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9.f) Staff Report-Local 49ers ContractSCANDIA Staff Report Date of Meeting: August 18, 2015 To: City Council From: Kristina Handt, Administrator Re: Collective Bargaining Agreement with Local 49ers, 2015-2017 Background: In November 2014 we received notice members of the maintenance staff had filed to form a union. The vote occurred in December 2014 and was approved by a majority of the members. Mayor Simonson, Council Member Schneider and I were selected to meet with the union to negotiate the terms of the collective bargaining agreement. We began meeting in February and a tentative agreement was developed in July. The union members have voted on this proposal and approved it. The final step before implementation is Council approval. Issue: Should the Council approve the agreement with the Local 49ers? Proposal Details: A copy of the agreement is included in your packet. Significant sections are summarized below. Article III recognizes those in the bargaining unit. "All Maintenance Workers, Equipment Operators, Snowplow Operators, Parks Wastewater Operators, Street, Sewer/Water employees employed by the City of Scandia, Minnesota, who are public employees within the meaning of Minn. Stat. § 179A.03, subd. 14, excluding clerical, supervisory and confidential employees." This excludes seasonal employees working not more than 67 days in a calendar year. Article VI recognizes the Employer Authority. "The EMPLOYER retains the full and unrestricted right to operate and manage all manpower, facilities, and equipment; to establish functions and programs; to set and amend budgets; to determine the utilization of technology; to establish, modify, eliminate, or otherwise change the organizational structure; to select, direct, and determine the number of personnel; to establish work schedules; and to perform any inherent managerial functions, duties and/or responsibilities. Except as clearly limited by the express terms of this Agreement, the right of the EMPLOYER in all respects to manage its business, operations, and affairs shall be unimpaired. The enumeration of rights and duties listed in this Agreement shall not be deemed to exclude other inherent rights and management functions not expressly reserved in this Agreement, and all management rights and management functions not expressly delegated in this Agreement are reserved to the EMPLOYER." Article VII lays out the Grievance Procedure. This includes four steps and then arbitration. Article IX covers work schedules and allows for changing them with a 72 hour notice except in the case of unusual circumstances like snow, tree removal, wastewater system failures, etc. Article XI addresses call back pay. A slight change from previous policy is that the two hours will be compensated at time and a half. This often happened in the past because the employee likely worked over 40 hours, however it wasn't guaranteed until now. Article XIV addresses discipline and is very similar to that in the Personnel Policy. Article XIX covers health insurance. The union employees will be switching to the union insurance (target date October). Currently the City cost for the three maintenance workers is $3,570.64/month (including HSA contributions). This will go down to $2,544 when the switch is made. The HSA contributions will not continue for the represented employees as their new plan is not a high deductible plan. Article XX covers life insurance requirements. The contract requires the City provide $15,000 in coverage for all eligible employees. We currently provide more than this. The base policy will provide $18,000 coverage up to age 60. At that time a supplement would need to be purchased. The City may drop the supplement they have been providing until this threshold is met in a few years. This is reduce City expenses by about $7/month. Article XM covers paid Holidays. The only addition is Christmas Eve from our current policy. Council should consider amending personnel policy to be consistent after adoption of union contract. It doesn't make sense to have one dept. on holiday and not another. If working on a holiday they would receive time and a half. In the past, this is often what happened since employees would work over 40 hours in a week but this guarantees it. Article XXIII covers PTO. It is the same as in the personnel policy. Article XXVI addresses the on call position. If the Public Works Director puts a maintenance worker on call they would receive extra compensation of $70 per weekend or holiday and $25 per week day. Article XXVIII provides for a new wage scale. The 5 step plan that would begin July 1 st is the same model that the City had in place prior to the new scale adopted in 2013. It provides for larger step increases but step increases are not given every year, rather there is a start, 1 year, 3 year, 5 year and 8 year increase on the employee's anniversary date. One employee will be at the top of the scale immediately, another at Step 4 in September and the other just started. In addition, a 2 % wage adjustment is made each year on January 1 of 2016 and 2017. The step increase is tied to an evaluation corresponding to the anniversary date. A new feature of the process will be an employee self-evaluation. Lastly, work performed outside of the bargaining unit (firefighter) will not be subject to this pay scale. Lastly, the agreement includes a memorandum of understanding to continue discussing the Central Pension Fund. The negotiation team has been unwilling to agree to allow employees to participate in the fund. The union would like to continue discussions. This allows the rest of the agreement to move forward while discussions continue. Fiscal Impact: The changes in health insurance and wages (base wages) will result in a savings to the City of over $5,000 in 2016. This number would be reduced if other optional provisions (on call, callback and holiday pay) are executed by the City. Options: 1) Approve the Agreement as presented 2) Amend and then Approve the Agreement (it would have to go back for a vote of the union members) 3) Don't approve the Agreement, Continue negotiations Recommendation: Option 1.