Magistrate Decision LIUNA 2-25-2013SM-2012-068
City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013
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Introduction
These proceedings arise from an impasse in the collective bargaining negotiations
between the City of Atlantic Beach (“City” or “Employer”) and the Northeast Florida
Public Employees’ Local 630, LIUNA, AFL-CIO (“LIUNA” or “Union”) for a successor to the
collective bargaining agreement that expired on September 30, 2012. The City is
represented by Mr. John Dickinson and Ms. Lori Mans of the law firm Constangy, Br ooks
& Smith, LLP. Local 630 is represented by its Business Manager, Mr. Andrew Bemis.
The City of Atlantic Beach is a jurisdiction of 3.5 square miles on the Atlantic coast of
northeast Florida in Duval County. Its current population is approximately 12,750 people.
It has a city commission form of government. Along with the mayor, the city
commission provides policy direction to the City Executive who is the CEO.
The City employs approximately 108 employees of whom 34 are in the bargaining unit
represented by Northeast Florida Public Employees Local 630, Laborers International
Union of North America (LIUNA), AFL-CIO, currently a party to this impasse. LIUNA has
been certified to represent this unit of blue collar employees since 1990. There is one
other bargaining unit of police personnel who are represented for purposes of
collective bargaining. The remaining employees are unrepresented. These two groups
are not parties to these impasse proceedings.
The parties have had a long and cooperative collective bargaining relationship. This is
evident, not only by their testimony, but also by their demeanor during the hearing and,
perhaps most importantly, by the nature of their proposals. Both parties attest to good
communications, and this is borne out by proposals that reflect consideration of the
other party’s position, and the effect on the other party of the changes each seeks to
achieve. Nonetheless, they have now reached the point where each side believes that
it has made as much movement toward the other’s position as its constituents will
accept.
In accordance with Section 447.403(1) F.S., the parties submitted the unresolved issues
to a Special Magistrate on October 31, 2012. On January 8, 2013, a hearing was held
and both parties were provided a full and fair opportunity to examine and cross-
examine witnesses and offer documentary evidence in support of their positions. The
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City presented three witnesses who testified under oath, and also offered a notebook
filled with exhibits, none of which was challenged by the Union. The Union Business
Manager made an unsworn statement in support of the Union’s proposals, and
responses to the City’s proposals. No sworn witnesses were called. The Union also
offered a notebook filled with exhibits, many of which duplicated the City’s, e.g., the
collective bargaining agreement, and the parties’ proposals. None of the Union’s
exhibits was challenged by the City. The parties further agreed to submit post-hearing
briefs which were provided to the Magistrate at close of business on February 4, 2013,
upon which the hearing was declared closed. The unresolved issues are now before this
Magistrate to recommend, for each issue, terms to be included in the collective
bargaining agreement for the current fiscal year with the objective of achieving a
prompt, peaceful, and just settlement between the parties.
In reviewing and considering the parties respective proposals, and their positions on
each disputed provision, I have taken into account the statutorily required factors set
forth in Chapter 447.405.
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City’s Financial Position
A summary of the City’s financial position is essential because the City based the
majority of its proposals on financial considerations, and because of its significant effect
on the statutory criteria to be given weight by the Magistrate. Information was provided
by the City, and was not disputed by the Union.
The City offered considerable testimony and introduced evidence concerning how its
financial status has been affected by declining revenues and increasing costs. The City
expressed its intention to respond to these challenges by balancing the allocation of its
resources between current and future needs of residents and taxpayers, with its
obligation of fundamental fairness to its employees.
The Union acknowledges the difficulties facing the City, and employees have been
willing to do their part to respond to them. Not unexpectedly, part of what brings them
to this point is a difference in opinion about what constitutes “their part.”
Revenues
The City of Atlantic Beach is primarily a residential community with ad valorem taxes
being its major revenue source, comprising more than a third of general fund revenues.
The recession has caused the City’s taxable property rolls to decrease from a high of
approximately $1,500,000,000 in 2006 to just under $1,200,000,000 in 2012. Ad valorem
tax revenues declined accordingly. In response, the City has raised the millage rate in
three out of the past four years.
Expenses
Because of these revenue challenges, the Mayor and City Commission have tasked the
City Manager with reducing expenses by 15-16% on a long term basis. A variety of
changes have been implemented including elimination of vacant positions (but not
employee layoffs), curtailment of certain city services, reductions in travel, training, and
overtime authorization. Capital projects have been reduced or eliminated.
Among expenses regarded as problematic by the City is the increasing contribution
required by the City’s pension plan. Since 2007, the City’s contribution has risen from
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13.99% of payroll to 26.34%. In dollar terms, City contributions more than doubled from
$482.363 (actual) in 2007 to $1,044.392 (budgeted) in 2013. Between FY 2008 and FY
2013, the City’s contribution to the pension plan rose from 2.71% to 6.07% of the General
Fund budget.
A significant factor inflating the city contribution is the unfunded liability of the pension
plan. In layman’s terms, that is the monetary value of the future benefits already
earned by participants, less the value of the assets in the plan available to pay those
benefits. The City’s contribution to the plan is actuarially calculated each year to
determine the amount necessary to amortize liability for such previously earned
benefits, in addition to the amount necessary to pay for benefits earned in the current
year. Of the $1,044,392 contribution for FY 2012, $559,924 was attributable to the
amortization of the unfunded liability.
In addition, due to the overall recession, investment returns for the pension plan fell far
short of assumed rates of return (2.1 to 5.0% compared with 8.00%). The City has
expressed concern about the sustainability of the pension plan as currently constituted,
fearing that the financial health both of the pension plan, and the general government
may be threatened.
Union Position
The Union acknowledges the financial difficulties faced by the City, and has
cooperated in making adjustments over the past several years to meet the fiscal
challenges. It is the Union’s position that changes already agreed to in prior years’
negotiations have not yet had sufficient time to yield anticipated savings. The Union
has expressed concern that too many cuts will handicap the City’s efforts to attract
and retain a qualified workforce to carry out the City’s mission.
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Issues
The parties are at impasse over the following eight issues:
I Article 8 Grievance Procedure
II Article 13 Personal Leave
III Article 16 Bereavement Leave
IV Article 17 Hours of Work & Overtime
V Article 20 Pension
VI Article 23 Uniforms
VII Article 25 Career Development
VIII Article 26 Wages
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I. Article 8 -Grievance Procedure
Disputed Provision
Current language1 provides 10 working days for appealing a grievance to arbitration.
The Union proposes increasing the time from 10 working days to 30 calendar days. The
City proposes no change.
Union’s Position
The Union proposes increasing the time period from 10 working days to 30 calendar
days (roughly 20 working days) on the basis that the Union’s internal rules require
Executive Board approval for a fourth step grievance to be advanced to arbitration.
The Union’s Executive Board meets monthly.
City’s Position
The City states that the current language allows the Union’s objective to be met
inasmuch as Article 10.6 authorizes the parties to mutually agree to extend the filing
deadlines at any step of the grievance process. The City provided un-rebutted
testimony by the City Manager and the Human Resources Director that there has never
been a situation where either party’s request for an extension was rejected. The City
thus maintains that the new language is not needed.
Discussion
Absent a significant change in circumstances, or a problem that one or both parties
wish to solve, the presumption will be in favor of current language. In this case, current
language was negotiated by the parties and, according to testimony provided by City
witnesses and un-rebutted by the Union, the existing provision has worked well for the
parties. I am therefore unwilling to substitute new language for that mutually agreed
upon by the parties.
Recommendation
I recommend retention of current language.
1 All references to “current agreement” are to the Agreement between the parties that expired on
September 30, 2012, and which constitutes the “status quo” in the absence of a successor agreement.
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II. Article 13 - Personal Leave
Disputed Provision
Article 13.1((h) of the existing Agreement provides for each employee to have a single
leave bank (“Personal Leave”) which can be used for vacation, sick leave, etc. Leave
is accrued at a rate determined by length of service, and ranges from 5.81 to 10.47
hours per pay period (151 to 272 hours annually). [Article 13.1 (h)] Employees also have
self-determined accrual limits (“caps”), above which excess accrued but unused
Personal Leave will be paid out in cash. The maximum amount an employee may
accrue (cap) is 960 hours. Employees have three choices for the timing of the Personal
Leave payout. [Article 13.1e] The Article contains other provisions related to Personal
Leave that are not in dispute.
The City proposes three changes to the existing Personal Leave system to be effective
on the date of ratification of this Agreement by both parties, or the date of legislative
action taken pursuant to Section 447.403:
o Accrual rate: The City proposes to lower the per-pay-period accrual rate to a
range of 4.62 to 9.54 hours, (120 to 248 hours annually) based on length of
service. However the proposal adds intermediate service milestones at which
the accrual rate increases such that employees will earn more leave sooner
than under the existing plan.
o Carry-over cap: The City proposes to lower the maximum number of accrued
Personal Leave hours an employee may carry over to the next fiscal year
from 960 hours to 480 hours.
o Pay Out: The City proposes to eliminate all payout of Personal Leave following
a final transitional payment upon implementation of this Agreement which
would pay out all accrued leave in excess of 480 hours, plus a one-time
buyout of employees’ current accrued leave in accordance with
employees’ December 2011 elections under current contract language.
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Under the City’s proposal, accrued but unused leave may be sold at
termination at the rate of 50%.
The Union counter-proposes changes effective for new hires (on or after October 1,
2012) only. These include
Reducing the maximum annual accrual from 960 to 720 hours, and
Limiting pay-out timing from three choices (June, December, or June and
December) to one choice (June or December) resulting in a single pay-out
date.
City’s Position
All of the City’s proposals relating to Personal Leave are driven by fiscal concerns. The
City provided extensive information about its financial condition since the start of the
current recession, as well as predictions of future trends. Labor costs are a significant
portion of the City’s budget and the City Manager has been given direction by the
Mayor and the City Commission to seek cost reductions of 15 -16% over the long term.
The cost of employees’ selling back unused leave time to the City is sizeable and the
City seeks to reduce it as part of its overall cost-reduction efforts.
Union’s Position
The Union has responded to the City’s financial difficulties by making a counter-offer on
Personal Leave which would apply prospectively only to new employees. The Union’s
proposal has two parts:
Reducing the maximum accrual from its current level of 960 hours to 720 hours, and
Reducing the frequency that an employee can sell back accrued leave from twice
each year to once each year.
The Union claims that the City has not provided sufficient information to support its
position that its proposed leave plan is competitive with similar plans in surrounding
communities. The Union stated its belief that the current Personal Leave provisions were
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in line with other northeast Florida jurisdictions, but fails to provide comparative data to
support that assertion.
The Union further contends that reducing the payout for leave at termination at only
50% is unjust inasmuch as the leave has already been earned.
Discussion
The City has provided a wealth of documentation to demonstrate both its fiscal
challenges and the actions is taking to address these challenges. Many, but not all
these efforts affect employees, and City leaders appear to be mindful of not seeking to
meet of its reduction needs on the backs of its workers. Thoughtful consideration of the
effect on employees appears to underpin the City proposals. Indeed several, including
the instant proposal, incur higher short-term costs in order to achieve a long-term
objective without decimating employees financially.
At one time, generous leave benefits were generally viewed in the public sector as a
low-cost alternative to higher wages. Paying for unused leave was a way of
encouraging people not to take time off. In the current economic environment, this
calculus is no longer the win-win trade off it once appeared to be.
Undoubtedly, some employees have come to view leave banks as a form of “deferred
compensation” providing supplemental income to those who were frugal in their leave
usage. While the City has been generous in providing paid time off in the form of leave,
paying a premium on employees’ salaries in the form of cash-for-leave has become
unfeasible in the current economic environment.
Changing established leave plans, especially where elimination of anticipated income
is concerned, is not an easy thing to do. I recognize that some employees may have to
make lifestyle adjustments to this change. In this recession economy, many people
face similar belt-tightening. Leave plans that go above and beyond their original
objective of providing pay for reasonable time away from work, are fair targets for cost
savings. The City has proposed reductions such as this as alternatives to more drastic
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cuts which could cost actual employee jobs as well as service cuts to residents and
taxpayers.
The City proposes a transitional plan whereby all employees who currently have
accrued leave in excess of 480 hours will be compensated for that leave. Five
employees are affected. In addition, employees who would be due payment for leave
in accordance with their personal elections in 2011 will receive a one-time final
payment for that time.
The Union proposes a two-tier leave plan with the old plan diminishing as existing
employees attrit out of the system to be replaced by new employees on the new plan.
The Union claims that the City’s data does not sufficiently support its claim that the
City’s proposed plan is competitive. However, the Union did not cite specific
shortcomings, nor did it submit its own data to contradict the City’s survey information.
Recommendation
I recommend adoption of the City’s proposed changes to the Personal Leave Plan as
set forth in Article 13 in their entirety to be effective prospectively.
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II. Article 16 - Bereavement Leave
Disputed Provision
The current allotment of three days for Bereavement Leave is unchanged, however the
Union proposes new language to guarantee that, upon request, an employee may use
40 hours of Personal Leave time to supplement the approved three days of
Bereavement Leave.
Union’s Position
The Union does not request additional days of Bereavement Leave (not chargeable to
the employee’s “Personal Leave” designated for sickness, vacation, or other personal
matters), but asks that 40 hours of the employee’s Personal Leave, be approved upon
request to extend the bereavement period.
The Union maintains that three days are often insufficient for a bereaved employee to
travel, if the death occurred away from Jacksonville. If the bereaved employee has
significant responsibilities related to the affairs of the deceased, three days may not be
sufficient time to discharge those responsibilities.
City’s Position
The City makes two arguments in support of its proposal that no changes be made to
the Bereavement Leave practice as codified in the current Agreement. First, the City
maintains that employees can already request to take available Personal Leave in
conjunction with Bereavement Leave, and therefore no special provision is necessary.
Two City witnesses testified that they had no recollection of an employee being denied
Personal Leave when requested to extend the bereavement period. The Union does
not contest this testimony. The City also argues that the current Bereavement Leave of
three days is comparable to Bereavement Leave provisions in other area contracts.
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Discussion
I find the City’s argument related to comparability with other jurisdiction’s Bereavement
Leave policies to lack relevance here, since the Union is not requesting to increase the
amount of Bereavement Leave.
In an earlier article, I referenced the presumption in favor of current language if there
were not a material change in circumstances or a problem to be solved by the
proposed change. In this case, the change involves significant modifications to the
Personal Leave Plan in Article 13.
In Article 13, also in dispute, the City seeks to materially reduce the amount of Personal
Leave time that employees earn, as well as imposing a lower cap on carry-over of
accrued leave, and eliminating cash payments for some unused leave. The City makes
clear that it intends Personal Leave to be a form of paid time off rather than an
additional source of income for employees. In that context, the Union’s objective to
ensure that Personal Leave will be granted, without discretion, for the serious purpose of
attending to a family death is consistent with the City’s objective for using Personal
Leave, rather than accumulating it. The fact that such leave will come from the
employee’s (now reduced) Personal Leave bank should discourage potential abuse.
Since the City seeks to encourage Personal Leave usage, it will simply have Personal
Leave that might have been taken at a different time during the year, used at the time
of bereavement. Inasmuch as such requests have not been denied in the past, the
City should not experience any material negative effect on current practice. I believe
that the Union’s proposed change is a reasonable corollary to the changes sought by
the City in Article 13.
Recommendation
Addressing this provision in the context of the entire existing Agreement, and the
changes proposed by the City in Article 13, I recommend adoption of the Union’s
proposal to add the following sentence at the end of Article 16:
Note: Employees will be allowed to utilize forty (40) hours of personal leave
to extend bereavement leave.
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Article 17 - Hours of Work and Overtime
Disputed Provision
Article 17.3 states that “the City shall have the discretion to compensate for overtime
hours in the form of cash or compensatory time.” The Union proposes to change
current language regarding overtime compensation by making cash payment the
default, and requiring the employee’s concurrence in order for compensatory time to
be taken.
Union’s Position
The Union states its belief that the employee “has the right to choose whether or not
he/she should receive cash payment or compensatory time off for overti me worked
with the week.” (Emphasis added) The Union also maintains that overtime work may
sometimes increase an employee’s costs, e.g., for day care, transportation, etc. as well
as causing conflicts with other obligations, resulting in some employees’ preference for
cash payment.
City’s Position
The City proposes current language for Article 17.3 which provides that the City “shall
have the discretion to compensate for overtime hours worked in the form of cash or
compensatory time.” The City states that there has never been a grievance
challenging the application of the current provision. The City also maintains that giving
each employee a choice of payment method in each overtime situation would be
administratively and operationally burdensome. Finally, the City would potentially incur
additional overtime costs which would be unpredictable and outside of its control.
Discussion
First it should be noted that both parties’ proposals contemplate that compensation for
time worked in excess of 40 hours in the work week, whether in cash or compensatory
time off, shall be at the rate of time-and-one-half.
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Despite the Union’s assertion, employees have no “right” to choose between cash
payment and compensatory time except as may be provided in this contract. Such a
“right” does not exist independently and the Union’s claim provides a weak foundation
for its proposal. While there may be many instances such as this where an employee
would prefer to have a choice, the Union simply has not made a compelling case for
instituting such choice.
The parties’ current language squarely rests discretion with the City and the Union has
showed no change in circumstances that would compel the change the Union seeks.
The Union’s claim that overtime work can result in added expenses or inconvenience
may be true, but it is often the case that employees must make adjustments to
accommodate the demands of their jobs.
Recommendation
I recommend no change to current language.
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III. Article 20 – Pension
The City of Atlantic Beach currently sponsors a defined benefit pension plan2 which is
codified in its municipal ordinance code. The plan, which covers City employees other
than police3, has existed since 1975.
According the Section 2-299 (a) and (b) of the ordinance code, the pension plan shall
be funded by contributions from employees, and contributions from the city and other
income sources provided by law. City contributions shall be made to the plan … in an
amount which, together with the member contributions … is sufficient to meet the
normal cost of the plan and to fund the actuarial deficiency …as determined by the
state-required actuarial valuation. (Emphasis added). Since 2006, the employee
contribution rate has been five percent (5.0%) of base salary. According to the most
recent plan valuation provided by the City, the City’s contribution has risen from 13.99%
of payroll in 2007 to 26.34% in 2013.
For employees hired prior to September 1, 2008, the vesting requirement is five years of
plan participation; for employees hired on or after September 1, 2008, the vesting
requirement is ten years of plan participation. (Sec. 2-298).
According to undated information provided by the City, there are 92 employe es in the
pension plan, 34 of whom are in the LIUNA bargaining unit. Twenty-eight, (76%) of
2 There are two major types of pension plans: Defined Benefit (DB) plans and Defined Contribution (DC)
plans. Their names derive from the drivers of their funding.
DB plans are more complex because of their structure and funding mechanisms. Retirement benefits
derive from a formula using salary and length of service. An actuarial calculation then projects the
amount of money, i.e., the contribution necessary to ensure that sufficient funds are available when
each employee retires (and for the projected length of that retirement). What is defined is the
retirement benefit, and the contributions are a construct designed to produce that benefit.
Contributions can be made by employees, the employer, or both.
DC plans are simpler in design and administration. The amount of money set aside is determined up
front. This “defined contribution” may be made by the employee and/or the employer. At the time the
employee retires, his/her benefit will be determined by the amount contributed, the length of time the
contributions are invested, and investment returns. Unlike a DB plan, the retirement benefit cannot be
precisely predicted in a DC plan.
3 Police are covered by a separate defined benefit pension plan, which is not the subject of these
negotiations or impasse.
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LIUNA-represented pension plan members are vested, compared with 70% of non-
bargaining unit employees, and 72% of all pension plan members.
Disputed Provision
The City proposes several significant changes to the existing pension plan:
Create a new Defined Contribution (DC) Plan with five year vesting.
o Place unvested current employees and new employees in the DC plan.
(Eight current bargaining unit employees are unvested and would be
affected by this move.)
o During the first ten years of service, the City will contribute up to 6.0% of an
employee’s salary as a match to the employee’s contribution. After the first
ten years, the City will contribute an additional 4.0% of the employee’s salary
without a match.
Defined Benefit Plan
o Close the existing DB plan to new entrants.
o Current vested employees remain in the DB plan.
o Increase the employee contribution from 5.0% to 6.0%.
As a transitional measure, the City proposes the following for those current, unvested,
employees it would transfer to the DC plan:
o Moving employees’ life-to-date contributions from the DB to the DC plan;
o Matching dollar-for-dollar the employees’ contributions that are moved to the
DC plan.
The Union counter-proposes the prospective creation of a Defined Contribution Plan,
with a five-year vesting schedule, into which new employees would be entered. All
current employees, whether vested or not, would remain in the current DB plan. The
Union’s proposal calls for the City to contribute 3.0% without a matching employee
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contribution, to be increased to 7.0% after ten years, in addition to matching employee
contributions up to 6.0%
City’s Position
The City has documented its dual financial challenges – declining revenues from ad
valorem taxes resulting from diminished property values, and escalating pension
contribution requirements for its current defined benefit plan.
City administrators have an objective to reduce expenses by 15-16% over the long term.
Sustainability of the existing pension plan has become a strategic issue because of the
inability to accurately predict or control the City’s pension contributions to a defined
benefit plan. Contributions have increased from 13.99% of payroll in 2007 to 26.34% of
payroll in 2013.
Union’s Position
The Union would prefer to have all employees remain in the current defined benefit
plan, but reluctantly offers to accept a defined contribution prospectively only for
newly-hired employees. Like the City, the Union proposes a five-year vesting schedule
for this plan.
Additionally, the Union proposes higher City contributions (3.0% unmatched for the first
ten years); an additional 7.0% unmatched after ten years (sub-total 10.0%) with an
additional contribution matching the employee’s contribution up to 6.0% for a (total of
16% maximum). Under the Union’s proposal, employees would not be required to make
any contributions although it appears that they could do so voluntarily.
The Union maintains that employees have made other concessions to help the City
address the fiscal crisis. Specifically the Union points to 2008 changes in the current
pension plan made in 2008 to lengthen the vesting period from five to ten years, and
increases in the employee contribution rate from 2.0% to 3.0% in 2004, and to 5.0% in
2005. Finally, the Union claims that the concessions and changes that have already
been made have not had sufficient time to show a positive effect on the pension fund’s
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performance, along with general improvement in the economy and investments
overall.
Discussion
The major disagreement is whether existing employees, i.e., the eight unvested
members of the LIUNA bargaining unit, will be required to move from the DB to a DC
plan. The unvested LIUNA participants all have less than five years of service, meaning
that, even under the pre-2008 five-year vesting schedule, they would not qualify for
vesting.
Secondary disagreements concern contribution rates both by employees and the City.
The Union basically seeks to make the DC plan non-contributory, i.e., all contributions
made by the City. I cannot support this approach. In the existing DB plan, employees
share responsibility for funding the plan, albeit at a lower level than the City. I believe
that the City has attempted to be fair to the DC participants who will vest in the City’s
contribution on their behalf in five years, only half the time that current participants in
the DB plan hired after September 1, 2008, would require to vest.
It is very difficult to tell an employee that a long-term benefit that he or she anticipated
upon employment will be discontinued. However, before they are earned, such
benefits are not guaranteed, and cannot be relied upon. The City does not propose
eliminating retirement benefits entirely, but offers to provide a similar benefit in a
different form. Unvested employees still have time before retirement to adjust their
lifestyles accordingly by increasing or changing their personal savings plans. The
objective is to maintain a viable retirement plan for employees without sacrificing other
financial obligations of the government. A radical change to the retirement system is
difficult, but in this case, it is the choice most consistent with the interest and welfare of
the public as well as the employees.
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Recommendation
I recommend adoption of the City’s proposal in its entirety to be effective
prospectively.
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Article 23 - Uniforms
Disputed Provision
Current language provides that the City will provide 11 sets of uniform pants and shirts
to employees who are required to wear uniforms in the performance of their duties.
Eleven uniform sets allows an employee five sets for the current five-day work week, five
sets to be at the laundry, and an extra set for the turnaround day at the laundry, i.e.,
one set going in to the laundry and one set coming out. The City replaces issued
uniforms as necessary, and also provides for their cleaning at the City’s expense.
The City proposed two main changes to this Article:
In Article 23.2, the City seeks to eliminate the guaranteed number of uniform
garments provided to non-Public Works and Public Utilities employees, i.e., Meter
Readers in the Finance Department.
In Article 23.4, the City expands the existing standards for weari ng the uniforms. This
proposal does not appear to be disputed by the Union.
City’s Position
The City maintains that the nature of the work performed by Meter Readers is not as
hard on uniform clothing as that performed by Public Works and Public Utilities
employees with the result that fewer uniform changes and replacements are needed.
The City states that its proposal does not preclude issuance of 11 uniform sets to Meter
Readers.
Union’s Position
The Union asserts that all employees, including Meter Readers, require clean uniforms
daily in order to comply with the City’s dress and hygiene standards and urges rejection
of the City’s proposed change.
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Discussion
The City’s argument is not persuasive that the differences in duties of these two positions
in the bargaining unit are sufficient to justify treating them differently with respect to
issuance of uniforms. Nor has the City demonstrated any material change in Meter
Reader work, e.g., change from a five-day to a four-day schedule, that would justify
reduction in the number of uniforms issued. By its own admission, the City may decide
not to exercise its requested discretion to issue a fewer number of uniforms to Meter
Readers. As before, the presumption will be in favor of retaining the current language.
No indication arose at the hearing, or in the post-hearing briefs, to suggest that the
Union does not agree with the City’s second proposal for Article 23.4 expanding the
standards for wearing uniforms.
Recommendations
Article 23.2 I recommend that current language of Article 23.2 be retained with
all bargaining unit employees treated the same with respect to issuance of
uniforms.
Article 23.4 No evidence or argument was made by either side on Article 23.4,
and so it appears that the Union has accepted the City’s proposal and this
provision is not part of the impasse. However, in the event that it is included, I
recommend implementation of the City’s proposal to revise the contents of
Article 23.4 as follows since the Union’s challenge does not appear to extend to
this part of the City’s proposal. :
The employee shall wear the articles of the uniform listed in Section 23.1 only for
official City business. Uniforms provided by the City shall be worn without
modification and only for official City business. Only City issued hats are allowed.
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IV. Career Development
Article 25
Disputed Provisions
A. Education Incentive
Article 25.1-25.3 in the current Agreement provides monthly monetary incentives to
employees who earn associate or bachelor degrees in the amounts of $50 and $100
respectively. According to testimony from City witnesses, these provisions mirror those
available to non-bargaining unit employees.
City’s Position
The City proposes to eliminate these incentives in their entirety as a cost-avoidance
measure. According to testimony from City witnesses, no bargaining unit member
currently receives education incentive, and none has received it for at least the past 13
years. The City argues that the proposed elimination of the incentives will avoid
potential future costs, without adversely affecting a population of employees who have
not historically used this benefit.
Union’s Position
The Union opposes removing the education incentives because to do so may
discourage employees from obtaining education or training which would help
advance their careers. The Union further argues that the education incentive s benefit
the City in the form of a more educated and capable workforce, and also helps the
City to identify leaders within the bargaining unit workforce.
Discussion
The City’s argument regarding future cost avoidance is not persuasive. For one thing,
the City’s own testimony demonstrates that that since there are currently no costs, there
are no savings to be had. Absent a sea change in participation among members of
this bargaining unit, potential savings or cost avoidances are small. However, as labor
costs continue to be a major component of any operating budget, it behooves
employers to maximize the efficiency and effectiveness of all its employees. Incenting
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improved education is a time-honored means of doing this. In addition, the world of
work is changing at an unprecedented rate. Technological changes impact jobs at
every level, in some cases making them obsolete. Employees should be encouraged to
prepare both for changes in today’s jobs, and the jobs of the future. Educational
incentives are an effective way of demonstrating such encouragement. Given that
there is no material change that would compel removal of this provision, the
presumption in favor of current language will prevail.
Recommendation
I recommend no change to current language.
***
B. Licensure Incentive
Currently, the Agreement has no provision for licensure incentives for Utility
Collection/Distribution Operators (hereinafter “Operators”). The Union has proposed a
new provision to Article 24.5 that would provide an annual lump sum bonus of $500 for
each aforementioned Operator who obtains a Water Distribution Level III license. The
City has countered with an annual incentive amount of $250. The parties’ proposals
are substantially similar except for the dollar amounts, except that the City’s proposal
does not provide proration for new employees.
Union’s Position
The Union bases its $500 proposal on the amount paid for other water-related licenses.
It further maintains that this license is difficult to obtain, and valued by other utilities. No
documentary or testimonial evidence was presented in support of this statement.
City’s Position
The City provided testimony to the fact that Operators who lack the Level III license are
classified as Utility Collection/Distribution Trainees (hereinafter, “Trainees”) in Pay Grade
15. Once they receive the license, required within 18 months of employment, they are
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promoted to Operators (Pay Grade16) with a concomitant promotional pay increase
as set forth in Article 26.5(b). The City pays for expenses associated with obtaining and
maintaining the license, including application, licensing and coursework fees. The City’s
witness testified that costs totaled approximately $224 for the initial license, and
approximately $150 or each subsequent year.
The City proposed a lower incentive amount, $250/year, because, as their witness
testified, the requirements for the Level III license are less than those for other licenses
that are incented at the $500 level as summarized in the City’s Chart of the Florida
Department of Environmental Protection Licensing Requirements for Water &
Wastewater Treatment Plant Operators and Distribution System Operators (undated).
Discussion
The Union has proposed a new incentive for Operators at an annual rate of $500 paid in
lump sum. It appears from reviewing the City-provided data on DEP licensure
requirements (unchallenged by the Union), that the requirements for the Level III license
are less rigorous than the other water, wastewater, and distribution licenses offered for
comparison. Employees without the license are hired as Trainees, and upon successfully
completing the licensure requirements, are advanced to the position of Operator at a
higher pay grade and a higher rate of pay. The City also pays the out-of-pocket costs
associated with both obtaining and maintaining the license. No evidence was
provided to suggest that there were difficulties in recruiting or retention that would be
ameliorated by incentives. The City counter-proposed an incentive for employees who
obtain the Level III license. The difference between the parties is the amount of the
incentive to be offered. The Union has not presented any testimony or evidence to
persuade this magistrate that the $500 incentive it proposes will provide any substantial
benefit not achieved by the $250 proposed by the City.
Recommendation
I recommend that the City’s proposal for a $250 incentive be incorporated in the
Agreement effective prospectively.
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Article 26 - Wages
Disputed Provisions
Three provisions of Article 26 are in dispute:
1) Wages
Across-the-board wage increase for the current fiscal year:
The Union proposes a 3.0% wage increase effective retroactively to
October 1, 2012, as well as a 3.0% increase in the pay ranges for
bargaining unit positions.
The City’s proposal is for a 1.0% wage increase effective prospectively
from adoption of the new Agreement; no increase is proposed for pay
ranges.
2) Longevity Pay:
The City proposes eliminating longevity pay as currently provided by
Article 26.1(c) for new employees, while retaining a modification of the
existing longevity schedule for employees who currently receive such pay.
The modified schedule, when fully implemented, will result in a five-dollar
($5.00) per month ($0.03 per hour) adjustment for every year of service.
The Union opposes the City’s proposed changes.
3) Pay Grade Adjustment for Collection and Distribution Operators:
The Union proposes increasing the Pay Grade for Collection and
Distribution Operators from PG 16 to PG 17 based on recent licensure
requirements introduced by the City.
The City opposes the Union’s proposed change.
Note: Both of the City’s changes are proposed to be effective prospectively from the
date of ratification or legislative action effectuating the new Agreement. The Union
proposes its changes to be effective October 1, 2012.
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Wages
City’s Position
The City’s one percent across-the-board pay proposal complements its Article 20.4
proposal for a one percent increase in employees’ pension contribution. The objective
in pairing these two proposals is to maintain current “take-home pay” such that
employee’s net pay after pension deduction not be reduced because of the
(proposed) increase in that deduction. Concerns for the City’s financial health limit the
magnitude of the City’s offer which is consistent with the amount the City granted to its
non-bargaining unit employees.
The City provided comparative data on local beach communities showing that City of
Atlantic Beach pay is comparable and competitive.
Union’s Position
The Union points out that employees’ last wage increase was four years ago, and that
the Consumer Price Index (CPI) has increased by more than three percent since then.
Discussion
It is understandable that employees might hope for a wage adjustment after four years
of flat pay rates. However, nothing in the pay plan suggests that City employees are
disadvantaged with respect to employees performing similar work in other local
jurisdictions. The City provided documentation from nearby beach communities to
show that City of Atlantic Beach pay ranges are competitive. The Union did not provide
any contradictory data, nor did they challenge the appropriateness of the beach
communities selected, the jobs compared, or the accuracy of the comparative salary
information submitted. In fact, though pay rates did not increase, employees did
receive additional income in FY 2011-2012 in the form of a one-time “appreciation
bonus.”
Comparative data provided by the City for four local beach communities similar to
Atlantic Beach show that salary ranges for bargaining unit positions are in line with those
of the comparators with no significant disparities. No testimony was provided to
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demonstrate recruitment or retention difficulties related to these nearby jurisdictions. It
should be noted though, that the comparative data did not identify either effective
dates for the included pay rates, e.g., collective bargaining agreement durations, or
the date(s) that the data were compiled. That additional information would have been
helpful.
The Union neither claimed, nor produced any documentation to show any history of the
parties’ utilizing CPI (Consumer Price Index) data to determine wages at the table. In
fact, the Union only alluded to “CPI” without specifying which of the many indices was
referenced, or what specific changes occurred over what time period, and how the
Union believed those changes affected bargaining unit employees. The CPI is not itself
a cost-of-living index and its applicability to wage discussions should be very narrow
and specific.
Recommendation
I recommend that the City’s November 30, 2012 proposal on Article 26.1(a) for a one-
percent across-the-board pay increase be included in the collective bargaining
agreement, to be effective prospectively.
I further recommend that there be no changes to the Salary Ranges incorporated in
Exhibit A of the current Agreement, City of Atlantic Beach Job Classification/Pay Grade
Salary Range.
***
Longevity Pay
City’s Position
The City seeks to phase out its current longevity pay system by freezing longevity pay
amounts for current employees. Frozen amounts will be at a rate greater than or equal
to what employees currently receive. Shortly after initial implementation, employees
who are between current longevity “milestones” will have their longevity pay adjusted
to include $0.03 per hour per year of employment for any years of service not currently
reflected in “milestone” longevity pay amounts.
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Employees hired after the effective date of this change will not be eligible to receive
longevity pay. Current employees will not lose their existing benefit, and may receive
additional benefits at a reduced level, but on an earlier effective date. The City
proposes that this change be effective on the date of ratification of this Agreement by
both parties, or the date of legislative action to implement it. The City maintains that its
proposal is fair and competitive.
Union’s Position
The Union objects to the elimination of longevity pay on the basis that it is the only
mechanism for employees to obtain increased pay based on length of service. Without
longevity pay, the Union claims that long service employees may earn the same rate of
pay as new hires.
Discussion
Longevity-based adjustments have long been components of public sector pay plans.
They are designed to incent employee retention in a competitive labor market. There
are different perspectives on them as employee compensation tools, including whether
longer service equates to added value, and whether such added value, if any, justifies
the increased cost. While the parties have incorporated longevity provisions in their
past agreements, the City seeks to move its compensation policy in a different
direction, as part of its cost-reduction efforts. The Union does not agree with the
proposed change, despite the fact that individual current employees may benefit from
it in the short run. While no current employee will lose existing pay, beyond the one-
time adjustment, employees currently receiving longevity pay will not increase the
amount they receive (though they will keep what they have). New employees will not
be able to look forward to receiving longevity pay in the future.
Recommendation
I recommend that the City’s November 30, 2012 proposal on Article 26.1 (c) for ending
longevity pay for new employees, and incorporating longevity pay in base salaries of
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current employees as proposed, be included in the collective bargaining agreement,
to be effective prospectively.
***
Pay Grade Adjustment
Union’s Position
The Union’s proposal for a one pay grade increase is based on the fact that the Level III
license is not required by law, but has been made a job requirement by the City for all
employees in the classification of Utilities Distribution/Collection Operator. Because the
license if required for operational convenience rather than legal compliance, the Union
argues that it should command an upgrade to a higher pay grade and associated pay
range.
City’s Position
The City points out that it requires an employee to have a Level III license to qualify for a
Utilities Distribution/Collection Operator position in Pay Grade 16. Unlicensed
employees are hired into a Utilities Distribution/Collection Operator Trainee position, pay
Grade 15 and, upon licensure, are promoted to the Operator position. There is no
difference in the work performed by the two positions (Operator and Trainee), only in
the licensure. In addition both parties have proposed lump-sum incentive payments to
employees who obtain the license. The City argues that in effect another pay grade
increase will triply reward employees for the same credential.
Discussion
Assignment of classifications to pay grades is typically done through a “pay and
classification study” whereby a common yardstick is applied to all jobs to measure
them using common criteria, and then. These rankings are then associated with pay
ranges, typically surveying to include both internal (comparing with jobs within the
system) and external (using market survey data) equity. While there was no testimony
from either side on this matter, in response to a question from the magistrate during the
hearing, the City’s Human Resources Director stated that the City does use a job
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evaluation methodology. It appears as if these factors have been considered in the
City’s agreement to advance employees by title and pay grade (from Operator
Trainee – PG 15 to Operator – PG 16) upon licensure. Additionally, the City has
proposed pay a lump sum incentive to employees upon attainment of licensure. To
advance the position by yet another grade to Pay Grade 17 seems gratuitous. No
documentation was submitted to justify the placement of the Operator position at the
higher pay grade along with other positions which, presumably, were evaluated at the
higher level.
Recommendation
I recommend that no adjustment be made to the Pay Grade of the Utilities
Collection/Distribution Operator (Pay Grade 16).
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CONCLUSION
I wish the parties the best in their ongoing collective bargaining relationship and the
successful conclusion of the 2012-13 Agreement and hope that my contributions will
prove helpful to them. I would like to thank the Commission and the parties for the
opportunity to serve in this matter.
Respectfully submitted,
Adrienne Davis Trott
Adrienne Davis Trott
Special Magistrate