City ready to trade pay hikes for big reduction in health insurance

  • Published in Local News

LACONIA — City employees have gone without wage and salary increases for the past two years, but City Manager Scott Myers has included both pay scale "step" raises for those eligible and a two-percent cost-of-living adjustment (COLA) for all in his proposed 2012-2013 city budget. In presenting the budget this week, Myers told city councilors that increased compensation was accompanied by significant reductions to taxpayers in health insurance costs and asked them to consider personnel ...

LACONIA — City employees have gone without wage and salary increases for the past two years, but City Manager Scott Myers has included both pay scale "step" raises for those eligible and a two-percent cost-of-living adjustment (COLA) for all in his proposed 2012-2013 city budget. In presenting the budget this week, Myers told city councilors that increased compensation was accompanied by significant reductions to taxpayers in health insurance costs and asked them to consider personnel costs in their entirety.

"We're looking to increase employees' share of health insurance costs," Myers said, explaining that they currently contribute four-percent and the goal is to increase  their share to 12-percent in this budget cycle and to 15-percent in the next. He said that he would be presenting a schedule of compensation and benefits matching these benchmarks to the council shortly.

Traditionally, the city has offered the same package of compensation and benefits to its non-union and union employees.

Most employees are represented by one of four unions, or collective bargaining units — the State Employees Association (SEA), American Federation of State, County and Municipal Employees (AFSCME), Laconia Police Officers Association (LPOA) and  the Laconia Professional Firefighters Association (LPFA). The collective bargaining agreements between the city and the LPOA and LPFA expired in 2010 while those with the SEA and AFSCME expired in 2011. Negotiations with all four unions are underway.

In agreements are not reached by the July 1 start of the new fiscal year, presumably raises will not be forthcoming for affected employees. Conversely, the city will remain bound to pay its current 96-percent share of health insurance premiums.

With Primex, the city's underwriter, leaving the health insurance market in June, Myers said the city invited requests for proposals this winter, ultimately choosing the New Hampshire Intyer-Local Trust, which carries Harvard Pilgrim. He said that the city specifically requested rates for plans with higher co-pays and including deductibles and received a  seven-percent reduction in rates.

The proposed 2012-2013 budget includes decreased appropriations for health insurance in all departments. Apart from employees of the fire,  police and public works departments, Myers recommends appropriating $739,052 for health insurance, which is $135,899, or 16-percent, less than was budgeted last year. He has budgeted $592,405 for the fire department, a decrease of $155,003, or 21-percent; $917,089 for the police department, a decrease of $182,893, or 17-percent; and $295,254 for the public works department, a decrease of 22-percent.

Altogether, Myers proposes to appropriate $2,5-million for health insurance in 2012-2013 compared to $3,1-million last year, a reduction of more than $550,000, or nearly 20-percent. At the same time, step raises and two-percent COLAs for non-union and union employees budgeted for all departments are projected to amount to approximately $235,000, including adjustments for Social Security and contributions to the New Hampshire Retirement System.