DATE: Thursday, August 7, 1997              TAG: 9708070477

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   78 lines

END OF TEMPORARY RAISES ANGERS NORFOLK RETIREES

The one-paragraph form letter from the city arrived in the mail like a slap in the face to Karl Herbert, a former Norfolk policeman who retired from the job in 1985 after 25 years.

The ``Dear Retiree'' letter, dated July 30, confirmed rumors circulating among the city's 2,200 retirees: A 3 percent supplemental retirement pay increase granted a year earlier by the City Council was being eliminated.

The next day, Herbert's July retirement check arrived - and he was $30 poorer.

``I just think it's another one of Norfolk's dirty tricks,'' Herbert said Wednesday. ``I don't see them taking 3 percent out of their pay.''

Herbert and dozens of city retirees have barraged city officials with angry phone calls and messages. They aren't mincing words: They want the extra pay restored.

James T. Reid, president of the city's Retired Employees Association, said the reduction comes as a hardship to many retirees, some of whom receive less than $200 a month in city retirement benefits.

``When you retire, you don't want to be forgotten,'' Reid said. ``If you take 3 percent away and you add in the increase in the cost of living, you're that far behind. You feel slighted.''

City officials say they understand how the retirees feel, but they point out that the supplemental pay hike was never intended to be permanent. It was passed as part of the 1996-97 budget as a temporary benefit - to recognize the retirees' many years of service, officials said.

``Nobody ever said to the retirees that there was going to be a permanent adjustment,'' said Deputy City Manager Darlene Burcham. ``In effect, what happened is that council gave them a bonus. It's not a case, in my mind, of taking something away.''

She said the idea for an increase came from council members at a time the city was overhauling its retirement system. The city management recommended against making the 3 percent increase permanent, Burcham said, because of fears that the city couldn't afford it.

The temporary payments cost the city about $515,000, officials said. It would cost millions more to continue paying the additional money, Burcham said. One study the city had done, Burcham said, calculated that an annual cost-of-living increase of 4.5 percent would cost the city $27 million annually.

In the current year, the city will pay $12.1 million into its retirement system.

``That kind of money comes right off the top,'' Burcham said, squeezing out funds that could go to improve neighborhoods, buy books for the library or repair curbs and sidewalks.

While last year's budget ordinance clearly states that the 3 percent benefit would be paid only during fiscal year 1997, which ended June 30, even some council members say they thought at the time that it was supposed to be permanent.

At least four of the city's seven council members said they want to revisit the issue.

``We're not finished with that,'' Councilwoman Daun S. Hester said. ``When you're on a fixed income, you count on every little thing you have - and now it goes away.''

Councilmen W. Randy Wright, Paul R. Riddick and Herbert M. Collins also have voiced concerns.

``It would seem to me that, as difficult as it might be from a financial aspect, there is a moral obligation there, and we should try to meet it,'' Wright said. ``I just feel we've got to find a way to make that work.''

Mayor Paul D. Fraim said he expects council to address the issue. It's important that everybody understands the costs involved, he said.

``That's a big hit for the city,'' Fraim said, ``But obviously we're very concerned about keeping faith with our retirees.''

Burcham said the city's retirement system, in place since 1942, was never intended as a sole source of retirement money. Most city retirees also receive Social Security benefits, and city employees can build retirement savings by contributing to a 401(k) plan.

But retirees such as Herbert said keeping up with inflation is tough. Herbert said he's received only three cost-of-living adjustments in his retirement pay from the city since 1985.

``They give you something and then take it away a year later. I just don't think it's right,'' Herbert said. KEYWORDS: COST OF LIVING INCREASE RETIREES

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