However, after the Finance Team conducted a detailed cost analysis based on enrollment statistics, we found that our budgetary needs for next year are actually less than in FY15.
I am no financial guru like Joe Smith or Joe Mendonca nor do I have the municipal acumen of Bob Healy or Connor Baldwin but thanks to people like Tom Moses, Bernie Lynch and Warren Shaw I have a decent grasp of how to read and understand the basics of a municipal budget. In my “real” job, I’ve dealt with the increase in health cost this year. That includes larger out of pocket cost for most of us. Looking again at this budget, my biggest unanswered question is how can the City of Lowell believe that Health Insurance for 2016 could possibly be lower by $225,000 than it was in 2015?
On March 30th the Mass Municipal Association had an article talking about the 2015 shortfall in the GIC and what the GIC was doing to make themselves more fiscally sound in 2016. In part the story stated:
The state’s financially troubled Group Insurance Commission, which provides health insurance to state employees as well as approximately 60 municipalities, regional school districts and other entities, has adopted a sweeping combination of plan design changes and rate increases in order to close a large projected budget shortfall for fiscal 2016.
The GIC is also awaiting a $190 million supplemental budget appropriation to close its substantial fiscal 2015 budget deficit.
The GIC is anticipating rate increases to be in the 5 to 10 percent range, depending on which plan a member is enrolled in.
Plan design changes adopted by the GIC in February include co-payment increases for prescription drugs, specialists, inpatient hospital stays and outpatient surgery. Non-Medicare plan deductibles will increase from $250 for an individual and $750 for a family to $300 for an individual and $900 for a family.
Municipal contribution rates vary, but the statewide average is roughly 75 percent paid by the city or town and 25 percent by the employee.
The States own website explains the GIC shortfall and cost increases.
Current projections include a $765 million shortfall for the Commonwealth and the GIC’s deficit accounts for $165 to $190 million of that shortfall. Most of our current budget shortfall is structural – we have been underfunded for the last three years and the budget base was not updated for the additional members that we have added, the end of federal funds, and the supplemental budgets we’ve received. The FY16 premium requests received from the plans, especially two of the larger ones, are not realistic given the budget situation. Additionally, too many patients are using expensive academic medical centers for routine care, further increasing costs for all of us.
The Administration has committed to making the GIC’s budget whole. However, despite the new budget base, there’s no room for increased spending next year. With many pressing Commonwealth of Massachusetts concerns, agencies have been asked to come in with level funding. The GIC has been pushing hard through the Centered Care Initiative to change the way providers are paid and move from fee for service payment arrangement that reward providers for ordering unnecessary tests and procedures to global payments. This has been a tough slog and progress has been slower than we would like. We will continue to push for these changes, but in the meantime, the Commission has had to make some difficult decisions. These were not easy decisions and they will affect all of us who work for the state and local communities. However, members will continue to pay lower out-of-pocket costs by seeking care from Tier 1 and Tier 2 specialists and Tier 1, and in some plans Tier 2, hospitals.
In the Cities Budget book, which is in my humble opinion a lot tougher to understand in the current format than it has been in the past 4-5 years, on Page II-76 shows a “2016 Request” for Health Insurance being $24,270,325 yet the “2016 Manager” proposal comes in $1,770,325 under that.
Looking at the years Lowell last time had a former State Rep. running the City, part of the problem that led to John Cox having to raid the reserves was that for a few years in a row he under valued the health care cost when Lowell was self insured. Manager Murphy at a time when every other city, town in the GIC is stating that the health insurance increase is effecting their budget wants the people and Councilors of Lowell to believe somehow Lowell isn’t being effective? Springfields FY16 budget includes $23.6M for health insurance for City department employees representing a 3.99% increase from the FY15 projection.
The Manager and his fiscal team need to provide a detailed analysis with numbers and facts to back them up to explain their statements that ” after the Finance Team conducted a detailed cost analysis based on enrollment statistics, we found that our budgetary needs for next year are actually less than in FY15.”
Other Budget Observations:
If you look at the Budget and see Requested FY16 and Manager FY16 and wanted to know why the numbers differ so much on many items the Difference is between what was submitted by dept heads (Requested FY16) and what the Manager sent to the City Council.(FY16 MANAGER)
No matter what you want to call it, a step increase, cost of living adjustment etc. ALL salaries and wages are going up.
The Manager’s “Contingency” is going down from $295,000 to $262,680
There is a line item that states Reserve for wages – FY16 Request was for $1 Million but FY16 Manager’s reduced it to $200,000.
Why is there a need to increase the Sick Leave Incentive in the City Manager’s budget by $500,000?
Why is the Manager’s office also increasing Salary and Wages Temp. by $5,000?
On page IV-17 there is a line item that states Business/Marketing Development, CVB funded by FY16 Manager @ $200,000 which is $5,000 LESS than 2015 and $50,000 less that FY16 Requested.
Why is there a need for $15,000 more in “Professional services” for the Manager’s office?
What is the $10,000 for Salaries and Wages Perm under Cable access that hasn’t been there the last 2 years?
Speaking of Cable, I need help understanding how this budget works when it come to these type of items (I’m assuming that a least a couple of Councilors would have the same issue understanding that I have)
On Page IV-13 that shows CABLE ACCESS 260,200
On page III-43 a listing that shows Cable Franchise Fee 650,000 / Comcast Capital 4,159 a grand total of 654,159
So is Lowell getting $910,000? I doubt it but it is confusing.
I had to do a little searching but Lowell does in fact list(and has in the past) how much the city receives for Veterans Benefits and State Land under the INTERGOVERNMENTAL REVENUE GENERAL GOVERNMENT REIMBURSEMENTS on Page | III-39
Veterans’ Benefits 697,697 Vets/ Blind Exemption 299,223 State Owned Land 201,060
WINCHENDON / Lowell Connections
1) A Great Case AGAINST giving Manager’s a Contract:
WINCHENDON — Voters overwhelming approved buying out Town Manager James M. Kreidler Jr.’s contract, 294-93, for $300,000 at a special town meeting at Murdock Middle High School Monday night.
The action was taken just five months after selectmen signed a renewal contract for Mr. Kreidler. A few weeks ago, the board then voted to add a mutually agreed upon termination addendum to the contract that would end it on or before May 1 and will cost taxpayers nearly $300,000 to fund. His contract ran through June 30, 2018, and selectmen said Mr. Kreidler forfeited 31 months of salary and benefits in the agreement. The money is coming out of the stabilization account, officials said, that has a balance of $515,000.
In a heated special town meeting Nov. 24, voters approved firing Mr. Kreidler in a secret ballot, 290-135. Mr. Kreidler has held the positon for 15 years. Mr. Kreidler will now receive a lump sum of $299,602 for 18 months of salary and benefits.
2) The town has a $3.8 million deficit and much like the John Cox era here in Lowell – Much of the deficit in Winchendon stems from the town’s annually underfunding the health insurance trust, according to the DOR. (The town is self-insured.) The agency is still going through fiscal 2015 figures.
3) Overheard at State Rep. Tom Golden’s Party was the news that former Lowell City Manager Bernie Lynch is one of the individuals the MA. State DOR is recommending Winchendon hire has an interim Town Administrator and let him try to assist in fixing the financial mess as he did here in Lowell.
End of an Era – Sandwich King
Best Wishes, Good Luck and God’s Blessing to my friend James Bouras and his lovely wife, his dad and the family on their decision to sell SANDWICH KING on Bridge St. The Bouras Family has been there a long time and Jimmy is one the nicest most sincere guys you will meet. Whatever road he now takes I hope it is one filled with success and know it will be filled with love especially with a new baby arriving soon!
The Circle of Lowell
Chris Scott’s Column Blog had a past this week about former Lowell School Committee member Kevin McHugh
“If Lowell Deputy Superintendent Jay Lang gets the top job in Chelmsford tonight, it will create a vacancy for the master of all things business, which is right up McHugh’s alley. Currently employed as the school business administrator in Lynn, McHugh, who still lives in Lowell, formerly held similar positions in Wilmington and Peabody.”
It brought back an old memory to the time Kevin and Rodney Elliott were the finalist for the Greater Lowell Tech Business Manager position. McHugh who had all the required certifications lost out to Elliott who had a year to get the certification required. Kevin moved on but a couple of Tech Committee members (led I believe by Mike Hayden) objected and contacted the State Ethics Commission who determined that Rodney had to resign from the City Council if he wanted to keep the job because they claimed he would in essence be collecting two checks from the same city. Rodney went back to the EPA, Kevin to various other positions.
Now Rodney could be one of Kevin’s bosses if he chose to apply for the Deputy Supt. position.
One strike against Kevin is that his sister in-law works on the system and we know how Kim Scott and KRS feel about family working in the system.
Candidates out and about
Ran into City Councils Candidate former Councilor Vesna Nuon at State Rep. Tom Golden’s Party Thursday night along with School Committee candidates Bob Gignac and Chris Roux. Current Councilor’s Rita Mercier, Dan Rourke, Corey Belanger, Bill Samaras and Mayor Elliott were also present. So were State Reps. Mangle and Mom.
Yesterday after Saturday Morning Live I stopped by the new Police Sub-station here in Centralville on Bridge St. and spoke with City Council Candidate Paul Ratha Yem and City Councilor Rita Mercier who is recovering nicely from her recent surgery.