New Hampshire Town and City November-December, 2015 by New Hampshire Municipal Association

November/December 2015

TownandCity N E W

H A M P S H I R E

In This Issue:

A PUBLICATION OF NEW HAMPSHIRE MUNICIPAL ASSOCIATION

Next Generation Professionals: An Inside Look at What Matters to Them.................................................8 Somewhere in the Middle: Cash Balance Plans........17 Rochester Innovates in Merit Pay for Municipal Employees..................................................23

Signs, Signs, Everywhere are Signs: Sign Ordinances and the First Amendment Wednesday, November 4

12:00 pm—1:00 pm

Upcoming Webinars NHMA will be hosting two webinars in November and December for members of the New Hampshire Municipal Association.



Signs, Signs, Everywhere are Signs:

Your sign ordinance is most likely no longer legal according to the United States Supreme Court – find out why! The recent decision in Reed v. Town of Gilbert has ushered in a new era subjecting local sign ordinances to exacting legal scrutiny. Join NHMA’s Legal Services Counsel Stephen Buckley and Attorney Ben Frost of the New Hampshire Planners Association, who will offer their insights on this important new ruling, and suggest strategies for amending sign ordinances in order to comply with this important Supreme Court decision.

The ADA and Municipal Governments: Is Your City or Town Meeting its ADA Responsibilities? Wednesday, December 16 12:00 pm—1:00 pm

Sign Ordinances and the First Amendment



The ADA and Municipal Governments: Is Your City or Town Meetings its ADA Responsibilities?

Although the delivery of public services varies from town to town, it is essential that people with disabilities have the opportunity to participate fully in the programs and services that municipalities offer. Applying for a building permit, attending a town meeting or street festival, or playing ball in the local park, for example, are typical programs, activities or services covered by the ADA. Join New Hampshire's Department of Transportation's John Ankenbrock, Chief of Labor Compliance, who will outline these requirements for municipal facilities, including Title II of the ADA which applies to all local governments programs, services, or activities, including access to courts, transportation, parks and sidewalks. This webinar will also focus on the necessity for a ADA Transition Plan and provide some helpful tips on how small towns and big cities can comply with the ADA.

For details and registration information, visit www.nhmunicipal.org under Calendar of Events .

Contents Table of

Volume LVIII • Number 6

November/December 2015

3 A Message from the

NHMA Executive Director

5 Happenings 7 Upcoming Events 28 Up Close and Personal in the Field: Adam Clark 30 Tech Insights: Can BYOD Work for Your Municipality? 32 The HR Report: 8 Steps to a Successful Workplace Wellness Program 34 Legal Q and A: Q&A on ACA (Affordable Care Act)

Center Spread: NHMA’s 74th Annual Conference

Next Generation Professionals: An Inside Look at What Matters to Them

Somewhere in the Middle: Cash Balance Plans

Rochester Innovates in Merit Pay for Municipal Employees

Understanding the Benefits of Disability and Life Coverages

Correction: The September/October issue incorrectly stated the location of the cover photo as Lyndeborough, NH - it is in Greenfield, NH.

New Hampshire Town and City Magazine Staff

Executive Director Editor in Chief

Judy A. Silva Timothy W. Fortier

Contributing Editors Margaret M.L. Byrnes Barbara T. Reid Art Director

Scott H. Gagne

Production/Design

Scott H. Gagne

Official Publication of the New Hampshire Municipal Association 25 Triangle Park Drive • Concord, New Hampshire 03301 Phone: 603.224.7447 • Email: nhmainfo@nhmunicipal.org • Website: www.nhmunicipal.org New Hampshire Municipal Association Phone: 800.852.3358 (members only) NEW HAMPSHIRE TOWN AND CITY (USPS 379-620) (ISSN 0545-171X) is published 6 times a year for $25/member, $50/non-member per year, by the New Hampshire Municipal Association, 25 Triangle Park Drive, Concord, New Hampshire 03301. Individual copies are $10.00 each. All rights reserved. Advertising rates will be furnished upon application. Periodical postage paid at Concord, NH 03302. POSTMASTER: Send address changes to NEW HAMPSHIRE TOWN AND CITY, 25 Triangle Park Drive, Concord, NH 03301. NEW HAMPSHIRE TOWN AND CITY serves as a medium for exchanging ideas and information on municipal affairs for officials of New Hampshire municipalities and county governments. Subscriptions are included as part of the annual dues for New Hampshire Municipal Association membership and are based on NHMA’s subscription policy. Nothing included herein is to be construed as having the endorsement of the NHMA unless so specifically stated. Any reproduction or use of contents requires permission from the publisher. POSTMASTER: Address correction requested. © Copyright 2015 New Hampshire Municipal Association

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NOVEMBER/DECEMBER 2015

New Hampshire Municipal Association

Board of Directors The Board of Directors oversees NHMA’s league services. The board is comprised of 23 local officials elected by NHMA member municipalities.

CHAIR

Scott Myers, City Manager, Laconia VICE CHAIR

Shelagh Connelly, Selectman, Holderness TREASURER

Donna Nashawaty, Town Manager, Sunapee IMMEDIATE PAST CHAIR

Stephen Fournier, Town Administrator, Newmarket

J. Allen Bennett, Councilor, Concord Butch Burbank, Town Manager, Lincoln Ben Bynum, Clerk/Tax Collector, Canterbury David Caron, Town Manager, Town of Jaffrey Jill Collins, Town Administrator, Hinsdale Philip A. D’Avanza, Planning Board Member, Goffstown Sue Desruisseaux, Town Administrator, Goffstown Elizabeth Dragon, City Manager, Franklin M. Chris Dwyer, Councilor, Portsmouth Bill Herman, Town Administrator, Auburn Elaine Lauterborn, Councilor, Rochester Brent Lemire, Selectman, Litchfield Patrick Long, Alderman, Manchester Harold Lynde, Selectman, Pelham Jim Maggiore, Selectman, North Hampton John Scruton, Town Administrator, Barrington David Stack, Town Manager, Town of Bow Eric Stohl, Selectman, Columbia Teresa Williams, Town Administrator, Wakefield

Affiliate Groups

Affiliate Groups are those groups whose members are comprised of mostly municipal officials, usually municipal professional organizations in the State of New Hampshire. Affiliate Groups are not entitled to any membership benefits and there are no annual fees for this status. Some of these Affiliates conduct their annual meetings in conjunction with the NHMA’s annual conference each November. Animal Control Officers Association of New Hampshire Association of NH Public Employer Human Resource Administrators Fire Instructors and Officers Association of NH Granite State Rural Water Association Municipal & Governmental Law Section of the NH Bar Association Municipal Management Association of NH NH Association of Assessing Officials NH Association of Conservation Commissions NH Association of Emergency Medical Technicians, Inc. NH Association of Fire Chiefs NH Association of Housing Authorities

NH Association of Regional Planning Commissions NH Building Officials Association NH Cemetery Association NH City & Town Clerks’ Association NH Coalition for Community Media NH Economic Development Association NH Fire Prevention Society NH Government Finance Officers Association NH Health Officers Association NH Library Association NH Library Trustees Association NH Local Government Information Network NH Local Welfare Administrators Association NH Municipal Lawyers Association

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NH Planners Association NH Public Works Association NH Public Works Mutual Aid Program NH Public Works Standards and Training Council NH Recreation & Park Association NH Road Agents Association NH State Firemen’s Association NH Tax Collectors’ Association NH Water Pollution Control Association Northeast Resource Recovery Association Working Dog Foundation

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A Message from the

NHMA

Executive Director It’s what’s underneath that counts wastewater, water, stormwater roads, solid waste, planning design, construction services funding, municipal services

civil & environmental engineering

Concord, NH 603.230.9898 Portsmouth, NH 603.436.6192

www.underwoodengineers.com

certified public accountants

experience counts We know New Hampshire governments. Your needs come first at Vachon Clukay & Company, PC, so we’ve structured ourselves to fulfill all of your service needs.We provide the following services: Auditing Accounting Support and Training Advising Personalized “Team” Service Expertise in How Your Organization Operates Computerized Forms Operational Management Studies We want to be part of your team. For personal attention contact: Robert L. Vachon, CPA 608 Chestnut St. • Manchester, NH 03104 Phone: (603) 622-7070 Fax: (603) 622-1452 www.vachonclukay.com

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Judy Silva

ave you signed up for the NHMA Annual Conference on Thursday and Friday, November 19th and 20th? I hope the answer is yes! If you haven’t signed up yet, then please hurry—the days are numbered and you will miss out on a great conference event. This year’s theme is Navigating the Waters of Municipal Government and our keynote speaker will be Captain Richard Phillips, former captain of the Maersk Alabama when it was hijacked by Somali pirates in 2009. He wrote a book about his experiences and his story was also told in the movie Captain Phillips. We will be showing the movie both Wednesday and Thursday evenings to give you the full flavor of Captain Phillips’ ordeal. He is sure to inspire all of us to be our best in the face of any adversity. NHMA staff have planned two full days of educational sessions covering: the Right-to-Know Law; the Court Update, an update of court cases from the past year; the Legislative Update, including what’s coming on tap in the second year of the session; land use and employment topics; finance and taxation; special programming for assessors and local welfare directors, and much more. Please see inside center spread of this magazine or go to NHMA’s conference website (https://nhmunicipal.org/annualconference) for more information and to register. The conference is always an exciting time because we get to see so many of the local officials we talk to during the year, but who may be only a voice on the phone—until conference time! The annual conference is a perfect opportunity to learn new things, meet new people, network with others who do what you do, and visit our sponsors and exhibitors who not only support the NHMA Annual Conference, but also provide the products that municipalities use and need. On behalf of the NHMA board and staff, we thank you for your continued support and look forward to seeing you at the NHMA Annual Conference.

Warmest regards,

Judy Silva NHMA Executive Director

NOVEMBER/DECEMBER 2015

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We are the Granite State’s Law Firm™ Concord 603.224.7791 | 800.640.7790 10 Centre Street, Concord, NH

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law@uptonhatfield.com | www.uptonhatfield.com

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HAPPENINGS Excellence in Financial Reporting and Distinguished Budget Presentation Awards The Government Finance Officers Association (GFOA) established the Certificate of Achievement for Excellence in Financial Reporting Program (CAFR Program) in 1945 to encourage and assist state and local governments to go beyond the minimum requirements of generally accepted accounting principles to prepare comprehensive annual financial reports that evidence the spirit of transparency and full disclosure and then to recognize individual governments that succeed in achieving that goal. The goal of the program is not to assess the financial health of participating governments, but rather to ensure that users of their financial statements have the information they need to do so themselves. GFOA recently announced the award of this

Certificate of Achievement for fiscal years ending in 2013 to the following: City of Concord (having received this recognition for 19 years); City of Dover (10 years); City of Nashua (9 years); City of Portsmouth (21 years); Town of Bedford (10 years); Town of Derry (17 years); Town of Londonderry (11 years) and Strafford County (1 year). In 1984, the GFOA also established the Distinguished Budget Presentation Awards Program (Budget Awards Program) to encourage and assist state and local governments to prepare budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA’s best practices on budgeting and then to recognize individual governments that succeed in achieving that goal. Winners of this award for budget years beginning in

2014 are: City of Portsmouth (having received this distinction for 9 years); and Sanborn Regional School District (1 year). Congratulations to all the award recipients! For more information about these award programs including the judging process and how to become a participant, visit the GFOA website at www.gfoa.org/awards.

Durham’s Town Hall Earns LEED Certification The Durham Town Hall has achieved LEED (Leadership in Energy & Environmental Design) Silver Certification. LEED is a green building certification program that recognizes best-in-class building strategies and practices. In order the obtain this designation, the over $3 million project installed high values of insulation on the walls and ceilings, triple glazed

Education Adequacy Group Meets to Discuss City of Dover’s Lawsuit Against the State A group of about 30 municipalities came to NHMA offices in late August to discuss the City of Dovers’ lawsuit against the State of New Hampshire regarding an unconstitutional cap on education adequacy aid that deprives growing communities of their full payment for educational adequacy. City Manager J. Michael Joyal, Jr. reported the City is suing the State to recoup nearly $14 million in education adequacy funding not provided to the City over several years. A petition for declaratory judgment was filed in Strafford County Superior Court on Thursday, August 20, 2015. The City is represented by Attorney Andru Volinsky. According to state law, first adopted in 2009, the amount that the state payment can grow from year to year is capped at eight percent. This cap exists without regard to the number of students who move into a school district. Currently, state law caps the education payments that a school district may receive from the state at 108%, regardless of whether the districts’ growth is 110%, 120% or more. According to information discussed during the meeting in Concord, if the court’s decision is in Dover’s favor and the cap on funding is unconstitutional, that decision will also apply to every other school district in New Hampshire.

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HAPPENINGS from page 5 windows, automatic on and off lights, and two rain gardens. “Typically with a municipal construction project, people are focused on how much does it cost and what is the cheapest and fastest way to build [it],” Selig said. “While it may have cost a little bit more to build it, our hope is it will save us some money over the long-term.” Selig reported that research has shown that on average, there is a decrease in energy costs by around 24 percent in LEED certified buildings compared to buildings that are not certified.

At the podium, Attorney Christine Fillmore of Hage Hodes, PA, presents. Seated to her left are NHMA Legal Counsel, Stephen Buckley, and NHMA Staff Attorney, Margaret Byrnes.

Over 90 Attendees Find Their Way to “Hard Road to Travel” Workshop With the 2015 revision of A Hard Road to Travel as a backdrop, this September workshop provided an indepth review of the laws related to liability, regulation, and maintenance of municipal roads, including updates in the law since the original 2004 publication. The workshop was very well received. Attendee’s had this to say about the workshop: “Great presenters, extremely knowledgeable.” “It was really good, one of the best.” “Program was relevant – very well developed.”

National League of Cities 2016 Presidential Election Task Force Comes to New Hampshire

Left to right, NLC’s Emma Lieberth, Portsmouth City Manager, John Bohenko, City Councilor and NHMA Board of Director, Chris Dywer, and NHMA’s Executive Director, Judy Silva.

As reported previously in Town and City, the NLC has formed a bipartisan group of 17 city officials and state municipal league executive directors (of which NHMA’s own Judy Silva is a member) to raise the visibility of city issues during the presidential election cycle. Toward that goal, Emma Lieberth, program manager for strategic partnerships at the NLC, has been meeting with New Hampshire municipal officials from around the state encouraging them to being the voice on issues critical to local governments and to bring the conversation around local issues to the forefront of the 2016 race.

Members Count on NHMA Workshop to Ensure Successful Budget Season On September 15 and 24, NHMA staff presented to nearly 170 members in Manchester and to 55 members in Bartlett the statutory requirements of the New Hampshire municipal budget law, focusing on appropriations, separate vs. special warrant articles, transfers, lapses, multi-year contracts, and much more. NHMA staff, including Legal Services Counsel, Stephen Buckley; Staff Attorney, Margaret Byrnes; Barbara Reid, Government Fi-

If you missed this workshop, don’t worry, another workshop is being planned sometime in the first quarter of 2016. 6

NEW HAMPSHIRE TOWN AND CITY

nance Advisor; and Judy Silva, Executive Director all made presentations and their expertise was tested during the very popular “Q&A” segment of the workshop. HealthTrust Attorney David Law, and HealthTrust Member Relations Advisor, Darlene Simmons, provided an update on current and pending Affordable Care Act requirements affecting local government employers. Attendees received a copy of NHMA’s 2015-2016 edition of The Basic Law of Budgeting: A Guide for Towns, Village Districts, and School Districts, which include new chapters and more resourceful information. Executive Director, Judy Silva, makes remarks at the Puritan Restaurant in Manchester, with NHMA staff members, Barbara Reid, Stephen Buckley and Margaret Byrnes, seated left to right of the podium.

www.nhmunicipal.org

Upcoming

Events

For more information or to register for an event, visit our online Calendar of Events at www.nhmunicipal.org. If you have any questions, please contact us at nhmaregistrations@nhmunicipal.org or 800.852.3358, ext. 3350.

November Webinar: Signs, Signs, Everywhere are Signs: Sign Ordinances and the First Amendment Wednesday, November 4 12:00 p.m. – 1:00 p.m. NHMA Offices Closed – Holiday Observance Wednesday, November 11 NHMA’s 74th Annual Conference The Radisson Hotel, Manchester Thursday, November 19 and Friday, November 20 NHMA Offices Closed – Holiday Observance Thursday and Friday, November 26 & 27

December Webinar: The ADA and Municipal Governments: Is Your City or Town Meeting It’s ADA Responsibilities? Wednesday, December 16 12:00 p.m. – 1:00 p.m. NHMA Offices Closed – Holiday Observance Friday, December 25

www.nhmunicipal.org

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Next Generation Professionals An Inside Look at What Matters to Them By Cheryl Hilvert, Patrick Ibarra, David Swindell, and Karen Thoreson

The August 2015 Public Management (PM) magazine cover story, published by the International City/County Management Association (ICMA), is based on the results of an informal Local Government Workforce Study (LGWS) of younger local government staff members conducted in early 2015 and concluded that public sector recruitment and retentionâ&#x20AC;&#x201D;and the ways in which governments proactively prepare their workplaces for the workforces of the futureâ&#x20AC;&#x201D;will look altogether different than in the past. The article is reprinted here with the permission of the International City/County Management Association.

NEW HAMPSHIRE TOWN AND CITY

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ost residents are only barely familiar with the behind-the-scenes operation of the local government organization that keeps them safe, provides clean drinking water, takes the waste away, maintains the roads they drive on, and provides numerous other services they take for granted every day. As individuals long wedded to the local government management profession, the four of us wondered how younger, relatively recently-employed local government workers viewed their roles, their employers, and their future. This article provides a glimpse into their perceptions of local government as a career choice and how these young professionals would choose to enhance their workplace. Their perceptions highlight the opportunities and challenges for today’s managers in response to significant changes in the workforce that are acutely felt in the public sector. Such changes include demographic shifts in the workforce as well as evolutionary changes in the workplace (see Figure 1). Managers who want to build their twenty-first-century workforce need to discard the “we’ve always done it that way” approach in favor of progressive and practical strategies and tools to optimize talent. Government leaders at all levels also need to adopt the mindset that government is an employer, thus competing with a variety of public, nonprofit, and private sector organizations for talent in the marketplace. In that regard, the human resources department should not go it alone on this quest. Instead, leaders need to make a strong commitment to ensuring that workforce-related issues and opportunities attract the best talent. In an effort to capture preferences about the local government workplace and workforce, we developed the 2015 Local Government Workforce Survey (LGWS) to collect information from a group of younger, next-generation staff members. Our team developed and validated the survey questions and administered it in February 2015. The team conducted the basic analysis in March. Survey participants included graduates of the Leadership ICMA program, the Alliance for Innovation NextERA members, the Emerging Local Government Leaders (ELGL) devotees, and the current and former Arizona State University Marvin Andrews Fellows. The survey was sent to approximately 250 individuals, with 107 providing responses.

Recruitment Practices People today aren’t simply looking for a job. They want www.nhmunicipal.org

careers with meaning and impact. Government service can provide that. Fully two-thirds of the respondents to the survey stated “making an impact on community/public service” as the top attraction to serving in local government” (see Figure 2). This high percentage stands to reason considering those who responded to the survey are involved with public-oriented professional associations. Consider, however, what might be the response in your workforce if employees were asked the same question? HR directors and managers might keep in mind that creating a qualified talent pool is no longer about sourcing specific candidates for specific jobs. Rather, it’s about generating a pipeline of valuable skill sets in all staff members. This allows your organization to recognize its skill gaps and then effectively find and reach the owners of those skills. Using social media channels and Web-based hiring sites have become common practice as powerful media for communicating an organization’s brand that relates to attracting and hiring top candidates.

Younger individuals are being drawn to public service to have a positive impact on their communities. The only barrier we face to realizing the benefits of this talented and motivated workforce is a blind adherence to doing business as usual.

There also is an increasing emphasis on mobile recruiting. Almost half of active According to research conducted in 2013 by Glassdoor.com, 82 percent of all job seekers are currently using smartphones to search for job openings.3 Almost half of the active candidates have applied for a job on their mobile device. The public sector will need to create mobile applications in order to appeal to the on-the-go job seeker. What does your hiring process say about your organization? First impressions are a critical part of the hiring process. The world is full of smart, skilled, and passionate people who are blue-chip prospects. These people won’t be interested in your organization, however, if the job announcement is a boring job description. In hiring a new budget management analyst, for instance, the job description could state “ability to understand NOVEMBER/DECEMBER 2015

NEXT GENERATION from page 9 statistics and research data.” Or it could say something more like this: “Want to make an impact on your community by helping to fund services that will benefit your neighbors and friends?” Or, “Bring your skills to bear in innovative ways to enhance the quality of life for residents in your community.” A second example is for a treatment plant operator position: “Conduct regularly scheduled tests of water quality to ensure compliance” (boring) or “Provide safe quality water for people to bathe their little ones” (exciting!). Innovative local governments, including Sedgwick County, Kansas, and Decatur, Georgia, have created effective job announcements and advertisements by moving away from the traditional “legal ad” format to appeal to those with an adventurous spirit who don’t just want a job, but who want to make a difference. In addition to better appealing to a candidates’ sense of wanting to serve, local governments must also recognize that timeliness is important when recruiting. While public sector agencies may have a series of written exams and performance tests that are required as part of their hiring process, accelerating the speed in administering these processes is important in maintaining the interest of talented candidates.

Figure 1. Demographic Shifts and Evolution of the Workplace.  According to the Pew Research Center (http://www.pewresearch. org/fact-tank/2015/01/16/this-year-millennials-will-overtakebaby-boomers), for the first time, millennials now outnumber baby boomers in the workplace, 76 million to 75 million. As baby boomers continue to retire and millennials continue to enter the workforce, this gap will widen.  The millennial generation may have different work motivations and expectations for greater work/life balance.  The workforce will be more culturally and ethnically diverse and include more highly educated women, military veterans, and people with disabilities.  Expectations are likely to increase for customized benefits, mobility of benefits, and flexible work options.  According to the State and Local Government Workforce 2014 Trends research conducted by the Center for State and Local Government Excellence of members of the International Public Management Association for Human Resources and the National Association of State Personnel Executives, the local government workforce shows: o In 2014, 19 percent of the government workforce reached age 61, the current average retirement age. By 2018, this figure rises to 28 percent of those currently working. o There is a surge in public-sector retirements, referred to as the “silver tsunami”: 49 percent of local governments reported higher levels of retirement in 2013 compared with 2012.  The historical, long-term arrangement between employer and employee—sometimes referred to as “life-time employment” where the employer provides steady employment, attractive benefits, and wages in exchange for an employee’s long-term effort and tenure-—is changing to one more akin to the private sector.  The service economy is shifting to the knowledge economy, emphasizing the changing nature of work toward more scarce and highly skilled jobs rather than lower-skilled, transactional work.  The digital workplace and the rise in mobile technology is redefining the nature of work and the means of collaboration, and it is facilitating work in and from almost any location.

Showing genuine interest in the candidate and being willing to modify the interview process to make it stimulating and interesting will set you apart as an employer of choice. This point was confirmed by LGWS respondents in Figure 6, citing the need to reform hiring processes as one aspect of the workplace that they feel needs to be changed.

the new employee—and the organization--will succeed. One county human services department in California modified its interview process to allow multiple staff at all levels to participate in the questioning of candidates.

which the candidate had applied. The result was a much better educated candidate on what the organizational mission is and a highly participatory workforce that helped to select the candidate who would best complement the team.

Finally, remember that a candidate who is a proper fit with your organizational culture is the best way to ensure

It went further by allowing staff and the candidate to interact during a two-hour session observing the work of the job for

A big benefit of this approach is that it ultimately reduced turnover and influenced higher employee morale.

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ployers expect workers to job hop on a much more extensive basis than they have historically.2

Figure 2. Attractions for People to Work for Local Government.

Another common management belief that must be reexamined is the general feeling that high employee turnover is bad and low turnover is good. In monitoring turnover in your organization, it is much more important to measure “regrettable” turnover—the number of departing employees whom you would desire to keep.

• Make an impact on community/public service • Influence policy/government • Stable employment, benefits, pay, flexibility • Interesting environment • Provide services • Family influence • Opportunity to advance

Retention of Top Performers Conventional wisdom says that employees will depart if they are discontented but that money will make them stay. This is likely an oversimplification. People stay in a job—or leave it—for a variety of motives. Local government leaders who want to build their twenty-first- century workforce need to discard the “we’ve always done it that way” approach in favor of progressive and practical strategies and tools to attract, retain, and optimize talent.

This theory was clearly seen from respondents’ answers to LGWS in Figure 3, where more than twice the number of respondents said that good management, culture, and quality of coworkers were more important to them than compensation and benefits. It goes without saying that employees want to be well compensated, but savvy managers should recognize that staff members are searching for other www.nhmunicipal.org

kinds of satisfaction, primarily related to professional growth and opportunities to make a positive difference to the organization of which they are a part. Managers must also recognize that younger employees are often undergoing a continuous job search and seeking potential opportunities that are a better fit for their lifestyle and career plans. According to Fortune, almost 90 percent of employees1 are already looking for work outside their current occupations, and research from Career Builder shows nearly one-third of em-

Exit interviews are important, but you also should do retention interviews. Meet with employees you consider as your top talent and ask them one question, “What more can we do as an organization to challenge you?” Most likely, you will discover that top performers value and seek several key organizational factors: • Flexible work programs. Such innovative organizational approaches as job sharing, flexible hours, and telecommuting can help your organization be more attractive to women, millennials, and older workers. LGWS responses (Figure 3) underscore the importance young

Figure 3. Reasons Why People Continue Careers in Local Government.

1st Priority

2nd Priority

3rd Priority

• Job stability, flexibility, location, work-life balance. • Impact community. • Interesting/innovative work. • Good management/organizational culture, quality coworkers. • Compensation/benefits.

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Figure 5. What Are the De-motivational Factors?

NEXT GENERATION from page 11 professionals place on a workplace that allows flexibility in work tasks, hours, and workplace location, the second highest organizational factor that would keep them in a career in local government.

• O utdated technology and programs. Working with inefficient infrastructure. • N egativity towards ideas that would require more work. Hearing “no” too often.

• Relationships. Based on a survey of 7,272 U.S. adults, Gallup’s State of the American Manager report concludes that people may go to work for an “organization,” but one in two left their job because of a failed relationship with their manager or supervisor. LGWS reinforces these Gallup results, highlighting the aspects of the workplace that inspire today’s younger local government workers. As Figure 4 demonstrates, 36 percent of respondents indicate that great staff or enthusiasm of coworkers is a huge motivator. If employees report that their managers’ expectations are unclear or that their managers provide insufficient equipment, materials, or other resources, the likelihood of a regrettable turnover increases.

• Small size of community. • Organizational aversion to effective change. • Poor management and oversight. • Partisan politics interfering with productivity. • T eam members who are hesitant to fully participate and support activities of the organization. • D isconnect between capacity of administration and expectations of community.

• Workplace culture. A workplace culture based on an inspirational set of organizational values is key to retaining top employees, as are management practices that emphasize shared decision making. These values include an organizational commitment to trust, creativity, team work, and employee involvement in decision making, which can be powerful motivators if they are part of dayto-day workplace behaviors and not just words on a page in an employee handbook.

Figure 4. Workplace Inspiration Factors.

• Help people directly. • Make an impact. • Great staff. • Make improvements to the organization. • Be a part of something special. • Enthusiastic coworkers and passion for local government. • Diversity of staff: age, gender, ethnicity, cultural background. • Nothing.

NEW HAMPSHIRE TOWN AND CITY

Managers must not underestimate the importance of a strong organizational culture, and they need to recognize their role in being vigilant about fostering a great workplace culture as a strategy to retain top-performing employees. Figure 6 shows that nearly one-third of LGWS respondents want to see an organizational culture that focuses more on employee input and communication throughout the organization. Figure 5 illustrates the most commonly reported factor that demotivates younger employees is poor management and oversight of the organization. These are important calls to action for managers of the future in retaining quality employees in their organization. • Professional development and growth. LGWS respondents indicated that they value investment by the organization in them as employees. Openings for upward mobility are only a portion of the equation to retaining top performers. Equally important is the investment organizations make in professional development and www.nhmunicipal.org

focus on team building, emotional intelligence, and understanding the political and cultural influences of the organization and community.

Figure 6. What Needs to Be Changed in Your Workplace?

They also enhance specific skills like facilitation, brainstorming, creative problem solving, public speaking, budgeting, project management, communications, and effective supervisory practices.

• Resource improvement: technology, amenities. • Reform human resources: (bonuses, pay for performance) and hiring and firing. • Diversity (age, gender, ethnicity) is needed in local government. • Local governments need to be financially sustainable. • Creativity/high quality of work should be rewarded. • Organizational culture: more employee input, communication. • Collaboration: interdepartmental, top to bottom, citizen • Ethics/fair treatment/transparency • N/A

• Experiential learning. When asked about the skills they need to improve to advance in their careers, more than one-third of the respondents said “general experience with management and leadership” (see Figure 8).

Figure 7. What Skills Do You Need?

Employees will increase their capabilities and position themselves for future opportunities, not just by learning new skills and actively engaging in a mentoring partnership, but also by participating in a series of targeted employeelearning activities. Rotating job assignments, “acting” roles, and shadowing are attractive pursuits to top performers who want to stretch themselves.

• Leadership and professional development/training. • More interaction with top management. • Fairness/no discrimination. • Challenging work/special projects. • Interdepartmental collaboration. • Organizational restructuring.

Anticipating Change

• More support. • More transparency and communication. • N/A.

growth opportunities for all employees (see Figure 7). Leadership and professional development and training were the top responses by 45 percent of the survey respondents to the question, “What could your workplace do in order to help you advance in your career.” If not already in place, a local govwww.nhmunicipal.org

ernment might develop a series of educational courses that focus on equipping employees with the requisite leadership, management, and supervisory skills to better perform their jobs. Many local governments now have in place leadership academies for their up-and-coming staff. These training activities

In addition to focusing on new strategies for recruitment and retention of younger staff, managers must also proactively work to prepare their workplaces for the future. Effective strategies include: • Engage in proactive workforce planning. Analyze the demographics of your workplace and estimate as best you can the projected attrition, not only among older workers but other age groups as well. Today’s younger workers are mobile and good managers need to develop a plan to transfer the mission-critical tacit knowl-

NOVEMBER/DECEMBER 2015

NEXT GENERATION from page 13

Figure 8. How Can Local Government Help You Advance?

edge prior to employee departures, regardless of age or tenure. • Partner with learning institutions. Local governments should pursue the opportunity to partner with local educational organizations to provide staff development opportunities and contribute to the enhancement of local government services. Educational and training programs and certifications are only some of the benefits such partners can bring to your organization. Local institutions also can provide inexpensive and enthusiastic talent through internship and apprenticeship programs that can help to develop a pipeline of future workers. • Evaluate paid-time-off (PTO) policies. These policies serve as the foundation on which flexible work arrangements can be built. A study of innovative local government organizations as well as the use of external evaluators can be particularly useful in these reviews and can help suggest appropriate adjustments for your organization that will increase the likelihood of attracting or keeping younger and mid-career workers. • Provide cultural awareness training. This type of training serves two purposes. First, it appeals to the desire among younger employees starting their government service for an open and diverse workplace. Secondly, the training sends a signal to all employees that the workplace can serve as a platform for discussing such challenging 14

• B etter understanding of the working mechanics of a local govenrment organization. • M ore experience with budget and financial management. • G eneral experience with management and leadership. • Technical skills. • Strategic thinking gained from experience. • Improving subject matter expertise. • Better communication. • Other.

issues as different cultural communication styles, how to give and receive feedback, and how different cultures review and assess employee performance.

In monitoring turnover in your organization, it is much more important to measure “regrettable” turnover—the number of departing employees whom you would desire to keep.

There’s Good News The LGWS results bring good news as well as direction for local government managers who heed the feedback from younger employees who will soon become tomorrow’s leaders. Let’s listen to their messages so that we can more effectively prepare our organizations for this next generation of public servants and the exceptional work they will do to provide service to our communities. Here are some ideas.

NEW HAMPSHIRE TOWN AND CITY

• Stress how the nature of local government work impacts our communities and allows employees to engage in performing interesting and challenging work that benefits many people. • Make a quality first impression on potential new employees through the job announcement and the interview process. Develop an effective onboarding procedure for new employees. • Expect your mid-level managers to be quality trainers, mentors, and advisers to new recruits. Provide training if they are not proficient in these skills. • Train and involve younger employees in broader organizational activities through professional development and experiential learning opportunities. • Have senior management meet periodically with new employees and listen to—and act upon— their good suggestions.

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• Rethink some of the more bureaucratic processes that are holdovers from bygone days. Where possible, simplify those that frustrate employees. • Consider using newer employees to look with fresh eyes at ways to streamline those processes or better connect with and serve residents. • Invest in your employees—both those who are new and those who are experienced. They will notice and appreciate it, and you will be the beneficiary. • Cultivate a reputation for being “Best in Class” as a local government employer. Word will get around that your community is the place to be for future public leaders. At a time when much of the rhetoric about local government work is vitriolic and portrayal of public servants on television shows reinforces false impressions of officials as corrupt or simply stupid, it can be easy for managers to overlook the many positive developments on the horizon as young professionals stand ready to assume the mantle of civic leadership. Younger individuals are being drawn to public service to have a positive impact on their communities. The only barrier we face to realizing the benefits of this talented and motivated workforce is a blind adherence to doing business as usual. PM 1

http://fortune.com/2014/08/05/ job-search-career-change. http://www.careerbuilder.com/ share/aboutus/pressreleasesdetail. aspx?id=pr824&sd=5/15/2014& ed=05/15/2014.

Survey data is based on a Glassdoor survey conducted online from August 14–22, 2013, among more than 1,100 employees and job seekers.

Cheryl Hilvert, Montgomery, Ohio, is former director, ICMA Center for Management Strategies, Washington, D.C., and is a retired city manager (chilvert@ zoomtown.com). Patrick Ibarra is cofounder and partner, The Mejorando Group, Glendale, Arizona (patrick@get-

Takeaways

✔

The “business as usual” approach to building the public sector workforce is no longer relevant and should be replaced with a contemporary method to reflect the changing workforce.

✔

Young professionals in the public sector are seeking an inclusive, diverse, and collaborative work environment with access to leaders and opportunities to grow, all the while in their role to make a difference in their communities.

Roberts & Greene, PLLC

Comprehensive Governmental Auditing and Accounting Services Contact us for: Accuracy Communication Timeliness

47 Hall Street Concord, New Hampshire

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tingbetterallthetime.com; www.gettingbetterallthetime.com). David Swindell is associate professor, Arizona State University and director, Center for Urban Innovation, Phoenix, Arizona (david.swindell@ asu.edu). Karen Thoreson is president, Alliance for Innovation, Phoenix, Arizona, and a former local government professional (kthoreson@transformgov.org).

Audits of Financial Statements Financial Statement Preparation Accounting Assistance Staff Training Management Advisory Services

603-856-8005 Email: info@roberts-greene.com

NOVEMBER/DECEMBER 2015

Experienced Lawyers for Municipalities Drummond Woodsum’s Municipal Group Matt Upton, Mark Broth, Keriann Roman, Matthew Serge and Anna Cole guide towns, cities and local governments through a variety of issues including: • Land use planning, zoning and enforcement • Ordinance drafting • Coastal and shorefront access • General municipal matters • Municipal employment and labor matters • Litigation and appeals

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Somewhere in the Middle: Cash Balance Plans By Paul Zorn

The following is an excerpt from an article originally published in the April 2013 issue of Government Finance Review. It is reprinted here with permission.

he recent financial downturn and resulting economic decline have put substantial fiscal pressures on state and local governments. As a result, many states have made significant changes to their retirement plans. Most of the changes were made within the existing defined benefit framework. Generally, the changes involved: 1) increasing employee contributions; 2) lowering benefit formulas for newly hired employees; and 3) reducing postretirement cost-of-living adjustments. However, some states made more fundamental changes. While only a few established new defined contribution plans, several introduced plans that combine elements of DB and DC plans, including two states that recently established cash balance plans. Cash balance plans are not new to state and local governments. The Texas Municipal Retirement System is a cash balance plan that has been operating since 1947, and the Texas County and District Retirement System is a cash balance plan that has been operating since 1967. In 2002, Nebraska established a cash balance plan to replace its DC plans for state and county employees. More recently, in 2012, Kansas and Louisiana also established cash balance plans. However, while cash balance plans are not new, their benefit design is fundamentally different from traditional DB plans. The goal of this article is to provide readers with a better understanding of how cash balance plans work and their key advantages and disadvantages.

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Comparing Plan Designs Although cash balance plans are legally considered to be defined benefit plans, they combine elements from both defined benefit and define contribution plan designs. To better understand how they work, it is helpful to compare them to DB and DC plans. The following discussion is summarized in Exhibit 1. Defined Benefit Plans. DB plan benefits are typically determined using a formula based on an employeeâ&#x20AC;&#x2122;s years of service, final average salary, and a benefit multiplier representing the portion of final average salary earned each year. For example, given a 2 percent benefit multiplier, an employee retiring after 30 years of service with a final average salary of $50,000 would earn an annual benefit of $30,000 (i.e., 2 percent x 30 years x $50,000). Generally, the benefit is paid as a guaranteed lifetime annuity, and it often includes a postemployment COLA to protect retirees from inflation. In addition, most state and local DB plans also provide disability and survivor benefits that are based on service and salary. In a typical DB plan, the plan sponsor bears most of the risk. Defined Contribution Plans. DC plans benefits are based on accumulated employer and employee contributions made to an employeeâ&#x20AC;&#x2122;s individual account, combined with actual investment earnings. Members usually have a significant control over how their accounts are invested. The benefit depends largely on investment returns and is not guaranteed over an employeeâ&#x20AC;&#x2122;s lifetime. Generally, the benefit is paid as a lump sum, which can be rolled over into other retirement accounts. DC plans do not provide disability and survivor NOVEMBER/DECEMBER 2015

CASH BALANCE from page 17 benefits, other than for the distribution of the employee’s account balance. In a typical DC plan, the plan participant bears most of the risk. Cash Balance Plans. Cash balance plans are similar to DC plans in that the benefit is based on an employee’s account balance. Under cash balance plans, employees contribute a fixed percentage of pay and employers also provide contributions (referred to as “pay credits”). However, unlike DC plans, the account is a hypothetical “nominal” account that keeps track of the benefit accrual, but the related contributions and investment earnings are held and invested by the cash balance plan. Members typically have no say at all in how their nominal accounts are invested. Interest is credited on an employee’s nominal account at a fixed rate (or may be based on an index rate or other variable rate). For example, a cash balance plan could promise to credit interest to a member’s account at an annual rate of 5 percent, regardless of the plan’s actual investment returns. Consequently, the interest credited to an employee’s cash balance account is generally less volatile than the interest earned by employees in DC plans. Cash balance plans are similar to DB plans in that the plan sponsor bears most of the risk. Also, cash balance plans commonly provide retirees with the option of converting their account balances into lifetime annuities. Unlike most DB plans, cash balance plans usually allow lump-sum distributions. Similar to DC plans, cash balance plans do not usually provide disability or survivor benefits, other than for the distribution of the employee’s account balance. For this reason, they may be less suitable for public safety employees whose jobs are more hazardous and, consequently, 18

Exhibit 1: Comparison of State and Local Retirement Plan Designs Defined Benefit Plan

Defined Contribution Plan

Basis of Benefit

Formula based on years of service, final average salary, and benefit multiplier

Account balance based on employer and employee contributions plus actual investment earnings

Nominal account balance based on employee contributions and employer pay credits plus credited interest

Benefit Distribution

Lifetime annuity with optional forms of payment. Some plans offer partial lump-sum distributions

Lump-sum payment, with ability to rollover to other qualified retirement plans

Lifetime annuity with optional forms of payment. Most plans also offer lumpsum distributions

Disability and Preretirement Death Benefits

Provided based on plan formula

Provided as a lumpsum distribution of the individual’s account balance

Provided as an annuity or a lump-sum distribution based on the individual’s account balance. In some cases, formula benefits provided through the existing DB plan

Postemployment COLA

Some plans provide a COLA

Not offered

Some plans provide a COLA while others allow employees to purchase a COLA with an equivalent reduction in the annuity benefit

warrant more substantial disability and survivor benefits. However, some public-sector cash balance plans have been structured to provide disability and survivor benefits to plan members. Another way in which cash balance plans are similar to DB plans is that both require actuarial valuations to determine the employer contributions needed to fund the promised benefits. Like DB plans, cash balance plans are subject to a variety of risks, including those related to investment returns, mortality, and inflation. While cash balance plans may help to mitigate some of these risks, they cannot eliminate them. The plan sponsor still bears the risk that terminations will be less than assumed, that salary increases will be more than assumed, and that investment returns will be less than assumed. If so, additional employer contributions will be required to make up the difference.

Advantages and Disadvantages In considering the advantages and disadvantages of plan designs, the overall goals of both employers and employees

NEW HAMPSHIRE TOWN AND CITY

Cash Balance Plan

need to be considered. For state and local government employers, key goals in providing retirement benefits include: 1) attracting and retaining qualified employees; and 2) providing sufficient and sustainable benefits. As discussed below, these goals are also important for state and local government employees, since they relate to the overall sufficiency of the benefits. The following discussion is summarized in Exhibit 2. Attracting and Retaining Qualified Employees. Defined benefit plans are useful in attracting and retaining qualified employees. This is due to the rewards they provide for long-term service and their provision of guaranteed retirement, disability, survivor, and in-service death benefits. However, DB plans are generally less portable than DC plans and may not appeal as much to younger and more mobile employees. Although DC plans may appeal to such employees, they are not as effective for retaining them. Cash balance plans are somewhere in the middle. Because the benefits accumulate as an account balance, they are more portable and may be appealing to www.nhmunicipal.org

more mobile employees. In addition, the account balance can be converted to an annuity upon retirement and, therefore, reward service with a guaranteed lifetime benefit. However, in themselves, cash balance plans may not provide attractive disability or survivor benefits. Also, since cash balance plans are more portable, they may be less effective than DB plans in retaining employees. Providing Sufficient and Sustainable Benefits. Because DB plans provide benefits based on an employee’s service and final average salary, the accumulated benefit is clear and directly related to replacing an employees’ preretirement income. Moreover, because the benefit is provided as a guaranteed lifetime annuity, retired employees can count on the benefit over their lifetimes. However, since DB plans shift the risks of funding the benefit to the employer, the employer’s contributions may be more volatile which could jeopardize sustainability. While DC plans limit the employer’s contribution volatility by shifting these risks to employees, the benefits they provide are much less certain and may prove insufficient throughout retirement.

Cash balance plans may help mitigate the investment risks by managing the interest rate credited to the employee’s accounts. If the interest is credited to employee accounts at a rate that reflects the plan’s long-term rate of return, but also allows for adverse experience, the employer’s contribution rates may be somewhat more stable. However, employers in cash balance plans are still subject to investment risks, since the interest credits promised to employees must be honored, even when the plan earns negative investment returns. Longevity risk is the risk that employees may outlive their savings. The amount of longevity risk borne by the employer and employees can vary in a cash balance plan depending on how much of the benefit is paid as a lump sum, how much is annuitized, and how much of a subsidy or surcharge is applied to annuities. However, because the benefit provided by a cash balance plan is expressed as an account balance rather than an annual benefit, it may be difficult for employees to judge whether it will be sufficient throughout retirement. In addition, the benefits provided by a cash balance

plan for career employees may be substantially less than those provided by a final average salary DB plan of a similar contribution level, all else being equal. This is because the benefits provided by a cash balance plan are based on the employees’ earnings over their full careers, rather than the earnings near the end of their careers.

Conclusions The financial downturn and resulting economic decline have put many governments under fiscal stress. As a result, numerous state and local governments have recently made significant changes to their retirement plans in order to manage their costs including, in two very recent cases, establishing cash balance plans. However, if these new designs are used, care should be taken that the implications are fully understood and that they are effective in attracting and retaining qualified employees and providing sufficient and sustainable retirement benefits. Paul Zorn is director of governmental research at the benefit consulting and actuarial firm of Gabriel, Roeder, Smith & Company.

Exhibit 2: Advantages and Disadvantages of Plan Designs Defined Benefit Plan Attract and Retain Qualified Employees

Advantages

Disadvantages

Sufficient and Sustainable Benefits

Advantages

Disadvantages

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•

Rewards long-term service

•

Provides death and disability benefits

•

Defined Contribution Plan

Cash Balance Plan

•

May appeal to younger and more mobile employees

•

May appeal to younger and more mobile employees

Less portable than defined contribution benefits

•

May not be effective in retaining employees

•

May not provide death and disability benefits

•

May not appeal to more mobile employees

•

Death & disability benefits only provided as distribution of DC account balance

•

Provides guaranteed lifetime benefits

•

Gives members control over investment selection

•

Provides guaranteed lifetime benefits

•

Pools risks related to investment, longevity and inflation

•

Pools risks related to investment, longevity and inflation

•

Lower benefits to short-term employees than under a cash balance plan

•

Transfers investment, longevity and inflation risk to employees

•

Benefit sufficiency difficult to understand

•

Higher fees for investment administration and management

•

Lower benefits to career employees than under a defined benefit plan

NOVEMBER/DECEMBER 2015

NEW HAMPSHIRE MUNICIPAL ASSOCI

Navigating

the

Waters Session Topics:

November 19 – 20, 2015

• • • •

_________________

The Radisson Hotel Manchester, New Hampshire

• • • • •

2015 Court Update Affordable Care Act Avoiding the Road to Liability Fraud & Forensic Investigations IT Trends for Cities & Towns Legislative Update Right-to-Know Law Zoning Enforcement 101 And much, much more!

Conference Schedule

Thursday, November 19, 2015

Friday, November 20, 2015

7:30 a.m.

Registration Opens Outside of Exhibit Hall

7:30 a.m.

Registration Opens Exhibit Hall Opens

8-9 a.m.

Opening Breakfast Buffet Armory

8-9 a.m.

Opening Breakfast Exhibit Hall

9-10 a.m.

Keynote Speaker Salon A

9-10:15 a.m.

Concurrent Sessions

10 a.m.

Exhibit Hall Opens

10:15-10:45 a.m. Morning Break Exhibit Hall

10-10:45 a.m.

Morning Break Exhibit Hall

10:45-12 p.m.

Concurrent Sessions

12-1:15 p.m.

Exhibit Hall Luncheon

Concurrent Sessions

12-1:15 p.m. Municipal Advocate of the Year Award Luncheon Armory

1:30-2:45 p.m. Concurrent Sessions

2:45-3:15 p.m. Afternoon Break Exhibit Hall

3:15-4:30 p.m. Concurrent Sessions

4:30-5:30 p.m. Exhibit Hall Reception

4:30 p.m.

NEW HAMPSHIRE TOWN AND CITY

Conference Concludes

www.nhmunicipal.org

IATION’S 74TH ANNUAL CONFERENCE

Municipal Government Thank You 2015 Sponsors — Diamond Level —

— Emerald Level —

— Platinum Level —

— Gold Level —

Wellness Fair (Thursday and Friday) Sponsored by HealthTrust, Inc. HealthTrust will host its Wellness Fair from 10:00 a.m. to 4:30 p.m. on Thursday and 8:00 a.m. to 3:15 p.m. on Friday. The fair will offer a variety of interactive demonstrations and information on all HealthTrust’s wellness programs available to your municipality. Learn proven strategies to help your employees became savvy medical consumers and maximize the benefits from their health coverage plans. Activities include: biometric health screenings; healthy cooking demonstrations; flu vaccines, and more. Wellness advisors will be available throughout the conference to assist you with your health management needs.

— Silver Level —

New This Year:

Conference Information at Your Fingertips!

Download the new NHMA Annual Conference Mobile App and have program information at your fingertips! Included on the App: schedule of events, session/room locations, sponsors, exhibitors, maps of the hotel and exhibit hall and up-to-the-minute updates of any changes! The App is free and can be downloaded in iTunes or Google Play by searching for “NHMA Annual Conf 2015.”

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— Bronze Level — Peter J. Riemer, LLC

— Program Support —

NOVEMBER/DECEMBER 2015

CONTINUED from page 19

Cash Balance Plan: An Alternative for New Hampshire? By Barbara Reid

s with many public pension systems across the country, the New Hampshire Retirement System (NHRS) has undergone a significant number of changes from 2008 through 2014 to address concerns over the long-term sustainability of its defined benefit pension plan in light of its $4.3 billion of unfunded liabilities. Statutory retirement reform measures, primarily enacted in 2009 and 2011, put a plan in place to amortize the unfunded liabilities over thirty years, increased employee contribution rates, and revised the benefit calculation provisions for newly hired employees, along with other changes. One indication that these reform measures are working to stabilize the system is the fact that the biennial employer rate increases that went into effect July 1, 2015 were much less than the biennial rate increases experienced over the past ten years. While things seem to have settled down in terms of statutory changes

to NHRS in 2015, legislators continue to look at alternative means of providing pension benefits to public employees at reasonable (and predictable) costs to the public employers (and ultimately the taxpayers) who fund those benefits. The NH House Special Committee on Public Employee Pension Plans, chaired by Representative David Hess from Hooksett, retained two bills from the 2015 session for further study and consideration: HB 369 establishing a defined contribution plan and HB 556 establishing a cash balance plan. At the time of writing this article, the committee had yet to make final recommendations on these bills, (either ought-to-pass or inexpedient-to-legislate), or to recommend amendments to the bills as introduced. However, the committee seems particularly interested in learning more about cash balance plans, which combine elements of both a traditional defined benefit plan (such as that administered by NHRS) and a defined contribution plan (a 401(k)-type plan). The accompanying article “Somewhere in the

NEW HAMPSHIRE TOWN AND CITY

Middle: Cash Balance Plans” by Paul Zorn, explains the mechanics of a cash balance plan including the advantages and disadvantages compared to both defined benefit and defined contribution plans. We cannot predict what the House Special Committee on Public Employee Pension plans will recommend regarding their retained bills, or what the 2016 legislature will do with the committee’s recommendations. However, NHMA’s long-standing policy has been to support the continuing existence of a retirement system for state and local government employees that is secure, solvent, fiscally healthy and sustainable. Understanding possible alternative means of achieving those goals, such as implementing a cash balance plan for new hires, is an important part of that policy position. Barbara Reid is the Government Finance Advisor with the New Hampshire Municipal Association. Barbara can be reach at 800.852.3358 or breid@nhmunicipal.org.

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Rochester Innovates in Merit Pay for Municipal Employees By Daniel W. Fitzpatrick

his July, the City of Rochester entered a new phase in its conversion to a merit pay system for city employees. A third wave of city workers began their first year of pay-for-performance. The system, which includes both union and non-union municipal employees, is the first expanded merit pay program of its kind in New Hampshire. Matthew H. Upton, an attorney with Drummond Woodsum, has represented the city in the merit pay negotiations and says Rochester is at the forefront of a national trend to bring performance measurement to municipal employee pay. “Where it has been introduced, it is as a hybrid system,” said Upton “I’ve never seen another city go to a full merit pay system. Still, I expect we will see other cities looking at one, as taxpayers continue the call for accountability in other areas, such as we’ve seen in standards-based learning.”

A Building Block According to the “The Development of a Pay-for-Performance Appraisal System for Municipal Agencies”—a 2012 case study by Michael A. Mulvaney of Eastern Illinois University, William R. McKinney University of Illinois at Urbana-Champaign, and Richard Grodsky of Grodsky Consulting, LLC—a well-designed employee performance appraisal instrument is critical to a successful municipal pay-for-performance system. According to the study, it also can be problematic when “both employees and management often view the performance appraisal process as frustrating and unfair.” The study found that development of the appraisal system had to engage both municipal managers and employees and required a commitment to the upfront training of www.nhmunicipal.org

the management personnel tasked with implementing the new system. In Rochester, that finding held true. The city began the transition from a traditional, stepped-pay system to merit pay more than two decades ago. The first group of employees to move to the new system were Rochester’s non-union employees in September 1994. The Police Department was the first group of unionized employees to undergo the transition to merit pay. That process was completed four years ago. The need to rethink the evaluation process became apparent early during the transition to the new system. Rochester Police Chief Michael J. Allen called it “the most critical aspect” of the system, and said department managers and employee representatives spent considerable time developing the form that he said “documents individual contributions” to the department and the city. He noted that an effective form brings transparency to the process. “The evaluation process has to be fair, it has to be equal, it has to be objective, and it has to be transparent,” said Chief Allen. He added: “It took time to get to that point. We spent a year working on the scoring system, training supervisors and getting union buy in.”

Door to Opportunity While the evaluation process can be an onerous one for both employees and managers, Rochester has tried to reframe the process and educate everyone about how it works. For employees who recently transitioned to the new system, many see it as an opportunity to be recognized and remunerated for their contributions to the city. NOVEMBER/DECEMBER 2015

ROCHESTER from page 23 “If you work hard, you are rewarded. That’s good for our members individually and as a group, and it’s good for the city, too,” said Dixon. His union, which has 43 members in Rochester, was the largest group represented in the current crop of employees to join the merit pay system. He noted that the city and the union have agreed to reconvene later this year to review any issues regarding the new system that have arisen. Dixon noted that one of the most popular elements is the opportunity for longer-term employees to be eligible for salary advances of up to 4 percent. Under the old, stepped pay system, longer-term employees were at a disadvantage once they achieved the top rung and were limited to cost-of living increases.

City Benefit The Eastern Illinois University study found the possibility of increased pay can prove a strong motivator for employees, and it does so on multiple levels: “Taken together, the employee’s participation in the appraisal process and the clearly stated areas for employee improvement led to higher perceptions of fairness and acceptance of the supervisor’s ratings.” There are also benefits to the city, in the form of higher productivity and greater control over payroll costs. “The ability to reward employees for the positive contributions they make to the city is central to the pay-forperformance model the Rochester City Council envisioned when it first began discussions about merit pay in the 1990s”, said Rochester Mayor T.J. Jean. He is also quick to recognize that

NEW HAMPSHIRE TOWN AND CITY

the evolution of merit pay at the city was possible thanks to the ongoing commitment to the concept by not only the city, but also its employees. “The City Council is very pleased with the progress we’ve made on the merit pay system,” said Mayor Jean. “I remain thankful to all of the stakeholders who have worked so hard to develop a merit system that is fair and equitable to both the taxpayers and outstanding employees of our community.” Daniel W. Fitzpatrick, ICMA-CM, PRP, is City Manager for the City of Rochester. Contact Dan at dan.fitzpatrick@rochesternh.net or 603.332.1167.

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Understanding the Benefits of Disability and Life Coverages By Scott DesRoche

isability and life benefits are extremely low cost, relative to other coverage offerings, but they can have an incredible impact on the lives of employees. In the event of a disability or tragically, a death, there are likely very few employees whose family have the financial means to survive weeks, months, or years. When surveyed, nearly 9 out of 10 workers say it is important to them to have disability coverage, according to the Consumer Federation of America. These workers recognize that even a relatively short absence from work can be financially devastating without income protection. As the cost of health insurance increases nationwide and employers are moving towards higher deductible plans, offering short-term disability, long-term disability and/or life coverage helps keep the employee benefit package robust without a huge cost to the employer. Good short-term disability, long-term disability, and life coverage should each cost only about $200-$500 per employee per year! This is typically a very small percentage of the cost of the overall benefit package offered by employers.

Short-Term Disability People hear the word “disability” and they think of a catastrophic event such as a serious accident or illness. The truth is that the majority of disabilities are due to more mundane illnesses, not life-changing events. For example, an employee might be out of work due to a broken bone, a bout of pneumonia, or the need for a minor surgery. These minor disabilities could put them out of work for a time period of several weeks to several months and they may not have enough sick leave to cover the absence. Workers’ www.nhmunicipal.org

compensation will apply only if the injury happened on the job, long-term disability usually won’t kick in until someone has been out for three or six months, and Social Security disability (which is only available for severe conditions which cause at least one year of continuous disability) would be unlikely to cover these illnesses. Many workers don’t have the funds to cover their expenses for several weeks, never mind several months. Short-term disability (“STD”) can fill in that financial gap until the employee can get back to work. It’s an important step in the continuum of coverage. Short-term disability plans are highly customizable, but will typically pay 60 or 66 2/3rd percent of an employee’s income for up to three to six months, depending on the plan. Coverage can start as early as one day after the disability-causing event, but typically vary depending upon whether the disability was caused by an accident or illness.

Long-Term Disability Long-term disability (“LTD”) is often coordinated with the employee’s short-term disability coverage in order to provide seamless coverage when employees are unable to work for an extended period of time. Each LTD plan is different, but most employer plans cover employees for a certain amount of time when they are disabled from their own job (called “Own Occupation”) and will continue to pay after that point if they cannot perform any job for which they would be reasonably qualified (called “Any Occupation”). For example, if a police officer is unable to return to duty due to a knee injury he would be covered for a set period of time. After that point, benefits may cease if he were able to transition to a different job, such as a sedentary office position. If NOVEMBER/DECEMBER 2015

UNDERTANDING from page 25 his disability were more severe to the point where he could not reasonably work in any profession for which he was qualified, the benefits would often continue until normal retirement age.

Life Coverage Out of the three benefits, life coverage is perhaps the most widely offered. Currently, about 72 percent of state and local government employees in New England are offered life insurance coverage by their employers, according to the Bureau of Labor Statistics. These plans are extremely customizable and vendors are typically able to offer a myriad of different benefit options in order to find one that fits each employer’s unique needs. Even lowcost plans can offer a vital benefit to the family of employees if they were ever to experience a tragedy. As an example,

in some situations a policy of $25,000 can cost as little as $60-$80 per employee per year. That money can be a big help to a family that experiences a tragic loss. In addition, employers are in a unique position to offer benefits to employees who may have a hard time qualifying for affordable life coverage on the private individual market. With group life plans, there is typically a base amount (“Guaranteed Issue”) that all employees can qualify for, regardless of age or current serious health concerns. Many employer life coverage plans also come with the option for employees to purchase additional levels of coverage, or even coverage for their spouse and dependents, at their own cost.

recognize this and are increasingly looking for these coverages in their benefit package. As the cost of health insurance increases and coverage trends toward higher deductible plans, offering disability and life coverage is an excellent way to maintain a competitive benefit package and to show your employees that you truly care about their financial well-being. Scott DesRoche is Assistant Manager, Ancillary Claims and Services at HealthTrust, Inc. Scott can be reached at 603.230.3386 or by email sderoche@ healthtrustnh.org.

Keeping Employees Happy Disability and life coverage can prove to be invaluable benefits for employees during difficult times. Employees

NEW HAMPSHIRE TOWN AND CITY

www.nhmunicipal.org

NOVEMBER/DECEMBER 2015

UP CLOSE & In the Field

PERSONAL T

he Up Close and Personal column is designed to give readers a closer look at staff or officials from New Hampshire municipalities. In this issue, we hope you enjoy meeting Adam Clark, solid waste manager for the City of Concord. Adam previously worked for the Northeast Resource Recovery Association, a New Hampshirebased non-profit advising municipalities on solid waste and recycling matters.

T&C: What are your duties and responsibilities as Solid Waste Manager? AC: I oversee the solid waste and recycling operations for the city. My responsibilities include collection operations, budget preparation, Pay-As-You-Throw program administration, customer service, and outreach efforts. T&C: What is the biggest challenge in performing your duties? AC: I think the biggest challenge I face is what I also enjoy the most. As an environmentalist, I always keep my eye on the greater goals, but as a student of economics, I have a strong interest in achieving those goals in the most efficient and economical way possible. That tension is sometimes difficult to navigate but I do believe it’s possible.

Adam Clark

T&C: What is the public perception about your job and how does it differ from the reality of your job? AC: I don’t think people often consider what happens to trash after it “goes away”. The truth is that there is an amazing infrastructure designed to help manage these materials and it’s getting better all the time. Trash has become a resource that we need to manage with foresight. T&C: Has your public position changed you personally? AC: I think working in the public sector has made me even more diligent about making reasoned choices. I take the charge of doing what is in the public’s best interest very seriously and I always keep that front and center in my mind.

Do you know someone who deserves to be profiled in a future edition of New Hampshire Town and City magazine? If so, please contact the New Hampshire Municipal Association at 800.852.3358 ext. 3408 or townandcity@nhmunicipal.org.

T&C: Has your job changed the way you look at the role of government? AC: I’ve been impressed with the caliber of people that I meet who work for municipalities. There are great people, truly motivated by the greater good, at all levels. T&C: What lessons about human nature have you learned in your role? AC: Generally when it comes to waste management, I’d suggest that people WANT to do what’s right and to do it well. I think that what we as solid waste professionals must do is figure out how to make it so that it is convenient and easy for people in order to support that. T&C: Anything else you would like to discuss about your job? AC: I think it’s important for municipal officials to listen to the solid waste professionals in their municipality. Many operators out there have great ideas on how things can be done in a better or more cost-effective way.

NEW HAMPSHIRE TOWN AND CITY

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Are you planning a capital project for 2016? We can assist you with your planning by providing various scenarios based on level debt or level principal payments for different terms. Contact us now for your estimated debt schedules. To schedule a meeting, obtain debt service schedules, or for details about our schedule, fees, Bond Anticipation Note programs, and current interest rates, please contact Sheila M. St. Germain, Executive Director, at info@nhmbb.com or call (603) 271-2595 or toll-free in NH at (800) 393-6422. For more information, visit our website at www.nhmbb.org.

NOVEMBER/DECEMBER 2015

Tech

Insights By Tim Howard

Can BYOD Work for Your Municipality?

BYOD (Bring your Own Device) has created a true anytime/anywhere work environment, and with device prices falling and features growing, it is no wonder that BYOD is becoming so popular. It is estimated that in 2016, approximately 38% of employers will stop providing computers to their workforces and will become entirely BYOD. As we are making decisions based on productivity, it is also important we still consider security and compliance. Your mobile/ smart phone is essentially a computer in your pocket. You know BYOD comes with risks, so you need to consider what the vulnerabilities are, and what you need to have in place to protect yourself.

1. W ritten Mobile Policy: A policy is an absolute necessity if your program is going to work. It must be clear as to what is acceptable and what is not. It should include things like who can bring their own device and whether it be fully or partially paid for. In addition, lay out the procedure for reporting lost or stolen devices and the consequences for not complying with the policy. It is also important to define how to get a device approved and what happens when the employee departs. There is a lot detail that will need to go in to this policy, and your town’s unique needs and compliances will define it.

Before implementing BYOD, let’s look at the pros and cons involved.

obile Device Management (MDM) Software: 2. M Software to manage all of these devices will be absolutely essential in managing this program. There are many companies that can provide MDM Software, or the management service, to you. You will need to research which solution works best for your needs. Modern MDM Software can minimize most disadvantages/risks that we discussed above. You will be able to monitor all devices across multiple operating systems, push policies, limit apps that are available, remote wipe devices, set and control security preferences per user, and so much more. Another feature is the ability to run two environments on one phone or tablet: log in one side and you are on your personal phone; log in to the other side and you are on your corporate environment. This would be very beneficial if you ever had to wipe the phone because you’d be able to wipe the corporate environment only. If you are staffed with your own IT department, you will need to discuss this type of software. If you do not have your own resources, you may need to reach out to an expert.

Advantages • Better equipment: Is your employees’ home equipment frequently newer than what you provide them with at the office? • Familiarity: Perhaps employees are familiar with their MAC, but not the Windows environment or vice versa; this familiarity may require you do to less training. • Simplicity and accessibility: Employees may not want to carry two phones, and they will always be reachable on their personal device, while they may leave dedicated work devices behind.

Disadvantages • Data loss, whether intentional or not is a large concern. • The need to keep all public records on the private network. • Loss of control. • Risk of losing the device itself. • Employees actually following written policies. Now let’s look at the three things you need to have in place to make BYOD a success at your workplace. 30

NEW HAMPSHIRE TOWN AND CITY

3. I T Administrative Training: You may need to look in to additional training for your current IT staff, especially if you are implementing new MDM software. You would need to set up a testing account and let your staff play with their own devices prior to launching. While you are making your official decision on BYOD, you may already have phones or tablets connecting to your www.nhmunicipal.org

network. At an absolute minimum make sure your employees are utilizing the basic security features that are most likely built in to their device, listed below. 1. Enforce a strong passcode to access the company’s network. Passwords should be at least 8 characters and contain lowercase and uppercase letters, symbols, and at least one number. On a cell phone, requiring a passcode be entered will go a long way in preventing a stolen device from being compromised. 2. R equire all mobile devices be encrypted. Encryption is the most effective way to achieve data security. Encryption scrambles data so it can’t be read by unauthorized users. iPhones encrypt data by default when you turn on a passcode. On Android devices, you often have to turn on encryption separately. Depending on which version of Windows your laptop or tablet is running you can also turn on the built in encryption. ake sure they can remote 3. M wipe their phone. Enable ‘find my phone’ features: Apple’s Find My iPhone and Google’s Android Device Manager help users locate lost phones and allow them to delete data from stolen ones. Additionally make sure the employee has a backup of their personal files, pictures, etc. so if someone does have to wipe the device, their data is not lost forever.

BYOD policy. BYOD is about being innovative and helping your employees work better.

While mobile devices have enhanced the work environment and created better productivity, employers need to remember these devices have created new security challenges and vulnerabilities. These devices need to be managed and treated the same way you have always treated traditional desktop PCs. So long as you are managing the risks, there is no reason that your municipality cannot support a

Architects

Tim Howard is President and CEO of RMON Networks located in Plaistow and Laconia. For free security tools and resources visit www.RMONNetworks. com/informationsecurity.

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NOVEMBER/DECEMBER 2015

The

REPORT

8 Steps to a Successful Workplace Wellness Program By William Byron

t’s the ultimate win-win situation: Creating a wellness program at your workplace is one of the best actions you can take for your employees and your organization. For every dollar spent on a well-designed wellness program, employers save on average $3.27 in reduced employee medical costs and $2.73 on reduced absenteeism, according to research from Harvard University. Worksite wellness programs help employees get and stay healthy by giving them the education, tools, and support needed to transform poor lifestyle habits into good ones, especially for quitting smoking, eating better, exercising, and seeking preventive health services. Establishing a wellness program at your worksite can increase employee engagement and job satisfaction, encourage team building among staff, lead to greater productivity, and create a happier, healthier work culture. The American Heart Association (AHA) notes that to be considered comprehensive, workplace wellness programs should provide: • • • •

Health education A supportive social and physical environment Integration into other organizational initiatives Linkage to other related programs, such as employee health and safety programs • Wellness screenings The steps below can help you meet these five criteria and develop a comprehensive wellness program in your city or town. 1. F orm a Committee. Establish a wellness committee to determine the needs of your staff and the resources available to implement a wellness program to address those needs. Try to include staff from all departments to ensure everyone is aware of the programs and resources available to your employees and their families. 2. I nclude the Right Components: Almost 40 percent of all deaths, 80 percent, of all chronic diseases, and 75 percent of all healthcare expenditures in the United States are related to Americans not being able 32

NEW HAMPSHIRE TOWN AND CITY

to sustain four healthy habits, according to the AHA. Those habits are abstinence from smoking, adequate physical activity, eating five fruits and vegetables daily, and consuming little or no alcohol. Providing education, challenges, support and services to help employees sustain these good health habits is important to any comprehensive workplace wellness program. Stress reduction and other mind-body activities are also important elements to a successful wellness program, and many programs now also incorporate oral wellness. To be sure the program you offer meets your employees’ specific needs and reduces healthcare costs, your wellness committee should review claims data, noting the most frequent and most costly claims. The committee can use this information to recommend educational materials, activities, and services for your wellness program that address specific lifestyle changes to reduce those claims. 3. A ssess for Success! Individuals should start a wellness program with a clear understanding of their current health status, so they can set health goals and create a plan for achieving them. Comprehensive workplace wellness programs typically offer two types of assessments. One is a confidential self-assessment, usually taken online, which can provide the individual a health status report as well as health goals to strive for. The second type of assessment is a biometric screening done by a third party—often the participant’s primary care physician, or medical professionals hired as part of the wellness program. The biometric screening can provide individuals with “vital statistics” including their blood pressure, blood cholesterol and blood sugar levels, body mass index, and waist circumference. Research indicates that simply learning these numbers makes individuals more likely to take steps to improve their health.

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4. D esignate a Wellness Coordinator. Encourage someone on your staff to be a coordinator who publicizes and runs worksite challenges and other wellness activities. Having one go-to person for the wellness program streamlines the program and may increase staff participation. For example, among HealthTrust Members, those groups that have a HealthTrust Health & Safety Coordinator on their staff typically have significantly higher completion rates of health assessments and biometric health screenings, and higher participation rates in all components of Slice of Life, HealthTrust’s wellness program. Ideal candidates for a coordinator may be a human resources staffer, a member of a safety, wellness, or joint loss management committee, or any employee interested in promoting a healthy work environment. 5. O ffer Rewards. Better health is its own reward, but studies show that employee participation is higher in wellness programs that offer financial incentives, such as reimbursements, cash rewards, and raffle entries. Financial incentives can also be effective motivators in helping people quit smoking, lose and maintain weight loss,

and modify other behaviors that are often difficult to change. nclude Professional Input. 6. I Wherever possible, offer your employees the online or in-person services of experts such as personal health coaches, nutritionists, stress-reduction experts, physicians, or other medical professionals. The professional input could come in the form of webinars and/or workshops presented at your workplace, or ongoing help from, for example, an online personal health coach who can answer participants’ questions, send them educational materials related to their goals, and offer them encouragement.

for rewards for reaching fitness and diet goals, hold walking meetings, share healthy potluck lunches, or engage in other activities, a successful wellness program can energize your employees, increase staff bonding, and create a happier, healthier environment. Doesn’t that sound like a great place to work? • American Heart Association article: http://circ.ahajournals. org/content/early/2015/04/13/ CIR.0000000000000206.full.pdf • Harvard University Study: http:// www.workplacewellness.com/ images/Workplace_Wellness_Programs_can_generate_savings.pdf

7. H eed HIPAA. Employees may be hesitant to participate in a workplace wellness program if they are concerned about how their personal health information will be used. Make sure your wellness program is compliant with the Health Insurance Portability and Accountability Act (HIPAA); reassure your employees their personal health information is fully protected and will not be shared with their employer or anyone at their worksite.

William Byron is the Assistant Manager, Health and Safety, for HealthTrust, Inc.. He may be contacted at 603.230.3311 or at wbryon@healthtrustnh.org.

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NOVEMBER/DECEMBER 2015

Legal

Q and A

By David Law, Esq., Benefits and Coverage Counsel with HealthTrust and Darlene Simmons, Member Relations Advisor with HealthTrust

Q&A on ACA (Affordable Care Act) Editor’s Note: This column is not intended as and does not constitute legal or tax advice. Questions regarding your specific circumstances should be addressed to your legal, tax or other professional advisors.

Once the new reporting requirements begin, the IRS will be able to compare what your employees said they had for coverage in 2015, and what you said they had for coverage in 2015 and make sure the two sides match up.

Q: What are the new IRS Reporting Requirements for Employers under the Patient Protection and Affordable Care Act (ACA) and why are they necessary?

Q: I’m not sure I’m prepared for the 2015 IRS reporting requirements. What should I be doing now to be ready by the end of the year?

A: The ACA includes new annual IRS reporting requirements relating to health plan coverage for employees that apply to all size employers with initial reporting due in early 2016 for Calendar Year 2015, regardless of plan year. All employers participating in an RSA 5-B risk pool, such as HealthTrust, will need to report to the IRS and each employee enrolled in the employer’s group medical plan (“Minimum Essential Coverage” or “MEC”) about their coverage. Applicable Large Employers (ALEs), those with 50 or more Full-Time Employees and/or Full-Time Equivalent employees (FTEs), must also report additional information about offers and cost of coverage for Full-Time Employees (30 or more hours per week). The new reporting requirements are intended to help the IRS administer and enforce the following ACA provisions: • The Individual Mandate, which requires all Americans to maintain Minimum Essential Coverage or be subject to a tax penalty. • The Employer Shared Responsibility (ESR) requirements, which obligate ALEs to offer their Full-Time Employees affordable minimum value health plan coverage or be subject to potential ESR penalties. • Marketplace premium tax credits and cost sharing subsidies, which are available to certain low and moderate income individuals with respect to coverage purchased from an ACA Marketplace/Exchange, provided the individuals are not eligible for affordable employer provided group health plan coverage. 34

NEW HAMPSHIRE TOWN AND CITY

A: Here is a brief checklist to assist you with planning for the IRS reporting under the ACA, which will be due in early 2016 for Calendar Year 2015. Action Steps for 2015 IRS Reporting ❑ Determine whether your group is an Applicable Large Employer (50 or more Full-Time Equivalent employees – or FTEs) or a Small Employer (fewer than 50 FTEs) for 2015 reporting purposes. ❑ Review the IRS Guidance, Forms and Instructions (see links below) - Carefully review the final forms and instructions for 2015. ❑ Contact your HR or Payroll software vendor to determine if it can store the necessary data and print the 1094 and 1095 Forms. Use the Correct Forms - Final 2015 Forms and Instructions were issued by the IRS on September 17, 2015 and are available at the links below. Be sure to review the Final Instructions and use only the Final Forms for filing. ❑ If You Are A Small Employer (fewer than 50 FTEs) – you will report Minimum Essential Coverage (MEC) for all individuals enrolled in your group medical plan coverage on Form 1094-B (transmittal to the IRS) and Form 1095-B (to enrollees, with copies to the IRS) for CY 2015. • Form 1094-B: f1094b.pdf.

https://www.irs.gov/pub/irs-pdf/

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Form 1094-B Transmittal (with copies of Form 1095-Bs) to the IRS by February 28, 2016 (by U.S. mail) or March 31, 2016 (if filing electronically). Name, Employer Identification Number (EIN), and contact information for the employer, as well as the total number of 1095-B forms that you will be filing for your enrolled employees. Copies of the 1095-B forms provided to your employees. • Form 1095-B: https://www.irs. gov/pub/irs-pdf/f1095b.pdf. Form 1095-B to each enrolled employee or other “responsible individual” (under-65 retiree, COBRA beneficiary or public official) by January 31, 2016.

Name, address and Social Security Number (SSN) of the employee, as well as their covered dependents’ names and SSNs (date of birth-DOBis provided only if an SSN is not available), and the months that each covered individual was enrolled in coverage during 2015. • Instructions to Forms 1094-B and 1095-B: https://www.irs. gov/pub/irs-pdf/i109495b.pdff. ❑ If You Are An Applicable Large Employer – or ALE (50 or more Full-Time Employees and/or FTEs) – you will report Minimum Essential Coverage (MEC) for all individuals enrolled in your group medical plan coverage and additional information about offers and cost of coverage for FullTime employees on Form 1094-C

(transmittal to the IRS) and Form 1095-C (to each Full-Time employee and other enrollees, with copies to the IRS) for CY 2015, even if you are eligible for 2015 Transition Relief from ESR penalties. These forms and instructions are available at the links below. • Form 1094-C: https://www. irs.gov/pub/irs-pdf/f1094c.pdf. Form 1094-C Transmittal (with copies of Form 1095Cs) to the IRS by February 28, 2016 (by U.S. mail) or by March 31, 2016 (if filing electronically, which is required if you are submitting more than 250 1095-C forms). • Employer Information. -- Employer Name, EIN, and contact information.

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LEGAL Q & A from page 35 -- Total number of 1095-C forms submitted with Transmittal -- Designated government entity contact information (if applicable) -- Aggregated ALE (Controlled) Group information (if applicable) -- Eligibility certifications (if applicable) relating to certain special offer methods and/or forms of ESR Transition Relief for which the employer may qualify. • By month: Employers must report additional information regarding MEC Offers, Full-Time Employee and Total Employee counts, and applicable indicators for Aggregated Groups and 4980H (ESR) Transition Relief. • Copies of the 1095-C forms provided to employees or other enrolled individuals • Form 1095-C: https://www.irs. gov/pub/irs-pdf/f1095c.pdf. Form 1095-C to all Full-Time Employees and any other enrolled individuals (under-65 retiree, COBRA beneficiary or public official) by January 31, 2016. • Name, address, EIN, and contact information for employer. • By month: For each FullTime Employee, whether MEC was offered, the FullTime Employee’s share of the single premium for the lowest cost plan option offered (even if the employee was not enrolled in that option), and certain additional information through IRS indicator codes. 36

• Name, address and SSNs of the employee and each covered dependent (DOB only if an SSN is not available) and the months that each covered individual was enrolled in coverage during 2015. • Instructions to Forms 1094-C and 1095-C: https://www.irs. gov/pub/irs-pdf/i109495c.pdf. Collect, Document and Track Data for IRS Reporting ❑ Document procedures on how you collect, store and report the required IRS reporting information. ❑ Collect missing Social Security number (SSN) data for enrolled dependents based on the IRS rules. Document collection requests and save response for reporting pur-

poses. Employers are required to make 3 separate requests (an initial request and two annual requests) in order to avoid IRS penalties. ❑ If you are an Applicable Large Employer, develop and maintain procedures for determining, tracking and documenting each employee’s Full-Time (>30 hours/week) or non-Full-Time status, and offers of coverage, the employee’s cost of the lowest cost plan option available, and enrollment by month. ❑ Talk to your HR or payroll software vendors to determine software module capabilities for data collection and printing of the IRS reporting forms. ❑ Electronic filing is required for employers filing 250 or more returns; and permitted for employ-

Affordable Care Act (ACA) Glossary EIN Acronym for Employer Identification Number. This number refers to the entity at which the employer works. It is different from the employer’s Social Security Number. Full-time Employees Employees who work 30 hours or more per week on average Full-time Equivalents or FTEs A unit of measure that reflects the total number of full-time hours worked by one or more employees. For example, if a project requires 10 full-time employees, an employer could hire 20 employees who each work 20 hours per week; those 20 part-time employees would equal 10 FTEs. MEC Acronym for Minimum Essential Coverage. The least amount of coverage an employee needs to be considered adequately covered and not subject to a fine under the ACA. For a list of the types of plans that meet MEC requirements, visit https://healthcare.gov/fees-exemptions/plans-that-countas-coverage/. SSN Acronym for Social Security Number. TIN Acronym for Taxpayer Identification Number. For individual employees their SSN serves as their TIN.

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ers filing less than 250 returns. If filing electronically with IRS, review “AIR” (Affordable Care Act Information Return System). Information about the AIR Program page can be found at http://www. irs.gov/for-Tax-Pros/SoftwareDevelopers/Information-Returns/ Affordable-Care-Act-Information-Return-AIR-Program.

Q: When does the Cadillac Tax go into effect and how should we prepare for it? A: The Excise Tax on High-Cost Employer-Sponsored Health Coverage (the “Cadillac Tax”), a provision of the ACA, becomes effective January 1, 2018. In essence, the Cadillac Tax says that if you, as a small or large employer, are offering healthcare plans that the ACA deems excessively costly, those plans will incur a tax on the excessive costs. The Cadillac Tax is intended to encourage employers, health coverage providers

and consumers to control health costs. To begin planning for the Cadillac Tax, review the checklist below.

❑ Review your current benefit offerings and explore more cost effective alternative plan options.

Steps to Strategize and Plan for the Excise Tax (Cadillac Tax) for 2018

❑ Understand medical cost drivers and take steps to contain them. Consider updating your plan design and adding worksite wellness activities to mitigate future rate increases.

❑ Estimate the potential cost of the Cadillac Tax to your group based on your current plans. Include the total cost of applicable coverage for each covered employee/retiree. This will include not only the total premium cost (both employer and employee share) for your primary major medical plan coverage, but also contributions to Healthcare Flexible Spending Accounts (Health FSAs) and Health Savings Accounts (HSAs), as well as employer funding of Health Reimbursement Arrangements (HRAs). Consider the impact of any such funding arrangements that you offer.

❑ Educate your staff through benefit education workshops and promote health management programs. ❑ Create a health committee at your workplace to build awareness and collaboration among employees to promote healthy lifestyles and mitigate rising healthcare costs. David Law is HealthTrust Benefits and Coverage Counsel and Darlene Simmons is HealthTrust Member Relations Advisor. They may be reached at 603.226.2861 or at info@healthtrustnh.org.

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NOVEMBER/DECEMBER 2015

Court

Update

By Stephen C. Buckley, Legal Services Counsel and Margaret M.L. Byrnes, Staff Attorney

Court Update, previously a regular column in New Hampshire Town and City magazine, has moved to the New Hampshire Municipal Association web site to provide more timely information to NHMA members. Opinions will be posted after they are released, and a reminder will be included here and sent in Newslink. To read previous Court Update columns, please visit www.nhmunicipal.org.

Now available online: Ordinance Banning Activity in Medians Not Narrowly Tailored Cutting et al. v. City of Portland, United States Court of Appeals, 1st Circuit, No. 14-1421, 9/11/2015 Town Authorized to Issue Supplemental Tax Bill Where Land Use Changed JMJ Properties v. Town of Auburn, New Hampshire Supreme Court, No. 2014-579, 8/11/2015 ZBA Did Not Exceed Authority by “Converting” Appeal Accurate Transport, Inc. v. Town of Derry, New Hampshire Supreme Court, No. 2014-512, 8/11/2015 Government Taking of Personal Property Requires Just Compensation Horne v. Department of Agriculture, United States Supreme Court, No. 14-275, 7/22/2015 Officers Names Removed from “Laurie List” Duchesne v. Hillsborough County Attorney, New Hampshire Supreme Court, No. 2014-028, 6/25/2015 US Supreme Court Clarifies Excessive Force Standard Kingsley v. Hendrickson, United States Supreme Court, No. 14-6368, 6/22/2015

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NOVEMBER/DECEMBER 2015

New Hampshire Town and City

2015 Index of Featured Articles Article

Issue Page

Economic Development Local Economic Development - You’re Not Alone..................................................................................................... Sept/Oct..................................................27 Employee Benefits Understanding the Benefits of Disability and Life Coverages..................................................................................... Nov/Dec.................................................25 Energy Energy Efficiency and Renewable Energy Programs for New Hampshire Municipalities............................................ July/Aug..................................................13 C-PACE, Coming to a Municipality Near You….Soon!............................................................................................ July/Aug..................................................17 Solarizing New Hampshire’s Upper Valley and Beyond Energy.................................................................................. July/Aug..................................................19 To LEED or Not to LEED? That is a Question for New Hampshire Municipalities Pursuing Sustainable Practices.. July/Aug..................................................31 Environment What’s Flushable....................................................................................................................................................... July/Aug..................................................23 Governance Best Practices for a Better Town Meeting................................................................................................................... Jan/Feb......................................................8 16 Things Every Citizen Should Know About Town Meetings.................................................................................. Jan/Feb....................................................11 Local Government: Making it Happen..................................................................................................................... Jan/Feb....................................................16 The Riggins Rules...................................................................................................................................................... Jan/Feb....................................................21 Human Resources/Workplace Employers Have No Past Practice Obligation to Pay Step Increases Following the Expiration of a Collective Bargaining Agreement............................................................................................................................................. Jan/Feb....................................................30 Outlier Federal Court Decisions on FMLA Designations is Troubling, But Not Binding on New Hampshire Employers..................................................................................................................................... Mar/Apr..................................................30 It’s All About the People: Obtain & Retain the Ideal Team....................................................................................... May/June..................................................8 How Am I Doing: A Look at Annual Performance Reviews..................................................................................... May/June................................................17 Benefits of Employee Development........................................................................................................................... May/June................................................19 The Critical Relationship Between the Town Manager and the Board of Selectmen................................................... May/June................................................21 Strategic vs. Tranasctional Human Resource Management in the Public Sector......................................................... May/June................................................23 Second Job for the Same Employer Results in Overtime Liability.............................................................................. May/June................................................30 Planning for the “Cadallac Tax” Under the ACA - New Excise Tax on High-Cost Employer Health Plans Set to Take Effect in 2018....................................................................................................................................... July/Aug..................................................30 US Department of Labor Proposes Major Change in FLSA Exemption Requirements.............................................. Sept/Oct..................................................30 Next Generation Professionals: An Inside Look at What Matters to Them............................................................... Nov/Dec...................................................8 Somewhere in the Middle: Cash Balance Plans......................................................................................................... Nov/Dec.................................................17 Rochester Innovates in Merit Pay for Municipal Employees...................................................................................... Nov/Dec.................................................23 8 Steps to a Successful Workplace Wellness Program................................................................................................. Nov/Dec.................................................32 Land Use and Energy Cutting Trash in Half: How New Hampshire Towns and Cities Can Secure Their Financial Future with Pay-as-You-Throw................................................................................................................................................... July/Aug....................................................8 Land Use and Environment What is an Agricultural Commission?....................................................................................................................... Mar/Apr....................................................8 Agriculture in New Hampshire................................................................................................................................. Mar/Apr..................................................17 Is Your Town Farm Friendly?..................................................................................................................................... Mar/Apr..................................................23 Land Use and Planning Assessing the Benefits of the New Hampshire Community Planning Grant Program................................................ Sept/Oct....................................................8 The Roles and Responsibilities of Municipalities in Monitoring and Enforcing Conservation Easements.................. Sept/Oct..................................................15 Orford Takes Stock of Community Facility and Infrastructure Needs........................................................................ Sept/Oct..................................................17 Is Your City or Town Meeting its Americans with Disabilities Act (ADA) Responsibilities?....................................... Sept/Oct..................................................25 Legal Questions and Answers The Moderator’s Role at Town Meeting..................................................................................................................... Jan/Feb....................................................32 Local Regulation of Agricultural and Horticultural Operations................................................................................. Mar/Apr..................................................32 Municipal Employment - Legal Relationships and Obligations................................................................................. May/June................................................32 Siting Energy Facilities in New Hampshire................................................................................................................ July/Aug..................................................32 Planning New Hampshire’s Future: The State Development Plan, Regional Master Plans, Local Master Plans, Capital Improvement Plans, and Community Services Master Plan........................................................................ Sept/Oct..................................................34 Questions & Answers on Affordable Care Act........................................................................................................... Nov/Dec.................................................34 Miscellaneous Celebrating the Past and Looking Forward to the Future........................................................................................... Jan/Feb....................................................25 Technology When it Comes to Computer Malware, It’s a Jungle Out There................................................................................ Jan/Feb....................................................28 Working Towards the Ideal System............................................................................................................................ Mar/Apr..................................................28 Technology: An Important Human Resource........................................................................................................... May/June................................................28 Ransomeware: The Threat That Wont’ Go Away...................................................................................................... July/Aug..................................................28 How Cities and Towns Can Benefit From the Cloud................................................................................................. Sept/Oct..................................................32 Can Bring Your Own Device (BYOD) Work for Your Municipality?......................................................................... Nov/Dec.................................................30

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