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Posted on Wed, Jan 9, 2013 : 5:59 a.m.

Vacation time and pension reductions: Ypsilanti considers employee benefits changes to cut expenses

By Katrease Stafford

Non-union City of Ypsilanti employees hired after Jan. 1, 2013 will have reduced benefits packages that are expected to the save the city money in the coming years.


City Manager Ralph Lange

Non-union employees hired prior to Jan.1 would remain on the old plan, which has a pension plan with a multiplier of 2.5 percent and allows retirement at age 50 with 25 years of service.

A multiplier is used to determine the size of the lifetime annuity an individual with a pension will receive. It's usually expressed as a percentage of final compensation times years of service.

The new plan will have a multiplier of 2 percent and would allow retirement at age 55 with 25 years of service. This amounts to a 20 percent reduction in the multiplier in comparison to the previous plan. City Council unanimously approved the change.

"This is just one of the new changes in the benefits that (City Manager) Ralph Lange is making to allow this program to last longer without employer contributions," said Sallea Tisch, Accounting Supervisor.

Lange said legacy costs are a huge drain on the city and he's trying to set the foundation that would hopefully reduce those amounts.

"This isn’t finished yet but we’re going to work as hard as we possibly can to do that," Lange said.

The chart below shows several additional proposed benefits changes that council will consider at its Jan. 22 meeting:


Council will consider these changes.

Courtesy City of Ypsilanti

"We have to be precise in who we hire and even more precise to keep the overhead down and get quality people," Lange said. "That's how we survive."

The city has seen a decrease in its staff levels. As of Jan. 1, the city has 81 full-time employees, six part-time and 10 interns.

In 2012, the city lost 15 employees who either retired or resigned. Altogether, those employees wages amounted to $1,030,374. Thirteen of those 15 employees were unionized employees from the police and fire departments.

The city has since hired four employees, three in police and Lange, who amount to a total of $218,705 in wages.

Lange said the next thing the city needs to tackle is the amount of overtime taken by city employees. Lange said the police and fire department had accounted for between $600,000 and $700,000 worth of overtime alone in previous years. Lange did not have numbers immediately available for non union workers, but said the overtime is a real "cash number item."

"Accrual of vacation and sick time are big time cost factors," Lange said. "Furlough days are a big item and I have the problem of how do I mesh people that are on furlough days and people that aren’t."

One of the proposed changes to benefits includes no furlough days for city employees hired after Jan. 1. Those hired before have 13 days per year. Lange said he wants to "drive things forward" to get everyone on a similar system and back to working on the same amount of days.

"Because we're so thin on employees, every time someone is out for a sick day or a personal day or a furlough day, that generates overtime," he said. "So now, instead of trading time for money, you gave them time off… the amount of people we have is very finite and we will be in a very tight personnel position for the next 18 years.

"I’m trying to set us up so that we hire people we desperately need and also limit the time off we have so there isn’t so much fill in time."

Lange said he is hopeful the changes will be cost effective, though the reward may not be immediate.

"We have to hire more employees, but you have to figure out how much each employee costs," Lange said. "Their cost is their pay, their benefits and their legacy costs. So some of this may not have full effect for 20 years until everyone is out of the system and they're now in another tier."

Lange said the city has some dedicated employees, but the city cannot continue to operate at the same benefits level.

"It’s a very complicated item and you’re talking about people that have been here a very long time that have been faithful," Lange said. "Certainly that needs to be rewarded and we still need to reward that, but we can't at the rate that we did in the past."

Katrease Stafford covers Ypsilanti for her at or 734-623-2548 and follow her on twitter.


Glen S.

Wed, Jan 9, 2013 : 6:10 p.m.

I know our City faces significant financial challenges, and I'm all in favor of looking for common-sense ways to save money now, and in the future. However, this proposal to discontinue health and dental insurance coverage for the families of future City employees is both short-sighted and shameful. Right now, we are very lucky to have some very talented and hardworking city staff -- but they won't be here forever -- and someday soon we'll need to attract (and retain) high-quality candidates to replace them. We certainly will not be in a very strong position to do that if we can't offer future candidates the security and peace-of-mind of knowing their family members will be cared-for in case of a serious illness or injury. Ypsilanti is a community where nearly 80% of voters recently chose to re-elect President Obama, and where I suspect a similar majority support the concept of universal health care. So -- of all the things we could consider to save money -- is proposing to deny adequate healthcare coverage to the families of future City employees REALLY the direction we want go? This proposal is short-sighted, and totally out of step with the character of our community. While passing this proposal may make it appear t some as if we're finally being "tough" on City employees' benefits, I predict it won't actually end up saving us a single penny in the long-run -- once we factor in the very real costs of having to hire, re-hire, and re-train a constant stream of new, short-term, and much less-experienced City employees.

harry b

Wed, Jan 9, 2013 : 9:06 p.m.

Do you think its a coincidence that Ypsilanti has extremely high tax rate / the city is broke and the fact that 80% voted for Obama. I think we just summed up Obama's Presidency in one sentence.

harry b

Wed, Jan 9, 2013 : 4:37 p.m.

Why would you offer a pension where people can retire as early as 50 years old. It's not the norm in the private sector and unneccesary in the public sector. What a waste of money. Who needs to retire at 50????


Wed, Jan 9, 2013 : 3:30 p.m.

"allows retirement at age 50 with 25 years of service." and they had trouble making end meet? Shocking. Anyway, I'm sure this is Slick Rick 1%er Snyder's fault. Just need to connect the dots somehow. You know, as the "assault on the middle class continues". Probably an assault on women too, since they are employees there.


Wed, Jan 9, 2013 : 3:13 p.m.

The health care coverage amounts to age discrimination. What parent can take a postition with the city now?

harry b

Wed, Jan 9, 2013 : 5:29 p.m.

Has nothing to do with age. A 18 year old can be a parent or have a spouse and so can a 90 year old. But I agree it is stupid not to offer family coverage. Not many people will take a job with the city. If they do it may be a short time until they have kids or get married.


Wed, Jan 9, 2013 : 3:11 p.m.

Has Lange moved to/near the city yet?

Katrease Stafford

Wed, Jan 9, 2013 : 4:01 p.m.

At a recent meeting, Lange stated he stays within walking distance of city hall during the work week. However, I do believe he still has a family residence elsewhere.

Katrease Stafford

Wed, Jan 9, 2013 : 2:13 p.m.

The benefit changes outlined in the chart above for new employees may still be changed. Council members last night expressed that since they approve union benefits, they felt they should approve non-union as well. It's tentatively set to be discussed at the Jan. 22 meeting.


Wed, Jan 9, 2013 : 1:38 p.m.

The other nice benefit that should be looked at is how the pension baseline is calculated. In private sector, the few places that have a defined benefit use last five years of baseline salary, overtime is Not added to baseline. In public sector, baseline calculation uses last five years total wages. So an employee who works overtime increases the baseline of their pension. Also it is common to get a promotion and big raise just before you leave. That cost Taxpayers a lot of money.


Wed, Jan 9, 2013 : 1:07 p.m.

Let's just make everyone a "Part Time" employee and pay them a good wage with "no" benefits. This will save the money the city needs to carry on. They can apply for Obamacare and have their medical covered. They can contribute to a 401K and have their retirement covered.


Wed, Jan 9, 2013 : 2:06 p.m.

Better yet, let's just set the entire middle class on fire! Why destroy it in dribs and drabs when one huge conflagration would be more efficient--and cost-effective?!


Wed, Jan 9, 2013 : 12:09 p.m.

Wow, no healthcare for family will not help retain experienced employees.


Wed, Jan 9, 2013 : 1:08 p.m.

Those employees with experience can find excellent jobs in the private sector with benefits matching their previous public level...

Basic Bob

Wed, Jan 9, 2013 : 12:57 p.m.

That concerned me, too. You can't expect to hire people with families on this. It would be better to stop allowing people to carry over unused vacation and sick time.


Wed, Jan 9, 2013 : 11:21 a.m.

How about the city use a defined contribution plan (401K) like the rest of the businesses world instead of the defined benefit plan (pension)? Overall, those cuts seem like a band-aid on a gunshot wound.


Wed, Jan 9, 2013 : 8:32 p.m.

@ahi, the city STILL has to pay into the pension plan, which is much more costly long-term. So no, there is no doubling of costs.


Wed, Jan 9, 2013 : 3:23 p.m.

Switching to a defined contribution plan means doubling costs. The city would have to continue paying the defined benefits of retirees and the defined contributions of current employees.


Wed, Jan 9, 2013 : 2:54 p.m.

I didn't see alot to be angry about if you are a new hire for the city. I agree, they need to cut more from new hires, maybe making up in pay for what they take out of benefits.