In a move to reduce fiscal 2021 expenses in the face of uncertain state aid, the Select Board voted unanimously at a special Tuesday afternoon meeting to require town employees and retirees, despite existing contracts, to cover more of the cost of their health insurance.
Once it is fully implemented, the change in policy will raise the amount that retirees and teachers, police, DPW workers, non-teaching school staff, and other municipal employees must contribute to their plans from 20% or 25%, depending on the year they were hired, to 30% across the board. If even more savings are required, the town will ask active employees to increase their contribution to 35%, but leave the retirees at 30%. The change is effective July 1.
Retirees and non-union employees will see an immediate increase next month in the amount they contribute to their health plans, but to change the rates of unionized workers and teachers, the town must first renegotiate their existing contracts. If the unions could be persuaded to accept the increase at the start of fiscal 2021, the town could reduce its benefits costs in the coming year by as much as $283,000, according to estimates prepared by Assistant Town Administrator Marie Sobalvarro. Without the full participation of every union, however, first-year savings are more likely to hover around $158,000, she told the board.
Sobalvarro has estimated that by increasing premium payments to 30% for retirees and non-union employees, the town can reduce its expenses by $138,638 in fiscal 2021.
Increasing the premiums of police and DPW workers would add another $20,083 to the total, but the town must first negotiate with their unions. While the outcome is foreordained, implementing the change requires the two sides to enter into impact bargaining. If the result is an impasse, however, the town has the right to simply implement the change, according to Town Administrator Tim Bragan, who has already advised union leaders of the coming changes. That’s because neither contract specifies a fixed benefit amount.
That’s not the case for Harvard’s teachers, whose union recently signed a one-year contract with the School Committee that fixes their contribution to health care premiums at 25%. Alice von Loesecke, chair of the Select Board and the 10-member Budget Working Group, has asked the School Committee to relay a request to the Harvard Teachers Association to reopen negotiations and consider a benefits change.
An increase in the premium paid by teachers to 30% would save the town an additional $124,929 in the coming fiscal year, Sobalvarro estimates. But the possibility of that happening before fiscal 2022, when the current Harvard Teachers Association contract expires, “is a pipe dream,” said Select Board member and former School Committee chair Stu Sklar at Tuesday’s meeting. If that’s so, von Loesecke has said, then the Select Board would ask the school department to cut the $124,929 from its budget by other means, a directive that Superintendent Linda Dwight said at last week’s Select Board meeting left her “speechless.” The schools have already agreed to cut $220,000 from their budget should an override fail at town meeting. (See story on page 16.)
Tuesday’s move is one of several expense-reduction measures the 10-member Budget Working Group is preparing in anticipation of a possible shortfall in state aid that town officials fear could reach $820,000. So far, the increase in benefit contributions is the only change the Select Board has implemented.
