To:                   Principal Officers – Executive Board Members - Membership

From:              Louis P. DeMici, President

Re:                  Medicare Court Case

On Monday, January 16, 2006 members of the Executive Board meet with Attorney Gagne to receive an update as to the status of the court case.  Attorney Gagne informed the Board that it appears that this case will go to trial sometime in March of 2006.

Attorney Gagne informed the board that the Union has completed depositions of Tom Fabiano and Dena Deorio, and that the City has completed it’s deposition of the Union’s President.  During the deposition of City Representatives, it became quite clear that the City has been placing retirees on Medicare for years, prior to Del Albano informing the Union, even when the City proposed the present language in the contract about placing retirees on Medicare, the Union was not aware that retirees were on the Medicare plan.

Attorney Gagne feels, that based on the notes of prior negotiations between the Union and City, it was clearly stated that by placing this language in the contract will not result in any costs to the members.

Attorney Gagne also meet with Brian Lynch, an Insurance Consultant to get an insight on the status of the present Insurance Language in the contract, and what actually takes place when the City places a retiree on Medicare, in that Medicare becomes the primary, and the existing insurance becomes the secondary, in doing this there is a cost saving to the City.

Brian also pointed out to Attorney Gagne, that this same now involving Medicare Part B, will have an impact if and when Medicare Part D (dealing with prescription drugs), this will have an additional cost to the retiree.

Thank you.