Lay offs appear likely if county is to meet court order to get health insurance costs back within original budget

LACONIA — County Commissioner John Thomas of Belmont, who chairs the Belknap County Commission, said yesterday that when the commission meets this evening it will "weigh its options" for addressing a court order prohibiting the commissioners from spending more money from any line item in the county budget than the convention appropriated to it and from transferring more than $300 from any line item without the express approval of the Belknap County Convention.

Last week Justice James D. O'Neill, III granted the request of the convention for a preliminary injunction to forbid the commission from spending more money from any annual line item than the convention appropriated to it without the written approval of the Executive Committee of the convention. Likewise, any transfer of more than $300 from one line item to another also requires the approval of the executive committee.

In the 2014 budget the convention adopted in March, $2,594,925 was appropriated for health insurance, the same amount expended in 2013. However, the commission, without approaching the executive committee, transferred sufficient funds from other line items to fund the employer's share of the annual premium increase and has authorized those payments for the first three quarters of the year.

Questioning the decision, Thomas said yesterday that "the judge is not looking at the ramifications of the issue. There's not much that can be said at this point," he continued. He said that the commission will meet legal counsel prior to their meeting tonight to consider the implications of the judge's order.

Meanwhile, County Administrator Debra Shackett and Finance Director Glen Waring had begun assessing the effects of the ruling and alternative means of complying with it.

Representative Colette Worsman (R-Meredith), who chairs the convention, said that she was very pleased but not surprised by the ruling. "I don't see how the statute (RSA 24) can be interpreted in any other way than how Judge O'Neill interpreted it," she said. "They have been playing dirty pool for two years," she said of the commissioners, "and they've bought themselves a boatload of trouble."

"There is nothing new, different or radical about he decision," said Representative Frank Tilton (R-Laconia), chairman of the executive committee of the convention. "This is how the budget process worked in Belknap County until the last four years," he said, allowing that this year the threshold for transfers requiring the approval of the executive committee was lowered to $300 while it had been as much as $10,000 in past years.

Tilton said that he has scheduled a meeting of the executive committee on Monday, September 15 to "review the budget through the month of August and consider any requests for transfers." Although he confessed "I have no idea what the commissioners will do," he said "I hope they will communicate before the meeting on September 15."

For the commission, defraying the employer's share of the increased cost of health insurance is a contractual obligation under the collective bargaining agreement negotiated with the union representing county employees. Those contracts have expired and new agreements have not been ratified or funded.

In the interim the Public Employee Labor Relations Board (PELRB) and New Hampshire Supreme Court have ruled that the employer is required to maintain the "status quo" until a new agreement is ratified and funded. Futhermore, the court ruled that "that the health insurance benefits received by the bargaining unit members ... are conditions of employment" and the employer "must continue to provide these benefits during the status quo period regardless of the cost."

Worsman, yesterday, disagreed. "There is no contract," she insisted. "The contract expired a year or two ago." She said that the convention met the obligation by budgeting the same amount in 2014 and as it did in 2013. "No one got less this year than they received last year," she said.

Nevertheless, the commissioners feared that should the county fail to fully fund the increase in the employer contribution to health insurance it could find itself in breach of contract. And they declined to reduce the number of employees — allowed under "status quo — and, with what the convention appropriated, full fund the health insurance benefit of those who remained.

Now there is a real prospect of lay offs.

During the first three quarters of the year, the commission will have spent approximately $180,000 more on health insurance than the convention appropriated. One option would be to lay off a sufficient number of employees, whose remaining health insurance costs would match the overage. The effect would be to balance health insurance expenditures with what the convention appropriated while spending less than appropriated for wages and associated costs. The Daily Sun estimated that this option would require laying off about 30 employees.

Alternatively the commissioners could reduce the number of layoffs and request the executive committee to approve transferring the funds saved in wages to offset the overage in health insurance.

Ironically, this spring both Worsman and Tilton introduced legislation to amend the statute governing the county budget process, which mirrored the logic and effect of O'Neill's order. In the New Hampshire House of Representatives, the Municipal and County Government Committee unanimously recommended against both bills, which were ultimately rejected by voice votes on the House floor.