The Board of Mayor and Burgesses (“BMB”) unanimously authorized execution of a new collective bargaining agreement (“CBA”) between the Borough and the Naugatuck Supervisors collective bargaining unit (“CBU”), Service Employees International Union (“SEIU”), Local 2001 (“UPSEU”), at the special meeting held on Wednesday, December 18, 2013. The agreement, which covers the period from July 1, 2013 (retroactively) through June 30, 2016, can be viewed here. A summary of the fiscal analysis of the CBA prepared by Director of Human Resources John Lawlor can be viewed here in both Microsoft Word and .pdf format.
The CBA includes changes in contributions to existing employee health benefits similar to the agreements reached with other bargaining units. 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, 2014, 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, 2014; and July 1, 2015.
HDHP or HSA
The Borough and the Supervisors CBU agreed to changes to the existing HSA plan that will result in savings. Beginning January 1, 2015, members will pay four (4%) percent for the premium cost share of the HSA. That percentage will rise to six (6%) percent beginning January 1, 2016. Effective January 1, 2014, 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, 2014: members will pay twenty five (25%) percent of the deductible;
- Beginning January 1, 2015: members will increase their portion of the deductible to thirty five (35%) percent; and
- Beginning January 1, 2016: 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 THIRTY SIX THOUSAND EIGHT HUNDRED NINETEEN and 46/100THS ($36,819.46) DOLLARS over the life of the CBA. Said calculation was made by the Borough’s Finance Department using a conservative eleven (11%) percent annual interest in health care premiums. Unfortunately, given the current climate of providing health benefits in the United States, this is just slightly above the average renewal rates.
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. The defined benefit pension plan is no longer offered to new hires in any of the Borough’s seven (7) municipal bargaining units.
Members of the CBU will received increases in general wages for the following years at the following rates:
- 2013-2014: Two and 15/100ths (2.15%) percent (retroactive to July 1, 2013);
- 2014-2015: Two and 15/100ths (2.15%) percent; and
- 2015-2016: Two and 25/100ths (2.25%) percent.
In addition, the Borough agreed to increase the longevity payments by FIFTY and 00/100THS ($50.00) DOLLARS over existing rates. The longevity payment schedule is as follows:
- Ten (10) years of service or over: TWO HUNDRED and 00/100THS ($200.00) DOLLARS;
- Twenty (20) years of service or over: THREE HUNDRED and 00/100THS ($300.00) DOLLARS; and
- Thirty (30) years of service of over: FOUR HUNDRED and 00/100THS ($400.00) DOLLARS.
After calculating the savings achieved through savings to the health care benefits, the total cost of the new CBA for the fifteen (15) member bargaining unit is estimated at ONE HUNDRED TWENTY FOUR THOUSAND THREE HUNDRED SIXTY THREE and 02/100THS ($124,363.02) DOLLARS, over the three (3) years of the agreement. That represents the following net percentage increases, inclusive of the health care savings:
- 2013 – 2014: 2.52%
- 2014 – 2015: 1.95%
- 2015 – 2016: 1.33%
- TOTAL: 6.04%
The Borough and the Supervisors CBU also agreed to other language changes in the new CBA, including but not limited to the following:
- Changes to the recognition clause identifying CBU positions;
- Reserving the right to change payment to bi-weekly and allowing for direct deposit;
- Clarifying exempt v. non-exempt positions on the Fair Labor Standards Act; and
- Implementing an evaluation process for all members of the CBU.
Our administration would like to thank the members of the SEIU Local 2001, particularly the representatives on the negotiating team, for respectful and productive dialogue. Borough Labor Counsel Nick Grello and Director of Human Resources John Lawlor worked reach agreement and finalize the language of the new CBA once the main components of the deal were completed. Borough Controller Bob Butler provided the fiscal analysis and supporting detail.
We sincerely appreciate the hard work and commitment demonstrated by our supervisors on a daily basis. Their commitment to assisting in implementing policy changes and increasing efficiencies in their respective departments is a critical part of any successful organization. We also recognize the negotiating team for working toward a more sustainable health benefit system for its membership and the Borough alike. The terms of the CBA are consistent with previous agreements reached with Borough teachers, clerical employees, visiting nurses, police officers and firefighters which combined modest pay increases with significant health care savings. Given the constraints of the state’s current collective bargaining law , the new CBU represents an equitable compromise between both parties.