City retirees must pay for premium benefits

After divided council vote and emotional comments, measure will save millions

A divided Jersey City Council approved on Wednesday a measure that will require municipal retirees to contribute to their health insurance premiums if they choose to remain in the city’s traditional health care plan. Retirees who decide to go into the less expensive direct access plan offered by Horizon Blue Cross will not be subject to the employee contribution requirement. The change will save Jersey City taxpayers about $3.5 million annually, according to Business Administrator Jack Kelly.
The council approved the measure by a vote of 5 to 4 over the objections of representatives from the fire and police unions.
The measure was passed at the same meeting at which the council, also by a 5 to 4 vote, approved Councilman Steven Fulop’s proposal to strip taxpayer-funded health benefits from part-time board members who serve on the Incinerator Authority and the Municipal Utilities Authority. Under the version of the ordinance passed Wednesday by the council, new appointees to these boards will not receive health benefits, and current board members will lose their benefits effective Jan. 1, 2012.

Jerry DeCicco said the measure violates prior labor agreements.
This was the fourth time within the past year that Fulop has tried to get this change approved by the council.
The debate surrounding both measures was at times emotional, as council members tried to explain their votes to the public and fire and police union leaders who showed up for the daytime meeting Wednesday.

‘Hard for me’

“This is really hard for me. I come from a union family,” said Ward B Councilman David Donnelly, explaining his vote to require municipal retirees to contribute to the traditional health plan. “But $3.5 million is nothing to sneeze at, and I have to take into consideration those residents, those taxpayers, who haven’t had a raise in three years.”
As an indication of how difficult the economy is and how much residents are struggling financially, Donnelly added that there are three homes currently in foreclosure on his street.
Councilman Michael Sottolano, who represents Ward A and who also voted in favor of the retiree contribution ordinance, said that he is a retiree on the Horizon direct access plan and he has not seen any changes in the quality of his health care coverage.
But Nidia Lopez (Ward C) and Viola Richardson (Ward F) both said they have received calls from several municipal retirees who have moved out of state who believe their coverage would be more expansive under the direct access plan.
“How the plan works for you depends on who you are and who your doctors are,” said Richardson. “Some retirees may indeed see a savings, but that is not necessarily going to be true for all retirees. If your doctors aren’t in direct access, then you’re paying out of pocket. This is a particular concern for retirees out of state.”
An impassioned Joe Krajnik, president of Local 1066 of the Uniformed Fire Fighters Association – who spoke for nearly 30 minutes in opposition to the ordinance – and Jerry DeCicco, president of the Jersey City Police Officers Benevolent Association, argued that the measure violates prior labor agreements made with union groups.
“This is a bad deal for retirees. This is not Wisconsin. This is not Michigan. This is not Ohio,” Krajnik said, listing Midwestern states that have recently curtailed the collective bargaining rights of municipal workers. “This is the great state of New Jersey.”
Council members Sottolano, Donnelly, William Gaughan (Ward D), Ray Velazquez (At-Large), and Council President Peter Brennan voted in favor of adoption. Council members Fulop, Lopez, Richardson, and Kalimah Ahmad (At-Large) voted against the measure.
A motion by Councilwoman Richardson to table the ordinance was also rejected by the council majority.
DeCicco and Krajnik have vowed to combine the financial resources of their unions, in addition to those of other collective bargaining groups with agreements with the city, to fight the ordinance in court.

Benefits end for board members

Although the vote to end health care benefits for members of the Incinerator Authority and the Municipal Utilities Authority came earlier in the meeting, the controversy surrounding the union benefits loomed large over Fulop’s ordinance.
Councilman Gaughan believed Fulop’s measure reversed a promise made to authority board members when they were appointed.
“Later, on this same agenda, the council is going to consider a proposal to require that retirees contribute to their health care,” Fulop said to Gaughan. “These are people who worked for the city full-time for 25 years or more. How you can then protect health care benefits for people who serve on a part-time board, who do about an hour of [work for the city] a week, doesn’t make sense.”
Fulop has long argued that offering health benefits to the political appointees who sit on these boards amounts to nothing more than “patronage.”
The council voted to end health benefits to authority board members by a vote of 8-0-1.
Gaughan abstained.
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