O.B. early-retirement-ordinance talk turns tense

Old Bridge Township Council members and members of the public tussled over budget issues during Monday’s council meeting, focusing mainly on a recent early-retirement ordinance that Republicans said should be repealed.

“I propose we repeal this ordinance and we work bipartisanly on a new ordinance that would actually help the employees who want to leave and also figure out a way to help the township,” Councilman Brian Cahill, a Republican, said.

After a tense discussion, Township Council members agreed to revisit the ordinance at its next meeting.

The early-retirement ordinance, passed last month in a 5-4 vote, reduced the amount of time an employee must have worked in Old Bridge from 25 to 15 years in order to retire and collect health benefits.

Supporters of the plan said it would help save the township money as the work force is reduced through attrition. However, Cahill argued that the ordinance would not save the township money as Democratic Mayor Patrick Gillespie and his fellow council members have stated.

Cahill said he was concerned that the cost of long-term health benefits would outweigh any savings from salaries being off the books.

Cahill said that without any sort of cost modeling on the effects of the ordinance, it was impossible to make an intelligent decision in voting.

“I really believe that if we had some analysis that showed true savings, it would have been a 9-0 vote [to adopt the ordinance the first time] and we wouldn’t be talking about this right now,” Cahill said.

GOP Councilman Richard Greene also refuted the potential cost savings of the plan, noting that there is a major difference between health insurance costs and pension costs for the township. Whereas there is a fund that is being paid for to help cover pension costs, with health insurance the township must for the most part pay as it goes, bearing the cost for health care benefits on a year-to-year basis. “In this economic climate, I question why we would move to enhance a health insurance benefit,” Greene said. “How can I support adding additional costs to the township?”

Gillespie said the early-retirement ordinance was necessary though to help avoid layoffs and targets those with higher salaries. These people, he said, have an indirect role in providing services to the public.

If layoffs were to occur, Gillespie said it would likely impact employees on the lower end of the pay scale who work day in and day out directly with the public.

“They are the people that go — last in, first out,” he said.

Gillespie said the early-retirement ordinance could save the township upward of $200,000 in the future.

By avoiding layoffs, Gillespie said the town would also avoid having to pay costly unemployment benefits. And while Republican members of the council fear that the positions of retirees will be backfilled, Gillespie said they have not done this in the past and will not start now.

“I think that this [ordinance] is the appropriate way to go,” he said.

Republican council members, however, reiterated that state officials also have questioned the potential cost savings of the early-retirement ordinance. In a letter dated June 1, Thomas H. Neff, director of the state Division of Local Government Services, requested the township take steps to repeal the ordinance, stating that combined with the recent sale of land, it appears to put the township “on a path to creating a structural budget problem that will be extraordinarily difficult to address.”

Lisa Ryan, a public information officer with the state Department of Community Affairs, said Neff and Gillespie had a “cordial and professional discussion” about the earlyretirement ordinance in the wake of the letter.

However, Neff and the department still have their concerns over the ordinance.

“We continue to stand behind our concern that the ordinance will aggravate financial problems in future years and should be repealed,” Ryan said. “It might save a little bit of money in the short term, but it will cost more in the long term. We have not seen anything that suggests to us that an ordinance expanding post-retirement medical benefits saves money.”

The early-retirement discussion highlighted a tense meeting filled with several public presentations against rising property taxes, utility rates and perceived financial mismanagement of township funds.

Sam Gallucci, a township resident who is leading the Old Bridge Tea Party, said he was forming a coalition to reduce taxes to their 2005 levels. Republican Township Council members raised their hands in support of the coalition.

“We are going to have so many people that when we have a meeting, we are going to have people standing outside these doors,” Gallucci said. “The war is on.”

Contact Chris Zawistowski at czawistowski@gmnews.com