The City of Covington has several important issues on its plate, including switching away from its defined-benefit retirement plan, possibly grooming a future replacement for City Manager Steve Horton and its future participation in the Leadership Collaborative.

During Tuesday's strategic planning session, Horton took time to update the city council.

Defined-benefit too expensive
The city has been aggressively pursuing early retirement options to save personnel costs, but eventually its growing retiree pool will become too expensive under the current defined-benefit plan.

Though defined-contribution plans were previously a popular retirement option, during the past few decades the private business sector has almost completely transitioned to defined-contribution plans, such as 401(k)s.

Because defined-benefit plans require organizations to pay employees a defined amount of money per month, the cost of the plans gradually escalate as more employees retire and live longer once retired. For many governments, the cost of these plans is beginning to eat away significant chunks of their budgets.

Defined-contribution plans not only require the employee to split some of the cost of investing in his retirement, but also don't leave governments on the hook in future years. The companies invest in their current employees' retirement plans each year, but once an employee retires, his retirement income is dependent on the performance of the stocks, bonds and other investments he owns.

Horton said the city actuarial consultant recommended a change by the beginning of 2011, and Horton said he plans to have a proposal for a retirement plan change ready by October.

Any employees who were hired under the current defined-benefit plan would have the option of keeping that plan; however new hires would come under the defined-contribution plan.

City manager replacement
Horton is known around the city as the go-to guy, the man who knows nearly everything and has an incredible memory and tons of institutional knowledge. Though Horton isn't planning to retire anytime soon, the council decided he needs some assistance and it needs to have a backup plan should Horton ever become incapacitated.

Horton said the city is working to develop a succession plan for his and other high-level positions. The city manager is particularly crucial in Covington because he is the main day-to-day operational officer, unlike some governments, like Newton County, where an elected official takes on that role. In addition, Covington has had two long-time employees at the position, Frank Turner and Horton, who both gained a lot of institutional city knowledge throughout their years at the city.

In fact, Horton trained under Turner, which some council members believe should happen with Horton's replacement. Under an ideal situation, Horton said he would work for another five years, but the sooner the city can find an assistant to serve under Horton the more comfortable the council will be.

Council members agreed to meet one-on-one with Horton to decide upon a future course of action.

Leadership Collaborative reboot
Following the completion of the 2050 Plan, a large undertaking that took four years and effort from dozens of community leaders, the Leadership Collaborative may need a reboot to get back on track.

The group is designed to bring members from different government bodies together to jointly plan and implement actions, and it contains members from the Newton County Board of Commissioners, Board of Education and Water and Sewerage Authority and the cities of Covington, Oxford and Porterdale.

However, while the planning process was successful, implementation of the 2050 and other plans has been sluggish, and the Covington city council wants to meet with its partners to take a fresh look at the process.

Covington participants felt that the meetings of the Leadership Collaborative's three committees have become stagnant recently and the group needs to take a fresh look at where it's headed. Mayor Kim Carter e-mailed the other parties Tuesday afternoon to set up a meeting.