…Teaneck’s management of Employee Health Benefits has been under escalating scrutiny ever since the Township AUDITOR reported on June 30, 2015 that – among many unprecedentedly serious financial management issues –
the Township had made health benefit waiver payments in excess of what the State allows. But what the auditor found then was barely a tiny tip of the iceberg that many residents and officials in the Township have been exploring ever since. Currently, the Manager and the Township Attorney are advocating passage by Council of an ordinance THAT LITERALLY PROPOSES TO REPLACE 8 YEARS OF Illegal WAIVER PRACTICE WITH LANGUAGE THAT SIMPLY MAKES THOSE 8 YEARS DISAPPEAR! It would be as if what was never legal just got made legal! And with that retroactive legal Houdini act magic would go literally $1.5 to 2M of taxpayer dollars in illegal payments to Township employees. Those payments would suddenly – by Council reconstruction of history – be just fine and with no questions asked, no culpable parties to be identified, etc. etc. You have to read this proposed ordinance language to believe it! click here.
Council narrowly decided on March 8 NOT to introduce this proposed ordinance — but it is slated to reappear for another shot at introduction at the Council’s March 22nd agenda.
Background: It is important to note at the outset that there are two separate lines of inquiry – one where law has been violated and the other where Teaneck is ignoring state recommended fiscal policies designed to avoid municipal government abuse. The first is the waiver policy. The second, which was vehemently explored in the video above, has to do with whether Teaneck council members, its only and very part-time elected officials, should receive full health benefits in light of the statutes and state policies. Those policies actively discourage municipalities from providing health benefits to those part-time elected officials – even those who have been elected continuously since 2010 and thus are legally allowed by the state to continue to receive the even as the State’s best practices “calls out” the minority of municipalities which continue (as does Teaneck) to provide them. Public pressure to have the Township end such benefits is clearly growing in Teaneck as is indicated by the audience reaction to the sparring on that 2/18/2016 video at the top of the page,
But although the two issues it is the waiver issue where the big bucks are to be found
. As the diagram indicates the waiver focus has evolved through a repeated series of discovery, review and defense sequences investigating the longstanding and expensive Township “waiver” program that would appear to have never been legal at all. The “in lieu of” waiver code section – and the twice-passed ordinance which the code copies – on its face indicates that Teaneck should never have started its waiver program unless it had first gone through the very public process of introducing and passing an ordinance to amend the 1965 & 1988 waiver proscription in the town code. Instead it passed only a resolution. And then in early February came the opaque acknowledgement that the Township has given at least 18 employees large waiver payments for many years for which they have not, at least since 2010, been eligible under state rules since their “other” health insurance plan was one that the state legislature’s statute had said could NOT be a source of health insurance that could also allow for a waiver and thus a waiver payment. Yet, apparently these 18 employees have been receiving benefits averaging about $13K per year!
About this mistake there is no doubt; the administration of the program has been badly flawed. Who knows whether there are more shoes to drop as the inquiries proceed. The last time the Township staff set out to show that the existing program somehow saves Teaneck tax payers money, the survey it developed to provide that evidence revealed the fact that the Township had never even inquired of most employees whether their “second” health insurance was of a type the state allows. More than $230K a year, and the Manager’s HR and fiscal team never checked? Thanks very much!
The actual code sub-section that discusses waivers (or remuneration in lieu of taking town insurance) and the 2008 resolution that was then was passed in apparent ignorance [if one wants to be charitable] of the code can be found by a click here.
Also found at the bottom of that page is a video of the 10/27/2015 Council meeting where 2 Councilmen challenge the affirmation made by the CFO and Manager about the Township’s Best Practices as they pertain to its waiver program – i.e. that that specific program had already been subject to a “thorough and adequate” review to determine its appropriate management and its success in reducing health care expenditures. That video can be directly accessed by a click here.
But precisely the review claimed in early October 2015 to have have already happened is finally now under way as a result of public and media outcry about the very legality of Teaneck’s current waiver practices. One interesting set of videos where the legal issues are directly addressed is found on a separate page to which you can click here. On that page interpretations differ widely as to what is called for under existing law and code – and what legislative changes may be in the immediate offing.
So what really happened? After the flurry of late summer activity about the auditor’s modest “findings”, some in Council pronounced the waiver program to be worthy – claiming it was saving Teaneck tax payers upwards of $1M. Then came a drumbeat of resident concern and finally the discovery by Teaneck resident Tom Abbott of that previously-cited provision in the Township’s code [2:152 (e)]- its local law – and that ordinance section’s apparent proscription against any waiver program. Then when an employee survey to try to gauge how waiver recipients might respond if the program were to end, the surveys themselves (when OPRA’d) revealed that 18 employees – thought to have received half of the total $400K+ expenditure – were simply nt eligible. As of 2/20 the number and data about the financial significance of needing to remove these “ineligible” recipients has only been alluded to in open Council session.
In sum, the Township last year spent more than $400K remunerating tens of township employees with such payments. It has likely paid out more than $2 million since mid-2008. Given that these hefty current payments and past ones are linked to a broad expectation that health insurance premiums will be a type of municipal expense that rises faster than almost any other type, the cost of the program can only go up. Although the State of New Jersey has for many years allowed municipalities to develop their own health benefits waiver policies, it has recently been limiting the size of those payments. It has been pointing out that municipalities need to evaluate whether their policies are actually saving tax payer dollars. Almost all public employees have been required to pay more of their health insurance costs if they do take the public’s policies so taking more than one has become very much less attractive – even without the waiver policy incentive.
Teaneck has paid the big money — but it has still not done any substantial cost-benefit analysis and clarified its the authority to do so – whether or not it is reducing municipal expenses.
What follows below is a video that tracks part of the debate on this issue which occurred in a Teaneck Council meeting on January 26, 2016. There are many facets to this policy debate. The following video provides only one facet – and is, as indicated, also inckuded as part of an entire page where this legal discussion is on video display.For background, the reader may also want to read what the local media has said about the issue. To read the recent Bergendispatch stories, click here and click here. For the Record’s story click here. And for an excellent story in the Suburbanite, click here. Residents have also weighed in with letters to the editor as, for example, in this February 11 Suburbanite edition – click here.
Click the arrow in the center of the picture of the video picture below from the aforementioned 1-26-2016 Council Meeting:
What about the second health insurance issue? Teaneck’s 3 longstanding Council people (Katz, Hameeduddin and Parker) have – without authorization apparently ever having been given in resolution or ordinance – been receiving health benefits that for 2 of the 3 now exceed $30K per year. Before 2012 most – possibly all – Council people either took the insurance or the waiver payments. But since 2010 and 2011, the state has been trying to stop this practice. It disallows any part-time elected official (read any Council person) from getting health benefits if elected after 2010. It grandfathered those already benefiting. But it keeps encouraging municipalities to halt the practice for all part-time elected officials and most of Bergen’s 70 municipalities have, over the past several years, ceased providing the part-time elected official health benefits altogether .Only 18 still do it – and Teaneck is one of them.
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Notice. The Township website as noted above, currently misrepresents the status if the ordinance through which the Manager and Township Attorney propose to remake this very expensive piece of improperly distributed payments.(There is no fault of the recipients here, incidentally. It is however in TT’T’s view 7 years of grossly negligent administrative management of this program and unimaginatively inexcusable failure of the township attorney to have followed the changes in state law and brought them to the attention of the Council in public session. Below is the email sent on 3/16/2016 to the Township clerk – copies to Council:
Mr. Abassi:
I am disappointed that you were unable to return my phone call earlier this afternoon. I am more disappointed that the Township website currently provides the public with following misrepresentation of the current status of Council’s consideration of how to address one of the major public mistakes involving taxpayer dollars ever to occur in Teaneck.
I went to find the ordinance that was on March 8 to address health waivers (4-2016) that had been proposed by the Manager for introduction. (See pre-meeting agenda at http://teanecktownnj.iqm2.com/Citizens/FileOpen.aspx?Type=14&ID=1198&Inline=True). As you well know, that ordinance’s proposed introduction was not approved. A motion to table the ordinance was made and approved on a vote of 3-2 which you yourself announced at 3:13:04 of the Township tape.
The only post-meeting coverage of the event currently on the website is in the listing of ordinance consideration at http://teanecktownnj.iqm2.com/Citizens/SearchAdvanced.aspx?SearchWhat=LegiFile-1003. (That, as you know is as it should be – since by code no release to the public of Council minutes is allowed prior to their prompt [10-day] circulation to the Council and Council’s approval thereof.)
But what is found at that url is very troubling. A clip of it is found below – and it clearly indicates that the 3 ordinances whose introduction were unanimously approved (5-2016, 6-2016 and7-2016) are “scheduled”. But as is seen, so also is said to be ordinance 4-2016 which was tabled – not scheduled.
No – it is NOT scheduled. But there must be someplace where the fact that 4-2016 did not get introduced is made clear –right? Let’s click it & go to the 4-2016 ordinance itself. What is found there (at http://teanecktownnj.iqm2.com/Citizens/Detail_LegiFile.aspx?ID=3097) is the following repeat of the ordinance as it had appeared in the agenda – and it could not be more explicit in specifying that the tabled ordinance on March 22 at 8pm will be “considered for final passage”. Nothing on the Township website indicates anything different – although that information is totally in error. See below for the clip. This error needs to be addressed immediately. And I hope that 4-2016 – if it ever again see the light of day – will be properly listed as being considered for the first time.
The code of the Township of Teaneck – every single piece of it – must at some early point be given the respect IT deserves. And it would be good if that respect began with the person responsible for the official records of the Township.
Chuck Powers
