North Castle Approves Benefits Cuts to Retirees, Part-timers

The North Castle Town Board last week eliminated health insurance benefits for its part-time employees and is requiring that retirees now contribute 15 percent toward their coverage.

In a controversial 3-2 vote on June 27, the board’s action to revise the town’s Compensation and Benefits Manual also did away with dental and vision coverage for current retirees. The changes, which took effect on Sunday, will see retired employees contribute toward their benefits for the first time.

By making the change, Supervisor Howard Arden said the town will save a projected $17 million on the current part-timers and retirees over the course of their lifetimes as figured in actuarial tables. While he acknowledged that it could be a hardship for some seniors on fixed incomes, the economic climate is demanding that everyone do their part to help all levels of government overcome fiscal hurdles, the supervisor said.

“My experience has been that if you don’t have any skin in the game it’s not important to you,” Arden said. “It’s just the way that human nature is. We’re not doing any more. It may not seem like a lot of money but it’s an important part of the whole concept.”

The revision now requires retirees to pay about $62 a month for their health insurance coverage. Other changes require that new employees must have at least 20 years of service to be eligible for retirement benefits while the new retirement age jumps from 55 to 62. There will also be a lifetime cap on retiree benefits. Among the people it will affect are the four council members and town justices, although state law prohibits changes to benefits for elected officials mid-term.

As expected, council members John Cronin and Diane DiDonato-Roth voted with Arden while councilmen Michael Schiliro and Stephen D’Angelo dissented.

The two factions also couldn’t agree on exactly how many people will be affected by the change or how much the town will save. D’Angelo said there are 22 retirees, the oldest of whom is 104 years old, and six part-timers. North Castle would save the town only about $90,000 a year, he said.

“I think it’ll take many years to get up to that $17 million number,” D’Angelo said.

However, William Potvin, the former chairman of the town’s Budget and Finance Advisory Task Force who helped Arden crunch the numbers, said the actual total is 25 retirees and 13 part-time workers. The $17 million will be saved based on standard life expectancy projections, he said. Savings will also accelerate because of anticipated cost increases in health insurance.

The vote was preceded by pointed dialogue from speakers and board members on both sides of the issue. Several residents applauded the board for its efforts to take on significant cost-cutting measures while others, including a former town justice and a few sympathetic to government workers, were critical of the board for trying to force cuts on the backs of people who could least afford them and charged the town was reneging on its obligations.

“The taxpayers don’t owe you lifetime cradle-to-grave coverage, and a lot of the people who are griping now are going to get a six-figure pension,” said resident Kerry Lutz, a town board candidate last year who urged town officials to revise its benefits package. “I don’t think the board is going far enough.”

Former water superintendent Anthony Futia said the change is fair for most of the current retirees, including himself. Futia said most retirees left the workforce with a healthy pension and their Social Security payments aren’t taxed if they continue to live in New York State. He said paying $62 a month isn’t asking much.

“I think everybody better wise up and start being reasonable,” Futia said.

However, former Town Justice Susan Shimer, who receives benefits for her service, said that the town board is abandoning basic fairness in trying to impose contributions from retirees, many of whom will find it a hardship to pay. Shimer said the town government runs the risk of being perceived as out of touch with its constituency.

“If the people do not believe the government is being fair they will lose respect for it,” she said.

With the board’s action, town officials are bracing for a legal challenge. In February, when North Castle’s labor consultant Michael Richardson spoke at a town board work session, he warned that the matter could wind up in the courts.

As last week’s meeting, Ronald Dunn, an Albany-based attorney retained by an undisclosed number of people affected by the change, urged the board to reconsider its measure, warning that it could expose itself to litigation.

While Dunn stopped short of saying there would be lawsuit, he did argue that it is illegal for a party to modify the benefits after it had been promised a certain level. Many of those affected took jobs in exchange for better benefits.

“I did not come down here to rattle my saber,” Dunn said. “It would be natural that this highly motivated group of people will (fight) to protect their benefits.”

Schiliro and D’Angelo agreed that it could make hiring the best people more difficult for the town in addition to punishing seniors.

But DiDonato-Roth called it “shocking” that given the fiscal pressures on the town that two board members would vote against it. She said the time had come for the town to start reining in benefits.

“If we don’t make these changes we will not be able to sustain ourselves,” DiDonato-Roth said.