VOL. 129 | NO. 163 | Thursday, August 21, 2014
City Union Presents Alternative Plan on Benefits
By Bill Dries
Memphis Fire Fighters Association president Thomas Malone takes the union’s plan for reversing city employee and retiree health insurance coverage cutbacks to a city oversight committee Thursday, Aug. 21, on employee issues.
“Our pitch will be that we will be shifting some costs. … We will come up with $24.6 million of shifting which would free up money for the administration,” Malone said earlier this month on the WKNO-TV program “Behind the Headlines.” “We have a presentation that will keep all of the employees, all of the spouses and do away with the 24 percent huge (premium) increase a lot of people can’t afford.”
But the high-deductible plan the union rolled out last month at City Hall may be dead on arrival in the latest chapter of the summer political saga.
The city’s insurance consultant, Mercer Global, told Memphis City Council members this week it doubted the plan would save the city the $24 million projected by the union.
There’s a more fundamental problem with the alternative.
City chief administrative officer George Little has said repeatedly that savings from the health insurance coverage cuts go toward the city’s unfunded pension liability. That is coupled with changes in the pension plan the council is scheduled to vote on in October.
So any alternative proposals on health insurance, Little said, have to do more than balance out the liability for the insurance plans – they also have to contribute to the pension liability.
Malone said the high-deductible plan does not contribute to the pension liability and shouldn’t have to. He likens tying the health insurance changes to the pension liability as “moving the goal post.”
“On the insurance, the unfunded liability means zero,” Malone said. “That’s the problem when you talk about trust to me. … The numbers that are thrown around are just made-up numbers they seem like.”
Meanwhile, Memphis City Council member Janis Fullilove pulled the plug Tuesday, Aug. 19, on a proposed November referendum on a citywide half-cent sales tax hike.
But she said municipal union leaders are pursuing a petition drive that could bring the question to the council and, from there, to the ballot.
The referendum ordinance was on the council’s agenda Tuesday for the second of three readings. Fullilove withdrew it, citing an opinion from council attorney Allan Wade that there wasn’t enough time for final approval and to get the measure to the Election Commission in time to be on the Nov. 4 ballot.
Fullilove and the union leaders want to use revenue from the extra half cent on the sales tax rate to restore city government employee and retiree health insurance benefit cuts the council approved earlier this summer.
The council continues to hear from employees and retirees, predominantly firefighters and police officers and their spouses, at the end of their twice-monthly council sessions.
Council chairman Jim Strickland and vice chairman Myron Lowery, meanwhile, sent Memphis Mayor A C Wharton Jr. a letter asking him to be present for the comments and criticisms the council is hearing.
Wharton has said in the past that he has specifically not been at the council discussions or the larger debate in council sessions because he met with employees and retirees before the council approved his proposal on health insurance benefits.
“It’s obvious there’s a lack of communication going on,” Strickland said.
“Citizens have come to us – all of us – saying, ‘Where is the mayor?’” Lowery added, a message he and Strickland put in writing and in person as they later met with Wharton.
When the council voted in June on the changes to health insurance coverage, Strickland said at the time that it was important for the mayor to be present for the decision.
Wharton was present in council chambers Tuesday for the first time.
The comments the council has heard at the end of each agenda since the decision feature some of the same critics from one meeting to the next. Tuesday, the comments went for an hour, with several critics questioning the intelligence of the council and whether they understood the jobs of city employees.
One complained that council member Edmund Ford Jr. was showing her disrespect because he was “sitting with his profile to me.”