MILLINOCKET, Maine — Brenda Angotti spent 37 years in Millinocket schools helping build award-winning music programs, secure in the knowledge that she would have health care benefits until she died, she said Monday.
The benefits, she said, were a staple of negotiations between the teachers union and school officials for many years.
“There were years where we gave up raises to keep that benefit. Every time you would negotiate it. I remember that this was a big issue,” Angotti said.
That’s what Angotti and other retirees described as heartbreaking in the Millinocket School Committee’s plan to cut about $620,000 in lifelong retiree health benefits from the $6.1 million school budget.
School officials petitioned a Bangor court on Friday for a declaratory judgment approving the cut, Superintendent Frank Boynton said. The civil complaint names 60 defendants plus the Millinocket Education Association.
Terry Given, president of the association, declined to comment on Monday.
The school board has “determined that it has no contractual obligation to provide any health insurance benefits to many of its retirees in perpetuity, and it is confident that the court will agree with that,” school officials said in a press release written by their attorneys, Boynton said.
The attorneys, who believe the school board has no responsibility to continue paying the benefits for retirees, sought the ruling as a confirmation of their opinion, the release stated.
“This action was necessitated because the school committee can no longer afford to pay legacy costs associated with retiree health insurance benefits,” the release continued. “Through the judicial process, the school committee hopes to bring certainty and financial stability for both the school and its former employees as to the scope of the school’s financial obligations, and provide a forum for all affected parties to respond to the town’s position on these important legal and financial issues.”
The retirees said it was unfair that they, who are largely on fixed incomes, should have to bear the additional economic burden of paying for benefits, although they said they understood how the town’s poor economic condition might make such a move necessary.
“It’s a benefit the teachers have earned over the years,” said Robert Pelletier, a 37-year Millinocket school veteran who retired in 1989 after 19 years as the system’s assistant superintendent and superintendent.
Theresa MacDonald, whose husband, Paul MacDonald, taught in the system for 38 years before retiring as Stearns High School principal in 2006, said health insurance payments would be a significant economic burden to her family should they have to start paying them.
The loss of revenue created by the auction of Great Northern Paper Co. LLC papermaking equipment last summer from the company’s Katahdin Avenue industrial site, and that company’s bankruptcy filing last month, are among the reasons school attorneys filed for the declaratory judgment, Boynton said.
The auction was expected to result in a $2.3 million loss in tax revenues in the 2015-16 fiscal year. Town Council members, who determine how much money to allocate to the School Department, ordered the town and schools to cut $3 million over the next two years to redress the $2.3 million loss.
Councilors also have pressured the school board to cut retiree benefits. Reasons included a decline in town tax rolls, shrinking state aid and town population, and the town’s decision in 2009 to cut lifelong life and group hospitalization insurance coverage to 29 retired and present town workers. School board members had until recently resisted the move, believing it violated an agreement they had made with school workers.
Citing rising costs, the council voted 7-0 on May 14, 2009, to eventually end the free health care benefits paid to the retirees. Since 1999, the town’s portion of retiree health benefits increased from as little as $282.40 per month in 1999 to $599.44 per month in 2009 under a typical plan, then-Town Manager Eugene Conlogue said.
The town’s workers appealed the decision to the Maine state supreme court and lost in 2012. One justice dissented from the majority.
The school retirees, who with the Millinocket Education Association have retained attorneys, fear that they might lose their case as well. Court documents gave no indication of a timetable for a decision.
“It is another one of those no-win dilemmas for everybody. It costs the town, but it also would be devastating to the teachers,” said Angotti, whose husband, Richard Angotti Jr., is chairman of the Town Council.
“I can understand both sides,” MacDonald said, “but you are supposed to be negotiating in good faith, and you should be honoring your contracts.”