The County of Dukes County
DCC Minutes 01-13-2010
Dukes County Commission Meeting Minutes
Wednesday, January 13, 2010
5 p.m.
County Administration Building

Call to Order
Chairman Leonard Jason, Jr. called the County Commissioners' meeting to order at 5:35 p.m.  Commissioners Tristan Israel, Leslie Leland, Melinda Loberg, Tom Hallahan, John Alley and Carlene Gatting were present.  

Also in attendance were County Manager Russell Smith, Executive Assistant Martina Thornton, County Treasurer Noreen Mavro-Flanders, Assistant County Treasurer Carol Grant, Vineyard Health Care Access Program Director Sarah Kuh, T.J. Hegarty of Integrated Pest Management, JoAnn Murphy – Veterans' Agent; Airport: Manager Sean Flynn, Assistant Manager Deborah Potter, Elaine Graves, Ryan Collins, Geoffrey R. Freeman; Registry of Deeds: Dianne Powers, Deborah Levesque, Jessica Burnham;
and Joanie Ames of MVTV.

Elections
Chairman
John nominated Carlene Gatting as Chair. Tristan seconded. Nominations closed. So voted. All in favor.

Vice-chair
Les nominated Tristan Israel as Vice-chair. Melinda seconded. Nominations closed. So voted. All in favor.

Appointment to Martha’s Vineyard Commission.
Tristan nominated Lenny Jason. Tom seconded. Nominations closed. So voted. All in favor.

Health Ins. Report – Melinda Loberg
*** Carlene Gatting joined the meeting. ***
Melinda gave overview of the history of the decision to change health insurance split from 90/10 to 75/25. See full report attached. She explained how the Sub-committee looked over various options and issues that need to be put into account and asked Sean Flynn, the Airport Manager to give presentation about the proposal for a new pay scale and the implications it will have on the county budget and employees.


Presentation  - Sean Flynn
(Full presentation attached.)
The presentation shows how the pay scale be converted to reflect the change in the health insurance split so that the extra 15% contributions are part of the wages.   We also recognized but did not address as part of this presentation that the health insurance cost increase will in the future outpace the increase of salary by the percentage of steps (or step and COLA). If we change the pay scale and increase the wages, it would increase the tax burden to the employees. It would also increase the contributions to the retirement system by the employee and the employer. There is a couple of health insurance plans available in the County. Assuming 8% increase in the cost per year we projected how much would the 15% difference for each plan be in FY2011. We created a new scale based on a most common denominator – clerk’s position and we added the difference in health insurance. Other colors are other current employees as places on the new scale. We put them on the step closest (lower), but not to exceed the 15% increased salary. They would still receive the whole difference for the health insurance change. This way in FY2012 not everybody would get the 4% increase, they would all just move to the next higher step.

We did a check on the clerk’s position in comparison with the towns in salary and in increases over the last 10 years, where the average town employee increase was 70.58% between the steps and COLA, the County was only 46.80%  - a difference of 23.78%. COLA average over the last 10 years for the towns was 40.88%, for the County 26.8%. Which shows that the COLA has accumulative effect when it comes to money given to the employees. We did not take the COLA in account in our calculations because it is an annual decision and must be part of the budgetary process.   

The end result for adopting the scale is calculated on a presumption of 8% increase of health insurance per year. There are moderate savings in all 5 years we projected. FY2011 would be the fist year when it is implemented. FY2012 would be the first year when everyone gets 4% increase unless they are maxed out, which would happen at 6 steps quicker. The savings to the county would be still significant in the long run. If the health insurance increases by more then 8% the employees will take on more of a burden and vice versa.
Basic Assumptions: current county scale has 10 steps at 2%; towns have 7 or 8 steps with average 3.8% between steps. Proposed scale would have 6 steps at 4% increase between steps.
If the change were voted the request to switch to 75/25 would be sent to the Airport Commission. The unions would be notified and the negotiations could be short or last 3 to 4 years at the longest and would delay the process. The staggered implementation would make it much harder to negotiate with the unions.
Questions:
Tristan asked if we could have one group of employees stay at 90/10 and another at 75/25. Sean said that all employees under one Tax Identification Number must be treated the same and the change cannot be done without having the unions’ acceptance. Tristan asked if it is realistic that it can happen for FY2011. Sean said that his personal opinion is that it is easier to negotiate if the pay scale change and wage increase is equal to the reduction for the employees. It sends a good signal that we are not taking money out of the employees’ pockets. Carlene asked what is the assumption of 8% increase in health insurance based on. Noreen said it is based on about last 4 years. Sean added that if the increase were higher the county would still have to come up with the extra cost on the 75% portion, which would be higher then the increase on the 15% for the employee. Carlene asked how this affects the retirement contributions. Sean explained that the $10,000 increase in salaries would not result in significant increase in retirement contributions. The COLA effect is much higher then this issue as the COLA affects the whole $300K of the salaries. Noreen added that on average the retirement contribution is 14% of employee’s salary.  Sean calculated that it would be $1400 increase for the county in retirement contributions and if we subtracted it from the projected savings there would still be $4,345 savings in the first year. John asked if this proposal affects employees that are retired. Sean said that it does not. The only effect it has is that if the wages increase there will be potentially better result at the retirement age. The discussion about transition for retirees from 90/10 to 75/25 would be in a later date. Carlene asked how were the positions compared to the towns. Sean said that there was only one position compared to the towns’ as there are not many positions in the towns that would be comparable to the county positions. Carlene suggested having a review of all the positions and how they are placed on the scale. Sean said that the new scale is based on a presumption that the current positions are places correctly on the current scale and all we did was take their current wages and added the 15% increase in health insurance contributions that they will be asked to pay in FY2011. Town of Edgartown hired consultant and undertook in depth study to analyze and review all positions and their placement on the scale. We used the one position to do a check that our new scale is not out of average. There might be review needed if there is an actual shift in job duties. There are airport employees that would not necessarily stay where they are seen right now as they have duties added to their jobs and might move on the scale once the review and re-grading is conducted. Tom asked if the health insurance contribution split is spelled out in the union contract. Sean said that he does not know but even if it is not and it is just the practice the process and the end result would be the same. Tom said that if commissioners implement it, the unions would still have to implement the decision at the end. Sean said that that is true but it could be very long process before the unions would agree to take the 15% cut. Tom said that it was not allowed to be part of the union negotiations for the state employees. Sean said that the state takes care of itself and there is a different process in place for the towns and counties. Tom noted that without the COLA the increase in last 10 year is only about 8.75% higher in towns over the county. Noreen made a point that the county 20% is over 10 years at 2% a year, but in towns they reach the end of the scale in only 7-8 years. It is inconsistent to look at it this way as Tisbury is at 35% in seven years, when county employees are only at 14% at that time. Sean said that it takes about two years to train a new employee for their position at the Airport, which is a big investment and he does not want to loose people over this issue. He does not want to take money out of their pockets and have them start looking for a job elsewhere. He would like to stay as neutral on this issue as possible. *** Carlene Gatting left the meeting. ***
Tom said that the common practice in the private sector should also be put in the account. For example the people at the Oceanographic Institute pay 50% of the cost of health insurance. Sean said that he does not feel that it is correct to compare this level of municipal government employees with the private sector as they are in most cases generally in lower paid positions and you keep them under the promise that the positions are long term as the government does not go anywhere. Tristan said that there should be a discussion tomorrow at the all-island selectmen’s meeting about tying COLA to some index island wide. He also asked if the Commissioners could vote this on provisional bases and see how it is received by the union and if the unions don’t agree the scale would stay as it was before. Sean said that it could not be negotiated as provisional, but the 75/25 change would be introduced as tied to the change of scale. Sean said that it we could be also looked at if all positions in the organization are fully utilized or if some could be part time. Les said that if we wait a year we could answer some questions raised. Sean said that the Bylaws need to be revised and the process would take years.
Lenny said that the question is if we treat our employees fairly and the answer based on information received this evening is no. Now we have opportunity to make it right.  He thinks that the sub-committee that came up with the new step and grade plan did do a good job and he would recommend it. Tom said that we have not been treating our employees as other towns did, but he thinks these are two separate issues and he feels that the salary increases might not be received well by the County Advisory Board (CAB). Tom would like to do this for one year and study this issue further. Noreen said that the CAB issue was not the salaries but the 90/10 and the bottom like of the budget. The towns would not see any increase in assessment other then the 2.5% and it would not be fair to shift the burden on the backs of the employees when they are already well behind the town salaries, increases and COLA’s. Sean said that he is not sure how the one year solution would work and how it would be received by the union. The COLA is always being promised but not always realized by the employees, just a promise to look at this in the future might not be satisfying. If we do want to study it we should wait on the implementation. Russell said that he is a county employee but this proposal does not affect him. He explained that all the money we would give to the employees with this proposal would be given back to the health insurance company; the employees would not bring home more money. In fact the County would make out a little bit and it would make the County ‘administratively’ look more like the towns and keep us in step with the way the Airport is going with union negotiations. There are other issues that need to be addressed within the Personnel By-laws, which could be done later and make the changes separately. He does not want the airport to use different pay scale than the county. This is an administrative fix. We do not want to change the promise to the employees we hired them under. Russell supports the proposal as good for the County and for the employees. Tristan said he sees urgency to make a decision. We spent time on this internal issue and it is time to start looking at other issues. He would like all to look it over in the next couple of weeks and make a decision at the next meeting. He supports the package but would like to see another position comparison. Sean said that there are not that many positions to look at and there are no position that would be comparable with the towns without hiring a consultant and going through the job descriptions. Mass Municipal did originally all the job descriptions for all the towns; Edgartown had a recent review done also. Noreen said that this is holding up our FY2011 budget process, we should be done with the budget by now and she would urge the commissioners to take a vote as soon as possible. Melinda asked the commissioner to absorb the information and be ready to vote on this at the next meeting.

Manager’s  Report
We are advertising for applications for the county appointments in the next couple of weeks to be ready to make the appointment in March.

We applied for CPC funds in all six towns and we received positive response from 3 towns that would fund the project.

Regional Services Study with the MV Commission in underway and we should have final report by the next meeting.

Tom asked about the roof of the Courthouse. Russell said that we still need agreement from the Edgartown Historic Commission what trim to use and it was agreed that it would not be done until the spring when the staging could be put up.

New Business
Lenny informed that the FY2010 budget has been approved.

Lenny reminded the Commissioners that they need to file the political finance forms. Tristan said that the deadline is January 20th.

All-island selectman’s meeting is tomorrow at 7.30pm at the Oak Bluffs Library.

Adjournment:
John /Tristan moved to adjourn the meeting at 6.55 p.m.


Respectfully Submitted by:


______________________________
JOSEPH E. SOLLITTO JR., Clerk of the Courts




Health Insurance Sub-Committee Report

January 13, 2010
Summary for Discussion

Committee Members:  Lenny Jason, Thomas Hallahan, Russell Smith, Noreen Mavro-Flanders, and Melinda Loberg

History:  Because regional entities including Dukes County, the Land Bank and the MVC have split health insurance costs with their employees at a 90/10%split while the Towns use a 75/25% split, the Towns have urged both to move to a 75/25% split to be in line with them.  It has often been given as a reason why the COLA’s and step increases are different – i.e. that County workers get a better health benefit.  

The first substantive discussion by the Commissioners was 12/17/08:  Motion: to have the Chairman appoint an information gathering committee for potential cut in contributions to the employees’ health insurance and that one of the members be the County Treasurer.
On Feb. 11, 2009 the sub-committee reported information gathered regarding impact bargaining.  No recommendation was made.
On Feb. 25, 2009, the sub-committee recommended elimination of the Master Medical option saving about $18,000 for the County.  Also recommended was a commitment to go to 75/25 for FY2011.  Motion passed.

The County began the process by eliminating the Master Medical choice and moving employees to a comparable, yet more cost-effective, alternative.  This generated a savings in the County budget for 2010.  

On October 14, 2009, the sub-committee brought a proposal to the Commissioners to offer employees a lump sum in the first year.  After discussion it was agreed that more information was needed.  It was the view of the Commissioners that the change should not cost the County, but rather have the potential to save money over time.  It was suggested to compensate individual employees according to the amount the change would cost them during the first year, and that input from the MV Commission’s counsel stated that individualized compensation would be allowed.  The question remained for some, what happens after the first year?
Goal:  To recommend to the County Commissioners a process for transitioning from a 90/10% to a 75/25% split (employer/employee) payment for health insurance benefit.

Assumptions:
 
  • The Towns support and encourage changing the percentage to 75/25 to bring the County in-line with their proportion and to save money on future increases in health insurance costs.
  • The Charter Study Committee referred to benefits in the report on services provided by the County Treasurer.  Specifically, the Treasurer acts as the Human Resources department by providing orientation, education and administration of the benefits package.  It took no position on the setting of specific benefits.
  • The County strives not to unreasonably burden the employees financially during this transition.
Pathways to 75/25

        Should county employees receive compensation during the shift to a higher health        benefit contribution?  The committee strives to compensate employees at         minimum that they not suffer a reduction in wages while maintaining the goal of developing modest savings over time to the County budget.

How?  
        The Committee, with the input from staff (Russell, Martina, Carol and Sean) and         elected officials (Noreen and Diane Powers), posits that one simple and straightforward way to integrate the new health benefit percentage is to amend the step and grade system once rather than develop a series of annual fixes for each employee.  This does not address the salary and benefits of elected officials and the County Manager, nor does it incorporate the amounts and timing of the longevity for staff above the sixth step and the additional cost of retirement paid by the County for its employees.  
        
When?
        The Committee developed two timelines for achieving this goal.  Here are        the options we offer for your consideration:

        Time Line A:  For FY2011, adopt the new step and grade system developed by the staff that Sean will describe (see attached).

        Time Line B:  Provide individualized compensation to employees for the health care benefit shift to 75/25% in 2011.  Begin now to perform audits and analyses that are overdue for study (see list below) and develop a permanent health benefit fix for 2012 that emerges from those studies.
        
The County has statutory obligations to review some of the following on a regular basis.  
With the departure of the Sheriff’s department, are there shifts in the workload and types of service demanded from County employees?  Reviews of the following need to be done by the appropriate supervisors in order to provide a guide to the Commissioners, County Manager and Treasurer in managing staffing needs.

  • Personnel Committee and By-Laws (Russell Smith et al)
  • Audit of County Functions and Job descriptions
  • Grade audit
  • Review step scale
  • Benefits analysis
  • Comp time review
  • Organizational Chart
  • Managerial Salary review/process