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DECISION - Atl Bch & LIUNA - SM-2012-068 2-25-2013 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Introduction These proceedings arise from an impasse in the collective bargaining negotiations - collective bargaining agreement that expired on September 30, 2012. The City is represented by Mr. John Dickinson and Ms. Lori Mans of the law fooks & 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 may commission provides policy direction to the City Executive who is the CEO. The City employs approximately 108 employees of whom 34 are in t represented by Northeast Florida Public Employees Local 630, Lab 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 s other bargaining unit of police personnel who are represented fo 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 bargainin evident, not only by their testimony, but also by their demeanorring and, perhaps most importantly, by the nature of their proposals. Bot communications, and this is borne out by proposals that reflect each seeks to achieve. Nonetheless, they have now reached the point where each accept. In accordance with Section 447.403(1) F.S., the parties submittethe 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 tpositions. The 1 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 nd sworn witnesses were called. The Union also offered a notebook filled with exhibits, many oe.g., the collective bargaining agreement, and the parties proposals. 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 object 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 statutori forth in Chapter 447.405. 2 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 on 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 concernin 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 Revenues The City of Atlantic Beach is primarily a residential community ad valorem taxes being its major revenue source, comprising more than a third of general fund revenues. The recession has 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, reducti overtime authorization. Capital projects have been reduced or eliminated. Among expenses regarded as problematic by the City is the increa required by the 3 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 Fund budget. A significant factor inflating the city contribution is the unfunded liability of the pension plan. In lay monetary value of the future benefits already earned by participants, less the value of the assets in the plan available to pay those benefits. ach 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 attribut 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 he 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. negotiations have not yet had sufficient time to yield anticipated savings. The Union 4 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 5 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 I.Article 8 -Grievance Procedure Disputed Provision Current language provides 10 working days for appealing a grievance to arbitration. 1 The Union proposes increasing the time from 10 working days to 3The City proposes no change. Position The Union proposes increasing the time period from 10 working da Executive Board approval for a fourth step grievance to be advanced to arbitration. Position 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 r 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 wish to solve, the presumption will be in favor of current langu language was negotiated by the parties and, according to testimony provided b witnesses and un-rebutted by the Union, the existing provision has worked well fo parties. I am therefore unwilling to substitute new language fo upon by the parties. Recommendation I recommend retention of current language. 1 All referenare to the Agreement between the parties that expired on status quo 6 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 II. Article 13 - Personal Leave Disputed Provision Article 13.1((h) of the existing Agreement provides for each employee to have a single 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 , 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 sem to be effective on the date of ratification of this Agreement by both parties, o action taken pursuant to Section 447.403: Accrual rate: The City proposes to lower the per-pay-period accrual rate to a o 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 le than under the existing plan. Carry-over cap: The City proposes to lower the maximum number of accrued o Personal Leave hours an employee may carry over to the next fiscal year from 960 hours to 480 hours. Pay Out: The City proposes to eliminate all payout of Personal Leave foll o a final transitional payment upon implementation of this Agreeme would pay out all accrued leave in excess of 480 hours, plus a one-time December 2011 elections under current contract language. 7 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 eave 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. All 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. Lab Mayor and the City Commission to seek cost reductions of 15 -16% over the long term. and the City seeks to reduce it as part of its overall cost-reduction efforts. -offer on Personal Leave which would apply prospectively only to new emplo 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 le each year to once each year. The Union claims that the City has not provided sufficient infor position that its proposed leave plan is competitive with similar plans in surrounding communities. The Union stated its belief that the current Personal Leave prov 8 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 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 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 th low-cost alternative to higher wages. Paying for unused leave was a encouraging people not to take time off. In the current economi 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 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, payi in the form of cash-for-leave has become unfeasible in the current economic environment. Changing established leave plans, especially where elimination oticipated income is concerned, is not an easy thing to do. I recognize that somemay have to make lifestyle adjustments to this change. In this recession ec face similar belt-tightening. Leave plans that go above and beyond their original objective of providing pay for reasonable time away from work, a savings. The City has proposed reductions such as this as altern 9 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 cuts which could cost actual employee jobs as well as service cu to residents and taxpayers. The City proposes a transitional plan whereby all employees who accrued leave in excess of 480 hours will be compensated for tha employees are affected. In addition, employees who would be due ment for leave in accordance with their personal elections in 2011 will receive-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 not sufficiently support its claim that the shortcomings, nor did it submit its own data to contradict . Recommendation I recommend adoption of as set forth in Article 13 in their entirety to be effective prospectively. 10 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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. The Union does not request additional days of Bereavement Leave (not chargeable to thed for sickness, vacation, or other personal matters), 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 decea sufficient time to discharge those responsibilities. 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 Agreem maintains that employees can already request to take available Personal Leave in conjunction with Bereavement Leave, and therefore no special proion is necessary. Two City witnesses testified that they had no recollection of an 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 othe 11 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Discussion 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 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 Unobjective to ensure that Personal Leave will be granted, without discretion, for the serious purpos attending to a family death is consistent with Leave, rather than accumulating it. The fact that such leave will come from the eave 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 yat the time of bereavement. Inasmuch as such requests have not been denied City should not experience any material negative effect on current practice. I believe ought by the City in Article 13. Recommendation Addressing this provision in the context of the entire existing changes proposed by the City in Article 13, I recommend 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. 12 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Article 17 - Hours of Work and Overtime Disputed Provision The Union proposes to change current language regarding overtime compensation by making cash payment the default, and in order for compensatory time to be taken. has the right to choose whether or not he/she should receive cash payment or compensatory time off for me worked (Emphasis added) The Union also maintains that overtime work may as well as causing conflicts with other obligations, resulting in some employeeeference for cash payment. The City proposes current language for Article 17.3 which providshall have the discretion to compensate for overtime hours worked in tm of cash or The City states that there has never been a grievance challenging the application of the current provision. The City 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 oposals 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. 13 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 assertion payment and compensatory time except as may be provided in this contract. Such a for its proposal. While there may be many instances such as thiemployee 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 t 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. 14 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 III. Article 20 Pension The City of Atlantic Beach currently sponsors a defined benefit pension plan which is 2 codified in its municipal ordinance code. The plan, which covers City employees other than police, has existed since 1975. 3 According the Section 2-299 (a) and (b) of the ordinance code, the pension plan shall be funded by contributions from employees, and contributions fro amount which, together with the member cis sufficient to meet 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 Citybution has risen from 13.99% of payroll in 2007 to 26.34% in 2013. For employees hired prior to September 1, 2008, the vesting requ plan participation; for employees hired on or after September 1, requirement is ten years of plan participation. (Sec. 2-298). According to undated information provided by the City, there arees in the pension plan, 34 of whom are in the LIUNA bargaining unit. Twenty-eight, (76%) of There are two major types of pension plans: Defined Benefit (DB)DC) 2 plans. Their names derive from the drivers of their funding. DB plans are more complex because of their structure and funding mechanisms. Retirement b derive from a formula using salary and length of service. An act 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 reti retirement benefit, and the contributions are a construct designed to produce that Contributions can be made by employees, the employer, or both. DC plans are simpler in design and administration. The amount o 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 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. 15 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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. Place unvested current employees and new employees in the DC plan. o (Eight current bargaining unit employees are unvested and would affected by this move.) During the first ten years of service, the City will contribute up to 6.0% of an o employee . After the first ten years, the City will without a match. Defined Benefit Plan 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%. o As a transitional measure, the City proposes the following for those employees it would transfer to the DC plan: -to-date contributions from the DB to the DC plan; o Matching dollar-for-that are moved to the o 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 current employees, whether vested or not, would remain in the current DB plan. The 16 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 contribution, to be increased to 7.0% after ten years, in additi contributions up to 6.0% The City has documented its dual financial challenges declining revenues from ad valorem taxes resulting from diminished property values, and escalating 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 strateg benefit plan. Contributions have increased from 13.99% of payroll in 2007 to 26.34% of payroll in 2013. The Union would prefer to have all employees remain in the curre 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% ten years); an additional 7.0% unmatched after ten years (sub-total 10.0%) with an ontribution up to 6.0% for a (total of 16% maximum any contributions although it appears that they could do so voluntarily. The Union maintains that employees have made other concessions t 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 fito 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 been made have not had sufficient time to show a positive effect on the pe 17 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 performance, along with general improvement in the economy and investments overall. Discussion The major disagreement is whether existing employees, i.e., the 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 ser, 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 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 different form. Unvested employees still have time before retire lifestyles accordingly by increasing or changing their personal savings plans. The objective is to maintain a viable retirement plan for employees financial obligations of the government. A radical change to th difficult, but in this case, it is the choice most consistent with the interest and welfare of the public as well as the employees. 18 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Recommendation prospectively. 19 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Article 23 - Uniforms Disputed Provision Current language provides that the City will provide 11 sets of to employees who are required to wear uniforms in the performanc Eleven uniform sets allows an employee five sets for the current-day work week, five sets to be at the laundry, and an extra set for the turnaround d one set going in to the laundry and one set coming out. The City uniforms as necessary, e. The City proposed two main changes to this Article: In Article 23.2, the City seeks to eliminate the guaranteed numb 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 wearing the uniforms. This proposal does not appear to be disputed by the Union. The City maintains that the nature of the work performed by Mete hard on uniform clothing as that performed by Public Works and Public Utilities employees with the result that fewer uniform changes and replace The City states that its proposal does not preclude issuance of Readers. ition The Union asserts that all employees, including Meter Readers, r 20 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Discussion The Cityis not persuasive that the differences in duties of these two positions in the bargaining unit are sufficient to justify treating them d 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 Readers. As before, the presumption will be in favor of retaining the current No indication arose at the hearing, or in the post-hearing briefs, to suggest that the 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 this provision is not part of the impasse. However, in the event that it is included, I recommend implementation of the Article 23.4 as follows : The employee shall wear the articles of the uniform listed in Se official City business. Uniforms provided by the City shall be worn without modification and only for official City business. Only City iss 21 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 respectively. According to testimony from City witnesses, these available to non-bargaining unit employees. The City proposes to eliminate these incentives in their entiret as a cost-avoidance measure. According to testimony from City witnesses, no bargaini 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 incentiv potential future costs, without adversely affecting a population not historically used this benefit. The Union opposes removing the education incentives because to do discourage employees from obtaining education or training which advance their careers. The Union further argues that the educatis 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 g future cost avoidance is not persuasive. For one thing, are currently no costs, there are no savings to be had. Absent a sea change in participation among members o this bargaining unit, potential savings or cost avoidances are s 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 it 22 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 shou l incentives are an effective way of demonstrating such encouragem 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 incentiv Collection/Distribution 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. are substantially similar except for the dollar amounts, except that t does not provide proration for new employees. Union Position The Union bases its $500 proposal on the amount paid for other w-related licenses. It further maintains that this license is difficult to obtain, a documentary or testimonial evidence was presented in support of tatement. The City provided testimony to the fact that Operators who lack the Level III license are classified as Utility Collection/Distribution Trainees 15. Once they receive the license, required within 18 months of employment, they are 23 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 promoted to Operators (Pay Grade16) with a concomitant promotional pay increase as set forth in Article 26.5(b). The City pays for expenses asso maintaining the license, including applicat witness testified that costs totaled approximately $224 for the 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 Chart of the Florida Department of Environmental Protection Licensing Requirements fo Wastewater Treatment Plant Operators and Distribution System Oper (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 are less rigorous than the other water, wastewater, and distribu 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 o 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 testim persuade this magistrate that the $500 incentive it proposes wil benefit not achieved by the $250 proposed by the City. Recommendation I recommend that tbe incorporated in the Agreement effective prospectively. 24 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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. 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 The modified schedule, when fully implemented, will result in a -dollar ($5.00) per month ($0.03 per hour) adjustment for every year of service. 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 licen requirements introduced by the City. proposed change. Note: date of ratification or legislative action effectuating the new The Union proposes its changes to be effective October 1, 2012. 25 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 Wages -the-board pay proposal complements its Article 20.4 proposal for a one percent increase in employee pension contribution. The objective - be reduced because of the (proposed) increase in that deduction. nancial health limit the the City granted to its non-bargaining unit employees. The City provided comparative data on local beach communities sh Atlantic Beach pay is comparable and competitive. The Union points out that employeeswage 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 th disadvantaged with respect to employees performing similar work jurisdictions. The City provided documentation from nearby beach communities to show that City of Atlantic Beach pay ranges are competitive. The any contradictory data, nor did they challenge the appropriatene 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- Comparative data provided by the City for four local beach communities similar to Atlantic Beach show that salary ranges for bargaining unit posit of the comparators with no significant disparities. No testimon 26 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 demonstrate recruitment or retention difficulties related to these nearby jurisdictions. It should be noted though, that the comparative data did not identi dates for the included pay rates, e.g., collective bargaining ag 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 wages at the table. In fact, the Union only referenced, or what specific changes occurred over what time per Union believed those changes affected bargaining unit employees. a cost-of-living index and its applicability to wage discussions should be very narrow and specific. Recommendation - 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 Range Exhibit A of the current Agreement, City of Atlantic Beach Job Classification/Pay Grade Salary Range. *** Longevity Pay 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 longevimilestones to include $0.03 per hour per year of employment for any years of service not currently reflected in milestone 27 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 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 effect. 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. The Union objects to the elimination of longevity pay on the basthe only mechanism for employees to obtain increased pay based on length longevity pay, the Union claims that long service employees may 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 thei 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 b 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 be able to look forward to receiving longevity pay in the future Recommendation Article 26.1 (c) for ending longevity pay for new employees, and incorporating longevity pay 28 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 current employees as proposed, be included in the collective bar to be effective prospectively. *** Pay Grade Adjustment license is not required by law, but has been made a job requirem employees in the classification of Utilities Distribution/Collection Operator. Because the license if required for operational convenience rather than lega argues that it should command an upgrade to a higher pay grade a range. The City points out that it requires an employee to have a Level III license to qualify for Utilities Distribution/Collection Operator position in Pay GradeUnlicensed employees are hired into a Utilities Distribution/Collection Operator Trainee position, p 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 th 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 29 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 evaluation methodology. It appears as if these factors have been considered in the 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 Oper 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 U Collection/Distribution Operator (Pay Grade 16). 30 SM-2012-068 City of Atlantic Beach, FL & Local 630, LIUNA February 25, 2013 CONCLUSION I wish the parties the best in their ongoing collective bargaini 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 31