Minutes of the special meeting of the Board of Finance held on Wednesday, February 24, 2005 in the Cafetorium of the Reed Intermediate School, Newtown, CT. Chairman John Kortze called the meeting to order at 7:30 p.m.
PRESENT: John Kortze, James Gaston, Harrison Waterbury, Michael Portnoy, Peter Giarratano, Joseph Kearney.
ALSO PRESENT: First Selectman Herbert Rosenthal, Finance Director Ben Spragg, Schools Superintendent Dr. Evan Pitkoff and Assistant Superintendent Alice Jackson , Board of Education Accountant Timothy Hart, Board of Education Chairman Elaine McClure and members Andrew Buzzi, David Nanavaty and Lisa Schwartz, AON representatives Steven Ribiero and Shelly Stokes, T.R. Paul representative Mary Griffin, nine members of public.
PUBLIC PARTICIPATION.
Discussion with AON and T.R. Paul regarding Health Insurance Costs. Mr. Rosenthal noted that he is a certified insurance broker and was the broker for the Board of Education in 1975 or 1976. He previously disclosed his relationship with T.R. Paul and has not taken compensation from T.R. Paul since 1976. He does not participate in the town medical insurance. Mr. Ribiero distributed “AON Fall 2004 Health Care Trend Survey” and a time survey (A). He said that the average administrative fee increase should be 3-7%. However, Blue Cross’s increase is 25%. He said that Blue Cross has the biggest network in the state and not many people use out of network providers under Blue Cross because it is difficult to go out of network with such a large network. Ms. Griffin said that figures will be obtained from
Healthnet, Aetna, United and CIGNA to compare to Blue Cross rates. She should have these figures in another week. Mr. Ribiero said that an HMO would have been slightly less expensive last year. Ms. Griffin suggested looking at PPO’s and HMO’s. She will suggest offering an option with a self-funding plan with a higher deductible than other options that will be offered. She said that when the Town shifted from self to fully funded there were no reserves and the town would have been $400,000 short last year if we were self-funded then.
Mr. Kortze asked why we have two brokers, AON and T.R. Paul. Mr. Rosenthal explained that when the Board of Education was self-funded with T.R. Paul the Town was fully funded with Blue Cross. The Town decided to have a broker in 1998. T.R. Paul was not brought in because Mr. Rosenthal did not want there to be any question about his relationship with T.R. Paul. AON was hired by the Town. The two brokers share the commission that would go to one broker.
Mr. Kortze said that Blue Cross seems to trend more on the expensive side. Ms. Griffin said that municipalities tend to be higher in claims in her experience than the private sector. Mr. Kortze asked why Blue Cross is charging more than others and what is the alternative. Mr. Ribiero said that we could go out to bid, which we do, and we could negotiate with Blue Cross, which we are doing. Mr. Rosenthal said that there is different language in the various town contracts. The teachers’ contract says “substantially equivalent” rather than “comparable.” He said that Town has 10 bargaining units; 5 say “equivalent or better” and 3 say “comparable.” He said that “comparable” is preferred. Mr. Gaston said that it seems that there is higher use and less
participation in the municipal sector and he feels some type of self-funding should be considered. Mr. Portnoy feels that the bargaining units should encourage less expensive plans and have more money for salaries.
Mr. Kortze asked when we can negotiate with the bargaining units. Mr. Buzzi said that the Board of Education wants options and will negotiate anytime. Mr. Rosenthal disagrees, saying that we cannot renegotiate unless there is a re-opener clause in the contract. Mr. Buzzi said that the units are willing to talk anytime but both sides would have to agree to a reopening of the contract. Mr. Kortze said we need to consider a long term perspective to save money, and what do we do for this budget year. He urged T.R. Paul and AON to provide the Board of Finance with the figures comparing the insurance companies by March 7. The Board of Finance will hold a public hearing on the budget on March 2 and will have a final vote on March 7.
Presentation of Proposed Board of Education 2005-2006 Budget. Dr. Pitkoff presented information concerning the proposed budget (B). He noted that budget items were frozen because of the oil spill at Reed Intermediate School and that these items need to be added to next year’s budget. He said that the overall increase requested is 7.95%. Personnel represents 79% of the budget. Mr. Portnoy and Mr. Kortze suggested either locking into a price for oil for the year or for a certain part of the year. Dr. Pitkoff said that by recently purchasing oil as needed Newtown paid less at that time than the consortium of schools that lock in a price for the year. Mr. Kortze noted that the Board of Education is not obligated for the $1.2 million for the oil spill as is presently inferred under “Current School
Year” in Dr. Pitkoff’s handout. He asked that it be noted that the Board of Education is not paying the entire $1.2 million.
T.R. Paul representative Ms. Stokes distributed “Lifelong Expert Benefits Advice.” ©
ADJOURNMENT. Having no further business, the meeting adjourned at 10:50 p.m.
Ann M. Mazur, Clerk pro tem
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