In this file photo, Huntsville Finance Director Penny Smith briefs the City Council and Mayor Tommy Battle on city revenues. The council overrode advice from Smith and the mayor to grant a one-time bonus to retired city workers.The Huntsville City Council voted Thursday - against advice from the mayor and city finance director - and spent nearly $1 million to give retired city employees a onetime bonus.
The cost to the city will be just under $1 million, Smith said. The city already helps support a trust that pays 30 percent of retirees’ health insurance and has bolstered that by a special appropriation of $4.5 million. Healthcare costs are rising for the city, partly because of retiree costs, and spending the extra money now could be “fiscally insensitive,” Smith said.
Battle said the city will have to look this year at low and even negative returns reported nationally for retirement funds. “It’s best for us as a city to hold our powder,” Battle said, “to make sure we have the funds to put back in to re-shore these funds as necessary” so everyone gets a retirement check. “That’s why we’ve not brought this to you before,” Battle said. He urged the council “to be careful with your dollars right now.
“There’s always unknowns,” Council member Frances Akridge said. Alabama’s public employee retirement system is not in trouble, she said, “and healthcare costs will probably continue to go up and, yes, we’ll probably have to do that also.”
It would have been a larger bonus, but we had to pay the legal fees for a murderer this year.