STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY. Minutes of The Human Resources/Audit-Finance Committee Meeting of April 26, 2011

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1 STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY Minutes of The Human Resources/Audit-Finance Committee Meeting of April 26, 2011 The Human Resources and Audit-Finance Committees of the State of Connecticut Health and Educational Facilities Authority met in joint session on Tuesday, April 26, 2011 at 11:30 a.m. The meeting was called to order by John Biancamano, Chair of the Human Resources Committee at 11:42 a.m. and, upon roll call, those present and absent were as follows: PRESENT: ABSENT: ALSO PRESENT: John Biancamano, Chair, Human Resources Committee Patrick Colangelo 1 Robert Dakers 2, Board Chair Sarah K. Sanders (Rep. Honorable Denise Nappier) Benson Cohn, Chair, Audit-Finance Committee Jeffrey A. Asher, Executive Director Paula L. Herman, General Counsel JoAnne Mackewicz, Controller Debra M. Pinney, Manager, Administrative Services Norberto Ramirez, Compliance Internal Auditor Jeanette Weldon, Managing Director and Kathy Owens, Receptionist/Administrative Assistant, of the Connecticut Health and Educational Facilities Authority 1 Mr. Colangelo arrived to the meeting at 12:03 p.m. 2 Mr. Dakers arrived to the meeting at 11:51 a.m.

2 The purpose of the meeting: 1. Approval of Minutes Human Resources Committee Meeting of October 26, Approval of Minutes Audit-Finance Committee Meeting of February 23, Review Proposed Compensation and Benefits Package for FY Other Business 5. Executive Session Personnel Matter Approval of Minutes Mr. Biancamano requested a motion to approve the Minutes of the Human Resources Committee Meeting of October 26, Ms. Rubin moved to approve the minutes; Mr. Lisi seconded her motion. Upon roll call, the Ayes, Nays and Abstentions were as follows: John Biancamano None Robert Dakers 3 4 Mr. Biancamano requested a motion to approve the Minutes of the Audit-Finance Committee Meeting of February 23, Mr. Mutone moved to approve the minutes; Ms. Sanders seconded his motion. Upon roll call, the Ayes, Nays and Abstentions were as follows: John Biancamano None Robert Dakers 5 6 Sarah Sanders 7 3 Mr. Dakers did not attend the meeting on October 26, Mr. Mutone did not attend the meeting on October 26, Mr. Dakers did not attend the meeting on February 23, Mr. Lisi abstained as he is not a Committee member of the Audit-Finance Committee and was not in attendance at the February 23, 2011 Audit-Finance Committee. 7 Ms. Rubin did not attend the meeting on February 23,

3 Proposed Compensation and Benefits Budget for FY 2012 Ms. Weldon presented the proposed compensation and benefits budget for FY Ms. Weldon pointed out that the human resources budget is the first step in the budget process and any feedback from the Committee will be incorporated in the final proposed operating budget which will be presented at the Audit-Finance Committee Meeting in May. She reported that in order to give context to the human resources budget, Ms. Mackewicz incorporates it into a pro forma operating budget so that the Board can see compensation in relation to revenues and other expenses. The operating budget numbers are preliminary at this point and subject to change. As was stated in the memo, Management is proposing a zero percent merit increase and no incentive compensation for FY This is an approach consistent with the Governor s proposed State budget. CHEFA is self-supporting and not funded by the State; however, given the impact of the severe economic downturn on the State s finances, CHEFA Management believes that as a quasi-public state agency, it is prudent to be fiscally conservative. Ms. Weldon also stated that CHEFA will not be paying out the incentive compensation for FY 2011 even though it was budgeted. The proposed FY 2012 compensation budget is a reduction of 7.2% from what was budgeted for FY 2011 which does assume those incentives. This is a significant decrease that totals approximately $160,000 in terms of a reduction in the total budget. Ms. Weldon reported that CHEFA s policy as far as merit increases are concerned allows up to a 3% merit increase for Officers and a 2-5% merit increase for all other staff. On the incentive compensation side, the incentive can go up to 20% for the Executive Director; 15% for the other Officers and 10% for all other staff. Those percentages are the maximums and for the past several years management has budgeted a pool of dollars that is a percentage of the maximum rather than budgeting at the maximum. The merit increases and incentive compensation are based on actual performance and are meritdriven. Ms. Weldon added that the proposed FY 2012 compensation budget is below not only the FY 2011 budgeted level, but also below 2010 s actual amount for compensation. Ms. Weldon reported that the fringe benefits that are included in the FY 2012 budget equate to approximately 31.8% of compensation, as compared to 28.5% in FY The increase is a function of a smaller base along with some expense increases on the fringe benefit side. A 20% increase in the health insurance premiums is assumed. The Authority continues to offer a CBIA High Deductible Health Savings Account (HSA) for medical benefits. When the Authority first presented the HSA to Staff, it was funding the deductible in full at 100%. Currently, CHEFA is funding the deductible at 75% which is a savings of $15,000 in FY This practice is being continued. The expected 20% insurance increase will not be effective until January In terms of how the compensation budget fits in on a preliminary basis with the rest of the operating budget, Management made some revenue assumptions based on tentative deals and the timing of closings. These numbers will be further refined when they are presented as part of the proposed operating budget at the May meeting. 3

4 Ms. Weldon reported that CHEFA is not making any changes in dental, or disability insurance. With respect to tuition benefits, Management expects to continue the policy of reimbursing up to a maximum of $5,000 annually of tuition for each staff member taking work-related courses. Mr. Asher added that CHEFA recently obtained vision coverage that is paid for solely by employees with no cost to CHEFA. The criteria for the coverage were that there would have to be no fewer than ten people participating. He further explained that the vision coverage provides a higher level of coverage for eye glasses and contact lenses. Mr. Mutone inquired if many Staff participates in tuition reimbursement. Ms. Weldon stated that there are four Staff currently participating. She further added that historically Staff have taken advantage of the benefit. Mr. Lisi inquired if the $5,000 pool can be applied to conferences or professional development. Ms. Weldon explained that the $5,000 pool is strictly for tuition and that the line item for conferences and continuing education is separate from tuition reimbursement. Mr. Biancamano inquired if anyone had any questions regarding the proposed staff compensation and benefits budget. The Committee agreed that further questions and discussion should be conducted during the Executive Session. Mr. Biancamano requested a motion to go into Executive Session. Ms. Rubin moved to go into Executive Session; Mr. Mutone seconded her motion. Upon roll call, the Ayes, Nays, and Abstentions were as follows: John Biancamano None None Robert Dakers Sarah Sanders The Committee went into Executive Session at 12:00 p.m. The Committee reconvened at 12:55 p.m. Mr. Biancamano stated that there were no votes taken in the Executive Session. Ms. Rubin moved that the Incentive Compensation Plan be totally eliminated effective July 1, 2010; that all deferred payments under that plan be paid out by June of 2011; and that the 4

5 base salaries for CHEFA staff should be adjusted by an amount equal to 50% of the maximum Incentive Compensation Plan amount they would have been eligible for effective January 1, Mr. Lisi seconded her motion; all were in favor. Upon roll call, the Ayes, Nays, and Abstentions were as follows: John Biancamano None None Patrick Colangelo Robert Dakers Sarah Sanders The meeting adjourned at 1:00 p.m. Respectfully submitted, John Biancamano, Human Resources Committee Chair, Board Chair, Audit-Finance Committee 5