Council Rejects Borough Clerk’s Claim To Lower Health Benefit Contributions

As the three hour and 46 minute Mayor & Council meeting of July 21st was drawing to a close, the governing body voted on a motion to reject a grievance brought about by Doreen Cali, the Borough Clerk. Council, by a 4-2 vote, rejected the Borough Clerk’s grievance to uphold the health benefit terms and conditions of her contract dated January 15, 2009. Councilwoman-At-Large Charlene Storey and First Ward Councilman Eugene Meola were the only two who voted in support of the grievance.

The grievance was purportedly a result of Elizabeth Cairney, a Roselle Park resident and Chair of the Roselle Park Republican Municipal Committee (RPRMC), submitting an Open Public Records Act (OPRA) request asking for the Borough Clerk’s contract in February of this year. Ms. Cali then submitted her grievance later that month alleging that, because of Ms. Cairney’s OPRA request, she became aware that the municipality was deducting 35% of the cost of her health benefits.

Section 5 of the three-page contract reads:

Insurance/Pension. The Borough shall provide health insurance, hospitalization, dental, prescription and life insurance coverage consistent with all other management/non-union employees hired after January 1, 1999 and commencing consistent with the terms of said coverage. Employee will be responsible for contributing ten percent (10%) toward the cost of health insurance coverage. Employee will have pension coverage under the New Jersey Public Employee Retirement System (“PERS”).

Furthermore, Ms. Cali referred to Section 14 of that same contract where it reads:

Modification. This Agreement may not be altered, modified, changed or discharged except in writing signed by both parties. Waiver by either party hereto of any breach or default by the other party of any term or provision of this Agreement shall not operate as a waiver of any other breach or default.

Citing those two sections, Ms. Cali notified the municipality that they were to cease deducting the 35% and return to the 10% that was in her contract as she had not modified the agreement.

She then filed a formal complaint to have the governing body hear her grievance. In their decision, council voted to have the Borough Clerk contribute to the increase in health benefits.

Even though Ms. Cali’s contract does not allow for her to file a grievance, the governing body heard the matter in a closed session. There was an opportunity to have her grievance heard publicly but Ms. Cali chose, as is her right, to have the matter heard in executive session. Ms. Cali also did not request to be retroactively compensated for all the deductibles paid.

In reaching their legal conclusion, the governing body cited three (3) significant points claiming that Ms. Cali’s contract was not valid in terms of enforcing the 10% contribution to health insurance coverage.

The first was changes that came into effect in 2011 regarding a section of New Jersey state law which made various changes to pension and health care benefits for public employees in Chapter 78 of the New Jersey Statutes Annotated (NJSA).

The second point had to do with Local Finance Notices (LFN) from the New Jersey Department of Community Affairs (DCA). There are two (2) LFNs, LFN 2011-20R and LFN 2011-34, which state that employees with individual employment agreements were to begin begin phasing in Chapter 78 and they were subject to implementation unless local legal counsel determined that applying Chapter 78 would result in an impermissible contract impairment. Neither the Borough Attorney nor the Labor Attorney have every made any formal legal determination.

This relates to Section 15 in Ms. Cali’s contract which reads:

Governing Law. This Agreement shall be governed by and construed under the laws of the State of New Jersey applicable to agreements made to be performed herein. The courts of the State of New Jersey, Union County, shall have exclusive jurisdiction.

The final position the governing body held to was that because of the two previous points, council would have to basically waive those changes in law and determine that they would give Ms. Cali that benefit of a reduced contribution. In doing so, then other public employees with comparable contracts would be able to request the same waiver. This would impact the cost of health insurance in the annual operating budget and, thereby, property taxes.

The motion passed in July needs to formally be put on the record through a resolution. Resolution 199-16 is on the agenda for the August 18th Mayor & Council meeting.

A copy of Ms. Cali’s individual contract, along with the two (2) LFNs and Chapter 78, P.L. 2011 of the NJSA are included below for review:

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