Transfer of Liability discussed by Council

By Frank Lewis

October 30, 2013

Frank Lewis

PDT Staff Writer

Portsmouth Police Chief Robert Ware said legislation that looks on the surface like just a pay raise for non-union city employees is, in reality, more of a Transfer of Liability, which is a pay adjustment that allows non-union workers to pay the same amount of their health benefit premium as the union employees already pay.

The legislation giving non-union workers a 6 percent pay raise came up at a recent City Council meeting and was pushed to the back burner not to see the light of day until March of 2014. However, Portsmouth Mayor David Malone brought it up again Monday night during his conference session, because he said he wants City Council and citizens to see the ordinance for what it really is.

Ware spoke to Council Monday night and reminded Council of the problems with the health care fund which is some $900,000 in the red.

“Right now the general operating fund is looking good for the coming year. The insurance fund is not,” Ware said.

He said a budget committee set up by Council has sat down with department heads to look at “the enormity of the problems and how we can fix those.”

Ware said three items on the conference agenda Monday go a long way toward solving those problems. One is the 6 percent pay raise for non-union employees; the second is raising those same employees to $80 a month for a single benefit plan and $200 a month for a family plan and the third is creating a health clinic for city workers at the City Health Department.

“These three measures together are going to shore up the deficit in our insurance fund,” Ware said. “It’s trending in the right direction while we’re looking at compensating people for what they’re worth.”

Ware elaborated on the ordinance that changes the amount of the health care premium paid by the non-union employee.

“This is a Transfer of Liability from a deficit fund to within the operating budget,” Ware said. “If you do the math, the 6 percent pay increase on the $30,000 wage earner is $1,800. What we’re asking those employees that are non-union members to do is pay $1,800 on the family plan on the insurance. What that will do is reduce that deficit in the insurance fund. But it’s all within the umbrella of the general operating budget. So we’re not putting a great liability on the city.”

Ware said there are some disparity in wages for various positions in the city.

“That still does need to be looked at,” Ware said. “And I’m sure the incoming city manager will take a look at all of our taxes - what we do and what compensation is paid out for each one of those.”

Several times during the meeting it was stated that union employees would be less likely to negotiate on certain health insurance issues if non-union workers were not made to pitch in more on their share of the cost of the health care package.

“The one underlying theme that we’re hearing out of all the big unions, is, ‘we’re not willing to negotiate any changes to the current health insurance contract without the non-union employees paying into that insurance fund,’” Ware said. “It makes sense to us. But it also makes sense that when you ask them to pay into that insurance fund, that you’re compensating them accordingly for that loss.”

Ware said if all of that can get done it looks very encouraging that the city’s insurance agent could negotiate a better insurance package as it affects the segment of the contracts that require the union’s approval.

The next labor agreement is scheduled for 2014-2015.

“I would encourage City Council to take a look at this - not as a pay increase - but as a transfer of that liability from the insurance line item to the salary line item,” Ware said.

Frank Lewis may be reached at 740-353-3101, ext. 252, or at flewis@civitasmedia.com. For breaking news, follow Frank on Twitter @FrankLewisPDT.