===OCR macOS Vision===
===PAGE 1===
Town of Lunenburg
Finance Committee:
Mark Erickson, Chairman
Terri Burchfield, Vice-Chairman
John Henshaw, Secretary
Karin Menard
Jay Simeone
17 Main Street, P.O. Box 135
Lunenburg, MA 01462-0135
978.582.4139
FAX 978.582.4148
Lunenburg Finance Committee
Minutes May 26, 2016
Location:
Town Hall
Present:
Mark Erickson, Terri Burchfield, Jay Simeone, John Henshaw
Absent:
None
Also Present:
Kerry Lafleur
RECEIVED & FILED
JUN 1 3 2016
LUNENBURG TOWN
CLERK OFFICE
1. Mark called the Finance Committee meeting to order at 7:00 pm.
2. Comments:
a.
Public: None
b. New Communications:
• Karin Menard sent Mark a letter of resignation because she has been elected to the Parks
Commission. It's a conflict of interest to serve on the Finance Committee at the same time serve the
Town in another board or commission. The committee's four members just make a quorum.
• Kerry said there is one person who filled out a Talent Bank form and showed interest in the Fin Com.
3. Town Meeting and Election Results:
a. The Pavement Management Plan debt exclusion override passed by a vote of 181 to 127.
• Kerry said the Town would put together a schedule showing the new spending on the local roads to
be worked on and when the work would be done over the four-year period.
•Jay asked if the Town was soliciting bids for materials for repair and resurface work and Kerry said
the full bid packet for asphalt is on the first page of the Town's web site.
Note that complete election results are attached to these minutes.
4. FY16 Salary Reserve Transfer Requests:
a. This request is for the Finance Committee to approve transfers to meet the Town's compensation
requirements. In summary:
• The reserve fund started FY16 with a $45,000 balance; The Town transferred $9,280.26 in to the
salary reserve fund as required expenditures became clearer subsequent to the FY16 plan.
• FY16 transfers fall into these broad categories:
Retirement buybacks to cover a percentage of unused sick time at the time of retirement. Kerry
is exploring the Town buying back some un-used sick days as a way to lower long term legacy
costs.
Salary increases because of a promotion, or because the current salaries were low relative to
salary levels of comparable positions in surrounding towns.
Salary, overtime, longevity, and stipend pay from FY15 as a result of a new contract that was
agreed on after FY15.
Mark observed that, net after these transfers, there would be roughly $2,800 remaining in the
account, which would--if it remained unspent-ultimately become free cash.
For more specific information on the transfer requests, please see the attached Salary Reserve
Transfer Requests sheet.
Kerry provided some background on the rationale for the transfer requests.
• As background, the reserve fund in the FY17 budget totals $50,000. The FY17 salary reserve
fund totals $93,996. Kerry stated that the salary reserve fund includes money to cover costs of
Mn-FY16-160526 doc (local and remote drives)
1 of 3
===PAGE 2===
the DPW contract (which has not been signed) for FY16 & FY17, for the firefighters for FY17, the
chief for FY17, and for the patrol officers in FY17 as well. It also includes reserves to cover the
costs of the one significant unused sick leave buy-back, that Kerry is aware of.
b. John made a motion to approve the reserve transfer request. Terri seconded the motion. The
committee voted 4-0 in favor of the motion. Mark circulated the FY16 Salary Reserve Transfer Request
which each member of the committee signed.
5. Town Manager Report: On Town Health Insurance Plans for employees and retirees.
a. Kerry handed out to all members a packet showing enrollment in the several health insurance plans the
Town offers current employees and retirees. This packet is a series of spreadsheet tables showing the
enrollment census, cost of plan and employee share, total cost by plan, and cost comparisons. It's
attached to these minutes.
• There has been an increase of 31 retirees in the last three years, and we have not had nearly that
many people retire. Kerry said that the reason may be a decrease in the MEDEX premium
encouraging some retirees to enroll in the Town's health insurance plan. The increase in the number
of people on the plan increases the Town's health care premium costs
• The "Cadillac Tax" would tax both PPO plans at a 40% rate for any amount over the threshold cost of
more than $10,200 for an individual plan or $27,500 for a family plan. Nineteen employees or
retirees are enrolled in the PPO plans. Kerry doesn't want the Town subjected to this tax. There is a
chance that the Cadillac Tax may never go into effect-the effective date has been pushed out from
FY17 to FY18 and it is now FY20.
Further, any "Cafeteria benefits option"- which allows any Town employee to have up to $2,500
withheld from their paycheck on a pre-tax basis and used for health care expenditures. Although the
Town does not match any part of the $2,500, that amount is added to the value of the plan, and thus
would be subject to the Cadillac tax in PPO plans.
• The Town reimburses 75% of the Medicare part B premium for retiree and retiree spouses, which
adds to the Town's costs. Whether the Town is obligated to subsidize spouses' premiums is unclear,
but the Town has been subsidizing the spouse's premium. This is an area Kerry would like to work
on in the next PEC agreement.
b. There are two ways the Town can explore to lower health insurance costs:
• Increase the enrollee share of health insurance premiums. If the Town/Employee split went from
75%-25% to 70%-30%, the Town would save about $285,000.
• Change the plan design. Over time the Town has increased co-pays and added co-pays for more
services. Those plan changes resulted in modest cost savings. An alternative Kerry described is a
benchmark plan. Benchmark plans which have significantly higher out of pocket expenses.
Adopting a benchmark plan but remaining at a 75%-25% split would result in about $100,000
savings.
6. Review of minutes:
a. Minutes of the March 31, 2016 meeting: Jay moved to accept the minutes; Terri seconded the motion,
and the motion was approved by a 4-0 vote.
b. Minutes of the April 28, 2016 meeting: Terri moved to accept the minutes; Jay seconded the motion,
and the motion was approved by a 4-0 vote.
c. Minutes of the May 12, 2016 meeting: Terri moved to accept the minutes; Jay seconded the motion, and
the motion was approved 3-0. Mark abstained from voting as he had not attended this meeting.
7. Budget Goals and Opportunities: Debt Service section of the Town's Financial Policies
a. The issue is that a bond rating agency determined that the amount of excluded debt the Town has taken
on to finance the Town's share to construct the new Junior-Senior High School put the Town in violation
of the Town's debt service policy.
• The sense of the committee was that this determination was based on a misunderstanding of the
scope of the debt service policy; that the policy concerned regular debt, but did not cover excluded
debt.
b. Mark stated that the revised debt policy needs to be more transparent and easier to understand so the
rating agencies would be less likely to misconstrue the policies. John offered that the new policy should
cover both excluded and regular debt.
Mn-FY16-160526 doc (local and remote drives)
7 of 3
===PAGE 3===
c. In addition, John said when setting an upper limit on the level of debt the Town could incur we needed to
anticipate future debt levels-for example, all large capital improvement projects, repairs to Turkey Hill
School, Storm Water Projects, and renovation of Turkey Hill School.
Mark advised him to include all projects on the horizon in a model along with user-changeable
variables like annual cost inflation, rates of interest, term of loans.
•
Regarding cost inflation, Jay and Mark were skeptical of the five percent annual inflation on fire
vehicles that Chief Sullivan had included in his spreadsheet. The model needs to let people look at
potential cost inflation at different rates.
8. Committee and Department Updates:
Committee/Department
Public Access Cable-John H.
Capital Planning-John H.
Dept. of Public Works-John H.
Library-Terri B.
Public Safety-Terri B
Update
PACC will meet on Monday, June 6*h.
The goal is to develop a more comprehensive and detailed capital
plan in piace.
Terri briefly reviewed that the library was broadening the items
they were lending to things other than books, video and music
recordings. "A library of things" is the term that broadly covers
this.
No Report.
Schools, Monty Tech, COA-Karin
M.
Green Task Force-Jay S.
Sewer Commission Task Force
| No Report.
No Report.
No Report.
Jay S.
School Bldg. Comm., Building Re-
Mark was not able to attend the School Building Committee, but
use-Mark E.
he heard from Superintendent Calmes that the new school
building has been granted a certificate of occupancy. However,
work on phase 2-asbestos removal and razing the old high school
and constructing athletic fields, and a lot of site work. There is
now roughly $3,000,000 in contingency. Unspent contingency
funds-net of MSBA deduction-will be applied against the balance
the Town owes on this construction project.
9. Next meeting: Thursday, June gth, at 7:00 PM at the Town Hall.
10. Mark announced that he had retired recently. Part of Mark's retirement is to go South for the winter.
Ultimately he wants to spend January and February in warmer climes. He has no immediate plans to resign
from the committee. He will also will do everything he can to help in the transition plan.
11. Adjournment: Terri made a motion to adjourn and Jay seconded the motion. The committee approved the
motion 4-0 at 9:09.
Respectfully submitted by John Henshaw June 8, 2016
Attachments (3):
Annual Town Election Results-May 21, 2016
Salary Reserve Transfer Fund Request
Overview of the Town's Health Care Plans
Mn-FY16-160526.docx (local and remote drives)
3 of 3
===PAGE 4===
Approved Date
5/7/2016
5/7/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
Effective Date
5/2/2015
712/2015
10/8/2015
12/31/2015
7/1/2015
10/14/2015
10/14/2015
7/1/2015
7/1/2015
7/1/2015
7/1/2015
7/1/2015
7/1/2015
7/1/2015
7/1/2015
Org/Object
11332-578000
11332-517000
11332-517000
11332-517000
12201-511000
11351-511000
11351-514002
11551-511000
12101-511000
12101-514002
12101-519002
12201-511007
12201-513000
12201-514002
12201-519004
Employee
Original Appropriation
Karen Kemp
Gregory Bingham
Janice Carrier
Patrick Sullivan
Karen Brochu
Karen Brochu
Stephen Malandrinos
James Marino
James Marino
James Marino
Various
Various
Various
Kenneth Jones
FY16 SALARY RESERVE TRANSFER REQUEST
Account Name
Salary Reserve
Salary Reserve-Retirement Buybacks
Salary Reserve Retirement Buybacks
Salary Reserve-Retirement Buybacks
Reason
Retirement
Retirement
Retirement
Salary Reserve-Supplemental Appropriation
ATM Transfer-FY15 Firefighters Contract
Fire Department-Chief's Salary
Accountant/Finance Director Salary
Accountant/Finance Director Longevity
IT Director's Salary
Police Department-Chief's Salary
Police Department-Longevity
Police Department-Educational Incentive
Fire Department-Daymen Salaries
Fire Department-Daymen Overtime
Fire Department-Daymen Longevity
New Contract
ded Finance Director Positi
ded Finance Director Positi
New Contract
New Contract
New Contract
New Contract
New Contract
New Contract
Fire Department-EMT Stipend
Retirement Buybacks
25,181.09
(19,460.98)
(5,720.11)
(5,719.74)
5,719.74
Contract Adiu 818 91
19,818.91
$
$
$
9,280.26
(3,611.32)
(3,600.00)
(1,314.00)
(278.00)
(3,093.00)
(5,308.00)
(266,00)
(621.00)
(6,288.33)
(701.76)
(180.68)
(1,000.00)
At the Finance Committee Meeting of
above Salary Reserve Transfer requests.
the Committee voted to approve the
Balance
$45,000.00
$25,539.02
$19,818.91
$14,099.17
$29,099.17
$25,487.85
$21,887.85
$20,573.85
$20,295.85
$17,202.85
$11,894.85
$11,628.85
$11,007.85
$ 4,719.52
$ 4,017.76
$ 3,837.08
$ 2,837.08
===PAGE 5===
SELECTMAN
ROBERT J. EBERSOLE
JAMES E. TOALE
Lance May
Dan Proctor
Greg Bittner
SEWER COMMISSIONER - 3yrs
JOHN REYNOLDS
CARL A. LUCK
Mary Trudeau
SEWER COMMISSIONER - 2 yrs
Wendy Mungove
all others
SEWER COMMISSIONER - 1 yr
Mary Trudeau
Joseph Anderson
BOARD OF HEALTH MEMBER
JAMES J. AUGE
ANNUAL TOWN ELECTION
Saturday, May 21, 2016
OFFICIAL BALLOT RESULTS
PRECINCT
A
B
BLANKS
TOTAL
BLANKS
TOTAL
BLANKS
TOTAL
BLANKS
TOTAL
BLANKS
TOTAL
80
84
1
1
44
210
82
71
56
210
100
105
1
104
105
75
30
105
51
1
148
52
38
58
148
74
74
1
74
52
22
14
58
63
35
156
65
53
38
156
78
78
78
78
00
18
D
73
85
54
212
88
69
55
212
2
104
106
106
106
32
106
TOTAL
254
283
1
1
1
186
726
287
231
207
726
2
356
363
1
1
361
363
261
102
363
===PAGE 6===
ASSESSOR
Rena Swezey
All Others
TOWN CLERK
KATHRYN M. HERRICK
Troy Daniels
ANNUAL TOWN ELECTION
Saturday, May 21, 2016
OFFICIAL BALLOT RESULTS
PRECINCT
A
B
BLANKS
TOTAL
BLANKS
TOTAL
10
1
105
88
1
105
8
3
63
74
62
12
74
CONSTABLE
JOHN E. BAKER
BLANKS
TOTAL
SCHOOL COMMITTEE MEMBER
MEREDITH A. WEISS
DAWNMARIE AYLES
Greg Berthiaume
BLANKS
TOTAL
80
25
105
78
77
55
210
53
74
48
1
52
148
5
73
78
71
7
78
60
78
53
54
49
156
D
13
93
106
87
19|
106
85
106
76
80
212
TOTAL
36
323
363
308
54
363
278
85
363
254
259
1
212
726
===PAGE 7===
ANNUAL TOWN ELECTION
Saturday, May 21, 2016
OFFICIAL BALLOT RESULTS
PRECINCTI
A
B
PARK COMMISSIONER - 3 yrs
Dennis Mannone
Peter McCauliff
BLANKS
TOTAL
PARK COMMISSIONER - 2 yrs
KARIN MENARD
All Others
BLANKS
TOTAL
COMMISSIONER OF TRUST FUNDS
Jane Denike
Robert Herrick
Joanna Bilotta-Simeone
BLANKS
TOTAL
CEMETERY COMMISSIONER
LANCE D. MAY
Stan Barney
Brian Kelly
BLANKS
TOTAL
LIBRARY TRUSTEE - 3 yrs
DONNA R. SALIA
RICHARD N. MAILLOUX
BLANKS
TOTAL
6
5
94
105
76
29
105
1
103
105
77
1
26
105
77
74
59
210
4
70
49
1
24
74
1
73
74
56
74
148
C
78
64
14
78
78
78
62
16
78
63
60
33
156
D
11
7
106
73
2
31
106
1
1
104
106
79
106
212
TOTAL
17
16
330
363
262
3
98
363
1
3
1
358
363
274
1
87
363
269
261
196
726
===PAGE 8===
LIBRARY TRUSTEE - 2 yrs
KIRJA PANANEN
PLANNING BOARD MEMBER
DAVID PROKOWIEW
HOUSING AUTHORITY MEMBER
LINDA M. MCDONALD
DEBT EXCLUSION
QUESTION 1 - Pavement Management Plan
YES
NO
ANNUAL TOWN ELECTION
Saturday, May 21, 2016
OFFICIAL BALLOT RESULTS
PRECINCT
A
B
BLANKS
TOTAL
BLANKS
TOTAL
BLANKS
TOTAL
BLANKS
TOTAL
76
29
105
76
29
105
76
29
105
58
28
19
105
50
24
74
51
23
74
53
74
27
36
74
62
16
78
59
19
78
59
19
78
34
32
12
78
D
80
26
77
29
106
86
20
106
62
31
106
TOTAL
268
95
363
263
100
363
274
89
363
181
127
55
363
===PAGE 9===
Notes:
Renewal Dates:
July 1 = HMO Blue; BCEP Alt (PPO)
January 1 = Managed Blue for Seniors; MedEx; Medicare Part B
Enrollment Census:
HMO Blue, Individual
HMO Blue, Family
PPO, Individual
PPO, Family
Managed Blue for Sr.
MedEx
Municipal
15
28
1
3
total:
47
School
48
115
1
6
170
Medicare Part B
Retiree
24
15
6
2
149
28
224
176
HMO Blue, Individual
HMO Blue, Family
PPO, Individual
PPO, Family
Managed Blue for Sr.
MedEx
$
$
$
$
Full Cost of Plan Employer Share (75%) /
8,844.84 $
6,633.63
23,261.76 $
17,446.32
10,840.08 $
8,130.06
28,509.00 $
21,381.75
3,296.40 $
2,472.30
3,692.76 $
2,769.57
Medicare Part B
1370.28 $
1,027.71
Total Cost, by Employee Group-Current Plan Offerings
Municipal
HMO Blue, Individual
HMO Blue, Family
PPO, Individual
PPO, Family
Managed Blue for Sr.
MedEx
$
$
$
$
99,504.45 $
488,496.96 $
8,130.06 $
64,145.25 $
School
318,414.24
2,006,326.80
8,130.06
128,290.50
$
660,276.72 $
2,461,161.60
Part B, Retiree
Part B, Spouse
Total: $
660,276.72 $
2,461,161.60
$
$
$
$
$
$
# $
$
# $
Retiree
159,207.12
261,694.80
48,780.36
42,763.50
368,372.70
77,547.96
958,366.44
124,601.40
69,060.60
1,152,028.44
===PAGE 10===
Cost Comparison using May 1, 2016 Enrollment
Current Offerings Current Offerings MIlA Benchmark
75/25
70/30
Municipal, HMO Individual
Municipal, HMO Family
Municipal, PPO Individual
Municipal, PPO Family
School, HMO Individual
School, HMO Family
School, PPO Individual
School, PPO Family
Retiree, HMO Individual
Retiree, HMO Family
Retiree, PPO Individual
Retiree, PPO Family
Retiree, Managed Blue
Retiree, MedEx
Retiree, Medicare Part B Reimb.
Retiree, Spouse Part B Reimb.
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
99,504.45 $
92,870.82
$
488,496.96
455,930.50
$
8,130.06
$
7,588.06
$
64,145.25
$
59,868.90
$
318,414.24
$
297,186.62
$
$ 2,006,326.80
$
1,872,571.68
$
8,130.06 $
7,588.06
$
128,290.50
119,737.80
$
159,207.12
261,694.80
48,780.36
42,763.50
368,372.70
77,547.96
124,601.40
69,060.60
$
$
$
$
$
$
$
$
148,593.31
$
244,248.48
45,528.34 $
39,912.60
343,814.52
72,378.10
$
$
$
116,294.64
64,456.56
$
75/25
96.796.35
475,201.44
7,885.08
62,276.58
309,748.32
1,951,720.20
7,885.08
124,553.16
154,874.16
254,572.20
47,310.48
41,517.72
368,372.70
77,547.96
124,601.40
69,060.60
total: $ 4,273,466.76
$
$
3,988,568.98
$
(284,897.78) $
-6.67%
4,173,923.43
(99,543.33)
-2.33%
===PAGE 11===
Individual
Analysis of FY2017 Costs
Using May 1, 2016 Enrollment as base
Municipal- Current Plan Offerings (75/25)
Individual:
Total Premlum
Employer Share:
Employer Annual
Current Plan Offerings (70/30)
Total Premium
Employer Share
Employer Annual
HMO Blue
BCEP AIt (PPO)
92,870.82
7,588.06
total: enrollment & cost
16_
$
107,634.51
_$.
100,458.88
School- Current Plan Offerings (75/25)
Individual
Total Premium
Employer Share
: Employer Annual
Current Plan Offerings (70/30)
Total Premium
Employer Share
Employer Annual:
HMO Blue
BCEP AIt (PPO).
19 8 2007 8 0700 8 a . 1 2000 20003
903.34 $
-7588.06
total: enrollment & cost
-49
326,544.30
$
_304,774.68|
Retiree- Current Plan Offerings (75125)
Individual Total Premium Employer Share
Employer Annual
Current Plan Offerings (70/30)
Total Premium
Employor Share
Employer Annual
HMO Blue
BCEP Alt (PPO)
$
903.34$
677.51
48,780.36
737.07
$
903.34 | $
515.95
632.34 S...
148,593.31
45,528.34
Managed Blue for Seniors
MedEx
274.70 $
307.73$
230.80 $
368,372.70
77,547.96
$
274.70 5
307.73 $
192.29 S
215.41 $
343,814.52
72,378.10
total: enrollment & cost
653,908.14
610,314.26
Medicare Part B Reimbursement
Retiree
Spouse
$
124,501.40
69.060.60
116,294.64
64,456.56
Total: inc. Medicare
847,570.14
$
791,065.46
MIIA Benchmark (75125)
Total Premium
Employer Share
Employer Annual
$
717.01$
876.12 S
537.76 $
857.09
$
96,796.35
7,885.08
104,681.43.
MIIA Benchmark (75125)
• Total Premium
Employer Sharo
876.12...
537.78_.$.
657.09
$
$
MIlA Benchmark (75/25)
Total Premium
Employer Share
717.01
$
_876.12.$
537.76
$
657.09
$
+ 67
us es
Employer Annual
309,748.32
7,885.08
317,633.40
Employer Annual:
154,874.16
47,310.48_
368,372.70
77,547.96
648,105.30
124,601.40
69,060.60
841,767.30
===PAGE 12===
Family
Analysis of FY2017 Costs
Using May 1, 2016 Enrollment as base
HMO Blue
ECEP Alt (PPO)
total: enrollment & cost
Municipal- Current Plan Offerings (75/25)
Total Premium Employer Share
HMO Blue
ECEP Alt (PPO)
total: enrollment & cost
HMO Blue
BCEP AIt (PPO)_
Managed Blue for Seniors
MedEx
total: enrollment & cost
Medicare Part B Reimbursement
Retiree
Spouse!
Total: inc. Medicare
31
total: Municipal, Active Employees
School - Current Plan Offerings (75/25)
Total Premium: Employer Share
121
Retiree-Curront Plan Offerings (75125)
Total Premium Employer Share
0.
17
$
552,642.21
$.
Employer Annual
2,134,617.30
2,461,161.60
Employer Annual
$
total: Retirees
I total: Retirees
304,458.30
304,458.30
1,152,028.44
Current Plan Offerings (70/30)
Current Plan Offerings (70/30)
Current Plan Offerings (70/30)
Total Premium
Employer Share
MIA Benchmark (75/25)
Total Premium
$
$
Employer Annual
515,799.40
537.478.02
616,258.27
$
642,159.46
Employer Annual
MIA Benchmark (75/25)
Total Premium
Employer Share
Employer Annual
1,872,571.68
119,737.80. 5
1,885.72 S
2,306.54 $
1,414.29 | $
1.729.91
1,951,720,20
124,553.16.
1,992,309.48
$
2,076,273.36
2,297,084.16
MilA Benchmark (75/25)
Total Premium
284,161.08
$
296,089.92