TOWN COUNCIL MAJORITY OFFICE
APRIL 19, 2013
SPECIAL MEETING
EAST HARTFORD POLICE OFFICERS’ ASSOCIATION ARBITRATION AWARD
SUCCESSOR PENSION AGREEMENT
PRESENT Chair Richard F. Kehoe, Vice Chair William P. Horan, Jr., Majority Leader Barbara-Ann Rossi, Minority Leader Eric A. Thompson, Councillors Marc I. Weinberg, Linda A. Russo, Ram Aberasturia, Patricia Harmon and Esther B. Clarke
ALSO Scott Chadwick, Corporation Counsel
PRESENT Michael Walsh, Finance Director
Santiago Malave, Human Resources Director
CALL TO ORDER
Chair Kehoe called the meeting to order at 5:53 p.m.
MOTION By Barbara Rossi
seconded by Ram Aberasturia
to reject the arbitration award in Case No. 2012-MBA-376 and direct the
Town’s Attorney to submit a written statement of the reasons for such
rejection to the State Board of Mediation and Arbitration pursuant to
Connecticut General Statutes.
Motion carried 9/0.
The Town Council recognizes East Hartford’s limited ability to pay since the town’s average household income is lower than the statewide average, the unemployment rate is higher than the statewide average and the mill rate is already higher than most other towns. Further, the Town Council adopts by reference the economic factors contained in the arbitration award dated March 27, 2013.
Further, the Town Council notes that its annual contribution to the pension plan has increased steadily over the past decade, rising to more than $10 million and, in particular, the town’s pension contribution associated with the police pension totals 30% of payroll. The Town Council has contributed the actuary’s recommended contribution every year and has lowered the expected rate of return on investments from 8.5% to 8%. The Council notes that the pension contribution calculation includes an additional contribution every year the town’s investments do not meet the expected rate of return and when actual experience of pension payments and longevity do not meet the actuarial assumptions.
The Town Council believes that it is in the public’s interest – given the town’s economic factors – to take steps to reduce the long term liability of its most significant costs, e.g. health insurance for current employees and retirees and pension payments. The public’s interest is clearly in maintaining an affordable standard of living in East Hartford – one of the more affordable housing markets in the Greater Hartford area. If taxes continue to rise due in major part to increases in pension and health insurance benefits, that interest is severely eroded.
Finally, the Town Council expresses its hope that while we reject the arbitration award, that the union and the town will reach an amicable settlement that reduces the long term pension liability of the town.
ADJOURNMENT
MOTION By Barbara Rossi
seconded by Ram Aberasturia
to adjourn (6:15 p.m.)
Motion carried 9/0.
Attest____________________________
Richard F. Kehoe
Town Council Chair
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