Union Contracts, $28.7M Budget on 2013-14 Warrant

Merrimack voters will be asked to decide on six money-related warrant articles during this year's election, including the budget and five, three-year collective bargaining agreements.

The Merrimack Town Council on Thursday night unanimously approved recommending a $28.7 million operating budget and at $27.9 default budget should the operating budget not pass the muster of the voters.

However, before approving the final budget figure, the Council first voted to give the town's non-union employees a $1,500 one-time pay raise to full-time non-union employees and a 73 cents an hour raise for part-time employees – to the tune of an $84,050 increase to the budget.  These raises would not include library employees.

"The union people have always had great representation don't," Councilor Dan Dwyer said after making the motion.

Non-union employees have been paying more into their insurance for the last three years, Dwyer said. The raises will help pay higher insurance costs coming with the new

Dwyer said Town Manager Eileen Cabanel and other department heads found some reductions that could be made to accommodate the wage adjustments which would allow the raise to be made with no impact to the $5.25 tax rate.

"We scraped the bottom of the barrel to come up with these things, we did everything possible to make this cost neutral," Cabanel said, adding that she endorsed the raises.

The changes gave the budget a new bottom line of $28,725,477.

The exemption for the library employees comes because just before the budget discussion, library trustee Sue Gustafson and Library Director Yvette Couser approached the board to discuss a plan to move the library on to its own insurance, separate from what the rest of town employees are signing on for, at a significant cost savings.

Because the library has its own board, it can branch out to negotiate insurance for a smaller group of people and in being able to do so, they would be able to give their full-time employees each a $1,500 wage increase and still have at least $12,000 left over, which it will use to make some upgrades to the library including new windows in the Lowell Room.

The Council heartily endorsed the change and thanked the trustees for their legwork and transparency with the council about the proposed changes. Councilor Bill Boyd said this is the kind of proactive management and vision the Town Council said they wanted the library to show them after a few contentious years dealing with the budget.

Also during the night, which was spent in large part finalizing budgets, contracts and warrant articles ahead of next month's deliberative session, the Council voted in favor, though not unanimously, for all five of the proposed collective bargaining agreements.

Cabanel said the employees made significant concessions when it comes to health insurance – agreeing to a plan that costs more out of pocket for the premium and has higher co-pays.

Cabanel said the insurance the town has carried included prescription programs that allowed employees to purchase three months worth of brand name prescriptions for a $1 and had a doctor's visit co-pay of $5, which often meant employees would go to the doctor more often than most and prescriptions were frequently purchased as name brand.

Cabanel said the new plan, which all five unions agreed to, carries a $20 co-pay and a $10/$20/$45 prescription plan.

Due to the increased insurance plans employees in each union will earn a one-time $1,500 increase in their wages in 2013.

The new insurance plans, however, will not take effect until the third year of the contracts.

Tom Koenig and Dwyer each voted in opposition of the contracts. Koenig said he values the work the town's employees do, but he doesn't like the way the contracts are figured and says it is misleading to taxpayers.

“Part of my frustration comes down to how state requires us to breakdown cost factor,” Koenig said.

Koenig pointed out that the way the contracts are presented, it looks as though there is a total increase cost to the town that is actually a fraction of the total.

For example, the NEPBA Local 112 contract indicates a $23,934 increase in contract costs from year one to year three with $27,661 coming in the first year, $9,829 in the second year and a decrease of $13,559 in the third year. Year over year analysis makes that true, but with a $1,500 pay bump, for a total of $21,068, that's another $21,068 in years two and three of the contract, but it isn't reflected because it's not an increase from the previous year.

What looks like five contracts negotiated at $198,369 increase to the town is actually an $823,362 increase over the three year life of the contract, Koenig said.

“The real cost of these contracts is significantly higher than is presented according to state law,” Koenig said.

The contract negotiations are represented below:

NEPBA Local 112 (Police dispatchers, office staff)

Dwyer and Koenig each voted against the contracts in five 5-2 votes. They also declined to recommend them on the warrant that will be presented to voters during the March 13 deliberative session.

The deliberative session will be held in the All-Purpose Room at James Mastricola Upper Elementary School at 7 p.m. The deliberative session is an opportunity for voters to suggest and vote on changes to the budget and remaining warrant articles before they are put to a vote on April 9.