Budget Review Committee

BUDGET REVIEW COMMITTEE APRIL 16, 2012 A meeting of the Budget Review Committee was held Monday, April 16, 2012 at 7:01 p.m. in the Aldermanic Chamber. Alderman-at-Large Brian S. McCarthy, Chair presided. Members of Committee present: Alderman-at-Large David W. Deane, Vice Chair Alderman-at-Large Lori Wilshire Alderman Richard A. Dowd Alderman Mary Ann Melizzi-Golja Members not in Attendance: Alderman-at-Large Mark S. Cookson Alderman-at-Large Jim Donchess Also in Attendance: Mayor Donnalee Lozeau Alderman-at-Large Barbara Pressly Alderman Michael J. Tabacsko Brian Morrissey, Chief, Nashua Fire Rescue Stephen Bennett, Esq., Deputy Corporation Counsel John Griffin, Chief Financial Officer/Comptroller Chairman McCarthy Alderman Cookson and Alderman Donchess had indicated they would be unable to attend this evening. PUBLIC COMMENT – None PRESENTATIONS Update of Union Contracts Mayor Lozeau The purpose of me doing a presentation tonight was I thought that it would be helpful to get folks up to speed on where we were with the contract negotiations. As everybody knows, we have 15 contracts; all but the Paraprofessionals contracts has expired, and we have been working towards solving that. If you move to the next slide I will begin by telling you about where we were. Now for some of you this slide will look familiar. March 23, 2011 is when I presented this, and I presented this information not only to the Board of Aldermen but to all of the employer boards as well. What we were facing at that time was about almost $7 million that we had to find a way to cover. The makeup of those costs included the increase in healthcare and retirement costs; we were then anticipating an 11% increase in healthcare costs that would equate to about $3 million. We had the employer rate increase in retirement, which was $1.7 million, and a FY11 decrease of 10% in State retirement contribution rate, which came to $1.4 million. Then I talked at that time about new dollars that we needed; included the Enterprise Resource Planning dollars for $100,000, the water supply, in other words the public hydrants for $210,000, the Capital Equipment Replacement Fund (CERF). As we’ve been talking about that plan we laid out to match the 10 year fleet assessment, it required an increase put into CERF through the operating budget of $385,000. Then as you know we were hoping to create a capital for buildings fund for $150,000. Those things we have done. Our position in 2011 was that with climbing healthcare costs and the City was baring the majority; 80-90% of the expenses were what the City was covering, and as I explained at the time we couldn’t let that continue Budget Review – 04/16/12 Page 2 that way. Employees were only sharing 10% on the HMO plan and 20% on the POS plan of that premium. The healthcare plans provided and continue to provide a full level of benefits for the 1,883 employees that are enrolled in the healthcare. As you know, it goes without saying that is very costly for the City, and it included a $10 office co-pay, no annual deductibles, and $5 and $15 prescription co-pays, which I don’t know that there are many people that have a plan like that out there anymore and that is what we were talking about at the time. In addition, we had Federal Healthcare Law mandates including wellness coverage with no co-pay, insurance for all subscriber dependents until the age of 26, as well as other plan improvements, and these mandates of course added costs to the City’s healthcare plans. We still, even today, don’t know the full impact of that. At that time, we talked about part of the solution included healthcare changes that we promoted adding a lower cost high deductible plan, we talked about removing the named healthcare carriers from the Collective Bargaining Agreements, we talked about increasing the cost sharing of premiums for HMOs going from 10% to 20% and POS from 20% to 30%. Then we also talked about plan design changes where we would actually increase the co-pays so the office visits would go from $10 to $20 and emergency room visits from $50 to $100, and that we would add deductibles for the first time, an annual deductible of $250 per single and $500 per family for inpatient, and outpatient services and that we do a managed three tier pharmacy program, and lastly we would introduce consumer driven healthcare strategies. The estimated healthcare premiums when we were planning the FY12 budget, if everything I requested of the employees would happen, this is what the numbers would have looked like. So the City’s annual share was $10 million, the school share of healthcare, which in essence is the City’s share because we carry that on our side of the lever as I say from time to time, that was $15.8 million. That equaled the City’s share of being $25,800,000. Then the employees on the City side annual share would be $2,600,000 and the employees on the school side would be $4.3 million for a total of $6,900,000. When you looked at that total at that time we were looking at almost a $33 million healthcare plan. Just thought that might help people to understand kind of the magnitude. Here are the negotiation issues; so the increase in healthcare contributions, the following groups have gotten on board with the City and School’s request, and they have settled their contracts. These subscribers are paying the additional 10% contribution towards healthcare so that means right now they are paying 20% for the HMO and 30% for the POS. Those contracts include the teachers, the school custodians, the school secretaries, the school food service, and the library employees. On the non-union side, our merit employees and police and school non-affiliated are paying it as well. That is a total of 1,339 subscribers or 70% are on board and paying those increased costs. The increase in healthcare contributions, here are the following groups that have not agreed to the employment contracts that include the additional 10% contribution toward healthcare, and they continue to pay at the 10% level for HMOs and 20% for POS; AFSCME, UAW Clerical/Technical, UAW Professional, Police Patrolmen, Police Supervisors, Police Communications, and Police UAW. Now Fire, which is before you tonight has a contract pending. That is a total of 544 subscribers that are not paying in or 30%. Should the fire contract pass tonight, we will be closer to 80% of the employees paying at that higher rate because as you will see in the contract tonight, that is proposed as part of their contract. Alderman Deane The total numbers you are giving Mayor, subscribers, those are people that actually subscribe to the health insurance? Budget Review – 04/16/12 Page 3 Mayor Lozeau That is correct. Alderman Deane So we’ve taken out those who don’t get health insurance? Mayor Lozeau Oh I’m sorry Alderman Deane, you’re saying in those numbers there next to all of those groups are those all subscribers or are those total employees? Alderman Deane All subscribers. Mayor Lozeau I think they are all subscribers. Alderman Deane So what is the total number of employees in the units? Mayor Lozeau The total number of employees in the union was that the… Alderman Deane Well… Mayor Lozeau The total number of… Alderman Deane …your fire shows 160… Mayor Lozeau Right. Alderman Deane …in your financial analysis and that number, 165 in your financial analysis and your number up there shows 160 so have the 5 that are part of the fire department been taken out of the mix? Budget Review – 04/16/12 Page 4 Mayor Lozeau I believe so, the non-subscribers. Alderman Deane That’s correct. Mayor Lozeau That is what we’re speaking to Chief. Alderman Deane So all of these numbers… Mayor Lozeau We have some employees that don’t subscribe. At least that is what these numbers… Unidentified Speaker There are a number of vacant positions. Alderman Deane Well that includes vacancies? Mayor Lozeau Right. Alderman Deane So when we go back to the prior slide it is still one in the same even though you have the teachers…you are showing… Mayor Lozeau There is … Alderman Deane 1,339 subscribers? Mayor Lozeau Right and the total subscribers in the city is 1,883. I believe if you do the 1,339 and the 544 that should equal 1,883. Budget Review – 04/16/12 Page 5 Alderman Deane So there is really more than 859 teachers perhaps or there is really more than 118 merit employees? Mayor Lozeau I would imagine there are. These are all numbers working off of the subscribers. Alderman Deane How old is this data? Mayor Lozeau It is fresh as of today. Alderman Deane Okay. Mayor Lozeau On the next slide, we have to ask so where are we. As you know the economy has not yet recovered although we do see some signs. Good fiscal stewardship requires some sacrifice from departments, employees, and our citizens, and that is what I talked a lot about last year when I was setting the table for what we were facing with the FY12 budget, and I talked about it incorporating three critical legs; the departments, the employees, and the citizens, in order to support the fiscal responsibility we had for 2012. Each are shared in that solution. Departments cut their budgets, as you know the majority of them by 3%, employees received limited wage increases and increased healthcare contributions, and Nashua residents paid a slight tax increase. And even with the recent changes to our healthcare plan we believe we offer the employees very good healthcare coverage. The new contribution rates are at or below the national averages for healthcare contributions. That is according to several sources where they range from between 27% to nearly 50%. I think employers and employees are making sacrifices here and throughout the city as you know. If we move to the next slide we talk about now what. So originally was asked that all employees pay that additional 10% beginning July 1, 2011 or at their expiration date and that the contracts be negotiated accordingly. Along with our merit employees, the following contracts, as I have mentioned, that have paid the contributions back to July 1st, so they paid retroactively, include the library, school secretaries and school custodians. As of September, teachers and food service employees have paid the increased contributions. As of October, school unaffiliated and police unaffiliated and contract employees paid the increased contributions, and before you tonight the fire contract proposed a retro date for healthcare contributions beginning October 1, 2011. As you can we’ve got an understanding of some that they have to offer some retroactivity but where that clock is is a bit of a challenge. If you go to the next slide, you are joining my world of struggles, which was so how do we keep the timing of the increased contributions comparable among all city employees, how do we ensure that those who settle their contracts in a timely manner are not penalized? So I intend to propose legislation for the Board of Aldermen’s consideration that would in effect reset the clock to October 1, 2011. This of course will also require the support of the various employer boards and employees. Now you know this hasn’t been an easy Budget Review – 04/16/12 Page 6 decision for me to make this recommendation. With the remaining 7 contracts and the others in play that we have talked about…I looked at the fire contract and thought I’m going to be in a place where I have to veto that contract because their contract expired in July and they are not going retroactive to July. Now I could do that and we could start all over, but I don’t think that helps us to move the ball forward. And in the meantime we’ve got a significant amount of employees that are paying more and taking home less than they did a year ago. st For the last 7 contracts, should we do that, should we reset the date to October 1 , the last 7 contracts have st to have their retroactive healthcare contributions as October 1 , it is very important. We can’t move it again. You know there is something to be said for you pick a date and you stick with it, but there is also something to be said for trying to move forward and bring everybody along. The final contracts have to agree to lower wage increases like the fire contract did. They committed to those increases that I asked for, and that they agreed to the changes in healthcare and the retroactive contributions. It is my hope that this is a way to resolve the final contracts that we are waiting to resolve. I’m happy to answer questions that I can. I would anticipate that this will be something that is brought before the board for your next meeting to be assigned, and at that time we can talk about some of the dollars and cents involved with it, but Mr. Chairman for those questions that I might be able to answer tonight, I would be happy to do so. Alderman Deane Thank you. A while back a piece of legislation had been brought in that had $1.6 million associated with it, which was going to be used as transfers back to the different departments who had settled their contracts prior to 30 June I believe. Is that right/ Mayor Lozeau Yes. Alderman Deane Some of those collective bargaining agreements were passed and that legislation just went away and language was added to the body of the collective bargaining agreement. I had asked for the analysis on where all of those numbers came from and I never got that. I don’t know why. I would still like to look at it. It must be available. Somebody must have done something to come up with that number. I just got tired of asking that is all. I got tired of asking… Mayor Lozeau I will wait until you are done asking your question and then I will respond. Alderman Deane Thank you. The people that paid, some of the departments have received money through the collective bargaining agreements and some like this fire contract, and I had talked to Alderman Tabacsko about it originally when the contract came in, showed no dollar amount and then we were told other than the transfer out of contingency negotiations, they had a December timeline to meet. So those who have paid the retro, my first question is how is that going to be adjusted or looked at? Are they going to be receiving money back from the city? Like the custodians. They are not? Budget Review – 04/16/12 Page 7 showed no dollar amount and then we were told other than the transfer out of contingency negotiations, they had a December timeline to meet. So those who have paid the retro, my first question is how is that going to be adjusted or looked at? Are they going to be receiving money back from the city? Like the custodians. They are not? Mayor Lozeau No. First of all let me start by responding to your question about what you have been waiting for and not received; as you know Alderman Deane it is important to me to make sure that I provide things that people ask for. The problem in that instance was that I don’t think we understood or communicated well what it was you were waiting for. When that legislation was no longer necessary I didn’t believe that it was necessary to provide that information. Alderman Deane It is still public information though Mayor. Mayor Lozeau I understand that, but I didn’t think you still wanted it. As I was saying, the restoration funds were on the table for people up until December. We have paid back about just under a million dollars in restoration funds to departments. That money was not to be used for contracts or wages or healthcare that was to be returned to their operating budgets. That won’t change. When we look at resetting the clock to October 1st, what is going to make the most sense is to in essence give employees a healthcare premium holiday where they won’t pay. We are doing the math now to find out if it is easier to have that be a weekly thing or a month or whatever those numbers bear out to be. But we anticipate that cost overall to be about $260,000. Alderman Deane So the people that have paid…the collective bargaining agreements that have been passed and the unaffiliated that have accepted this are not part of this? Mayor Lozeau No they are part of…that is the point. Alderman Deane Just let me phrase this differently then. I brought up the issue with the unaffiliated with the school district; you have people with 6 figure salaries that agreed that October 1 that their contribution would increase but you have janitors making $30,000 that had to pay retro back to 1 July, but the unaffiliated didn’t. What about the unaffiliated for the police department, they didn’t pay any retro back right? Mayor Lozeau October 1st. That was my point Alderman Deane. So we have some people that came to the table right away. Library was the first one to come to the table. They accepted the changes, they took it, and they started paying their increased contributions and got a lower wage increase. School custodians went back to July 1st; I think the food service workers went back to July 1st, retro to where their contract expired. Teachers’ contract expired in August, they started paying in September the increased contribution and the unaffiliated were October. And that is exactly my point. We’ve got this whole group of employees, some of which you’ve Budget Review – 04/16/12 Page 8 just mentioned, that are making less than $30,000 a year including one in my office that has been paying an increased healthcare cost for a long time. In the case of my office they have always paid it, but and others that have waited, and I don’t want to be in a situation where why would we penalize the ones that came in and did what we asked for and not everybody else? st If we reset the clock to October 1 what that does is it puts everybody in the same place. The janitors, the library employees, the merit employees, others like that, we will do the math and they will receive…they won’t get a check back, but they will have a month or 6 weeks whatever that math turns out to be of no increased payment in their healthcare. Alderman Deane You’ve already given the money back to the departments and they’ve already … Mayor Lozeau Two separate things. Alderman Deane But wasn’t that the cost savings associated with the increase in the contributions? Mayor Lozeau Those cost savings, a significant amount of them, will still be there with the October date. It will be 3 months. Alderman Deane But what is the start date on the cost savings; it goes back to when the contract was settled, when it expired? Mayor Lozeau No the savings start when people agreed to the changes. Alderman Deane No I understand that, but you gave money back to the department. Mayor Lozeau And I gave them from July to January so October still falls in there. Alderman Deane I understand that, but where did that money come from? Mayor Lozeau That money came from the amount that we have in the employee benefit plan. Budget Review – 04/16/12 Page 9 Alderman Deane In the 308 right? In the 308 account? Mayor Lozeau I can’t tell you the number off the top of my head. Alderman Deane So that was the anticipated…we were anticipating not having… Mayor Lozeau A $3 million savings of which we appropriated some and of which we put aside for restoration funds to budgets. And that didn’t include other cost savings from the plan that we’ve received part of which is in plan design changes, which became effective October 1st. Alderman Deane So you had that cost avoidance, but now you have to further compensate certain groups up to October. What is that dollar value? Mayor Lozeau About $260,000. Alderman Deane Out of that $1.6 million, $1 million was put back into different departments? Mayor Lozeau I would think $960,000, just under a million. Alderman Deane Just under a million. Chairman McCarthy So does that mean that …I understand Alderman Deane’s question and I’m not sure I understand an answer to it yet, which is we anticipated a certain amount of savings and we made the budget whole with what we were going to contribute to healthcare costs and what we were going to give back to the departments and now we anticipate another $260,000 in expenses to adjust that number forward to October 1st. Where does that $260,000 come from? Is that in savings that we haven’t accounted for somewhere else yet? Mayor Lozeau In essence it is all accounted for in the healthcare internal services fund. So we anticipated if everybody started as planned we would have had a $3 million savings in healthcare for the full year. That is what it Budget Review – 04/16/12 Page 10 would have been with the increased contributions. So when I bring in the legislation to talk about it I will bring in the spreadsheets that show where the dollars and cents are coming from and going to. I would prefer not to have to be in this circumstance, but I’m hopeful that people understand I don’t think it is right to move forward with the last 30% with a different date than everybody else and not do something about the employees that already did something. Chairman McCarthy The question though is the $260,000, is it coming out of a general fund appropriation or are we just saying that the fund balance in the healthcare fund will be $260,000 less at the end of this? Mayor Lozeau $260,000 less. Chairman McCarthy Does that answer your question Alderman Deane/ Mayor Lozeau It is not coming from an appropriated line. Alderman Deane That account was budgeted anticipating that there would be no cost avoidance and that the $3 million is placed in the budget to begin with, and then as the contracts rolled out and the contributions changed and the cost avoidance was realized and portions of those funds were transferred as part of the collective bargaining agreement legislation back to the different department as was promised, and the balance of whatever the remaining CBAs that are left out there those costs should be all the way out to the end of the fiscal year. Mayor Lozeau Agree. Alderman Deane Now that will be a new placeholder for these other unions that are out there. Mayor Lozeau Mhmm. I can tell you if we agree to this resetting of the date, I’m hopeful that the board will not let contracts through here that have a date that is different than October 1st. I know that for what it will be worth I will veto any of them that come in that are not at the October date. I can’t reset the clock again, but I am trying to find a way to move forward and I’m trying to find a way to support all of the employees that have been at the table. If you remember the last time that the healthcare contributions levels were changed it was a little bit at a time; some did 1% and some did 2%, and it took over 3 or 4 years to get them from 5% to 10%. I came along and asked them to add another 10% on in one year. We still will recognize a significant savings from the October date, and we’re keeping that in mind looking at healthcare costs going forward. We anticipate just under a 6% increase in healthcare while others are looking at anywhere from 11% to 20%. I think it is paying some dividends already. Budget Review – 04/16/12 Page 11 You know it is not easy to try to find a fair solution and it is particularly difficult from this chair and from your chairs because we’re not the ones negotiating the contracts. When I look at the fire contract, although I can’t wrap my brain around the 24/7, but it is apparently not a cost item so I guess I don’t have to wrap my brain around it, but the wages came in the way I asked and the healthcare came in with concessions, not to July like I would have liked, but to October. And when you look at the list I gave you on all of those different st trigger dates, it just seemed if we reset the clock to October 1 it would capture all of the plan design changes and all of the increased contributions and we would know it began October 1, 2011. Alderman Deane Basically it is going to be a health benefit holiday for the employees and whatever the cost of their plan is and their premiums are taken pre-tax? Mayor Lozeau Right. Alderman Deane So none of that has to be factored in. Mayor Lozeau Exactly. So the CFO and the H.R. Director have been working on determining how to make it work for the individual employees and what plans they are in and… Alderman Deane If you saw a $3 million cost difference if everything had been passed, right, isn’t that what was stated earlier? Mayor Lozeau Right. Alderman Deane Why was only $1.6 million put aside? Mayor Lozeau Because we knew we were going to realize other savings from; one thing we did was we renegotiated our administrative costs by about half a million dollars, which saved us significantly and the plan design changes we anticipated that we would see at least a million dollar savings from that, if not, at least a change in what our rate of our increase would be. So far the rate of increase is correct, but we don’t know yet what our savings is from the plan design change because not everybody is in it. The biggest group is in it, but not everybody. Alderman Deane When was the last time the healthcare committee met? Budget Review – 04/16/12 Page 12 Mayor Lozeau The healthcare committee that was created before I got here? Is that the one you mean? Alderman Deane We met at the Hunt. There was a big meeting at the Hunt Building a number of years ago that I remember. Has it met since then with all of the… Mayor Lozeau It has. Alderman Deane When was that? Mayor Lozeau The last time it met, when I got here and read the health report and saw who was on it we brought people together to talk about doing the prescription drug carve out because that had been a unanimous agreement of all of the people that had signed as one of the things that should change. Alderman Deane When was that about 4 years ago or so? Mayor Lozeau 2008 maybe early 2009. Then we couldn’t get the prescription carve out passed so didn’t really see a reason to bring the group back together again when we couldn’t get agreement on something that had already unanimously been agreed to frankly. But I have a healthcare group that is working and looking at numbers, consumer driven initiatives that we can put in… Alderman Deane Who is that? Mayor Lozeau …higher deductible plans. It is the consultant that we hired W.B.S. and some of the staff here. We work on a regular basis with things that we’re hopeful to be able to bring to people for consideration. Most of it right now is focused on adding additional options for employees so they don’t have to necessarily be negotiated but they can be things that people can choose to use. We’re also meeting with healthcare providers and others about services that the employees use. We’re reaping benefits from the prescription changes. Alderman Deane I guess 4 of 5 months down the road we will know what really goes on right, with everything? Thank you Mr. Chairman. Budget Review – 04/16/12 Page 13 Chairman McCarthy Did you get all of your questions answered? Alderman Deane Yes sir. Alderman Pressly Thank you. For those that have to pay back the retroactively, do you have any idea what the approximate amount will be and will they be able to pay it back in steps and stages or will it all be due at one time/ Mayor Lozeau The way it has worked so far with the groups that have already agreed and are paying retroactive, it is for the length of their contract so… Alderman Pressly So they don’t get hit with a… Mayor Lozeau Right. It runs anywhere from $6 to $12 a week in increased premium. Alderman Pressly Okay so no one employee is going to get hit with a big amount at once? Mayor Lozeau No. Alderman Pressly Thank you. Mayor Lozeau You are welcome. Chairman McCarthy Are there other questions? Thank you. Mayor Lozeau Thanks Mr. Chairman. I have the CFO here tonight to work with the fire department on the cost analysis. Budget Review – 04/16/12 Page 14 Chairman McCarthy Okay. COMMUNICATIONS – None UNFINISHED BUSINESS – None NEW BUSINESS – RESOLUTIONS R-12-25 Endorsers:Alderman Michael J. Tabacsko Alderman Kathy Vitale Alderman Diane Sheehan Alderman-at-Large Lori Wilshire Alderman Richard A. Dowd Alderman Mary Ann Melizzi-Golja Alderman Daniel T. Moriarty Alderman-at-Large Brian S. McCarthy Alderman-at-Large Jim Donchess APPROVING THE COST ITEMS OF A COLLECTIVE BARGAINING AGREEMENT BETWEEN THE NASHUA BOARD OF FIRE COMMISSIONERS AND LOCAL #789, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS FROM JULY 1, 2011 THROUGH JUNE 30, 2013 AND AUTHORIZING THE TRANSFER OF $47,730 FROM ACCOUNT #597-86605 “CONTINGENCY- NEGOTIATIONS” INTO ACCOUNT #532-11915 “FIRE-PAYROLL ADJUSTMENTS” MOTION BY ALDERMAN WILSHIRE TO RECOMMEND FINAL PASSAGE ON THE QUESTION Chairman McCarthy I guess we want to first just run through what is in the contract. I assume that is you Attorney Bennett. Stephen Bennett, Esq. I did provide a summary of the cost items. I handed it out earlier. MOTION BY ALDERMAN DEANE THAT THE RULES BE SO FAR SUSPENDED AS TO ALLOW FOR THE INTRODUCTION OF A COMMUNICATION RECEIVED AFTER THE AGENDA WAS PREPARED MOTION CARRIED From: Stephen Bennett, Esq., Deputy Corporation Counsel Re: Summary of Cost Items for Nashua Fire Fighters’ Collective Bargaining Agreement MOTION BY ALDERMAN DEANE TO ACCEPT AND PLACE ON FILE MOTION CARRIED Budget Review – 04/16/12 Page 15 Stephen Bennett, Esq. Thank you. Again, these summaries are prepared mostly for a guideline for the conversation we’re having tonight. Obviously it is not exhaustive of all of the redlined changes you will see through the contract, but again the resolution goes towards the cost items. If you would like we can walk through these, and I would be glad to answer any questions. Chairman McCarthy I think it is probably best if we just walk through them first. Stephen Bennett, Esq. The first one is Article 12; Safety & Health. The change there is an expansion of an existing infectious disease program to include Hepatitis C and tuberculosis. The note there is; it is not anticipated to be a substantial increase. The think is not a majority of the people are going to sign up for the additional shots or inoculations to go along with this. Like any vaccinations, there is a down side. There is always a chance that things will go wrong so there is always a danger. The number of people who sign up is expected to be very limited. That is it on Article 12. Chairman McCarthy Any questions on Article 12? Stephen Bennett, Esq. Article 13, Salaries; for the two years of the contract it would be .5% increase added to the grids. Along with that all members who are eligible for a step would receive the step. That, in the cases of members of the fire department, their steps are not annual. Once they hit four years the steps go from I think it is 4 year or 5 year increments, and as reflected on the costing sheet prepared here by Mr. Griffin, you will see that the step increases, line 6, for this year is $7,100 approximately and for FY13 about $12,900. That is for all employees across the board, those who would qualify. The actual number of steps, the amount of money is I won’t say it is minimal, but it is not like other departments where every employee gets a step. In addition, one of the changes is that stipends for members who are certified for hazardous materials, Awareness, Operation and Decon and who are EMT-B or higher, those stipends which up till July 1st of this year would be paid separately will be incorporated into the base pay for those who have the certificates. Those who don’t have those certificates will be at the uncertified rate, at a lower rate. Alderman Deane So when I’m looking on my cost analysis and I go under HAZMAT, Item #21, and I go out in fiscal year 13, there is about $103,000 reduction. Where is that moved to? That is moved into the base salary? So if I go up to base pay the difference between the $9.5 million and the $9.6 million includes that $103,000? Where did the $103,000 go? Chief Morrissey It goes into line 10. Budget Review – 04/16/12 Page 16 Alderman Deane Because your increases… Stephen Bennett, Esq. You see it reflected under 8 and 9 are the changes. That is where the changes are reflected, the stipends are moved. Alderman Deane So that is when the base goes up from the .58% to 2.86%? Stephen Bennett, Esq. Right. Alderman Deane Out of the EMT certification, how many…those numbers are one in the same. It is the same amount of fire fighters that have the same stipend or… Chief Morrissey Generally speaking, the same members are eligible for it so generally speaking those numbers will be very close. Alderman Deane Okay. Chief Morrissey There may be two people that have the emergency medical stipend but may not have the HAZMAT stipend, but it will bounce back and forth depending on who gets the certification and at one point in time in the year. Generally speaking we would budget them equal. Alderman Deane So those two lines are taken out of the other salary costs that start at line 14 and go down? Chief Morrissey Correct. Alderman Deane Item 23 okay. Thank you. Budget Review – 04/16/12 Page 17 Stephen Bennett, Esq. The remaining item change is that the department covers keeping people current on their certifications and the training is generally done during duty hours. The addition this year is the city would cover 1 shift per EMT- paramedics. I believe there is a total of 7 in the city. We say the cost of that would be minimal. First of all certifications aren’t required necessarily every year and some of this training will be done while they are on duty and they can shift around personnel. It is anticipated again that the cost would be minimal. Chairman McCarthy What constitutes a shift in the terms of this paragraph? Stephen Bennett, Esq. Either 14 or 10 hours depending on whether it is day or night. Chairman McCarthy Is that true with the new shifts as well? Stephen Bennett, Esq. Well it is a 24 hour period. It is still going to be broken down into 10 and 14 hour shifts. Chairman McCarthy Okay. So we just view that as the employee having a consecutive 10 and a 14 hour shift. Any other questions on Section 13? Stephen Bennett, Esq. I included hours of duty in Article 14 just because I figured it was easier to try to explain it right up front than to wait for the questions. It is not a cost item, but it is a significant change that we did want to bring to the attention of the board. Again, under this shift, we work off what we call 24 hour service periods. Those are broken down into 10 hour day shifts and 14 hour night shifts, which is essentially what we have now. The difference will be in the order in which they are worked. So there will be a 10 hour day shift, followed immediately by a 14 hour night shift, then there will be two 24 hour periods off, that would be followed by another 10 hour day shift and another 14 hour night shift and then there will be 96 hours off. That is the cycle that they will run off of. It does not change the number of hours worked over a year period of time. Alderman Deane It is still a cost item though. It is part of their base pay. They get paid hourly. Stephen Bennett, Esq. The organization and the manner in which the fire department is run; who is working when and the hours they work, is under the authority of the Fire Commissioners. Again, I think what you are looking at if somebody was to be dissatisfied with this; maybe what you would be looking at is the hourly rate, which would be under 13, the salaries. But this in itself I don’t believe is a cost item. Budget Review – 04/16/12 Page 18 Alderman Tabacsko Just to clarify, the annual hours worked is the same as the current system and so in the calculation for overtime when that comes into the picture, can you explain that a little bit? Chief Morrissey The calculation going forward will be calculated the same way that it is now. What happens is an employee when receiving overtime, at the end of the week we do a look back as to how many actual hours they worked, then they have to cross the threshold of 53 hours before they actually get paid any premium on that overtime. Generally speaking when they come in they are going to work for their straight hourly rate and if they exceed 53 hours actually worked then they will receive a half time premium for hours in excess of 53. Alderman Tabacsko And the 53 is the current mark? Chief Morrissey Correct. Alderman Tabacsko Okay. That at least theoretically will not have any impact. Chief Morrissey There shouldn’t be a net increase. It is a net neutral. Alderman Tabacsko Okay. Thank you. Chairman McCarthy I guess I’ve heard that we anticipate that this helps us with coverage. Can you explain how that… Chief Morrissey I really don’t believe that there is any change in the level of coverage. We’re going to continue to staff the exact same way that we do currently. What may occur over time is generally speaking when a member now comes in say on a Friday or a Thursday for their first shift they will end up working Thursday, Friday, Saturday, Sunday, Friday, Saturday, Sunday, Monday so they will employ leave time generally to maybe if they need a portion of the weekend off or whatever. Under this schedule they will end up if they start on a Thursday they potentially will have Friday and Saturday off, if they end on a Thursday, if their last shift is Thursday they may be off for the weekend. So they won’t be working back to back regularly scheduled weekend days. Ultimately it should adjust the way that we are covering. That is about the only difference that you will see. Chairman McCarthy Thank you. Any other questions on Section 14? Budget Review – 04/16/12 Page 19 Stephen Bennett, Esq. Section 15, Overtime; again part of the changes have to reflect the changes in the duty hours so we had to make some language changes. Other changes have to do with not cost items so much as the rotation list for overtime or extra duty. We made changes to that as far as how members would lose their place and so forth. Other changes again detail list, changes with how that is going to work; again not a cost impact. The one cost impact here that we anticipate is overtime payments to members who are required to attend administrative or committee meetings, essentially Captains who are called in on their days off to attend administrative meetings, which is anticipated to be like 2 a year with a possible cost of up to $1,500 per year for the Captains. I believe there are 8 Captains. Chief Morrissey There will be 7 Captains. Stephen Bennett, Esq. Seven Captains as of January 1, 2013 there will be 7 Captains. Alderman Deane How much time does the meeting take that warrants $1,500? Is that for everybody? Chief Morrissey Correct. Generally speaking, we will have two 4 hour meetings; one in the first half of the year and one in the second half of the year so there will be 7 employees over the course of the year for 8 hours and so 7 employees times 8 hours it is 56 hours times their hourly rate. It will approximate out to about $1,500. But also when we schedule these meetings some of these members will actually be on shift already so there won’t be a compensation outside of their regular day rate. They will be on duty and they will just attend the meeting. Alderman Deane Thank you. Chairman McCarthy Anything else on Section 15? Stephen Bennett, Esq. Article 20; Paid Holidays, they deleted a provision, which had to do with two hour paid meal periods for members on duty on certain days. That was pulled. Chairman McCarthy Any questions on that? Stephen Bennett, Esq. Article 21; Paid Vacations, again while I listed all of these items, I don’t think there are actually costs Budget Review – 04/16/12 Page 20 associated with them. There had been requirements for certain employees who had four weeks or more of vacation per year to take at least a solid week vacation. That is no longer a requirement. It doesn’t change the number of vacation days per year or duty shifts per year they have vacation. Day at a time vacation rules were changed somewhat, and employees can now carry one week over to the following year, which has to be st used by May 1 . This provision, I believe there are several police contracts with a similar provision, and again it doesn’t cost anything in addition. For dispatchers and members of specialist divisions there was an entitlement to be paid for up to 2 weeks of unused vacation time in January of their following year if they remained employed. This had been a week I believe out of the former contract. I think some of that has to do with some difficult in people getting vacation time off. Finally, there is an additional provision for personal leave purposes each year for members who have at least 320 hours of accrued sick leave to their credit they will be allowed 1 shift for personal leave purposes and that is deducted from their sick leave. Chairman McCarthy Any questions on vacation? Just out of curiosity, how are those accounted in terms of what does a week’s vacation translate into in shifts? Chief Morrissey Currently it is 2 days and 2 nights so it is a full block and going forward a week would continue to be 4 shifts, but it would be 48 hours not to exceed. Chairman McCarthy Okay. Stephen Bennett, Esq. Article 23; Bereavement, I included that one; there is no cost difference. We just explained the shifts because of the changes again in their duty hours. So there is actually no change in the amount of bereavement leave provided. Article 24A; Extended Leaves of Absence, this is actually a combination of two things; it’s the policy that had been in place by the board for extended leaves of absence. For example people whose spouse had a new job and was say being moved for a year, the member of the fire department could apply for an extended leave of absence to accompany their spouse for that absence from say New Hampshire if they had to go across country for a year or 6 months or we have given extended leaves to people who served in Serbia and Croatia. We had several who went over to serve over there. That had been the policy. There have been 6 of these; I think the last count was 6 over the last 20 years so it is not a regular occurrence. The cost is that the city carries the medical coverage, the city’s portion during these up to; well these are limited to 90 days. The reason it is showing up now is because we had an arbitration decision that said we had to put it into the contract. That is why it is here this year. Chairman McCarthy Any questions on that section? Budget Review – 04/16/12 Page 21 Stephen Bennett, Esq. Article 31; Educational Assistance, the budget amount of $18,000 is the same as was budgeted for FY11. Beginning in 2013 there can be up to a $500 increase or a $500 increase per year if for the last full fiscal year there was $500 or less left in the budget. Alderman Deane Why? Stephen Bennett, Esq. Part of it reflects increased costs for courses. I think we have seen that in all of the contracts, I don’t mean all the contracts, but for all courses. In our discussions with unions, there has been a substantial increase in the cost of courses. I think in part that is reflected there. Alderman Deane Basically it is telling us that we have to add $500 if the balance is $500 or less at the end of the last full fiscal year so… Stephen Bennett, Esq. Which means going back actually two years because you won’t have the full fiscal year when you are putting your budget together. Alderman Deane And these courses are all requirements associated with different items that they are; HAZMAT and things like that? Is that what a lot of them are or what are the courses? Chief Morrissey Most of them are courses that are offered through the Fire Standards & Training Division of the State. There are other employees that take college level courses whether they are at the Bachelors Degree or some guys even take Masters Degree and those are paid at a substantially different rate; we reimburse half of the level of a course if it is outside of their direct job description. What has happened is as Attorney Bennett spoke, a number of classes that a few years ago we were paying out at the $500 or $600 level, those same classes now run the employee probably double or even triple that depending on where they are doing them. Even online classes tend to have substantial cost to them so they are burning through the money quicker. They were looking for us to actually put more money into the educational assistance line, and after significant discussion, we agreed that if we got…I think it already calls for us to be at $18,000 so we said if we actually got close to that number then we would add an additional $500 going forward. Alderman Deane What is the criteria for what is an accepted educational assistance? Budget Review – 04/16/12 Page 22 Chief Morrissey Generally we use the Human Resources will…people will send us the course, where it is, what they are going for, if they are an undergraduate degree or a graduate level degree, and they will send us all of that information and then we vet it against their job description and we use Human Resources to help us filter out the ones that are related and the ones that aren’t. Alderman Deane Okay so the educational assistance is related specifically to their… Chief Morrissey Job function. Alderman Deane Okay. Chief Morrissey Or it could be something that we do in the fire department like say for example fire fighters that may be in the promotional process there may be courses that are related to another job in the fire department and then they get paid at a different rate; they don’t necessarily get paid the full rate for those classes. Alderman Deane Thanks. Chairman McCarthy Any other questions? Alderman Dowd The way this reads, is this cumulative like if you get down to less than $500, it says each year so if it goes to $18,500 is the next year if you spend $14,000 something then it is going to go to $19,000 the following year? That appears to be the way the wording in at least this paper here reads. Chief Morrissey The way that I understand it and Steve you can correct me, he is the language guy. It is my understanding say we use $17,600, the following year it would go to $18,500. Then in that year we only use $15,000 it would remain at $18,500. It doesn’t necessarily automatically jump. You would have to get again you would have to be at like $18,300 and once you got to that it potentially would go to $19,000, but it could take several years to get to that level. Alderman Dowd Okay. That is during the course of this current contract. Budget Review – 04/16/12 Page 23 Chief Morrissey During this contract you basically only have FY13 is the only year that we would see an adjustment potentially. Alderman Dowd Okay. Chief Morrissey I haven’t done the numbers to tell you…I don’t believe it is going up but we could be close. Chairman McCarthy Did we have $17,500 in expenses last year? Chief Morrissey I would have to look at that. I didn’t bring that number with me. We may have been at $16,800 and we won't go up to $18,500. Chairman McCarthy Any other questions on that article? Stephen Bennett, Esq. Article 32; Insurance that essentially follows what the Mayor was discussing earlier. The guidelines; as of October 1st, the city will contribute 70% for a POS plan and 80% for an HMO. The employees will be increasing their contribution from 20-30% on the POS and from 90-80% on the HMO plans. Along with those go the plan changes where there will be the increase in co-pays and then we will have deductibles also for the plans. The other changes were made here, the union agreed to remove references to specific providers in this plan. Essentially their insurance article is consistent with those other articles which had been previously agreed to. Finally there was a change to the long-term disability in that we just removed certain language, which had summarized benefits and the long-term disability plan will be consistent with the City’s plan and the amendments to those plans. Chairman McCarthy Any questions on healthcare? Alderman Deane I know it is slim pickings, but the cost analysis shows the FY11 base at $18,500 for the educational assistance. It was at $18,000 right. Budget Review – 04/16/12 Page 24 Stephen Bennett, Esq. FY11 was at $18,000 yes. Alderman Deane The cost analysis shows $18,500. Stephen Bennett, Esq. It does. Alderman Deane But FY11 is $18,500. Aldermanic approved for FY12 was $21,000. Stephen Bennett, Esq. If you look at the contract it was $18,000. Chief Morrissey I would say Alderman Deane we also have members of the UAW and merit employees that are not covered by the labor agreement and all of those employees can also use educational assistance. Alderman Deane Okay so that was tied into the $21,000? Chief Morrissey Yeah. The $18,000 would be related to the IAFF, but there are members that are in the UAW and there are also merit employees so just because the numbers in the budget are somewhat different that would explain that. Stephen Bennett, Esq. The contract language was $18,000. Chief Morrissey Correct. Alderman Deane Okay. Stephen Bennett, Esq. Essentially on the insurance, back on Article 32, those are the changes, which again with an October 1st start Budget Review – 04/16/12 Page 25 date, 2011. And the members are responsible, again during the course of this contract, to reimburse for the st cost since October 1 , increase. Alderman Dowd Again just a nit; in the costing sheet under educational assistance you show in FY12/FY13 $18,500, but that has the potential of going to $19,000. Chairman McCarthy I think we just heard that the … Alderman Deane It is a moot point. Alderman Deane Moot point because… Alderman Deane There was $21,000 budgeted… Alderman Dowd Okay. Alderman Deane So they’ve got their $18,500. The people that are going to be on the short end of the stick are the ones that aren’t part of this agreement; they get the balance of whatever is left in that account. Chairman McCarthy I guess we may have to go look at some of the other, the UAW agreement and what it calls for and that the $21,000 may be the combination of what is required in this contract and the UAW contract. Chief Morrissey I can’t speak at the moment to what the requirement is, but we do have members of both UAW and merit that may also apply. I think what happens is currently in FY12 we have $18,000 is the line from the fire fighters’ labor agreement so the exposure would be $18,500 in FY13 potentially. That would be the high limit in FY13. It wouldn’t go to $19,000 because we are only at $18,000 currently. Alderman Dowd Okay. Budget Review – 04/16/12 Page 26 Chairman McCarthy Anything else on Article 32? Stephen Bennett, Esq. Article 36; Assignments, there are a considerable number of changes on how the assignments are done. Those are not cost items. The one cost item under that article has to do with…it is effective January 1, 2013. There will be a Captain who will be in charge of all of the HAZMAT operations. The cost difference is that there will be one less Lieutenant on the roster. The cost for FY13 will be actually half of the difference between the cost of the Lieutenant as to a Captain and that is approximately $3,500. The HAZMAT operation not only covers the City, but it is an area coverage we are responsible in. Just involved in a matter where we responded up to Amherst for I guess it was actually about 4 years ago, but it is a matter we are litigating. We cover not only this area but also the surrounding towns. Article 39; Duration in Effect, it is a two year contract. It runs from July 1, 2011 through June 30, 2013. Alderman Deane I don’t mean to beat a dead horse, but your educational assistance for UAW comes out of Human Resources? Chief Morrissey Yes. Alderman Deane 515? John Griffin This would have to be the merit. To the extent the merit employees get assistance, I would suggest that it may come out of that line, but we can research that. Alderman Deane But is UAW employees…how many UAW employees in the fire department? Chief Morrissey Four. Alderman Deane So out of that $10,000 that was funded in 515 that is where the draw would come from? John Griffin That is correct. Budget Review – 04/16/12 Page 27 Alderman Deane Okay. I had one other thing; on page 60 of the contract, under the insurance, in the first sentence right before the word interests, the s at the end of interests should be moved between the e and the t. Stephen Bennett, Esq. Are you on the redlined one? Alderman Deane Yes. Article 32. Alderman Tabacsko What is the gist of it? Alderman Deane Okay. Still needs to be changed. Stephen Bennett, Esq. What word is that? Alderman Deane “bet interests”. The s should be between the e and the t and taken away from interests. Stephen Bennett, Esq. I’m lost on the page of where you are. Alderman Deane Page 54. Mayor Lozeau Last paragraph. Alderman Deane Page 54 and it is the last paragraph, first sentence under Article 32… Stephen Bennett, Esq. Yeah. Budget Review – 04/16/12 Page 28 Alderman Deane The word “bet” should be “best” and the word “interests” I think should not contain an s, for what it is worth. Stephen Bennett, Esq. Thank you. Alderman Deane I guess we can amend that and then I can explain this whole contract to Alderman Chasse during the Board of Aldermen’s meeting. Chairman McCarthy I’m not sure we need to amend the typos. Alderman Deane The text will not be amended? Chairman McCarthy I think it can be amended due to typos without us having to do that here. Alderman Deane Yeah we can either accept or reject cost items; we can’t amend them so the s can’t be moved. Chairman McCarthy Unless you can prove it cost… Alderman Deane Don’t want to be in front of the public employee labor relation board for moving an s. Alderman Tabacsko Is it too little to ask of everybody to mispronounce it? Stephen Bennett, Esq. We can have a couple more negotiation sessions I’m sure that we can… Alderman Deane Do you want to send this back to negotiations and see if they will move it? Budget Review – 04/16/12 Page 29 Stephen Bennett, Esq. I think we can take care of that tonight. Thank you. Alderman Deane Okay. Mr. Chairman I wanted to thank Attorney Bennett for these summary sheets. They are very helpful. Chairman McCarthy The motion then is to recommend final passage of R-12-25. Is there any discussion of that motion? MOTION CARRIED Chairman McCarthy Thank you gentlemen. Chief Morrissey Thank you Mr. Chairman and members of the committee and others. John Griffin Thank you Mr. Chairman, thank you members of the committee; I appreciate your diligence in this effort. Thank you. GENERAL DISCUSSION - None PUBLIC COMMENT - None REMARKS BY THE ALDERMEN Alderman Melizzi-Golja Attorney Bennett may I have an extra copy of your summary of the cost items to include with the minutes please? Stephen Bennett, Esq. Yes. Alderman Melizzi-Golja Thank you. Chairman McCarthy Are there any other remarks? Budget Review – 04/16/12 Page 30 ADJOURNMENT MOTION BY ALDERMAN DEANE TO ADJOURN MOTION CARRIED The meeting was declared closed at 8:15 p.m. Alderman Mary Ann Melizzi-Golja Committee Clerk  NASHUA FIRE FIGHTERS' COLLECTIVE BARGAINING AGREEMENT SUMMARY OF COST ITEMS JULY 1, 2011 THROUGH JUNE 30, 2013 ARTICLE CHANGES 12 - Safety and G - The department's infectious disease program for employees will Health now include Hepatitis C and tuberculosis. It is not anticipated that there will be a substantial increase in cost the cost of this program. 13 - Salaries A - Effective July 1, 2011, a .5% increase in wages will be added to the payroll grade and step grid. All eligible members will be placed on the payroll grade and step grid as detennined by classification and certification. A.l - Effective July 1,2012, a .5% increase in wages will be added to the payroll grade and step grid. All eligible members will be placed on the payroll grade and step grid as detennined by classification and certification. D - Effective July 1, 2012, members with certifications for Hazardous Materials: Awareness, Operation and Decon and EMT-B or higher will have added to their base pay compensation equal to one-half (1/2) times hourly rate for these certifications. Prior to July 1, 2012, members with these certifications receive stipends equal to this increase in their base pay. Stipends for other certifications will remain unchanged. G.3 -The city will cover EMT-paramedics for one (1) shift for the purpose of receiving their recertification. The cost of this coverage is minimal. 14-Hours of B.l.a - Effective July 19, 2002 the work schedule will be based on Duty twenty-four (24) hours service periods. Members will work a schedule of one (I) ten (10) hour day shift, followed by one (I) - included for fourteen (14) hour night shift, followed by forty-eight (48) hours off, infonnational followed by one (1) ten (10) hour day shift, followed by one (1) purposes only fourteen (14) hour night shift, followed by ninety-six (96) hours off. This change in work hour scheduling does not change the total number of hours worked during a year by a member.  15 - Overtime G - In part, the changes are due to the changes in Article 14 - Hours of Duty. Other changes to the rotation list for overtime clarify when a member loses his place on the rotation list. 0.3 - The changes to the detail overtime list regard how the detail list will work and do not have a cost impact. • 0.3.4 - This provides for overtime payments to members who are required to attend administrative or committee meetings outside of their nonnal scheduled work hours. The cost of this provision will be approximately S1500.lyear 20 -Paid E - Deleted provision requiring two hour paid meal periods for Holidays members on duty on New Year's day, Thanksgiving and Christmas holidays. 21 - Paid H - Requirements for one (1) solid week of vacation for members Vacations earning four (4) weeks of vacation or more was removed due, in part, to the new duty hours schedule. H.2 - Changes were made as to when "day at a time" vacation can be taken. J - Employees are allowed to carry over one (1) week of vacation to the next calendar year which must be taken by May lSI, Additionally, dispatchers and members of specialist divisions are entitled to be paid for up to two (2) weeks of unused vacation in January of the following year as long as they remain employed. P - Members will be provided with one (1) shift for personal leave purposes during each year, provided they have a minimum of three hundred twenty (320) hours of accrued sick leave. The personal leave shall be deducted from the employee's sick leave. 23 -- Bereavement A.B - Changes were made to reflect the changes in the Article 14 - Leave Hours of Duty. There is no increase or decrease in bereavement leave. 24A - Extended This article puts into effect the policy of the Nashua Fire Rescue as Leaves of required by an arbitration decision during the period of the last Absence contract. The cost is anticipated to be minimal. Approximately six (6) leaves of absence have been granted over the last twenty (20) years.  13 - Educational C - The budgeted amount for FY2012 will remain at $18,000. Assistance Beginning in FY2013, the budgeted amount will increase by $500 each year if the budget line for this benefit has a balance of $500 or less at the end of the last full fiscal year. 32 - Insurance A.I - All named providers were removed and the city may change Insurance carriers provided the benefits to participants are comparable and the city elects the least expensive plan available. The parties agree to an expedited arbitration process should there be a dispute over whether a plan is comparable or not. There is also an agreed upon definition for a "comparable plan". The arbitration and defmition provisions mirror provisions in other city contracts. A.2 - Effective October I, 20 II the city contributes seventy percent (70%) of the premium for a POS plan and eighty percent (80%) of the premium for an HMO. Effective upon signing of the agreement, all POS and HMO plans will include minimum co-pays of $20 for medical visits, $100 per emergency room visits, -and $250 per person $500 per 2-person/ family inpatient/outpatient facility deductible and a three tier phannacy benefit. E - Changes to the long-tern) disability plan provision allow the city to make amendments to this plan and delete mention of specific benefits or limitations. 36 - Assignments B - A captain will be added for Hazmat as of Januaryl, 2013. The rooster will be reduced by one lieutenant. The cost will be approximately $3500. for FY2013. 39 - Duration in This agreement is in effect from July 1,2011 through June 30,2013. Effect