MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
February 23, 2005
The regular meeting of the Hull Contributory Retirement Board, duly posted to be held in the Selectmen’s Meeting Room, Town Hall, Hull, MA on the above date was called to order at 9:00 a.m. Present were Leonard Colten, Chairperson, Members Donald Brooker, Arthur Flavin, Ann MacNaughton and James Yacobucci and Retirement Administrator Marcia Bohinc.
On a motion by Jim Yacobucci, seconded by Donald Brooker, the board attested to the minutes of the November 29, 2004 regular Board meeting without changes.
On a motion by J. Yacobucci, seconded by D. Brooker, the board attested to the minutes of the January 19, 2005 regular Board meeting without changes. It was noted for the record that the direct language from the Personnel Bylaws for the Town of Hull, Section 46.4.3 j. and Section 46.4.3 i. regarding ‘sick leave buy-back’ was inserted in the minutes for clarification and reference.
The Board signed all bill warrants for February 2005.
The Board signed the January 2005 contributory payroll.
The Board signed the February 2005 contributory payroll.
On a motion by J. Yacobucci and seconded by Ann MacNaughton, the Board approved the Application for Withdrawal of Accumulated Total Deductions for former Sewer Department employee Janet White, effective February 28, 2005. Ms. White resigned on December 31, 2004, with 9 years, 9 months of service. Her refund of contributions is $21,548.27, with a balance of $448.89 interest to be transferred to the pension reserve. Voted unanimously.
On a motion by J. Yacobucci and seconded by A. MacNaughton, the Board approved the Application for Withdrawal of Accumulated Total Deductions for former Fire Department employee Michael Gallagher, effective February 28, 2005. Mr. Gallagher resigned on April 16, 2004, with 0 years, 5 months of service. His refund of contributions is $1,902.41, with a balance of $6.09 interest to be transferred to the pension reserve. Voted unanimously.
Public Hearing
At 9:13, Lenny Colten made a motion to open the Public Hearing regarding the granting of a fiscal year 2006 Cost of Living Adjustment (COLA) increase that will be effective on July 1, 2005. Seconded by J. Yacobucci and voted unanimously. Without any public attendance or comment, the meeting was closed.
J. Yacobucci made a motion to grant the Social Security Administration announced Cost of Living Adjustment (COLA) of 2.7% increase to the retirees and beneficiaries of the Hull Retirement System. D. Brooker seconded the motion for discussion.
Mr. Yacobucci elaborated on his reasons for recommending the 2.7% increase, instead of the permitted 3%. He stated that the Board is trying to be fiscally straight, including the recent decision to invest all the assets in PRIT, the Board members not being paid the annual $3,000 stipend to which they are entitled, and to continually look for other areas to save money. Stating that with the escalating payroll costs, the system simply does not have the money to grant a greater increase.
Note: At the May 1, 2000 Annual Town Meeting, the Town of Hull voted to accept the provisions of G.L. c. 32 §103(i) which allows the Hull Retirement Board to pay an annual cost of living increase to the retired members not to exceed three percent (3%). The Board has three options: 1.) 3% (maximum), 2.) 2.7% (CPI amount) or 3.) 0%.
Countering, D. Brooker stated that he is in favor of the maximum 3% increase. He also pointed out that in the past, there were years with no COLAs. When there is an opportunity to grant a 3% increase, he is in favor of doing so. L. Colten commented that a 3% increase equates to ten cents per day. J. Yacobucci argued that he feels that he is the only fiscal watchdog on the Board and will continue to look for ways to be fiscally correct.
Art Flavin remarked that while he appreciates the thought and concern of escalating costs, he does not want to make up fiscal mistakes on the backs of the retirees. The current retirees are not responsible for the past poor performance of the Board and the current position of the system. However, he did want to duly note that with any increase the Board may grant, the Board is doing it with concern, and might not always make the same decision.
With that, L. Colten called for a vote on J. Yacobucci’s original motion of a 2.7% COLA increase. Voted, J. Yacobucci yes, D. Brooker, no, L. Colten, no, A. Flavin, no, A. MacNaughton, no defeating the motion.
D. Brooker made a second motion to grant a 3% cost of living increase to all eligible retirees. Any increase is applicable to only the first $12,000 of retirement allowance, up to a maximum of $360 per year, or $30 per month. Seconded by A. Flavin. Voted unanimously. This increase applies to both the retirees and beneficiaries of the Hull Contributory Retirement System and the non-contributory retirees of the Town of Hull.
Article for Annual Town Meeting
The Board reviewed the proposed article for Annual Town Meeting, scheduled for May 2, 2005 regarding elected officials. Noting that the change would need special legislation, the first step is to request the Town to vote to petition for such change.
Using Chapter 100 of the Acts of 2004 for the Town of Richmond as a guide, the Board discussed the following proposed article:
To see if the Town will vote to petition the General Court to enact special legislation to be known as “An act relative to the retirement and health benefits of certain elected officials of the Town of Hull”.
Said Act is as follows:
Section 1. Notwithstanding chapters 32 and 32B of the General Laws or any other general or special law to the contrary, any elected official of the Town of Hull who receives regular annual compensation from the town that is less than $10,000 annually, adjusted annually according to changes in the United States Consumer Price Index as reported by the Bureau of Labor Statistics as of June 30, shall not be eligible for the benefits provided under said chapters 32 and 32B.
Section 2. Section 1 shall not impair the retirement or health benefits of any person serving as an elected official in the town of Hull as of January 1, 2006, provided, however, if said elected official fails of nomination or re-election and is subsequently elected following such failure said elected official shall be subject to this act.
Section 3. This act shall take effect upon its passage.
Enrollment in the retirement system by elected officials is at their discretion. Currently, the retirement system is available to elected officials of the Boards of Selectmen, Light, and Assessors, the Town Clerk and the Town Moderator. There are four elected officials as members in the system who do not qualify for a retirement allowance at this time due to either age or service. A fifth member, the Town Clerk is eligible for an allowance because of membership in the system for several years, including years prior to election into this position.
Concerned that current eligible elected officials may not have been notified of their right to membership, D. Brooker made a motion to notify by certified letter, all present elected officials of the Town of their option to join the Retirement System. After discussion, it was agreed that this would be done.
Regarding the article itself, A. Flavin expressed his concern about the inclusion of the health benefits with the retirement benefits, stating that to affect both, perhaps it would be more appropriate to jointly submit the article with the Board of Selectmen or the Town Manager. He commented that health insurance and health benefits are not the domain of the Retirement Board and by including it in the article, the Board may be overstepping their bounds.
He also reminded the Board of the time and energy elected officials put forth in serving the Town. Stating that there is no current abuse of the benefit, and the difficulty in getting people to serve, that perhaps the insurance is an incentive to serve and the Town should reward them somehow.
Note: The health insurance benefits are defined in M.G.L chapter 32B.
D. Brooker commented that at Town Meeting, portions of articles can be amended and if desired, the health insurance portion could be deleted. However if eliminated prior to submission, it cannot be added back at the meeting. A. Flavin continued to argue that the health insurance is not for the domain of the Retirement Board. L. Colten argued to let the Town decide if the article should be amended.
With this, the Chair called for the vote as written: D. Brooker, yes, L. Colten, yes, A. Flavin, no, A. MacNaughton, no, J. Yacobucci, no, defeating the motion to submit the article as written.
As a substitute, A. Flavin made a motion to submit the article without reference to 32B. Stating that this serves a number of purposes, including that by taking away the retirement system, officials can enjoy the benefit of the health insurance while they serve the Town, but the Town is not forced to fund a life long benefit. Additionally, while a person serves the Town, they should be entitled to some benefit. Seconded by J. Yacobucci. Voted unanimously. The article will be submitted as amended, without reference to ‘health benefits’ or ‘32B’.
Restoration to Service
The Massachusetts Appeals Court ruled in 2004 that any disability retiree who was examined to return to service before September 29, 2000 and was found able to return to service by a majority of the medical panel must be returned to service subject to requirements of vacancy and retraining. In a PERAC notice dated February 11, 2005 the Board was informed that based on PERAC’s review, Thomas Claffey was determined to be able to perform the essential duties of his former job, and therefore must be returned to service. Mr. Claffey retired on January 12, 1990 as a Captain in the Fire Department. His date of birth is March 25, 1944 and currently receives a retirement allowance of $2,350.04 per month.
The Chair signed the Board Notice of Restoration to Service notifying the employer (Fire Chief) and the Personnel Administrator at the Commonwealth’s Human Resources Division to reinstate the member to service. Upon direction from the Fire Chief, the Board will also complete and return the Notice to PERAC of Reinstatement Duties Form.
Insurance Update
MACRS has contracted with the Amity Insurance Agency for both fiduciary and fidelity insurance. The new agent, Paul Shanley, Director of Professional Liability reported that the Hull Retirement System is not eligible for fiduciary insurance. The underwriters said that the system would need a dramatic increase in funding level, at least to 60% before even being considered for coverage. He also stated that even at that level of funding, the policy would have a higher deductible and require supplementary coverage. Fiduciary coverage is optional.
Regarding fidelity insurance, which is required by PERAC, Mr. Shanley is researching last year’s policy. He was told that Hull was covered by a $1,000,000 policy with a $10,000 deductible. Travelers did not agree that Hull was covered; however felt that such a policy would be issued. Note: Hull has been continually covered by the required fidelity policy.
On a motion by J. Yacobucci and seconded by D. Brooker, the following employees were approved for membership in the system:
Member's Name |
Group |
Hire Date |
Membership Date |
Department |
Johnson, Steven |
4 |
10/27/2004 |
10/27/2004 |
Fire |
Marciello, Michael |
4 |
10/27/2004 |
10/27/2004 |
Fire |
Magnoli III, Vincenzo G |
1 |
04/07/2004 |
04/17/2004 |
Highway |
Resnick Jr, Kenneth J |
1 |
05/18/2004 |
05/18/2004 |
Highway |
Selig, Ann M |
1 |
09/01/1998 |
10/04/2004 |
Library |
Saunders, Scott F |
4 |
07/26/2004 |
07/26/2004 |
Police |
Sweeney, Andrew J |
4 |
06/14/2002 |
10/11/2004 |
Police |
Belmarsh, Susan M |
1 |
09/19/1995 |
11/01/2004 |
School |
Boretti, Sheri L |
1 |
10/08/1999 |
10/04/2004 |
School |
Campbell, Frank A |
1 |
09/03/2004 |
09/03/2004 |
School |
Capone, Cindy |
1 |
09/13/1999 |
11/01/2004 |
School |
Clerkin, Beverly |
1 |
12/02/1996 |
11/01/2004 |
School |
Connolly, Geraldine F |
1 |
09/30/1996 |
11/01/2004 |
School |
Contrado, Tammy |
1 |
02/08/1993 |
11/01/2004 |
School |
Hulverson, Tammy A |
1 |
10/29/2004 |
11/01/2004 |
School |
Kulak, Toni L |
1 |
10/22/1999 |
11/01/2004 |
School |
Macdonald, Joan F |
1 |
06/16/2001 |
09/20/2004 |
School |
Murphy, Susan D |
1 |
02/28/2000 |
11/01/2004 |
School |
O'Neill, Frances B |
1 |
05/02/2002 |
11/01/2004 |
School |
Petrocelli, Tamra |
1 |
05/08/2000 |
11/01/2004 |
School |
Rosen, Julie A |
1 |
03/09/2001 |
11/01/2004 |
School |
Stanley, Barbara F |
1 |
09/09/1996 |
08/15/2004 |
School |
Thomas, Karen A |
1 |
11/06/1998 |
09/20/2004 |
School |
Trubia, Jo-Anne M |
1 |
11/06/1991 |
09/07/2004 |
School |
Unis, Maryanne L |
1 |
09/05/2000 |
09/07/2004 |
School |
Walsh, Jason A |
1 |
09/13/2004 |
09/13/2004 |
School |
Warshauer, Lori
|
1 |
10/01/1999 |
11/01/2004 |
School |
Wood, Shawna |
1 |
09/27/1999 |
09/20/2004 |
School |
|
|
|
|
|
Total |
28 |
|
|
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Due to an administrative error at the school, the permanent part-time school aides were excluded from the retirement system. All school employees have been reviewed and all eligible employees are now in the retirement system. Make up contribution information will be provided as applicable.
Retirement Allowance Calculation
In the discussion regarding the retirement allowance calculation for former police officer David Leary in the January meeting, the Board determined that they wanted to hear the opinion of Board Attorney Michael Sacco in this meeting. In accepting the invitation, Attorney Sacco offered the following commentary on the situation:
The Board could proceed with their decision in two ways:
1) Agree that Hull Town Counsel said that Officer Leary was entitled to the payment
of educational incentive under the Quinn Bill, and because Quinn Bill is considered
regular compensation, when the Town paid the benefit, the retirement allowance
must change, or
2) Deny the change because Officer Leary was not entitled to the payment of Quinn
Bill. For some reason, he was disqualified therefore not eligible for payment, and
his retirement allowance does not need to be altered. However, because the Town
paid him the benefit, upon challenge, the Retirement Board will have issue with the
Town.
He stated that the Board needs Town Counsel James Lampke’s opinion on the record on how the decision was made, and how he determined that the Town could override the Police Chief’s decision based on the language of the police contract. Because of a lack of commitment from Town Counsel to jointly appear, the invitation to Attorney Sacco was deferred until the March meeting.
L. Colten reminded the Board that Town Counsel cannot make a ruling; he can only give his opinion. If his reasoning is sound that Officer Leary was entitled to the Quinn Bill compensation, then by definition, then the retirement allowance needs to be adjusted.
In contrast, and fully understanding the police contract, D. Brooker offered that the educational incentive pay is subject to collective bargaining. The benefits while on injured on duty status were negotiated for the current contract, and under this contract, Officer Leary was not entitled to the benefit. He went on to state that under the contract, Officer Leary was given the opportunity to grieve, however for whatever reason, did not.
The morning of the meeting, Town Counsel was available and agreed to appear and discuss his opinion and the background of his research with the Board at this meeting.
For the Board and Counsel’s benefit, D. Brooker presented a brief background of the police contract, both current and immediately preceding this contract regarding benefits while on injured on duty status. He also provided a brief history of the situation from the time of the injury through current. He concluded that based on the contract language and the method of payment by the Town, the Retirement Board should not increase the retirement allowance. He posed the question to Mr. Lampke – what was David Leary paid, and if the payment was educational incentive, why was this done when the contract clearly stated that he was not entitled to the same?
Mr. Lampke replied that the payment voted at Town Meeting was based on the determination by him that Officer Leary was entitled to the pay under M.G.L chapter 41 §111F. The article at Town Meeting was described as a miscalculation of pay that an employee was entitled to; therefore the town approved the ‘unpaid bill’ payment at the meeting. He referred to his opinion that he issued on July 27, 2004 that stated that while on §111F, an employee was entitled to regular compensation. The Quinn Bill, is defined in M.G.L chapter 41 §108L as “a career incentive program offering base salary increases to regular full-time members of town police departments…” Section 111F states that “all amounts payable under this section shall be the regular compensation of such
police officer…’ By definition, the correct pay under §111F includes the Quinn Bill.
D. Brooker agreed with Mr. Lampke’s opinion, however he pointed out that the contract states ‘An employee shall not accrue benefits during a period of an unpaid leave of absence…’ Mr. Lampke clarified that Officer Leary did not get any money from the Town during his unpaid leave of absence, and no part of the additional compensation paid was for the period of unpaid leave of absence.
Mr. Lampke went on to explain the Quinn Bill, including the argument on whether it is a benefit or not. In his opinion, the Quinn Bill is a statutory entitlement that an employee has if the Town accepts it. Hull accepted the Quinn Bill; therefore this by statute changes the definition of regular compensation. He clarified that the Quinn Bill is not the same as a benefit that an employee gets in terms of sick leave, longevity, vacation pay, uniform allowance, or any traditional benefit. If the Town did not accept the Quinn Bill, as in the contract before the acceptance, education incentive type pay would be considered a traditional benefit. Then, the base pay for §111F purposes may or may not include the contractual educational incentive benefit. Once the Town accepted the Quinn
Bill, a police officer obtained the rights under the Quinn Bill and the corresponding adjustment in the base pay.
Accepting that, D. Brooker remarked that §111F can be negotiated in the collective bargaining agreement. The Quinn Bill incentive is just on portion of the compensation, therefore can be negotiated.
The discussions and negotiation for the section K clause of the current police contract were based on the Quinn Bill, and a member not being entitled to the additional compensation if out on injured on duty status after 30 days. This is what was negotiated and agreed upon. D. Brooker went on to say that if the Quinn Bill cannot be negotiated, then the compensation available under the Quinn Bill would be available for overtime and holiday pay, which it currently is not.
Mr. Lampke argued that in M.G.L. chapter 150E, section 7 (Collective bargaining agreements…) §108L is not an enumerated section that can be negotiated; it is a statutory right and must be distinguished from contractual benefits. He agreed however that §111F is negotiable. The focus of the Quinn Bill is an increase in base salary – when receiving compensation under §111F, the statute clearly states that leave is granted without loss of pay and the payment is regular compensation. The regular compensation has been increased with the acceptance of the Quinn Bill.
L. Colten asked if Officer Leary’s pay changed when he was being paid under §111F. The answer to this is yes, but according to D. Brooker, this is because of the negotiated contract. He also asked whether compensation under the Quinn Bill is pensionable. Again the answer is yes; PERAC recognizes Quinn Bill as regular compensation, therefore is to be included in the retirement pay.
In the end, the Board still needed to make the determination of while an employee is receiving compensation under §111F, is he entitled to the compensation under the Quinn Bill (§108L). They questioned that if §111F can be bargained, but §108L cannot, what does that mean. An finally, if the Quinn Bill is an entitlement, for §111F purposes, can a new base pay be negotiated – meaning that the base pay for §111F would not be as it is under the Quinn Bill but be as it is under the contract and changed at the discretion of the chief, as written in section K of the police contract.
To resolve these questions, both Retirement Board Attorney Michael Sacco and Town Counsel James Lampke will be in attendance in the March meeting.
The Board reviewed the current year-to-date trial balance and cash accounts’ reconciliation without discussion.
Investments
The following monthly investment materials were provided to the Board:
· PERAC Letter – February 17, 2005 revoking exemptions from statutory restrictions granted for SSgA and Freedom Capital
· Investors Fund Performance – Final Calendar year 2004
· PRIM Board Update – December 31, 2004
· PRIT – Summary of Plan Performance – December 31, 2004
· Investors Fund Performance – January 31, 2004
· PRIM Board Update – January 31, 2005
· PRIT – Summary of Plan Performance – January 31, 2004
· Investors Fund Performance – Updated through December 2004
· SSgA – Total Return through December 2004
M. Bohinc distributed a summary of her previous year’s accomplishments, and the Chair signed her annual increase as negotiated in 2004 without discussion.
New Business
Regarding Michael Sacco’s memo dated February 9, 2005, on Motor Vehicle Usage,
D. Brooker asked that the Superior Court Decision Pelonzi and PERAC v. Beverly Retirement Board and The Contributory Retirement Appeals Board be distributed in the next meeting.
The Board read all informational mail:
Public Employee Retirement Administration Commission’s Report on the Exam-ination of the Hull Retirement System as of January 1, 2000 to December 31, 2003
MACRS Memo – 2005 Annual Meeting and Conference
MACRS – Save the Dates Communication
E-mail – Michael Sacco – January 31, 2005 – MACRS agendas
Comprehensive Training Program for Board Members and Staff
Annual Meeting and Conference
Memo- Michael Sacco – February 9, 2005, re: Motor Vehicle Usage
PERAC Memo #4/2005 – Investment Manager List
PERAC Memo #5/2005 – Tobacco Company List
PERAC Memo #6/2005 – The PERAC 2004 Publications Library on CD
PERAC Memo #7/2005 – 840 CMR 10:10(3) and 10:15(4) – Annual Review of Medical Tests
PERAC Memo #8/2005 – New Disability Pension Fraud Poster
PERAC Memo #9/2005 – 2005 Interest Rate set at 0.6%
PERAC Memo #10/2005 – Buy-back and Make-up Repayment Worksheet
PERAC Memo #11/2005 – 2005 limits under Chapter 46 of the Acts of 2002
Pension & Investments – February 7, 2005 – Mass PRIM cuts 1 high-yield manager, spurns another
Boston Globe – Board reduces Bulger pension
Boston Herald – Panel trims bulging pension: Bulger’s benefits cut
Babson Staff Letter, February 11, 2005
Babson Staff Letter, January 28, 2005
Babson Staff Letter, January 14, 2005
Babson Staff Letter, December 17, 2004
Segal Bulletin – January 2005
Retired State, County and Municipal Employees Association of Massachusetts – Newsletter, March 2005
The Board affirmed the next regular Board Meeting for Wednesday, March 30, 2005 at 9:00 a.m. in the Selectmen’s Meeting Room.
The Hull Contributory Retirement Board meeting adjourned at 11:15 a.m.
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