About 100 city union members packed the Wiggin Auditorium in City Hall last night, as the Peabody City Council debated the merits of a new law that would curb the unions' ability to negotiate their health benefits.
The council did not take a vote last night, but at the request of Mayor Ted Bettencourt elected instead to schedule a special meeting for Feb. 28 to discuss and vote on whether to adopt the law.
The law, passed by the Massachusetts Legislature last summer, gives cities and towns across the state much broader power in negotiating with unions and saves money for taxpayers by shifting some health insurance costs onto employees in the form of higher co-pays and deductibles. Peabody could save up to $4 million per year on health insurance costs if it were to adopt the law, according to a health consultant.
The union members who showed up last night, however, feel like they have been more than fair with the city in the past and see the new law as an affront to their rights.
"We have formed a coalition and met with the mayor and told him we wanted a seat at the table, and by the end of the conversation we thought he would take what we said into consideration," said Russell Lewis, the president of the city's firefighters union. "But the next day, he filed the paperwork to adopt this legislation. I was a little taken aback by that."
Lewis said the firefighters already agreed a couple of years ago to take on a bigger portion of health costs, which saved the city $1 million.
"We made a good faith effort," he said, reiterating that the union would work again with the city to find more savings. "Don't just take it out of our hands."
Bruce Nelson, the president of the Peabody Federation of Teachers, said the city has missed out on a lot of potential savings by not requesting bids from other insurers over the years. He also said that the unions have made significant concessions already, and he doesn't think it's right to take steps to curtail their power to negotiate.
"Historically, and I am talking about going back all the way to the 1970s, the municipal unions in this city have accepted lower wage increases to protect their health benefits," Nelson said. "Look around, we have noticeably lower salaries than other communities."
The law would also streamline the process for getting a deal done. If it is adopted, city leaders and a representative from each city union have 30 days to reach an agreement on health benefits. If no agreement is reached, it goes to a three-person panel — composed of one city representative, one union representative and one neutral person. If the proposed health plan is not more costly for employees than the plan offered to state employees through the Group Insurance Commission, then the panel must adopt the city's proposal. Alternatively, the city could choose to join the Group Insurance Commission, if it can show that the savings would be 5 percent greater than the proposed plan. Unions would receive a portion of the realized savings to offset the increased cost for members who would be most adversely impacted.
"This is in no way a refusal to sit down and negotiate and discuss options with union leadership," Bettencourt said last night, adding that he grew up in a union household and understands the struggle. "Please understand that the initiation of this process does not bind us in any way to the (Group Insurance Commission.)"
Bettencourt said that health costs are expected to go up "significantly," even while state aid isn't likely to increase much.
"Right now, costs are not sustainable," he said. "I would feel like I was not doing my job if we did not pursue this."
The mayor and the union heads will have another meeting next week and try to come to an agreement on a health plan before the Feb. 28 meeting. If an agreement is reached that satisfies the unions and saves the city a sufficient amount, the meeting could be canceled and there would be no need to adopt the law.
The city councilors who spoke last night seemed to be in favor of that scenario.
"I would very much like to see both sides, the mayor and the unions, to come together and get this resolved," said James Liacos, the council president. "I think two and a half to three weeks, should be enough time."
Councilor Barry Sinewitz made a pitch to give the mayor and unions three more months to hash out a deal before another meeting, an idea that was applauded by the dozens of union members in the room.
"If we can work out a deal that does not involve the state, I am all for it, but if we can't I am ready to go" on adopting the law, he said.
At the Feb. 28 meeting, if it takes place, the mayor will make a presentation detailing timelines, the process and provide estimates on how much the city would save under various plans.
As of Feb. 1, at least 53 communities have formally adopted the law, which is required in order to use the new negotiating rules enacted by the Legislature. According to the Massachusetts Taxpayers Foundation, the 21 communities who have adopted and renegotiated health contracts have saved a combined $60 million, and it is expected the reform will collectively save municipalities in excess of $100 million across the state.
Beverly adopted the law and reached a deal with its unions last month that will save taxpayers an estimated $1.2 million per year. Salem has also adopted the law.
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