To The Daily Sun,
In more than a decade that I’ve worked for the city, to say contract negotiations are frustrating would be an understatement. This last go-round was no different. For as long as I’ve been here, the city has always had a “take it or leave it” approach to “negotiations.” When all is said and done, the city gets what they want while many of their employees are left feeling underappreciated, with a twinge of resentment.
That being said, an agreement was reached between the Laconia Police Officers’ Association (LPOA) and the Laconia Police Commission over what was presented as the “city’s best offer.” Funding of the agreement was approved Monday night by the City Council — thank you City Council. This letter, however, isn’t about what was agreed to, it’s about what was excluded.
The city, as a benefit of employment, offers its employees health insurance. This comes at a substantial cost to the employee and an even greater cost to the city. In an effort to lessen the city’s financial burden where health insurance is concerned, the city offers employees the option to “opt-out” of the insurance. In exchange for opting out, the city pays the employee a certain percentage of what it would cost to insure that employee, and the city keeps the rest. It’s called an insurance “buy-out.”
The amount of money the city saves depends on the plan (single person, two person, or family) the employee is eligible to receive. The savings to the city (respectively) is approximately $5,000, $10,000 and $16,000 for each employee the city doesn’t insure. The opt-out is a mutual benefit to both the city and the employee, but it certainly weighs more in the city’s favor. This is an adopted practice nationwide.
Only employees whose spouses are not employed by the city are eligible to receive a buy-out. That makes sense, except when you have one spouse who works for the Laconia School District and another spouse who works for any other city department. The health insurance offered to employees of the School District is different from what the city offers its other employees. The School District’s insurance is also not administered through the city like it is with other departments. That means, if one spouse works for the School District and another works for some other city department, both spouses can get separate health insurance plans. Each of their separate plans can cover one spouse, both spouses, or both spouses and their family if they have children. The practice of being covered by two health insurance plans — having primary and secondary insurance — is a regular practice nationwide.
During negotiations, we asked that employees working for the Police Department, whose spouses worked for the School District, be eligible for the insurance buy-out. That way, even though it was an offered benefit to each employee, the city wouldn’t have to pay the cost for both insurance plans. The Police Commission wouldn’t agree to the request. In fact, the attorney representing the city through the Police Commission, referred to any employee who would elect to get a second insurance plan through the city as “spiteful” and said the city would rather pay the higher cost to insure that employee than pay them a buy-out.
First of all, that doesn’t make any financial sense! Would the city really rather pay the higher cost to insure that employee, essentially wasting taxpayer dollars, and for what? To be spiteful? Secondly, why would the city offer employment benefits to its employees, and then turn around and call them spiteful for using those benefits? I certainly hope that the sentiment expressed by the attorney isn’t indicative of our city leaders.
I felt the attorney’s comments were a slanderous assumption and inappropriate, but to his credit, his stance softened a little by the end of the negotiation session. He retracted his statement that the city would rather pay the higher cost to insure an employee vs. paying them a buy-out, but he said the city would be surprised if an employee opted to pay for a second insurance plan. The message there: the city thinks we’re bluffing about getting insurance. They didn’t think an employee would pay to have secondary coverage, so they didn’t think it was necessary to negotiate terms that would allow the city to avoid paying the higher cost of the insurance. Well, they were wrong.
Currently, there are two members of the Laconia Police Officers Association whose spouses work for the School District. Both have opted to take advantage of the insurance benefit offered to them by the city. In the first year alone, because the commission failed to negotiate different terms, it will cost the city around $53,000 to pay for those two insurance plans. That figure will certainly increase as the cost of insurance rises year after year. Had the commission agreed to make those employees eligible for the buy-out, the cost to the city would be around $21,000, thus saving the city $32,000 in the first year alone.
Thirty-two thousand dollars compared with the city’s overall budget doesn’t amount to much. It is something though. You can’t convince me that our fiscally minded city councilors, who work feverishly to save money and shave expenses to make the budget work, would be ok spending an extra $32,000 where they didn’t have to.
Whether or not you agree with the idea, you can’t argue with the numbers. It would save the city tens of thousands of dollars a year to give city employees whose spouses work for the School District and another city department, a buy-out rather than paying to insure them. What’s frustrating is that the City Council never even got a chance to weigh in on the topic because the Police Commission wouldn’t agree to the terms, so it was never presented to the council as part of our contract. Even after funding for the contract was approved, the commission refused to acknowledge the cost saving benefit to what we were proposing. I say it was the commission, but I’m not sure it would be fair to give them all of the blame. They were merely relaying terms from the city manager. He knew what we were asking for, and he knew the risk to the city by not supporting our request.
This letter was sent to the Mayor and City Council two weeks ago, but even they have remained silent.
Tony Horan, President
Laconia Police Officers Association