The Board of Mayor and Burgesses (“BMB”) unanimously authorized execution of a new collective bargaining agreement (“CBA”) between the Borough and the Naugatuck Police collective bargaining unit (“CBU”), American Federal County State and Municipal Employees (“AFSCME”), Council 15 (“UPSEU”), American Federation of Labor – Congress of Industrial Organiations (“AFL-CIO”), Local 1126, at the regular meeting held on Tuesday, August 7, 2012. The agreement, which covers the period from July 1, 2012 (retroactively) through June 30, 2015, can be viewed here. A summary of the fiscal analysis of the CBA prepared by Borough Comptroller Wayne McAllister can be viewed here in both Microsoft Excel and .pdf format. Said fiscal analysis does not include the savings to the Borough which will be accrued over many years as a result of the changes to the retiree health care benefits as discussed below.
The CBA includes changes in contributions to existing employee health benefits similar to the agreements reached in 2011 with the clerical and visiting nurses bargaining units, in addition to a significant restructuring of retiree health insurance. A summary of the CBA is as follows:
The Borough achieved significant cost savings as a result of changes to health benefit packages offered to the members of the CBU. Two choices are offered to members: the traditional preferred provider organization or “PPO”; and the high deductible health plan or “HDHP”, which for the plan offered is a health savings account or “HSA”. Many members of the CBU have already switched to the HSA through previous negotiations.
Beginning on January 1, 2013, the premium cost share for members in enrolled in the PPO plan will increase from eight (8%) percent to nine (9%) percent. Premium cost shares for members will increase to ten (10%) percent and eleven and 50/100ths (11.5%) percent respectively on July 1, 2013; and July 1, 2014.
All employees hired after July 1, 2012, will pay twenty five (25%) percent of the premium cost share for the PPO throughout the three (3) years of the CBA.
HDHP or HSA
The Borough and the Police CBU agreed to changes to the existing HSA plan that will result in savings. Beginning January 1, 2013, members will pay a premium cost share of two (2%) percent toward their HSA. Premium cost shares for members will increase to four (4%) percent and six (6%) percent respectively January 1, 2014; and January 1, 2015. Effective January 1, 2013, the HSA deductible will shift to a TWO THOUSAND and 00/100THS ($2,000.00) DOLLAR / FOUR THOUSAND and 00/100THS ($4,000.00) DOLLAR plan.
More importantly, members enrolled in the HSA will gradually increase the deductible paid toward their respective plan in the following manner over the life of the agreement (plans are managed on the basis of calendar years rather than fiscal years):
- Beginning January 1, 2013: members will increase their portion of the deductible from twenty five (25%) percent to thirty (30%);
- Beginning January 1, 2014: members will increase their portion of the deductible to forty (40%) percent; and
- Beginning January 1, 2015: members will increase their portion of the deductible to fifty (50%) percent.
The changes to the health benefits contained in the CBA represent significant savings to the Borough over the three (3) year period. Said savings are estimated to total TWO HUNDRED SIXTY EIGHT THOUSAND SEVEN HUNDRED SIXTY TWO and 61/100THS ($268,762.61) DOLLARS over the life of the CBA.
Retiree Health Care
Prior to this CBA, police officers retiring from the Borough received health care in retirement without any contribution from the former employee. The new CBA makes significant changes to the cost share structure. Any member of the CBU who retirees by June 30, 2017 (within the next five years) shall receive retiree health benefits without cost to the former employee, which is no change from the current practice. After this five (5) year period, retirees will contribute the following percentages of their health care cost on a graduated scale as follows:
- Retiring more than five (5) years, but (10) years or less after June 30, 2012: FIVE (5%) PERCENT
- Retiring more than ten (10) years, but fifteen (15) years or less after June 30, 2012: TEN (10%) PERCENT
- Retiring more than fifteen (15) years, but twenty (20) years or less after June 30, 2012: FIFTEEN (15%) PERCENT
- Retiring more than twenty (20) years, but twenty one (21) years or less after June 30, 2012: SIXTEEN (16%) PERCENT
- Retiring more than twenty one (21) years, but twenty (22) years or less after June 30, 2012: SEVENTEEN (17%) PERCENT
- Retiring more than twenty (22) years, but twenty three (23) years or less after June 30, 2012: EIGHTEEN (18%) PERCENT
- Retiring more than twenty three (23) years, but twenty four (24) years or less after June 30, 2012: NINETEEN (19%) PERCENT
- Retiring more than twenty four (24) years, but twenty five (25) years or less after June 30, 2012: TWENTY (20%) PERCENT
- Retiring more than twenty five (25) years after June 30, 2012: TWENTY FIVE (25%) PERCENT
Most significantly, all employees hired after July 1, 2012, shall pay FIFTY (50%) PERCENT of their health benefits upon retirement.
No changes were made to the pension as an agreement was reached in a previous agreement to provide defined contribution pension plans to new members of the CBU. Said previous agreement has been included in the new CBA as Appendix A. The defined benefit pension plan is no longer offered to new hires in the Police CBU.
Members of the CBU will received increases in general wages for the following years at the following rates:
- 2012-2013: Two and 00/100ths (2.05%) percent;
- 2013-2014: Two and 50/100ths (2.50%) percent; and
- 2014-2015: Two and 20/100ths (3.00%) percent.
The wages of the Police CBU were slightly higher than those reached with clerical employees and visiting nurses (2.10%/2.15%/2.20%) to compensate for the fact that police officers in Connecticut do not receive social security like traditional employees.
In addition, the Borough agreed to increase the individual officer clothing allowance from ONE THOUSAND and 00/100THS (1,000.00) DOLLARS per year to ONE THOUSAND FIVE HUNDRED and 00/100THS ($1,500.00) DOLLARS.
The total increase in cost for the three (3) year period for wages (calculating estimated overtime costs) and the increase in the clothing allowance is approximately SEVEN HUNDRED TWENTY FOUR THOUSAND SIX HUNDRED SIXTY NINE and 11/100THS ($724,669.11) DOLLARS.
After calculating the savings achieved through savings to the health care benefits (not including the long term, structural changes to the retiree health benefits), the total cost of the new CBA for the Borough’s largest, municipal bargaining unit (fifty seven members) is estimated at FOUR HUNDRED FIFTY FIVE THOUSAND NINE HUNDRED SIX and 50/100THS ($455,906.50) DOLLARS, over the three (3) years of the agreement.
The Borough and the Police CBU also agreed to other language changes in the new CBA, primarily involving clarification to the grievance and discipline process as well as educational reimbursements for officers. A copy of the entire agreement with all changes in highlighted yellow can be viewed here. Article Twenty Four (24) of the CBA requires the Borough and the Police CBU to begin negotiations regarding a standardized drug testing policy by September 1, 2012; with recommendations being presented no later than January 1, 2013.
Our administration would like to thank the members of the AFSCME Local 1126, particularly the representatives on the negotiating team, for respectful and productive dialogue. A tentative agreement was reached by both parties through entirely “off-the-record” conversations. Borough Police Chief Christopher Edson and Deputy Chief Joshua Bernegger were instrumental in the process, particularly with regard to language relating to management issues. Borough Labor Counsel Nick Grello worked to finalize the language of the new CBA once the main components of the deal were completed. This helped to reduce legal costs associated with the new CBA and avoided formal negotiations.
Through hard work, experience, training and a commitment to our community, Naugatuck Police officers do a tremendous job protecting the Borough in a dangerous world. All officers play an integral part of a fantastic team that has transformed the Naugatuck Police Department into one of the most effective law enforcement units in the state. We are grateful for the contributions to Naugatuck on a daily basis, the sacrifices made by each and every one of them and their family members, and their willingness to reach a reasonable and more sustainable agreement that will benefit Naugatuck taxpayers, particularly with regard to future health expense obligations.
We would also like to thank Attorney Grello, Chief Edson, Deputy Chief Bernegger, insurance broker Rob Fitzpatrick, Human Resource Director John Lawlor and Comptroller Wayne McAllister for their sound advice and diligence throughout the process. The terms of the CBA are consistent with previous agreements reached with Borough teachers, clerical employees, and visiting nurses which combined modest pay increases with significant health care savings.