East Hartford settles financial issues

By Evan Pajer - Staff Writer
East Hartford - posted Thu., Jan. 17, 2013
Finance Director Mike Walsh (right) discusses the effects of the new union contract with the Town Council. Photo by Evan Pajer.
Finance Director Mike Walsh (right) discusses the effects of the new union contract with the Town Council. Photo by Evan Pajer.

The town of East Hartford has settled two major financial issues, including a settlement with the family of Marcum Asiamah, the student who drowned in the pool at East Hartford High School in January of 2012, and an agreement through arbitration with the Service Employees International Union Local 2001, which represents town employees. The matters were addressed during a Jan. 15 Town Council meeting.

The council voted unanimously to approve a $1.5 million settlement with Asiamah's family. The settlement had been previously approved by the Board of Education. It was noted that $500,000 of the settlement will be paid by the town, with the rest coming from the town's insurance policy.

The town entered into arbitration with Service Employees International Union Local 2001 over several issues, mainly centered around reducing the town's healthcare costs, but which also included provisions such as overtime pay and vacation time. Human Resources Director Santiago Malave said that the town successfully negotiated a change that redefines the thresholds for overtime pay to 40 hours a week and eight hours a day, up from 35 hours a week and seven hours a day. "That change will result in $15,000 in savings for the town each year," Malave said.

Another change will be to how the town pays for accrued sick days and vacation time when an employee retires. Malave said that the town negotiated for a 50-percent reduction in what is paid out. Malave said that if an employee had 100 sick days accrued, which could take anywhere from seven to eight years, "they could see a $9,000 reduction in the lump sum at retirement."

Finance Director Mike Walsh said the town hopes to see employees use their sick days. "There's some immediate benefit and some potential benefit in that employees may take more sick days when they are ill," Walsh said.

The largest issue by far was moving employees to a new high-deductible health care plan, similar to one the teacher's union moved during a contract negotiation last year. Malave said that the town will re-structure how it spends money on each of the plans to make the high-deductible plan more attractive. "If you are a single employee, you will pay $1,125 of the $9,000 of coverage under the town's PPO," Malave said. "There will be a dramatic increase in the amount of money the town will save on the PPO plan." Malave said the high-deductible plan will come with a 2-percent reduction in costs for the town. Malave said that there will also be voluntary health screenings for employees. "Assuming they meet conditions, they will receive $250 toward the Health Savings Account, so there's an incentive for them to participate," Malave said.

Malave said that the high-deductible plan will not solve all of the town's cost issues. "This is not a magic bullet," Malave said. "We could not go from zero to 60 in one full step under the arbitration agreement." The Town Council also approved an additional $238,659 that was needed to implement the new contract and get the new health system in place.

"The town won on the majority of the issues," Town Council Chair Rich Kehoe said. The council voted unanimously to approve the new contract.

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