To please a department employee described as a major asset, Commissioner Rory Hoskins signed off on allowing that worker to forego their health insurance benefits in exchange for a pay increase. That decision, made in late 2007, occurred without any input from other elected officials.
The ability to swap insurance coverage for cash is extremely uncommon for village employees, and no such option is spelled out in employee handbooks or other policy manuals. Only two current employees are allowed to bolster their salaries this way.
“The mayor was made aware of it later,” Hoskins said. “I didn’t share it with the mayor.”
Hoskins disclosed his role in the negotiations over the course of two recent interviews with the Review. Those discussions occurred after the village provided the newspaper with records sought under the Freedom of Information Act.
In July, the newspaper requested records – dating back to 1990 – detailing who has been allowed to swap medical benefits for added salary. According to several employees involved in fulfilling the request, accounting software introduced several years ago makes it easy to ascertain that two such deals have been struck since 2003. However, short of pulling individual personnel files, there is no way to tell whether similar deals were arranged prior to 2003.
“I don’t think it was common practice,” Finance Director Judy Kovacs said.
According to records that were provided, Police Chief Jim Ryan receives the full value of the health insurance premium that Forest Park would otherwise pay to insure him. That deal was struck in August 2003 as part of the salary negotiations under which he was hired.
At the time of his hire, Ryan’s annual insurance premium would have cost the village $12,965. Instead of paying that amount to an insurance company, Forest Park tacked it onto the chief’s salary. The village’s records do not make clear whether Ryan’s compensation has changed as premiums increased or if his eligibility for different plans has fluctuated.
Village Clerk Vanessa Moritz opted out of the village’s insurance plan in September 2007 and receives 50 percent of the premium that would otherwise be paid to provide medical coverage. Moritz was hired in mid April 2005 and enrolled in the benefits plan the following month.
Hers is the deal that Hoskins approved independent of the council. According to Moritz, she approached former village administrator Mike Sturino with a request to drop her insurance coverage in lieu of a pay increase. Hoskins said that Sturino came to him seeking approval.
“Sturino was not just going to do that without someone’s approval,” Hoskins said.
Since negotiating the trade, Moritz has been paid $17,519 in added salary through the end of July. Conversely, had Moritz remained enrolled in the insurance plan, the village would have spent an additional $17,519 to provide coverage.
Commissioner Marty Tellalian said that for months he has been pushing the council behind closed doors to adopt a policy allowing non-union employees to opt out of their medical insurance. Those discussions began, he said, in September 2008 – one year after Moritz opted out of the insurance program – when the council was reviewing salaries for non-union employees.
During a July 13 council meeting, Mayor Anthony Calderone presented a revised handbook that applies to this group of employees, but did not include any of the changes sought by the commissioner. For the first time publicly, Tellalian alluded to the compensation deals that had been negotiated.
“I just felt that we should be aware of it when these kinds of packages are offered to employees,” Tellalian said. “We should have a written policy.”
Calderone said he agrees with Tellalian that a formal process for offering any benefit should be spelled out, but defended the absence of such in the revised handbook. According to the mayor, he told Tellalian in private discussions that more data was needed before any standards could be adopted. In no way, said Calderone, did he intend to abandon the issue.
The mayor said he only learned of the village clerk’s extra salary within the last two months – not in September – and as of the July 13 meeting didn’t have all the facts. Hoskins’ role, for example, wasn’t revealed to him until late July.
“I was becoming aware of it, but all I had was hearsay,” Calderone said of the clerk’s salary.
The mayor said that it was another employee who told him of Moritz’s pay increase.
Calderone said it was “grossly improper” for Hoskins to negotiate with an employee after the decision to hire was made. Such “side deals” could even be revoked if the council decides on a policy that runs counter to Moritz’s benefits.
The terms of the police chief’s salary were reached, and documented, when Ryan took the job. Calderone said he has known of the chief’s salary benefit from the beginning, but could not say whether that deal was approved by the council. A 2003 memo from a former village clerk to then village administrator Matt O’Shea documents that O’Shea signed off on the terms.
Reached by phone, O’Shea said he could not recall specific conversations with the council regarding Ryan’s compensation, but that those details likely would have been discussed in closed session prior to approving his employment.
“I do not believe [Hoskins] had the authority to do that,” Calderone said.
No documents memorializing changes to the clerk’s benefits were provided to the newspaper in response to the records request.
In recent weeks, the village has surveyed an estimated 30 municipalities to see how common it is to provide an incentive for employees to opt out of their insurance, and how it’s administered. Those reports are not finished, said Calderone, but he indicated that roughly one-third of the respondents offer such a program.
Commissioner Mark Hosty said he is not aware of how Ryan and Moritz came to enjoy the benefit that they do, but favors developing a policy that would allow the village to offer something similar to eligible employees. In the clerk’s case especially, said Hosty, the village is realizing a savings.
Hosty said initially he was unaware that Hoskins had approved the clerk’s salary increase, but “I’m not offended that he did.” Within his own departments, said Hosty, he has given department heads permission to use municipal vehicles for personal use. He said he made that decision without consulting other elected officials.
The issue of crafting a policy to address such perks has been lingering, said Hosty, and Sturino, the former village administrator, made attempts to do so.
“It’s not something that has just popped up,” Hosty said.