ORDER-2019-85 : City of Melrose Operating Budget for Fiscal Year 2020 in the amount of $86,662,987.61. (Eighty-Six Million, Six Hundred Sixty-Two Thousand, Nine Hundred Eighty-Seven Dollars and Sixty-One Cents).

Transcript (~17 min @ 12:25)

Speakers identified by voice; unnamed voices are numbered within this recording. Auto-caption text — verify against the video.

▶ 12:20 Kate Lipper-Garabedian: Alderman Mortimer seconded by Vice Chair Boisselle all in favor that concludes our public comment portion of our agenda and our first order on the agenda tonight is order number two zero one nine dash eighty five city of Melrose operating budget for fiscal year 2020 and the amount of eighty six million six hundred sixty two thousand nine hundred eighty seven dollars and sixty one cents and we have with us tonight several different departments with the first on our agenda

▶ 12:53 Peter D. Mortimer: being human resources suspend the rules so we may marry and long second made by

▶ 12:58 Kate Lipper-Garabedian: alderman Mortimer seconded by aldermen's work go all in favor opposed great thank you for joining us tonight if you'd like to provide some introductory remarks we be happy to hear them and then follow up with some questions I am here to seek

▶ 13:10 Speaker 2: approval for for budgets human resources unemployment compensation workmen's compensation and the benefits budget and I'm available to answer any questions

▶ 13:31 Kate Lipper-Garabedian: you may have motion to consolidate said budgets second consolidate the budgets for what we list as departments 152 912 913 and 914 made by aldermen's work go seconded by alderman Mortimer all in favor opposed okay so those are all consolidated now so we can discuss them any questions thank you I wanted to

▶ 13:58 Monica C. Medeiros: thank you first of all for your very detailed questionnaire about all the budgets in the department and and I am hoping that maybe you could just for the public just talk a little bit about some of the details that are here and what

▶ 14:19 Speaker 2: your office does and these sure that would be so the human resources department is responsible for everything related to employment within the city that includes all of the benefit budgets that are before you labor relations collective bargaining recruitment performance management etc there is my as HR director and also Pauline a lot of the HR manager who happens to be here tonight observing we work very closely with the city solicitors office Kelly Kagan assists us with workers compensation and we work very closely with the auditor's office as well the auditor and his staff and all of these

▶ 15:08 Monica C. Medeiros: budgets combined you have here in the memo at thirteen point five million dollars approximately yes this is a very large chunk of our city budget it is yes and and that's so that yes that's very large you also have the breakdown of the number of employees serviced is that the total number of employees in this in the

▶ 15:33 Speaker 2: city so when when we draft the numbers the the statistics it depends upon the month so this is a snapshot done in preparation for this budget at 261 employees are the city benefit eligible excluding schools 586 employees are city benefit and non-benefit eligible and those are our part-time employees who work 18 hours or less and they do not receive any benefits they are paid

▶ 16:11 Monica C. Medeiros: hourly does that include the school non-benefit employee city that is simply

▶ 16:21 Speaker 2: the city benefit and non-benefit eligible and the 751 employees served our city and school benefit eligible does your office interact with the

▶ 16:33 Speaker 2: school non-benefit no we don't so our role the Human Resources Department's role with the schools is primarily around managing benefits the benefits for school employees are managed through our budgets and that's the extent of our

▶ 16:52 Monica C. Medeiros: interaction with the school department so your office deals with about over 13 hundred employees and then there are some additional and retirees and

▶ 17:07 Monica C. Medeiros: retirees yes and you are the liaison for the employees and in your memo you talked a little bit about how you handle the transactions for the employees that

▶ 17:21 Speaker 2: are over-the-counter and can you explain what so we have approximately 45 retirees or survivors as we refer to them which is the spouses of retirees who have passed away they are eligible for health insurance but they're either the pension died so to speak with the retiree or there aren't enough funds in their pension monthly pension check to pay for benefits and they actually pay us what we refer to as over-the-counter they write checks to us either monthly quarterly sometimes annually for health insurance so and this this is retiree

▶ 18:03 Monica C. Medeiros: only retiree only so their their benefit doesn't cover it but it's probably beneficial for them too but they're eligible through our plan and that's beneficial but any time for them to be part of the big plan yes thank you for

▶ 18:16 Monica C. Medeiros: explaining that and I see that you said you handle we handling pet insurance we

▶ 18:22 Speaker 2: have we offer pet insurance the city doesn't contribute to it it's it's a voluntary benefit paid entirely by the employees but yes we do offer it I'm

▶ 18:32 Monica C. Medeiros: sure that's good I'm sure there's many employees that yes find that very beneficial yeah it's it's very costly yeah it's very costly and it's very emotional and having to make that choice of when your pet is sick and yes take

▶ 18:50 Monica C. Medeiros: away the burden of the financial burden that certainly helps one thing I was hoping you could also answer and many of the budgets if not almost all of them that we've gone through this year there's a sick leave incentive that's included in the salary portion could you just talk a little bit about what that

▶ 19:05 Speaker 2: yes so the sick leave incentive has been in existence long before I was human resources director and essentially it is a financial incentive that is paid on an annual basis for sick time that isn't used and depending upon the bargaining unit it's a different incentive for non-union employees and you'll see in our budget for both Polly and I as as non-union there's a maximum amount of $600 incentive for not using your sick time and that's prorated based on the

▶ 19:49 Monica C. Medeiros: number of days someone uses and the numbers that we're seeing in the different accounts that's based on the actual employees that are in that budget

▶ 19:58 Monica C. Medeiros: yes and then I think my my last overall question is just sort of about some of the indirect cost calculations and I'm not sure if you're involved with determining that but obviously you process the benefits for many of the different employees including those in water and sewer yes and so in terms of determining what's what's used out of your budget that is something that is you do you speak with the auditor's office on that I I have no input in the

▶ 20:33 Monica C. Medeiros: indirect cost that's determined by the CFO okay and I see our CFO here you'd like to answer that question that would be great i may sure of course

▶ 21:05 Speaker 3: thank you

▶ 21:41 Peter D. Mortimer: you do all right madam chair before we proceed i'd like to make a motion to

▶ 21:49 Kate Lipper-Garabedian: add this to the record second we have a uh balderman mortimer has moved to add this packet of information entitled City of Melrose water and sewer indirect costs allocation to services to the record seconded by Vice Chair Boisselle all in

▶ 22:07 Speaker 4: favor aye thank you very much and I appreciate the extra time I was able to put this together and I apologize for the timeliness but there's no more than why not one item I've been trying to put together for this evening and I know in past i had worked with alderman forbes and i indicate i think to the committee waterman saw through my liaison that i was going to have this together and i i beat the time i did have it done and i think what's important here is that it by the title itself city of murrell's water and saw indirect costs and again paraphrasing through the chair for alderman Medeiros if i may um where this information I believe the board has seen perhaps at different times in a different setting but it's consistent with what is always been presented to this board and briefly but at your own leisure you can review the actual language if you so desire but there's an explanation of terminology there's a five-year history of percentages which we will talk about this evening there's the inclusion of my memorandum that I had prepared for the board and you see the date of June 6 2016 very very detailed and water and soil and direct costs probably answers any more questions one would have on what they are their origin in the nature and the second of interest is the signatory page of department heads so if you look in section 5 if you can

▶ 23:55 Speaker 4: come through that and you should see and now a department has signatures that proceed the

▶ 24:02 Speaker 4: right here it's the acknowledgement form if anyone's on that page and

▶ 24:15 Speaker 4: acknowledging by the each office that they've sat and they review these indirect cost allocations if you look on the very next page you'll see a small table of the percentages assigned to each department person that's in the department and the allocation of percentage of time

▶ 24:42 Speaker 4: and if you proceed to the very next section you'll see each section detail that i think all the member deals was making a question regarding the actual activities within that department and by department i think you'll find it's it's um compiled quite nicely the kind of work that's done to support the water and so enterprise fund in a detailed fashion so i think that will help address issues as we go on this evening um relative to the how the indirect costs are derived how consistently we have been and how um each department interact with another to make um what i think is a very good end product but i appreciate the extra time but that was an explanation to the question that was asked to you Thank you. Thank you. Thank you. I'll be here all night. Don't worry.

▶ 25:42 Monica C. Medeiros: I'm sure we will discuss this again during water and sewer.

▶ 25:50 Monica C. Medeiros: So we're looking at, and just in terms of health, and Mr. DellaRusso's memo is talking

▶ 25:58 Monica C. Medeiros: about benefits administration through open enrollment, workers' compensation, lead management, life changes, performance management, grievance hearings, collective bargaining, and recruitment.

▶ 26:10 Speaker 2: Yes.

▶ 26:14 Monica C. Medeiros: great thanks okay and then if we could since we're looking at all the department budgets we're looking at an increase in workers compensation a 20% increase in that line and I I know we you had come to us somewhat recently yes

▶ 26:32 Speaker 2: maybe you could again just talk about that I just want to um yeah keep up with which budgets you're referring to four different ones here so bear with me so with workers compensation the accounts have increased for two reasons as we discussed at the transfer hearing several months ago one is we have three long-term recipients as opposed to two a spouse of an employee who died on the job and is entitled to lifetime benefits, so that increased our indemnity and benefit account in line item. And then medical expenses associated with that incident obviously increased that line item. But the other thing that occurred is on May 1st, the Human Resources Department was notified that Cook & Company, our third party administrator, they've been our TPA for approximately 30 years, was leaving the workers' compensation industry. So that was May 1st. I immediately contacted five other TPAs and asked for proposals, and we just made a decision a couple of days ago. and their annual expense, the amount that they're charging us is actually $29,995 a month. We didn't know what they were going, a year, sorry. Thank you, thank you. We didn't, at the time that this budget was submitted, we actually didn't even realize that Cook & Company was exiting the field. And then when I informed the CFO, he added $10,000 to the expense line item as a placeholder. So we assume that that will cover the expenses related to the third-party administration.

▶ 28:52 Speaker 5: Is that the indemnity line or no, what's that?

▶ 28:54 Speaker 2: that is the expense yes so the the indemnity line five four three two zero zero the seventy thousand that was level funded that's for injured on duty for police and fire and again we're self-insured for all of these the

▶ 29:21 Speaker 2: workers comp benefits are the both the long-term benefits to those three recipients and they're also compensation benefits to employees who are hurt on the job and out temporarily and then the expense line item is is the one that we increase to thirty six eight seven five did want to just note that is eight