Questions linger after lame-duck council’s health benefits ‘caper’

By: Brian Louwers | Warren Weekly | Published November 21, 2019

WARREN — Who orchestrated the “camouflaged” effort to give Warren elected officials a “golden parachute” in the form of years of city-paid health insurance coverage after leaving office following eight years of service?

A seemingly routine resolution to approve the continuation of coverage for city employees was passed unanimously by the Warren City Council on Sept. 10. But as first reported by the Macomb Daily on Nov. 17, the measure also included an amendment mentioned only as a single word by now-former City Council Secretary Robert Boccomino, affording elected officials who have served just eight years full medical, dental and prescription drug coverage after they leave office, until they qualify for Medicare at age 65. Their dependents would also be covered under the resolution.

According to multiple sources, the “premeditated” two-page amendment to the resolution was introduced at the council table just before the meeting with no backup material. No documentation was included in the agenda packet distributed to council members for review and reference before the meeting, and the amendment was not added afterward to the compiled online archive of meeting materials.

George Dimas, the director of Warren’s Department of Personnel Management and Human Resources, served 32 years on the City Council and retired from Chrysler before taking a series of administrative jobs with the city. He said he was at the meeting with City Controller Rick Fox, a veteran overseer of municipal finance, and neither of them caught what happened.

By the time they found out six days later and brought it to the attention of Warren Mayor Jim Fouts, it was too late to effectively veto the measure under the provisions of Warren’s city charter.

“It was really camouflaged. I was at the meeting, but when Robert Boccomino made a motion to approve the health care coverage and he basically garbled the word ‘amendment,’ which was not very clear, I didn’t really catch it,” Dimas said.

He said the proverbial cat was let out of the bag the next week after the city’s benefits representative received correspondence from the City Council office. That prompted a meeting with Dimas, Fox and the city’s third-party health care coverage administrator. They decided a legal opinion was needed.

“That took some time, obviously. I think this whole effort was premeditated because we didn’t find out about it until the following week when they got that correspondence from the City Council office,” Dimas said. “It didn’t give the mayor an opportunity to study it, and it basically didn’t give him the right amount of time to veto it. It made the mayor furious to find out they were going to pull a caper of this type before their term ends in November.”

Years ago under former Mayor Mark Steenbergh, the city began looking to end costly “defined benefit” retirement packages for new employees in favor of “defined contribution” options like 401(k) and health savings plans. Retirement health care had been afforded to employees who worked 25 years full time for the city.

The amendment slipped into the Sept. 10 resolution references one from April 1999 that addressed “certain pay increases, fringe benefit improvements and other benefits” granted to “non-union employees and officers of UAW Local 412 Unit 35, excluding boards and commissions,” which were structured on the basis of 25 years of service per the union contract.

As passed on Sept. 10, the measure would amend “the vesting schedule of elected officials to one hundred percent vested upon eight (8) years of completed service.”

The resolution further states, “The current benefit structure is not inclusive of elected officials, requiring twenty-five (25) years of service and a one-year separation in employment after serving as an elected official, making full vesting near impossible to achieve, and Council approving this portion of the UAW contract could be considered a conflict of interest.”

It was concluded that because insurance rates are lowered by increased participation, allowing those with eight years of service to vest and continue coverage, along with their dependents, has the potential to lower costs for individuals and the city.

But if implemented, Dimas said, the council’s amendment would put the city in a bad bargaining position with its employee unions.

“It could be huge. With eight unions in the city and the City Council giving themselves lifetime health care coverage, I’m sure the unions could be looking at this and saying ‘me, too.’ It could run into the millions,” Dimas said. “Obviously, they’d say if it’s good enough for the council members, it’s good enough for us.”

Dimas said it would also put the city in violation of a commitment to the state, one the previous council signed off on last year, to maintain funding for retiree health care coverage at a minimum of 40%.

Fouts has since vowed that the move will not stand, calling it “dead on arrival.”

“It was a scam and what I’m angry about is if this would have gone through, this would have had a profound, severe financial encumbrance on the city of Warren and would have cost taxpayers millions of dollars,” Fouts said. “It would have created a problem, and it would have been financially insurmountable.”

Fouts confirmed that he learned of the amendment after the fact and said it was too late to issue an effective veto, as the window to do so closed 72 hours after the council’s vote on Sept. 10.

In another twist, the vote was actually used in political literature to attack now-former Councilman Keith Sadowski, who before Nov. 5 was running against Sonja Buffa for the Warren city clerk position. She was supported by Fouts.

Deputy Public Service Director Gus Ghanam, whose Michigan Business United political action committee distributed the piece targeting Sadowski, said he learned about the amendment and used Sadowski’s vote on the issue as political ammunition, but by then it was already too late for the mayor, his boss, to take action with a veto.

While its enforceability was unclear given the rules outlined in the charter, Fouts issued a veto anyway on Nov. 19 and called on the newly elected Warren City Council to take a vote to rescind the “illegal” amendment as part of a “united message.”

“This is unprecedented, unthinkable and just unspeakable. It’s something I can’t believe anybody would consider doing,” Fouts said Nov. 20. “It’s bad political judgment, too. I don’t know what they were thinking when they did this. Some of them were enemies. Some of them were my friends. I’m just shocked that any of them would do this, friend or foe.

“I’m just profoundly disappointed in all of them. It was just bad judgment, and it could have put the city in financial jeopardy. It was a self-serving move. We’ve had 12 years of labor peace, and this could have caused years of labor distrust.”

Boccomino offered the resolution and the amendment — the latter, quickly and without explanation — for consideration on Sept. 10, but did not return messages seeking comment for this report.

Six of the seven council members who voted to approve the measure left office after the election on Nov. 5. Councilman Ron Papandrea, who was previously appointed, was elected to his first full term in District 1. Boccomino, Cecil St. Pierre, Scott Stevens and Steven Warner were deemed ineligible to seek council office under term limits after a legal challenge that went all the way to the Michigan Supreme Court. Sadowski, who was also term limited, ran for city clerk and lost. Kelly Colegio, who was eligible to seek a third term on the council, was defeated by Fouts in the mayor’s race.

Colegio later said she knew nothing about the amendment, which she called a “deception” in a Facebook post. She suggested the amendment was authored by Boccomino, “since he made the motion approving it, and other witting council members.”

“I thought I was supporting our city employees and unions. Had I known what was truly being voted on … I would have voted NO,” Colegio posted.

Pat Green, the top at-large vote-getter in the 2019 City Council election, who is now serving as the council’s president and the city’s mayor pro tem, vowed to bring the matter to the table at the next meeting with the intent to “unwind this action.”

“We did not create this mess, but we will absolutely see it resolved,” Green said.