Benefit cuts frustrate city retirees
GLADSTONE — Gladstone city retirees voiced their frustrations again during the Gladstone City Commission meeting Monday night. The retirees spoke about cuts made to their post-retirement health benefits and how they are not getting any answers and if and when changes can be made to undo or rectify the city’s decision. Some even threatened a lawsuit if the city doesn’t act on the matter soon.
“To say I’m very upset, I mean I missed my granddaughter’s track meet to come to this meeting tonight because we have been put off for over eight weeks. I’m speaking for several of our retirees, if you think you had a lawsuit with Mr. O’Connor, you better buckle your belt because we are getting really, really ticked off,” said Linda Gray, a retired city clerk.
In December 2017, the Michigan Legislature passed Public Act 202, also known as the “Protecting Local Government Retirement and Benefits Act.” This new law required all local municipal governments in Michigan to report to the state treasurer the status of pension systems and retiree health insurance benefits.
PA 202 requires a minimum 60 percent funding level standard for pension systems and retiree health benefits to be 40 percent funded. Gladstone’s pension system was not in compliance with the requirements, so the city had to create a corrective action plan.
City commissioners decided the best course of action to meet the was to make changes to post-employment benefits.
Changes include ending all lifetime medicare supplement benefits, which affected two retirees, and all other retirees will receive a stipend placed into a Health Reimbursement Account (HRA) of $602.01 monthly or $7,224.12 yearly for up to 10 years or until age 65.
City commissioners approved the plan and submitted it to the state. The plan was reviewed by the Michigan Treasury Municipal Stability Board and accepted.
When the retirees were made aware of the changes that were going to take into effect on April 1, there were many questions about its legality and if the city could undo or amend the decision.
“We are all well aware we’ve been dealing with this since February when we were informed that the Public Act 202 was going to be put into effect for us on April 1,” said Paul Geyer, a Gladstone Public Safety Department retiree. “I would agree with the comments that we’ve had so far. We’ve asked some very simple questions. Some questions that should have had answers back in November when this was presented to you as a commission for approval. And definitely answers to questions that we should have had before it was sent to the state for approval. Now we are going backwards and we’re trying to correct a situation that I believe could have been averted by following the best practices of the municipal stability board, created by the state and by the Treasury Department to include the retirees in this entire process when it first began.”
At recent city commission meetings, a motion was made by Commissioner Dave Nemacheck that charged city staff to look into cuts in the budget to allow for an increase in the monthly stipend for retirees by Monday night’s meeting. The issue of whether or not changes could be made to the corrective action plan was also to be answered.
However, due to a lack of commissioners being present, they were unable to go into a closed session before the regular meeting to get an attorney opinion on if they are legally allowed to make changes to the corrective action plan for retirees. Commissioner Darin Hunter and Commissioner Brad Mantela weren’t able to be at the meeting and there needs to be more than two commissioners to go into a closed session.
Despite not being able to go into closed session, Nemacheck made a motion to increase the $602.01 monthly stipend to $1,000.
“It’s not my job to figure out where it comes from or what — we have people like Darcy (Long) to figure that out,” he said.
The motion died due to lack of support as neither Commissioner Dave Phalen and Mayor Joe Thompson seconded the motion. Phalen and Thompson wanted an attorney opinion if they can legally change the plan.
“I understand the frustration from the retirees, if I was in their shoes I would feel the exact same way. I think this is ridiculous, it’s gone on far too long. I think the information they’ve asked for should have been provided to the commission and them by now too. I would really like to put this to bed one way or another. We need to figure out if we can amend this and if we can amend it then that’s what we need to do,” Phalen said.
Commissioners approved the motion to have a closed session meeting on Wednesday, May 15, at 5 p.m. and a special meeting on Monday, May 20, at 6 p.m. on the PA 202 Gladstone corrective action plan for retirees.
In other business, the commission:
– witnessed the WPPI scholarship presentation to Emyln Verbrigghe. Sydney Herioux was also awarded the scholarship but was unable to attend.
– heard the 2018 annual water quality report from Rob Spreitzer, city water superintendent. The report has been posted publicly throughout Gladstone, copies are available at city hall, it is posted on the city website, and a copy of the report will be sent to every water customer.
– approved the reappointment of Steve O’Driscoll to the EDC.
– approved the appointment of Steven Soderman to the EDC.
– approved changes to existing MERS Health Care Savings programs and approved the filing of an Established Authorized Signatories form for ease in changes. City Clerk Kim Berry, City Treasurer Vicki Schroeder and Tammy Marier from MERS reviewed existing healthcare savings programs and with retirements and employee changes, some of the plans have changed since they were originally set up.
– postponed awarding a bid for the 9th Street Project until the May 20 meeting.
– rescheduled the city manager goal setting workshop to June 5 at 5 p.m. and the city manager performance review special meeting to June 5 at 6 p.m.
– heard a report from Long about a medicare supplement program that he and other staff are working to get implemented by the end of the month. It is a city sponsored program and anyone who worked for the city that are medicare eligible can get the coverage.