OFFICE OF CEMETERY OVERSIGHT - Maryland Department of …



OFFICE OF CEMETERY OVERSIGHT

ADVISORY COUNCIL ON CEMETERY OPERATIONS

MINUTES

DATE: June 24, 2010

TIME: 10:00 a.m. – 1:00 p.m.

PLACE: Department of Labor, Licensing and Regulation, 500 N. Calvert Street, 2nd Floor Conference Room, Baltimore, Maryland 21202

CALL TO ORDER

Chairman Goodman called the meeting to order at 10:10 a.m.

MEMBERS PRESENT

David Goodman, Chair

Jay Cherry

Richard Cody

Susan Cohen

Frank Porter

Sarah Rex

Harriet Suskin

Walter Tegeler

David Zinner

MEMBERS ABSENT

F. Thomas Claxton

Erich March

STAFF PRESENT

Benjamin Foster, Director

Patricia Tress, Investigator

Leila Whitley, Administrative Aide

Paulette Wirsching, Assistant Attorney General

GUEST SPEAKERS

Richard Fishman, Director-New York Cemetery Board

GUESTS

David Mason, Mason Government Relations Service

MINUTES

The April 22, 2010 and May 27, 2010 minutes were deferred until the July 22, 2010 meeting.

ANNOUNCEMENTS

Chair Goodman informed the Advisory Council members that Mr. March and Mr. Claxton were attending the Maryland State Funeral Director’s 91st Annual Convention in Ocean City and would not be in attendance at today’s meeting.

Chair Goodman distributed several news paper articles to the Advisory Council members and Office of Cemetery Oversight staff. The first was from the Montgomery County Gazette entitled “Society seeks assistance with pet cemetery’s care” in regards to problems with an abandoned pet cemetery; the second one was from the Wall Street Journal entitled “A Final Farewell To Arms” about “Veterans Group Locates, Inters ‘Cremains’ Left on Mortuary Shelves for Decades” in reference to abandoned cremains of veterans; and the final was a collection of five articles from five different newspapers documenting recent problems at Arlington National Cemetery.

Mr. Cody also distributed a hand out related to the Agenda item on “A proposal for Abandoned Cemetery Lot Legislation”.

GUEST RICHARD FISHMAN-DIRECTOR, NEW YORK Division of Cemeteries

Chair Goodman introduced Mr. Fishman who is the Director of the State Division of Cemeteries for the State of New York and who agreed to join the Advisory Council to exchange thoughts, ideas and perspectives on a wide range of topics related to the death care industry.

Mr. Fishman started his remarks by commenting on Mr. Cody’s handout on Abandoned Cemetery Lot Legislation regarding the reclamation of unused graves. He shared that the amount of time to reclaim a grave in New York is seventy-five years and requires state approval. In New York City alone there are thousands of unclaimed graves and cemeteries have not yet applied for state approval. In New York graves are not considered property. Instead it is considered a “right of burial”. He commented that consumer advocacy groups did not oppose legislation allowing cemeteries to reclaim graves.

Cremation

Mr. Fishman then focused his remarks on cremation and began by stating that cremation in New York represents a direct threat to the survival of cemeteries. He said it was possible to track the decline of cemeteries to the increased rate of cremations. As a result he has observed cemeteries laying off staff and being forced to make cut backs. Only eight to nine percent of cremains end up being buried in cemeteries at half the cost. Niche sales have also dropped precipitously. He has witnessed a decrease in the reverence for cemeteries which poses a real dilemma.

There is a forty-five percent cremation rate (while the burial percentage drops). Crematories have always been regulated in New York (crematories are defined as cemeteries). A cremation is final disposition.

The New York Cemetery Board does approve services prices and no other state jurisdiction approves service charges prices. Out of forty-seven crematories regulated in New York, seventeen are stand-alone crematories, fifteen are run by funeral directors (grandfathered in by the law), and two crematories are run by vault companies. New York has an anti combination law which bans funeral directors from controlling a cemetery greater than thirty acres. FAQ’s have recently been added to the New York Cemetery Board website. They have a three-page authorization form that went public March 1, 2010.

If a body has a battery-powered heart implant (that was not removed before the body arrived at the retort, there can be an explosion. A blown retort can cost between $15,000 and $20,000 to repair. Crematories cannot remove the implant; a funeral director must remove them.

Families never pick up Seventy percent of cremains. The cremains end up back at the funeral home. (Cremains cannot stay at a crematory.) After a number of years, funeral directors ask cemeteries to bury the cremains. Transporting cremains does not require a burial transit permit.

Funeral directors estimate the weight of bodies, where as crematories actually weigh the bodies. Mr. Fishman went on to explain the requirements of crematories.

The Department of Environmental Conservation regulates emissions on crematories. Embalming is not required by the state of New York but depending on the type of burial, it is required by some funeral homes. They do not announce when investigators go out to crematories. Funeral homes required identification before cremation takes place.

Perpetual Care

In New York, there is a maintenance and care fund for long-term maintenance of the cemetery. The principal cannot be touched unless the State approves the principal to be taken out.

Every regulated cemetery is required to have a Permanent maintenance fund. The permanent maintenance fund is separate from perpetual care. It is the Division of Cemeteries rule of thumb that there ought to be $100,000 in the fund per acre. For example, ten acres must have $1,000,000 in a trust fund. Many cemeteries are selling off land to generate income to offset the increase in cremations.

Record Keeping Standards

Cemeteries in New York must have record keeping. Some larger cemeteries have computerized record keeping while small cemeteries rely on card systems. Mr. Fishman spoke about family disputes and how good record keeping practice protects the Cemetery. The cemeteries also have to have maps of their cemetery. The state approves all service charge prices and the prices are required to be posted in cemeteries.

On behalf of the Advisory Council, Chair Goodman thanked Mr. Fishman for having traveled all the way from New York to meet with the Advisory Council and for his invaluable insights, knowledge and perspective.

SALES PRACTICES

Chair Goodman introduced discussion about sales practices by sharing that he had received feedback that some cemetery sales staff were representing to consumers that monuments sold by outside dealers would not have the same protection if damage occurred and that the cemetery would not be liable even if the damage was caused by cemetery staff. Ms. Tress acknowledged that this is a frequent complaint. Proof of who caused the damage is a very difficult problem. Mr. Cody commented that when a cemetery collects supervision fees it assumes the liability. Mr. Tegeler spoke about aggressive sales counselors using unethical sales tactics to intimidate consumers in to buying only from the cemetery. Ms. Wirsching commented that this kind of sales practice would be considered a violation of the OCO Code of Ethics. It was suggested that the family would have to report this practice to the office and should be encouraged to do so. Mr. Tegeler spoke about the challenge of trying to maintain a positive relationship and good will with the cemetery.

From the flat marker cemeteries perspective, if a mower goes over the marker, the marker is not supposed to break. If it is bought from the cemetery and breaks, the cemetery will replace it for any reason it should happen to break.

If cemeteries require a six to eight inch marker, they probably will not have problems with markers breaking easily (especially at the point where the vases are-which is probably the weakest part of the marker).

PERPETUAL CARE TRUST ACCOUNTS

Chair Goodman introduced the discussion on Perpetual Care by referring to a continuum of choices available for consideration. At one end of the continuum is the option of recommending that there be no changes in the existing statute pertaining to Perpetual Care. A second choice would be to simply change the name from Perpetual Care to Endowment Fund to mitigate the expectations generated by the name

Perpetual Care. At the opposite end of the continuum would be more complicated options / choices using elements proposed by Hayden Burris. One such option would require cemeteries offering Perpetual Care to submit to a evaluation and recertification process every two years involving a review by a financial planner and actuary to determine the appropriate level of investment in the Perpetual Care fund.

Mr. Foster stated currently the Office gets the Perpetual Care Reports and looks at them. A request for a part-time CPA had been denied in the past. Currently 10% of Perpetual Care is required to be trusted. It cannot be known just by walking into a cemetery that the cemetery is not trusting correctly. There has to be more of a paper trail.

Mr. Foster asked Mr. Fishman who reviews the financials with the New York Cemetery Board. Mr. Fishman stated they have eight accountants for 1,850 cemeteries. Every cemetery that has over $1,000,000 trusted has to have a CPA review. The maintenance is not the same at all cemeteries. There is more maintenance on a cemetery that has upright markers than a cemetery that has flat markers. Mr. Fishman stated unless IRS comes out and audits Office of Cemetery (OCO) Oversight’s licensed cemeteries, no one will really know what, if anything is actually being put in the trust accounts. Ms. Wirsching stated OCO really does not have the time or resources to collect any more information. Mr. Zinner suggested, when visiting cemeteries, randomly pull two contracts in the previous six months to see if cemeteries are actually depositing 10% into the trust accounts. Mr. Foster stated, 10% is the minimum that has to be deposited, if any cemetery wants to deposit more, they can.

DIRECTOR’S REPORT

Chair Goodman deferred the Director’s Report until the July meeting.

INVESTIGATOR’S REPORT

Chair Goodman deferred the Investigator’s Report until the July meeting.

NEW BUSINESS

Chair Goodman announced Harry Loleas would be a guest speaker for the July meeting. Chair Goodman is still trying to get someone from Congressman Rush’s office to be a guest at one of the Advisory Council meetings.

Chair Goodman announced refreshments are ‘bring your own’ to the July meeting unless someone wants to volunteer to bring refreshments.

Chair Goodman thanked Mr. Fishman for coming all the way from New York to meet with the Advisory Council today.

ADJOURNMENT

A motion to adjourn the meeting made by Mr. Porter and seconded by Mr. Cherry. The meeting adjourned at 1:10 p.m.

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