LAKEWOOD — Municipal officials announced on Dec. 6 that they were unable to reach an amicable agreement with bargaining unions that represent the majority of Lakewood’s employees.
The result of that impasse will be layoffs and unpaid furloughs for municipal employees.
Lakewood Mayor Steven Langert said, “We are disappointed that the township employees did not choose to work together with us to reduce operating costs that would have avoided potential layoffs and furloughs.
“It’s no secret that our town and our state are in dire financial straits. We simply cannot sustain the levels we have all enjoyed in better economic times. We are looking at an $854,000 increase in pension contributions, and health care insurance premiums are soaring, among other rising costs. This was an opportunity to save an estimated $900,000 for the township.”
According to a press release from the township, at issue was the change in health insurance plans. The township has been providing six different health care plans through its carrier the Central Jersey Health Insurance Fund. Changing to only one, uniform health care benefit package, a plan that has the same benefits that county and state employees receive, would have resulted in a savings of an estimated $900,000 for the township, according to the press release.
With a unified plan in place, the township could have saved $1.3 million in health care costs between 2010 and 2011. The savings would have been realized from a combination of the consolidation of the health care plan and a change in co-pay for some employees from $5 to $10. Some employees already have the $10 co-pay, according to the press release.
Langert said, “In fact, most employees would have seen a reduction, an added benefit, for any out-of-network doctor visits because their co-pay would have been reduced from 30 percent to 20 percent.”
According to the press release, the downside of not accepting a unified health insurance plan will most likely mean layoffs and furloughs for township employees. Lakewood has submitted a layoff plan to the state that was approved and handed out layoff notices on Dec. 3.
The union representing some police officers is pointing out that the retirement of police officers this year will result in a $1.6 million savings, according to the press release.
On the other hand, the township is responsible for $1.4 million in unused sick and vacation pay, along with other buyout costs.
Langert said, “The last thing I wanted to do is tell people they have lost their jobs during the holiday season. I am deeply disappointed in the fact that our unions refused to voluntarily accept the change that, in reality, no one would ever feel. For example, when a person goes to the doctor, all the township employee has to do is lay out a $10 co-pay. That would not change under a new plan.”