2010-06-30-AC-min - Laserfiche WebLink

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June 30, 2010 4. Coalition Bargaining Settlement. Town Manager Carl Valente and Denise Casey, Human Resources Director, reported to the Committee on the results of a coalition bargaining settlement that had recently been reached with all of the Town's unions on health benefits. Carl and Denise provided the committee with a spreadsheet detailing the terms of the settlement and summarized the highlights as follows: • The Town's contribution rate will be decreased by 2.5% each year for the next two years from its current level of 85% to 80% • Plan design will be changed to increase co -pays and to add a new co -pay for inpatient hospital visits ($250 per visit up to a maximum of 3 visits per year) • To offset the concessions on health benefits, the Town will increase the base wages of all full -time employees across the board by $500; part-time employees will receive a pro -rated amount • To fund the agreement, Town Meeting will be asked at the next annual town meeting (or special town meeting if one occurs earlier) to transfer the necessary amounts from the health benefits budget to the salary budget. If Town Meeting does not approve the transfer, health benefit funding will revert to the status quo ante (i.e., 85% contribution, no increase in base salary) Finally, if legislation is enacted at the state level that allows the Town to make unilateral plan design changes, and the Town makes such changes, the default Town contribution rate will revert to 85% The Town Manager estimates that the net savings to the Town that will result from the settlement are approximately $365,000 in FY2011 (1.5% of the health benefits budget) and $942,070 in FY2012 (3.6% of the health benefits budget). The committee commended the Town Manager and his staff for this achievement. In response to questions, it was noted that extensive efforts had been made to negotiate for a health cost reimbursement account arrangement instead of a base salary increase, which would have had tax advantages for Town employees, but these efforts were not successful. Efforts to introduce "rate saver" plans were also unsuccessful, but are believed to be worth a continued look in the future. The increase in base salaries will have an impact on pension costs, but these have been accounted for in the net savings calculations and will be factored into the adjustments to be made at the next town meeting. 5. Miscellaneous. The Town Manager advised that the most recent revenue projections for FY2011 are not particularly promising, but the possibility of a revenue shortfall was not unexpected, and approximately $400,000 of unallocated revenue was left aside at the Annual Town Meeting to cover possible shortfalls. Approximately -2-