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Joking that he and First Selectman Pat Llodra “took the heat off” the incoming administration, Selectman Herb Rosenthal and Mrs Llodra approved three-year labor contracts for Newtown’s Parks and Recreation and Police Departments during a brief but busy Board of Selectmen meeting November 6.
Selectman Will Rodgers was absent.
Noting that Mrs Llodra, in her second to last selectmen’s meeting before retirement, negotiated the two local labor contracts, Mr Rosenthal added that she gets the credit for the effort. During a review of the contracts, Mrs Llodra noted that the police union accepted a new feature in their contract that allows for a Deferred Retirement Option Plan or DROP — and that Newtown is just the third municipality in Connecticut to offer the benefit.
Finance Director Robert Tait explained that officers electing to participate in the DROP benefit who have reached or are approaching their 30th year of service and are eligible to retire, can elect to essentially freeze their pension calculation and remain on the job up to an additional five years.
“Then those funds are held in trust, but capped at the 30-year calculation,” Mr Tait said.
In its simplest terms, benefitsattorney.com, an employee benefits legal resource site, defines a DROP plan as an arrangement under which an employee who would otherwise be entitled to retire and receive benefits under an employer’s defined benefit retirement plan instead continues working.
However, instead of having the continued compensation and additional years of service taken into account for purposes of the defined benefit plan formula, the employee has a sum of money credited during each year of the continued employment to a separate account under the employer’s retirement plan. The account earns interest either at a rate stated in the plan, or based on the earnings of the trust underlying the retirement plan.
The account is paid to the employee, in addition to whatever benefit the employee has acquired under the defined benefit plan based on earlier years of service, when the employee eventually retires. In many cases, the DROP benefit is preferred because it is payable as a lump sum while the defined benefit is available only as a lifetime annuity.
For the first time, Mrs Llodra said that both union groups also have an option to sign on to a high deductible health plan (HDHP) offered through the town’s self-insured program.
For Parks & Recreation employees who are members of Teamsters Local 145, the new contract stipulates contributions toward health care will advance from 13 percent in year one, to 14 percent next year, and 15 percent in the 2019 benefit year. Those choosing the HDHP will pay ten percent and the town will contribute half of the deductible for both single and family plans into a Health Savings Account to help lessen the out-of -pocket financial burden.
Mr Tait said this same benefit is already in place for participating HDHP school district employees.
Pay increases will be 2.25 percent in year one and two, graduating to 2.5 percent in year three.
Police, who participate in the Nutmeg Independent Public Safety Employees Union (NIPSEU) will see health benefit contributions and pay increase schedules mirror those in the Parks & Rec contract, along with the addition of the DROP program, and an increase in the life insurance benefit from the current $50,000 to $100,000 retroactive to July 1, 2017.
The selectmen also heard from Newtown Cultural Arts Commission (NCAC) Chair Laura Lerman and commission member Rob Kaiser regarding progress on coming up with an official name for the gallery space at the Municipal Center.
Mr Kaiser who headed up the research and development effort for the commission said that he and his colleagues ranked nine different prospective names which included “MUNICIPAL:HALL:ART,” “Municipal Building Art Space,” “Hall Pass Art Gallery,” “Art in the Hall,” and simply “MUNi.”
He said the commissioners settled on “Municipal Gallery at Fairfield Hills,” and then presented a selection of different designs that would brand the gallery on signage and in other media.
Before moving on to the next agenda item, Ms Lerman reported to the selectmen that four of the last five artists who exhibited in the Municipal Center gallery space have sold work, forwarding the core mission of CAC to help promote and benefit local artisans and artists.
Conservation Commission Chair Holly Kocet also appeared briefly as the selectmen approved adopting a Newtown Invasive Plant Ban, that essentially draws from the annual Connecticut Invasive Plant List. The selectmen affirmed that as plants were added to the state list, they would be incorporated into the local list, which names nearly 100 different species.
Budget Shake Out
During his Finance Director’s Report, Mr Tait reviewed the implications to the Newtown Municipal Budget now that the Connecticut State Budget has been signed.
He started by illustrating the difference between what the town adopted in its budget for various revenue points versus what was finally approved in the state budget, combining to total a surplus of $2,052,293. According to the worksheet circulated to the selectmen, Newtown is losing $107,000 in elderly tax relief, and $90,987 in PILOT grants, which compensate the town for property taxes that would otherwise be paid on state buildings and land.
Newtown will have to make up $1,947 in reductions to grants in programs for the totally disabled; and $493,666 in all other state revenue. On the other hand, Mr Tait said Newtown will receive a slight offset of $235,371 in un-budgeted revenue.
That positive variance is $2,052,293 before deducting $447,572 the town is losing in motor vehicle taxes because of a state cap of 32 mills. Newtown’s current mill rate is 33.87.
A mill represents one dollar in taxation for every $1,000 in taxable property.
The balance available for special appropriations is approximately $1,605,000, from which the town will provide $1,032,000 to the Board of Education budget to make its special education budget whole if approved by the Legislative Council.
“If you remember during the budget process, the council reduced the Board of Ed [special education] line item for an expected increase in special education funding, so the council reduced the Board of Ed budget by $1,032,000,” Mr Tait said. “But the council said that if those grants did not come in they would make them whole. So Pat suggested the council initiate a special appropriation to restore the Board of Ed budget for the special ed grant they did not get.”
Mr Tait also reviewed a number of other line items the council reduced, but had suggested refunding if state revenues exceeded the amount projected when the Legislative Council moved its 2017-18 budget request to referendum in early April. Those included a $55,000 contribution to the Board of Education pension line; $133,000 to the municipal pension line; $250,000 in appropriations for road repairs; and $135,000 for school district noncritical maintenance.
The finance director suggested holding off on funding any of those shortfalls from the remaining state revenue until next spring to see how the overall budget landscape shakes out.