Selectmen link trash fee to acceptance of health plan
Published on February 27th, 2008
The Selectmen warned municipal workers last week that their ranks will be thinned next fiscal year unless Stoneham’s employee unions accept inclusion in the state’s health insurance program by this May.
In a 4 to 1 vote, the Selectmen agreed that no trash fee would be instituted this year unless the union membership endorsed a shift to the Commonwealth’s Group Insurance Commission (GIC).
According to Selectman Paul Rotondi, who led the charge last Tuesday for the GIC concession, the vote is not intended to threaten Stoneham’s employees and local citizens, but rather to force the town to change the way it does business.
In particular, he warned that Stoneham could not continue to subsidize its budget with the trash fee, because the town’s refuse costs are expected to soar by as much as $2 million in 2010, when the contract will have to be negotiated.
And in order to avoid year after year of budget woes, Rotondi argued, local officials need to either tap a significant revenue stream or reduce services to a level that will end the deficit cycle of past years.
“The problem is very simple. We are using the trash fee to subsidize operating expenses,” said Rotondi. “In 2010, we’re going to be hit with an increase of $2 million.”
“If we’ve already committed the trash fee for operating expenses, we’re going to have no way to cover that $2 million,” the Selectman explained. “Until we get a base from which we can grow, you’re going to have to go through this every year.”
Last Tuesday, Town Administrator David Ragucci pitched a $57.9 million budget for FY’09 which would not contain the approximate $1 million in trash fee revenues.
According to Ragucci, without that funding source, a mirroring deficit would exist next year. To plug that hole, he has proposed that library revenues be nearly halved, slashing $300,000 from the facility’s $790,000 budget.
On the school side, all high school athletics, 20 staffing positions, and 10 percent of supply line-items would likely be eliminated.
With the trash fee, the library would be fully-funded and the schools would receive another $500,000 in revenues, saving 80 to 85 percent of all sports programs and the loss of eight staff members.
While the Town Administrator has identified several ways to save or generate revenue, he labeled a shift to the GIC as the big ticket item that could be pursued to shave expenses.
“Probably the biggest thing we could accomplish as a town would be to join the GIC. This year alone, we saved $900,000. If you had that, you’d have no problem [next year],” Ragucci remarked.
Late last July, Governor Deval Patrick officially signed a bill that allowed municipalities to join the state’s GIC.
Proponents of the measure argued that local cities and towns could save hundreds of thousands of dollars in health insurance costs, as the GIC covers all of the state’s workers, providing more negotiating leverage with health care providers.
Opponents of the legislation, including some high powered labor unions, have argued that the GIC would cost municipal workers more for health coverage, that unions would lose their ability to negotiate co-pays and deductible, and that major insurance providers like Blue Cross Blue Shield do not offer plans under the pool.
Based upon the measure, a city or town’s CEO, whether a mayor or town administrator, must convene a Public Employee Committee (PEC) meeting with members of each union, plus representation from the municipality’s retirees.
At least 70 percent of the unions membership, based upon a weighted vote that reflects the size of each collective bargaining unit, must approve the shift to the GIC.
The last date for cities and towns to join the GIC and benefit from cost savings next year has already expired — the deadline was last October. And according to Ragucci, Stoneham’s unions have ignored his calls for PEC gatherings over the past six months.
“First they lose their negotiating power over co-pays and deductible. They would be higher for town employees,” said the Town Administrator, when asked why the unions would ignore the requests for PEC meetings.
“The third reason is because we’ve already signed a contract with them, so the want to hold out until the next one [so they can negotiate a pay raise for a GIC concession],” Rotondi later vented.
In their vote last Tuesday, town officials explained that they would extend the trash fee for another year, if the unions agreed to join the GIC by FY’10.
According to the Selectmen, should the unions agree to lend a helping hand to the town during the difficult budget year, they would agree to bridge the FY’09 funding gap to guarantee the jobs of town workers.
“Even if the unions sign-up for the GIC this year, we’ll not be able to get those savings until next year. So we’ll say, ‘Okay, we’ll subsidize that for one year, if you’re willing to put up your share,’” Rotondi explained.
Schools Supt. Dr. Les Olson later defended the town’s unions, explaining that they weren’t attending the PEC gatherings because they wanted to wait for the insurance rates to be released by the state this March.
Another town employee, who only identified herself as Martha, later insisted that Stoneham’s workers were being demonized for a budget crisis that was largely not of their doing.
Admitting that the town’s workers received excellent health benefits, she argued that salaries weren’t very competitive, when compared to many surrounding communities.
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