AFSCME Deal Sets Stage for County Budget

Washtenaw County board of commissioners special meeting (Sept. 13, 2011): At a meeting called for the sole purpose of dealing with tentative labor deals, the county board approved new agreements with three unions representing county employees, including its largest employee union, AFSCME Local 2733.

The deals affect 675 union employees, as well as 271 non-union, court non-union and elected officials – or nearly 70% of the county’s total 1,369 employees.

AFSCME Local 2733 represents about half of the county’s employees – 644 people. The Local 2733 agreement was ratified by a 2-to-1 vote earlier this week, but only 325 members voted. Caryette Fenner, president of Local 2733, described it as a typical turnout.

County administrator Verna McDaniel said these three agreements, coupled with those already approved, will yield $7.7 million in savings over 2012 and 2013. The county has a goal of gaining $8 million in labor concessions for that two-year period, to help overcome an estimated $17.5 million deficit.

McDaniel is expected to present a draft budget to the board at its Sept. 21 meeting.

There was no discussion before the board vote, which occurred after the board emerged from a 30-minute closed session to discuss labor negotiations. Commissioner Dan Smith (R-District 2) cast the lone vote against the agreements.

In a follow-up interview with The Chronicle, Smith cited concerns over health care provisions that would cost the county more than he had been led to expect, based on previous agreements already approved by the board for Michigan Nurses Association Units I and II.

And because of “me too” clauses in other union agreements, the more favorable terms negotiated by AFSCME Local 2733 will likely be applied to other union contracts as well.

In addition to the agreement with five bargaining units of AFSCME Local 2733, Tuesday’s approved agreements were with: (1) the two bargaining units of TPOAM (Technical, Professional and Officeworkers Association of Michigan); and (2) one of two bargaining units of AFSCME Local 3052. Also, the same benefits that AFSCME Local 2733 receives will be extended to the non-union, court non-union and elected officials.

The second bargaining unit of AFSCME Local 3052, representing 55 general supervisors, voted down its agreement this week. Nancy Heine, president of AFSCME Local 3052, told The Chronicle that union leaders would be polling their membership on Wednesday to determine what issues caused members to reject the tentative agreement.

In addition, agreements have not yet been reached with four other bargaining units: Two units with the Assistant Prosecutors Association, representing 24 employees; and two units with the Public Defenders Association, representing 13 employees.

Two other bargaining units – the Police Officers Association of Michigan (POAM) and the Command Officers Association of Michigan (COAM) – earlier this year reached agreements that aren’t part of the $8 million goal. The POAM and COAM deals are for a four-year period through 2014.

Details of the Agreements: AFSCME

AFSCME (American Federation of State, County and Municipal Employees) Local 2733 represents a total of 644 members. There are five bargaining units within Local 2733. The largest is Unit A with about 340 members, including all general county professional employees who have a four-year college degree or higher, excluding supervisors and jobs in several other categories.

Other Local 2733 units are:

• Unit B – general county employees whose job requires less than a four-year degree, excluding supervisors, administrative staff, and personnel in several other categories.
• Unit C – all employees of the 22nd Circuit Court and Friend of the Court program, excluding supervisors.
• Family Division/Juvenile Center – all employees of the Washtenaw County Trial Court’s Family Division/Juvenile Center, excluding supervisors, court bailiffs/officers, and temporary or seasonal employees.
• Juvenile Detention – all employees of the county juvenile detention facility, excluding supervisors, court bailiffs/officers, and temporary or seasonal employees.

Agreements for the AFSCME units run through Dec. 31, 2013. [.pdf file – summary of AFSCME agreement] The agreements stipulate no wage increases unless property tax revenues increase by at least 2% on or before Dec. 31, 2012. In that case, a 1% wage increase will take effect on Jan. 1, 2013.

Other items include:

• a 10% employee contribution to the Washtenaw County Employees’ Retirement System (WCERS). The vesting period will increase from eight years to 10 years, though current employees will be grandfathered in at eight years.
• $75/month premium sharing for the core health care plan. Currently, employees do not pay premiums.
• Co-pays will increase or be added. For example, the co-pay for an emergency room visit increases from $50 to $250. Co-pays for prescription drugs will increase ($0 to $7 for generic drugs, $30 to $70 for brands).
• 10 bank leave days for 2012 and 2013. No furlough days will be imposed. Though bank leave and furlough days are similar – both are unpaid – the bank leave days do not affect calculations toward an employee’s retirement or longevity pay. In contrast, furlough days are deducted from the calculations toward retirement and longevity pay.
• Longevity payouts will be eliminated for new hires after Jan. 1, 2012; for other employees, longevity payouts will be reduced by 25% in 2012. There will be no reduction in longevity pay in 2013. (Longevity pay is a benefit provided to employees based on years of service with the organization – generally available after 5 years of service. Employees would receive between 3%-9% of their prior year’s wages, paid out either in a lump sum payment or bi-weekly throughout the year.)
• Step increases – automatic increases in wages that are built into an employee’s contract – will remain in place for 2012, but will be frozen for 2013.
• Tuition reimbursement is frozen at 0% for 2012 and 2013.
• Payout for excess vacation will be eliminated for 2012 and 2013.

Details of the Agreements: TPOAM

TPOAM (Technical, Professional and Officeworkers Association of Michigan) represents 27 total members in two bargaining units: (1) Unit I – all senior deputy district court clerks, deputy district court clerks and probation secretaries at the 14-A District Court; and (2) Unit II – supervisors and probation officers at the 14-A District Court, excluding magistrates and the deputy court administrator. Until last year, these employees had been represented by the Teamsters, but they voted to de-certify and become certified as part of the TPOAM union instead.

The TPOAM agreement also includes a 1% wage increase, effective Jan. 1, 2013, if property tax revenues increase by at least 2% on or before Dec. 31, 2012. [.pdf file – summary of TPOAM agreement] Though the “me too” clause will likely cause some of these items to be modified, other elements of the agreement approved by the board on Tuesday include:

• a 2% employee contribution to the Washtenaw County Employees’ Retirement System (WCERS).
• a $150/month premium sharing for the core health care plan for nine months.
• 10 bank leave days for 2012 and 2013.
• Longevity payouts will be eliminated for new hires after Jan. 1, 2012. For other employees, longevity payouts will be reduced by 50% in 2012 and 2013.
• Step increases will be frozen in 2012 and 2013.

Unlike the AFSCME agreement, the TPOAM agreement also states that if Gov. Rick Snyder does not sign the 80/20 legislation into law, the union can re-open negotiations with the county. That legislation would require public employees to pay 20% of their health care costs, effective Jan. 1, 2012, or would cap the amount that local governments would pay as premiums for employees.

Labor Agreements: Commissioner Vote

All resolutions are voted on twice by the board. First, they’re voted on at the meeting of Ways & Means, a committee of the entire board.  Resolutions are given a final vote at the regular board meeting. Ways & Means and regular board meetings are held back-to-back, but typically a resolution that’s passed at the Ways & Means meeting is considered at the regular board meeting two weeks later.

However, for some items that the administration or board wants to expedite, votes are taken the same evening at both meetings. That was the case with the resolution on the labor agreements at the Sept. 13 special meeting.

Early in the Ways & Means meeting, commissioners entered into a closed session to discuss labor negotiations, which lasted about 30 minutes. When they emerged, they handled the main action items on the agenda – resolutions to approve the three labor agreements.

There was no discussion about the agreements. Generally, commissioners follow the advice of the administration and corporation counsel not to publicly discuss labor issues, particularly during contract negotiations.

Outcome: The board’s vote at its Ways & Means Committee meeting passed unanimously. Wes Prater and Ronnie Peterson were absent.

The board moved immediately into it regular board meeting. Again, the main action items on the agenda were approval of the three labor agreements. And again, there was no discussion on these items.

The final vote taken at the board’s regular meeting passed on an 8-1 vote, with dissent from Dan Smith (R-District 2). Wes Prater and Ronnie Peterson were absent.

Reached later this week by The Chronicle, Dan Smith indicated that his vote against the agreements was due in part to the health care benefits, which he described as significantly different from what he’d expected to see. He had believed the benefits would be similar to agreements previously approved by the board for the Michigan Nurses Association Units I and II, representing a total of 15 employees.

In those agreements, for example, health insurance premium sharing was $150 per month. In the AFSCME agreements, the premium sharing is half that amount – $75 per month. He noted that with “me too” clauses in other union agreements, the premium sharing will likely be lowered for other employees too.

Smith also noted that the AFSCME agreements aren’t congruent with the state law that’s expected to take effect Sept. 15, and he objected to rushing the agreements through at the last minute.

The state law that Smith referred to is the “Publicly Funded Health Insurance Contribution Act,” which was passed by the Michigan legislature on Aug. 24, 2011. It is scheduled to be signed by Gov. Rick Snyder on Sept. 15. Agreements that are in place before that date do not have to conform with the act, which is also often referred to as “80/20″ legislation. [.pdf of the bill]

The legislation stipulates maximum “hard cap” dollar amount equivalents that public employers can contribute toward employee healthcare: $5,500 for single-person coverage, $11,000 for individual and spouse coverage, and $15,000 for family coverage – for coverage years beginning on or after Jan. 1, 2012. There’s another option that an employer can follow, if approved by a simple majority vote of its governing body, which would limit the benefit contributed by the employer percentage-wise instead of using a hard cap. On that option, public employers could contribute no more than 80% of their employees’ health care costs for coverage years beginning on or after Jan. 1, 2012.

However, on a 2/3 majority vote, which must be repeated each year, a governing body of a public employer can opt out of these requirements. In an email to The Chronicle on Monday, county administrator Verna McDaniel stated that the board will be asked to opt out, which would exempt the county employees from the requirements of this law.

Reaction of Union Leaders

Several union representatives attended the Sept. 13 meeting, though they did not address the board during public commentary.

Caryette Fenner, president of Local 2733, said it had been a difficult negotiation, especially since union members had already given concessions in 2009, for the 2010 and 2011 calendar years. [At the time, those concessions were expected to save the county about $5.8 million over two years.]

She noted that one significant difference between the previous contract and the current one is the stipulation that members will receive a 1% raise in 2013 if the county’s property tax revenues increase 2% or more in 2012. They didn’t have that assurance when they made wage concessions in 2009, she said, and it turned out that tax revenues had been better than originally projected. [Though the county's property tax revenues have been better than projected, revenues still declined – falling 5.33% in 2010 and 2.85% this year. For this year, the county's equalization staff had originally projected a drop of 8.5%.]

Fenner also observed that even with the concessions made in this labor agreement, there’s no assurance that the county won’t cut jobs.

Nancy Heine, president of AFSCME Local 3052 – which voted down their tentative agreement – told The Chronicle that the membership would be polled to determine what issues caused them to reject the tentative agreement. There’s a question about whether everyone is bearing their fair share, she said, as well as concerns over whether employees who are already struggling will be able to absorb even more cuts. Some union members have already lost their homes to foreclosure, she said, and others are worried that they won’t be able to make mortgage payments if their longevity pay is cut – that’s a direct hit to their paychecks, she noted.

Heine also said that only nine of the Local 3052 members are “general fund” employees – that is, employees whose salaries and benefits are paid for out of the county’s general fund, which gets the majority of its funding from property tax revenue. Savings from concessions made by non-general fund employees won’t help the county deal with its projected $17.5 million deficit, she noted. [Examples of non-general fund departments include the parks & recreation commission and CSTS (community support & treatment services).]

Present: Barbara Levin Bergman, Leah Gunn, Kristin Judge, Alicia Ping, Yousef Rabhi, Rolland Sizemore Jr., Dan Smith, Conan Smith, and Rob Turner.

Absent: Ronnie Peterson, Wes Prater

Next working sessions: Thursday, Sept. 15, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. in Ann Arbor. An additional working session is set for Thursday, Sept. 22 at 6:30 p.m.

Next regular board meeting: Wednesday, Sept. 21, 2011 at 6:30 p.m. at the county administration building, 220 N. Main St. in Ann Arbor. The Ways & Means Committee meets first, followed immediately by the regular board meeting. [confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public comment sessions are held at the beginning and end of each meeting.

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