09/23/2010 - SpecialAgenda
Council Hearing for Resolution of Impasse
September 23, 2010
1:30 p.m.
1. Introduction by Mayor
1) Rules of Decorum
2) Issue at Impasse -- Wage increase for FY 2009/2010
3) Procedure
II. CWA presentation (up to 1 hour limit; may reserve up to 10 minutes of
allotted time for rebuttal).
Council questions,. if any.
III. City presentation (up to 1 hour limit; may reserve up to 10 minutes of
allotted time for rebuttal).
Council questions, if any.
IV. CWA rebuttal (if time reserved).
V. City surrebuttal (if time reserved).
VI. Council discussion.
VII. Council decision on issue at impasse.
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CWA Impasse Presentation
The issue we are asking you to resolve today is the current impasse between the City and
Communications Workers of America Local 3179, representing all of our unionized General
Employees throughout the City.
Currently, the City and the Union have an approved labor agreement that covers the period
from October 1, 2008 through September 30, 2011. That agreement calls for a 2.5% merit
wage increase for all represented employees during the first year of the agreement, which was
accomplished concurrent with the City's 08/09 fiscal year. The agreement also provides for the
parties to reopen negotiations for a possible merit increase and/or pay range adjustments
during FY 09/10 and again in FY 10/11. The issue of a wage?increase for FY 09/10 is the only
item in dispute here today. The City's impasse position is for no increase in wages or
compensation for this time period while the Union position is for a one-time, $250 lump-sum
remuneration for each represented employee.
The negotiations for this wage reopener began over one year ago in August, 2009, with the
Union proposing a 3% adjustment to pay range minimums-,and maximums for all job
classifications represented by the bargaining unit, a 5.5% merit-based pay increase for each
represented employee, and a 4.5% one-time lump sum "bonus" payment for employees whose
pay is at their respective pay range maximum. The Union indicated the 5.5% base pay increase
was intended to make up for a reduction in the merit increase amount from 4% in the prior
labor agreement to 2.5% in the first year of the current contract, and also due to the increase to
members' health insurance costs. The City responded that based on the extraordinary budget
environment the City found itself in, no merit increase, general wage increase, or pay range
adjustment was justified. Over the course of the next six months, the Union reduced its
demands for a base pay merit increase incrementally to 4.5% and then 3%, with a
corresponding reduction in the bonus for those at their pay range maximum to 2.5%. However,
the City remained consistent in offering no increase for the contract year.
In April of 2010, while the City continued to advise the Union that a base pay increase would
not be appropriate in light of the City's budget concerns, the City did provide the Union with a
proposal for a $150 one-time, lump sum cash remuneration to be paid to each bargaining unit
member, with no adjustment to pay range minimums and maximums. The Union eventually
reduced its proposal to a 2.5% merit increase and the City responded by increasing its offer to a
one-time, lump sum cash remuneration of $250 in an effort to reach an agreement. The City
advised the Union that this proposal would be the City's "best and final" offer. The Union then
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presented a counter-proposal for each member to receive a one-time, lump sum bonus
equivalent to 2% of his/her respective annual base pay.
In July of 2010 and with no expectation of an agreement forthcoming, the City felt, in light of
being well into the budget process and facing another year of significant reductions, that its
proposal for a one-time cash remuneration of $250 per employee was no longer realistic. As
such, the City withdrew that offer and returned to its previous proposal of no base pay increase
only. The Union negotiating team, understanding the fiscal environment, accepted this offer
with the condition that any savings realized would be used to help reduce layoffs of bargaining
unit members, and with the City agreeing to make efforts to find alternate job placement for
those who might be subject to layoff. The tentative agreement was brought to the Union
membership for a ratification vote, and in spite of the Union's best efforts at endorsement, this
tentative agreement was not ratified by a vote of 96 to 46. Subsequent to the ratification vote,
with no expectation of reaching an agreement, the City declared impasse on July 27, 2010.
Historically in the Public Sector, there has grown to be an expectation that annual wage and
benefit increases are something that every employee can anticipate, and over the years such
has been the norm here in Clearwater. The City's approach, more often than not, has been to
grant wage increases and enhance benefits to our employees in order to ensure we could
recruit and retain employees, and to assure that we remain competitive with surrounding
governmental agencies. While we generally have not held an expectation that our salaries and
benefits should be the highest in the region, our goal in better economic times has been to
attempt to maintain a status above the average for our local operating area of west-central
Florida.
Currently, the City is not experiencing recruiting or retention issues. A recent City job posting
for an entry-level CWA-represented Accounting Clerk vacancy produced more than 220 eligible
candidates. Consequently, the significant funds that would be required to adjust all of the
CWA-represented pay ranges simply cannot be justified. For example, an increase of only 2% in
the pay range minimums for all CWA represented job classifications would result in a cost of
$64,000 annually simply to bring the base pay for any applicable employees up to the new
range minimum.
Our CWA represented employees provide dedicated, loyal, and professional service to the
citizens of this City. We have confidence that we can count on them to be there when
necessary to accomplish whatever task we ask of them, and we certainly appreciate all that
they do. But our current environment has given rise to a new economic reality in the public
sector, necessitating a change in the context within which we consider enhancements to
employee wages and benefits. The downturn in the economy and the corresponding reduction
in tax and other revenue available to local government have compelled the City, as well as
r
other governmental agencies, to evaluate every available means to reduce costs while
maintaining essential services. And it is not minimal costs that the City has been discussing with
the Union for over a year in this set of negotiations. A 1% base pay increase alone for the CWA
bargaining unit would result in a recurring cost of $288,000 ($151,000 from the General Fund)
to the City. Even the Union's proposal before you today would amount to a total impact to the
budget of $218,000. When we consider that almost 70% of the City's General Fund dollars are
expended on what we provide for our employees, reducing these costs must be considered.
The Union would tell you as we have heard at the bargaining table that the City holds significant
funds in reserve and can find the money to spend considerable dollars on projects and property
acquisitions, yet there seems to be nothing available to provide additional compensation to
their members. I disagree with that perspective. While the City feels we must hold the line on
wages, extraordinary efforts have been made in other areas to provide for the welfare of our
employees.
In the last three years, budget reductions have resulted in the elimination of more than 200
FTE's (175 FTE's in the General Fund). Yet during that time, contrary to what we have seen in
many other government agencies, only four part-time and two full time CWA represented
employees have been laid off, and all of these employees could have remained with the City in
alternate positions had they chosen to do so. We were able to accomplish this through hiring
freezes and analyzing every position before deciding to fill it. Even more significant was the
effect of the incentives that the City Manager proposed and this body approved to encourage
eligible employees to retire. Over a two year period, these efforts resulted in the departure of
113 employees at a cost to the City of over 1.6 million dollars in retirement incentive payments.
But of greater importance were the resulting permanent savings of 4.3 million dollars in
recurring employee costs.
We should also take into account that the current economic and investment environment has
required the City to significantly increase the contributions we make to the employee pension
fund. While our employees continue to contribute the 8% of pay required by our Pension
Ordinance, the City contribution has increased from the required 7% of pay to the current 24%
of pay (and is expected to increase to nearly 34% of pay in the next few years),
The City has also recently opened our Employee Health Center (EHC), which is providing a no-
cost primary care option for all of our employees, retirees, and their family members who
participate in the City's medical plan. This Council approved the expenditure of over 1.75
million dollars in reserves to fund this effort for the first 18 months of operation. In addition,
we anticipate the EHC will enable the City to continue affording quality health care options
while moderating both employees' and the City's health care costs.
We come before you today not only as representatives of management, but also as employees
of the City. In a perfect situation, we would rather be in a position to be making a
recommendation that you give every City employee a wage increase. But clearly, the City is
operating from a different perspective now, and moving into the future we can more than likely
anticipate further budget reductions.
Therefore, I ask that you consider all of these factors when evaluating this situation and support
the City's impasse position of no wage increase, cash remuneration, or pay range adjustments
for CWA-represented employees in FY 09/10.
Thank you for your consideration.
CWA Impasse Costing
2% RANGE ADJUSTMENT -
bring 122 employees up to new range minimums
$64,000 (actual $63,765.118)
REMUNERATION :
873 employees - (806 fulltime & 67 part-time)
$250 = $218,000 (actual cost $218,250)
$150 = $130,950
1% INCREASE:
$288,000 ($151,000 Gen & $136,000 Ent.)
?P
A