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05/23/08 City retirees’ ‘free’ health care required sacrifice
The News Tribune never lets us down. For months, whenever doing a story on city retirees’ health and medical benefits, the newspaper consistently has made reference to the fight over free medical care benefits for city retirees. This seems to have been done to inflame the public and generate sentiment in opposition to the retirees’ negotiated, rightful benefit.
In the process of collective bargaining 26 years ago, city employees made very costly and important concessions, such as forgoing vacation days, reducing sick leave and, not the least, accepting less-than-prevailing wage adjustments. That was called good-faith negotiations. A give-and-take process arrived at an agreement. Union members in the private sector are quite familiar with this. Nowhere is a negotiated benefit labeled “free” by the newspaper other than with regard to this hospital and medical program for retired city employees.
The News Tribune owns the ink and the paper and thus can continue to spread misinformation. But as representatives of city retirees, we can serve as a truth squad wherever and whenever.
The News Tribune seems to want to correlate this benefit to whatever taxes are levied and call it an “unfunded liability,” as per the propaganda put out by city government. It’s unfunded because succeeding city administrations ignored it for years.
Now quickly let us ask why the News Tribune doesn’t compare the high rate of electricity in the area with the luxurious pension, bonus and medical benefits afforded to retired executives and the CEO of the local power company — the CEO who, coincidently, submitted the negative task force report on city retiree benefits? What is the unfunded liability we consumers of electricity will pay for these folks over the next many years?
Eli J. Miletich, Ted Griak, Bob Laflamme, Gerry Veillet
Duluth
11/25/07 Court already has ruled: Retiree benefits are for life In response to the Arend Sandbulte’s Nov. 9 commentary, “Duluth’s retiree health-care liability requires cooperation of all sides,” I’d like to share some of the wording in the city labor contracts to help clarify the city’s retiree health-care coverage.
Section 23.1 of the Basic Unit Employees Contract of 2000-02 states in part that qualifying city retirees who are “currently receiving a retirement or disability pension from any such fund shall receive hospital-medical insurance coverage to the same extent as active employees, subject to the following conditions and exceptions: “(a) The City will provide any eligible retired employee without claimed dependents the approved fee-for-service coverage or plan 2 coverage, whichever is designated by the employee at the time of retirement, provided active employees, without cost to the retiree.” And “(d) Such coverage shall be for the life of the retiree.”
The intent of the wording in Section 23.1 is to provide a long-term, permanent benefit. The words “provided active employees” are used to define the benefit that the city will give to the retiree (commencing on the date of retirement) and does not imply that the future health-care benefits for employees may be imposed on retirees. (To see contract wording visit the city of Duluth Web site and the links to human resources and union contracts.)
Court cases establish precedence for questions like this and the Minnesota Supreme Court decision of May 19, 2005, in Chisholm Housing and Redevelopment Authority v. Norman, ruled that “the retiree’s right to such benefits is vested for the life of the retiree and cannot be altered absent the retiree’s consent.”
An increase in health-care costs (e.g. raising deductibles and co-payments) isn’t affordable to most retirees on fixed incomes. More threatening is the prospect of losing the health-care coverage completely — which is possible if the benefits are based on future labor contracts.
Robert Winkler
Duluth
10/21/07 Apology needed from arbitrator
As a member of the committee that first negotiated the employee retiree health and medical benefit back in 1982 for the city of Duluth Supervisory Unit, I’ve followed present-day City Hall-union negotiations with interest. Previously I was president of the Basic Unit, AFSCME, so I am intensely familiar with collective bargaining.
Back in 1982, none other than the Rev. Clarence Maddy, the city’s administrative assistant, proposed city employees consider accepting a permanent program of paid health and medical coverage in exchange for conceding needed, improved wages, which employees sought. He also insisted we employees make concessions on already established sick leave and vacation policies. We had some heated debates within our association, but forward thinking prevailed. Good faith collective bargaining is what it’s all about. The other city unions followed suit. The city was satisfied with the agreements, and we were moderately satisfied.
An arbitrator recently released a decision in the case of the police union vs. the city, and the union will not appeal. That’s the union’s choice. I write about a comment attributed to the arbitrator, a Stephen A. Bard: The savings as a result of his decision, “even when combined with the increased revenues from various measures adopted by the city will be insufficient to tame the gigantic gorilla that is the unfunded liability,” he wrote, alluding to retirees’ benefits.
First, the arbitration was called to consider the merits of both sides’ arguments and state arbitration law precluded an arbitrator from considering the financial status of the government entity. Bard’s comment was inappropriate and out of line.
Second, benefits for present retirees was not on the table and never will be, inasmuch as we are not members of any union. We expect an apology from Bard.
Ted Griak
Duluth
10/12/07 City Hall missteps played role in health-care liability Duluth’s health-care liability is part of a larger problem, yet other reasons for the city’s budget deficit are disregarded in a mad rush to condemn employees and their benefits. What about the spending habits and poor judgment of previous administrations, or that health-care money was diverted to pet projects? Sensationalizing this complex issue seems easier for the media than good investigative reporting. Property owners should be aware that the city takes a smaller part of the tax dollar than other entities such as schools. In return, citizens get many services and amenities that are easily taken for granted. All businesses include the cost of employee compensation in the prices of their products or services. Prices go up in the private sector without all the fanfare because there’s no convenient “scapegoat.” The city sometimes ventures into unnecessary and unwise investments that lose money, and then the city expects employees and retirees to pay for the mistakes. Mayors and city councilors and their lack of due diligence in budgeting for health insurance is the real problem. Unvarnished interpretations of state rules, health insurance plans and past union contracts are necessary in solving this problem.
The Basic Unit Employees Contract for 2000-02 states that “the city will provide any eligible retired employee without claimed dependents the approved fee-for-service coverage or plan 2 coverage, whichever is designated by the employee at the time of retirement, provided active employees, without cost to the retiree. …Such coverage shall be for the life of the retiree.”
Whether these benefits can be modified is between the individual retirees and their employer — the city of Duluth. The insurance provisions were offered to employees instead of higher pay, and employees accepted the terms. The employee contract is legally binding and must be honored.
Robert Winkler
Duluth
09/24/07 City employees blamed for politicians' failures
Baloney. That's what the News Tribune repeatedly writes about Duluth's contract with retired former employees.
The Sept. 19 story "City, AFSCME reach tentative deal" mentioned an alleged $309 million retiree health-care liability. "Duluth's crisis," the story stated, "stems from new accounting rules that require the city to put on its books the total amount it would have to pay out if all potential health insurance claims were made." First, there are no "new accounting rules." Instead, there are suggested principles by the Governmental Accounting Standards Board. The key word is "if." What that means is that if all employees and present retirees were to go to a doctor, be hospitalized, have surgery, or go through an extended illness on the same day of the same week of the same month, then there would be an unfunded liability.
That's ridiculous, but great reading material for those who dwell on making government employees the culprit in error or omissions committed by the politicians elected to have some integrity in dealing with the public trust.
City employees negotiated a contract with the city back in the early 1980s in which good-faith bargaining took place with give and take by both sides. As expected, employees and retirees adhered to the agreement, expecting likewise from a succession of inept mayors who never once presented it in the budget and councilors who didn't ask questions about the obligation to fund retiree's health insurance. Who created a crisis?
The editorial also on Sept. 19 ("AFSCME deal should lower city's $300 million liability " we hope") rambled on and quoted Arend Sandbulte, the former CEO of Minnesota Power and the former retiree insurance task force chairman. Reporters might ask Sandbulte about his retirement benefits and those of other Minnesota Power executives and whether they're related to the cost of electric power for customers.
By coincidence, Sandbulte is campaign manager for a mayoral candidate.
Eli J. Miletich
Duluth |
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