or there's no paid-on-call firefighters available.
"It's not a large amount of calls," Scholz said. "I don't run out the door on every single call by any means."
He noted the hourly rate he was paid for after-hours calls was equal to halftime, not overtime as Bunting put it. As chief, his hourly rate is normally $36.96. But for after-hours calls, he was being paid $18.53 per hour.
Township Supervisor Bill Dunn noted the chief's after-hours pay averaged about $3,000 per year over a three-year period.
Scholz was particularly concerned about the township's decision to not pay any portion of his health benefits after he retires. He indicated he talked to chiefs in surrounding communities, such as Brandon and Rochester Hills, and they still get health insurance after they retire.
"I can understand, kind of, where it's coming from, but by adding that in with the other (cuts), all at the same time, it is a lot," he said.
Scholz asked the board why this benefit was deleted from his new contract.
"As a direction, we're going away from providing medical benefits for retirees," said Trustee Mike Spisz. "As of right now – today – you are the only employee, I believe, in Oxford Township that had after-retirement benefits."
Dunn indicated he didn't want to set a precedent. He feared paying part of the chief's retirement health benefits would motivate the firefighters union to insist the same thing be added to its next contract. A union representative was sitting in the audience taking notes.
It was Dunn and Spisz who negotiated the new contract with Scholz.
Spisz noted that in the private sector, "almost nobody anymore" offers to pay for retirees' health insurance.
In his opinion, it's these types of "legacy costs" that are causing financial problems in many other local governments.
"If we don't continue to address them, we're going to be potentially in the same position," Spisz said.
Bunting, who works as a police officer for Birmingham, noted, "A lot of private sector people make a higher amount of money to where they're able to afford those costs on their own, where(as) public safety (personnel) do not." He worried that eliminating such benefits would make it harder to attract and hire good candidates for public safety jobs.
"When you don't have anything for people to grab onto . . . it makes it difficult sometimes. Sometimes we pass up quality people," he said.
Bunting noted he doesn't necessarily believe the township must pay "full boat" when it comes to things like retirement health insurance, but it would be good to offer something.
"We're going to lose quality people when you don't have any incentives," he said.
When there's no incentive to stay, a community can simply become a "training ground" for public safety personnel, who stay a short time, then move on to jobs elsewhere.
Despite his concerns, Scholz informed the board he would sign the new contract.
"Nothing's going to change, so it is what it is," he said. "I'll do my best to continue to serve the community."
However, Scholz noted he was upset to find himself trying to negotiate a new contract during a public meeting two weeks before his current one is set to expire Dec. 31.
"I still resent the fact that it (took) until the last second when we had plenty of time to sit down over the last three months and talk civilly across the table and try to negotiate something," Scholz said.
CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.