SHIRLEY -- Charged with exploring possible cost-saving changes in the town's employee health-plan design, which state law allows municipalities to do without collective bargaining, Treasurer Kevin Johnston told selectmen at a previous meeting that the Insurance Advisory Committee he serves on would be on hiatus over the summer.

The group, whose makeup is mandated by state law, also includes union representatives and retirees.

On Monday night, he updated the board on the status of the health-insurance issue.

Town Meeting some time ago accepted the provisions of Chapter 32B, a state statute established in 1959, Johnston said, and the town had to change its practices to fit the law.

In May, 2000, for example, Town Meeting voted to provide retired town employees with 50 percent of the town-paid health benefits they received while working, a decision backed up by a ballot vote.

"It made us a more competitive employer," Johnston said.

But there's still more "housekeeping" to do to "align" with the law, he said.

"We're updating our actuarial report," he said.

The report projects the cost to the town for paying out promised retirement benefits when they come due. The next step is to start funding the trust fund established to cover those future liabilities, he said.

Selectmen Chairwoman Kendra Dumont asked if the town is still paying for School Department employees who retired before the start of the Ayer-Shirley Regional School District, which is an entity in itself and must now maintain its own retirement fund.


The answer was yes, but the burden isn't too heavy.

"We have a minimum number overall," Johnston said, adding that there are 31 retirees versus 60 active employees.

The balance in other area towns leans the other way, he said, with "millions" in liabilities.

However, the town must also anticipate being billed by the school region for its share of retiree benefits, he said, as well as by other towns where some former town employees went to work after leaving Shirley and from which they subsequently retired.

"The good news is that we don't pay it all for most employees," Selectman Robert Prescott said.

And the scenario works both ways.

Citing one of his memos to the board, Johnston said it stated "where we are in FY2014 with the current plan design in place."

Apparently, that's the starting point, with the Insurance Advisory Committee set to meet again soon and to make changes, one of which involves Medicare.

Tapping into a law enacted in 1994, retirees not currently enrolled in Medicare extension plans, such as Medex for prescription-drug coverage now provided by the town-paid plan, would be required to do so, Johnston said. And Medicare enrollment is a must.

Prescott asked if it's possible to apply the same rule to active employees 65 or older.

"We'd make up the difference, and it would save the town money," he said.

Johnston said he'd look into it.

"Certainly, there's room within the statute to make changes as recommended," he said.

But some of the perks might be worth the added cost if they attract valuable employees.

"We want to be an employer of choice," he said.

Johnston recommended engaging a law firm experienced in the field to "sort through all this" to define the law in context and frame new rules and regulations accordingly.

Although Dumont said she's all for achieving cost savings and favors Johnston staying on the current track, she stopped short of endorsing his recommendation to hire the firm.

"Before we do that, I still want to see (a report on) where we are compared to other towns" in terms of competitive salaries and benefits, she said.

Johnston said one way to save the town money, with overall compensation still intact, would be to increase employee co-payments by a small amount, a proposal the IAC had voted on earlier. But the vote wasn't unanimous, he said, with one last-minute holdout.

Dumont suggested that Johnston continue moving forward in the same direction.

But Prescott said he takes a "broader view" of the issue.

"We need to revamp a whole list of things," he said. "This encompasses a lot of people, probably more than it should. I think we have a lot of housekeeping to do."

But his focus isn't full-time employees. Rather, his reference was to on-call firefighters and others who work in various capacities for the town and who at some point were added to the eligibility roster for the town-subsidized insurance plan, even though they are not on the payroll.

Shirley is one of only two towns in the area offering that option, Prescott said. "And we're the only one that pays for it."

With a new town administrator in the wings, pending negotiations, and an anticipated start date in October, he'd prefer to wait until she's on board to hammer out a new insurance-design plan with her input, he said.

Given the town's "precarious" position with the current setup in terms of future liability, however, the board agreed that Johnston should continue to pursue the current course as presented, for now, most likely with adjustments to follow.

"I don't think you'll get it all done at once anyway," Johnston said.