Pelham considering eliminating free retiree club memberships

Published 10:21 pm Monday, July 12, 2010

The Pelham City Council will decide during its July 19 meeting whether it will continue to allow city retirees to have a free membership to the Pelham Racquet Club and Ballantrae Golf Club.

The announcement came during the council’s July 12 meeting, during which it held the first reading for the proposed ordinance.

If the ordinance is passed during the July 19 meeting, it will repeal previous ordinances which gave retirees a free lifetime membership to both clubs.

Because the plan is considered by the Internal Revenue Service to be a taxable benefit, the city’s current structure of offering the free memberships to retirees is illegal, said Place 3 Councilman Bill Meadows.

If the city continued to allow the free memberships, it would be required to send IRS 1099 tax forms to the retirees who held the membership vouchers, Meadows said.

“What we are doing now is illegal. There’s no ifs, ands or buts about it,” Meadows said. “It was brought to my attention that we are not following the U.S. code.

“It’s nothing personal,” Meadows added. “I wouldn’t want to pay taxes on that benefit.”

Pelham Mayor Don Murphy said if the council voted to repeal the free memberships, it should include a grandfather clause for the retirees already taking advantage of the program.

“I think the people already on it should be grandfathered in,” Murphy said, noting the grandfather clause should be optional for those who do not wish to pay taxes on the free memberships.

“I think we owe it to the people who have served the city in the past,” Murphy added. “I don’t think we should take that away from them.”

Gary Waters, the city’s retired fire chief, said repealing the free memberships would be “heavy handed,” and urged the council to consider a more gradual approach toward abolishing the benefits.

“What this ordinance proposes appears pretty heavy handed,” Waters said. “I think something should take place between the policy in place now and what the city is considering.”

“I don’t know if I would call it heavy-handed,” said Council President Mike Dickens. “I don’t know how I feel about it right now. I will voice my opinion at the next meeting.”

In other business, the council:

– Heard from Murphy, who disputed a letter to the editor written by Pelham resident Robbie Kidwell. The letter appeared in the July 10 edition of the Pelham Reporter.

In the letter, Kidwell criticized the Pelham Library’s computer system, and said Murphy was running a “scam” by “not giving quality (library) service while collecting the same tax dollars from the citizens.”

Murphy said the letter was a “misstatement,” and said Pelham’s library is one of the best in the state.”

“The letter accuses me of seeking ways to keep people out of the library. That’s simply not true,” Murphy said, noting he planned to submit a letter to the newspaper combating Kidwell. “To date, we have had 126,311 library visitors. I just don’t like anything bad being said about our library.”

Murphy said, because of the high volume of library visitors, the library installed a timer system on each of its computers. After someone uses a computer for a certain amount of time, they must log off and allow another patron to use it.

“I see it like a merry-go-round,” Murphy said. “You wait in line to ride the pony, and when it’s your turn, you ride the pony until it’s time for you to get off.

“If you want to ride the pony again, you get back in line and wait your turn,” Murphy added.

– Announced the city will save about $660,000 over the next several years as a result of a recent bond issue interest refinance.

Interest on bonds issued in 1998 will be reduced from 3.8 percent to 2.75 percent, and will cost the city “no additional money at all,” Murphy said.