PROVO — City employees will not only receive funding to enhance their compensation, they'll get the opportunity to vote for what benefits they want.

In the face of a tight budget year, Provo City Council approved a final budget for 2009 of approximately $149.6 million on Tuesday night that has two options: to fund city employees' 1 percent cost of living adjustment or to cover health-benefit costs and maintain 5 percent pay steps.

And there's a special treat for city employees: They get to pick which alternative they prefer.

This opportunity is being offered to employees after City Council requested that city administration re-examine the budget and find a way to enhance employees' compensation beyond Mayor Lewis Billings' original recommendation for the upcoming fiscal year.

Provo City Employees Association president Skip Tandy said the employees are appreciative of the council and mayor's efforts to address their concerns.

"Provo city is still a great place to work," he said.

Originally, Billings recommended a budget that cut employees' cost of living adjustment and required employees to front cash to share the burden of rising health-benefit costs. Billings' proposed budget also scaled back the first five steps of employees' annual pay ranges from 5 percent to approximately 2.5 percent step increase each year for the first 10 years of city employment.

With 78 percent of the city's operating costs committed to employees' salaries and benefit expenses, Billings said it was not possible to balance the budget without finding a way to reduce the cost increases associated with salary and benefit projections.

But City Council gave their collective headshake of disapproval to that recommendation last week, and sent city administration back to the drawing board to find ways to give the employees some compensation benefits.

"We have to look after our own," City Councilwoman Midge Johnson said at the time.

Tuesday night, Billings presented two options to provide some benefits to city employees. Under the first option, the city would use $305,000 to provide a 1 percent cost of living adjustment. Under the second option, the city would channel $155,000 to restore the 5 percent step increase and use $150,000 to eliminate the need for employees to contribute to health insurance — which equates to $60 for family coverage and $34 for single coverage.

Billings said it's been difficult for them to determine which alternative is more important to employees, so they will take a poll of full-time employees and implement one of the two options based on the results of that poll.

A representative of the Provo City Employees Association will be present during the tabulation of the vote, Tandy said — not because the group doesn't trust city administration, but because it wanted to validate the process.

Billings said the finance department achieved the $305,000 savings to fund the options by:

• Cutting $55,000 in city departments for which revenues were already available.

• Implementing a delayed hiring program to generate savings by keeping vacant city positions open a little longer than needed to generate $125,000.

• Using $125,000 in existing general fund balance to make up the difference.

Billings said he's concerned because the city is "drawing a little bit from the future" to fund the benefits, but Johnson said it's worth it to help employees.

City staff will poll the city employees over the upcoming days to determine which alternative the majority wants. The City Council will then approve that budget option.


E-mail: jdana@desnews.com