129 jobs on the line in city; Negotiations founder over health plans.

• Position: NEWS

Byline: Nick Kotsopoulos

WORCESTER - Unable to reach agreements with most municipal employee unions on having them join less costly health insurance plans developed by the city, City Manager Michael V. O'Brien is moving forward with a fiscal 2012 budget proposal that will include roughly $7 million worth of spending cuts so he can deliver a balanced budget to the City Council.

Mr. O'Brien said that will translate into the loss of 129 non-school municipal positions, including significant personnel cutbacks in public safety, public works, parks and inspectional services.

In addition, the Worcester Public Library will be forced to reduce the number of hours at the Frances Perkins Branch Library in Greendale - the fourth busiest branch library in the state - is open, while the main library in Salem Square will be open 10 fewer Sundays.

The employee layoffs, which the manager said he is making with a "very heavy heart," will have a widespread impact on the delivery of services.

Mr. O'Brien had originally planned on submitting his fiscal 2012 budget to the City Council last Tuesday night, but delayed it one week so discussions could continue with the employee unions on health insurance.

Based on what he termed were "positive conversations" with the unions, the manager agreed to continue those discussions through Friday. But City Hall sources familiar with the negotiations said the manager was able to reach agreement with just one of the smaller collective bargaining units and that ended up saving two jobs that otherwise would have been lost.

The new health plans developed by the city are similar to plans offered to state employees through the Group Insurance Commission. The manager had said that if the employee unions agreed to have their memberships offered those less-costly plans, it would save the city more than $5 million and he would not have to go forward with any layoffs.

The manager is moving all 270 non-school employees not represented by a union or association into the new health plans, effective July 1. That is expected to save the municipal government about $500,000 and will help keep 19 jobs that otherwise would have been lost to the budget ax.

"I have been negotiating in good faith for months with our city-side unions to avoid layoffs," Mr. O'Brien said. "I held off on presenting my fiscal 2012 budget recommendation by an additional week with the hope that we could find common ground, all to no avail.

"My sole focus has been to save...