6/9/2011 FINANCE COMMITTEE Minutes

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r ` Dan wolf stated that Provincetownx Chatham, Barnstable and Falmouth are the only towns on the Capp that are hooked up to sewer systems. Cape water issues are among the three top priorities of the State Environment and Energy Committee; there will need to be a smart local match to the funds contributed by the committee; no,one is going to give us the money to get it done. This is,a top agenda item at the state level. Question#3 (Charles G si r): 'What possible state legislation is being proposed to help municipalities deal with the cost of employee benefits which have been increasing by+/- 10% per year for at least a decade's How do you see the state responding to the unfunded liabilities related to future employee pension benefits'?" Char~Wolf: This is a work in progress. The Public service Committee is now taking a look at pension reform. Public employees are not contributing to Social security, and this is the one pension that they have. Mr. Wolf stated that he does not}ret have a well informed opinion as to what should be done, that all of the pension plans around the Commonwealth are different, and they all constitute a compensation package for each employee. , Mr. Wolf encouraged the committee to take advantage of what is to come out of the budget that gives some latitude, and hopes that it be done through the collective bargaining process with our unions at the table. H encouraged the committee to look at the public service, education, public works and safety people, the lower middle class, as to how those end users are going to be impacted. Randy Hunt: The municipalities across the Commonwealth have experienced an average annual increase in medical insurance premiums of 11%. The state Group Insurance Commission (GIC) plans have experienced a % increase. Mr. Hunt is skeptical about the collective bargaining process with the unions. Mr. Hunt stated that the legislature is working on the pension benefits issue and their history is not.to change the rules on people who are already in the programa. The state says it is around $25 billion unfunded on retirement benefits and pointed out that most of us are unfunded on our mortgage liability. The key is that you are going to have cash flow available when the payments are due. David Vieir : The days of the o co-pay and no deductible are over. Mr. Veira stated that the entire state legislature has the GIC option if they get their health care through,tine state government. All of our state unions are on GIC. Dan Wolf stated that the GIC is ddven b actuaries, so if we change the complexion of the GIC: that can change what happens to the cost,'and there may be a short terra savings but ultimately it could not bb food news in the 3 to year period. [question #4 (Oskar' hen rt : What is the financial stability of the state in regard to future planning? Will the scope of allocated funds be expanded (CPA funds) from 27% back to 100% or 0% ghat is the near or the distant future that this may happen? Randy Hunt: The CPA money comes from the tax at the registries. The fact that the match has gone from l00% down to 27% is purely matin. As more towns are getting into the CPA and adopting that, then the match is shrinking because all of the registries all over the state contribute to the fund, so the fund for that matching only goes up and down relative to the number of real estate transactions. If Foston should jump in, it does not create more matching money, it takes from that fund. David Viols; There will not be much change in the next year unless there is a huge turnaround in the recordings of deeds. What you will see, if the Community Sustainability Act goes through, is the fee structure to go to a sliding scale. David started that there is some hope from this bill to bring some relief and bring some snatching funds back.