City Council OKs AFSCME Accord

Ann Arbor city council special meeting (Aug 29, 2011): In a 5:15 p.m. special session convened specifically for the purpose of ratifying a new agreement with the city’s largest union, the Ann Arbor city council approved a new contract for its American Federation of State, County and Municipal Employees (AFSCME) Local 369. It’s a roughly 2.5-year deal, lasting through Dec. 31, 2013.

Key features of the agreement with the 230-member union include: no across-the-board pay increases for the duration of the agreement; employees will make greater contributions to their pension and health care plans; a 10-year vesting period for the pension plan; and an access-only style plan for retiree healthcare benefits.

Council deliberations were relatively brief, with remarks focusing on praise for the city and the union’s respective bargain teams and details of the agreement. Almost equal time was given to the manner in which the special meeting was noticed to the public.

Though questions were raised by The Chronicle through the day on Monday about whether the city had met its obligation to provide notice to the public under the Michigan Open Meetings Act, city attorney Stephen Postema relied on a recent unpublished court of appeals opinion, which is not binding on other courts and which included a strong minority dissent, to justify the city’s failure to meet a basic noticing standard set forth in an opinion from Michigan’s attorney general.

That AG’s opinion – which is also not binding on courts, but which has guided the conduct of public bodies in Michigan for over 30 years – requires public bodies to post physical notice of special meetings in a way that makes the notice publicly accessible for the 18 hours preceding the meeting.

The council’s urgency in approving the contract, reflected in the calling of the special session, was based on recently passed state legislation that limits the amount that public employers can contribute to employee health care costs. Ann Arbor’s contract with AFSCME does not conform to the limits set forth in the legislation. So the council was keen to approve the contract before the effective dates stipulated in the legislation, and did so with only seven of its 11 members able to attend the meeting.

The legislation itself specifies Sept. 15, 2011 as the relevant date; however, Ann Arbor city staff appeared to rely not on the legislation, but on an early draft of a memo drawn up by a legislative staff aide to state senator Mark Jansen, which contained a typo. Although the draft was corrected immediately after its limited initial distribution, the original draft’s stipulation of “Sept. 1″ instead of “Sept. 15″ spurred the city of Ann Arbor to convene the special meeting. The council’s next regularly scheduled meeting is on Tuesday, Sept. 6, 2011 – well before the actual Sept. 15 date in the legislation. 

AFSCME Contract

The Aug. 29 special session had one item on its agenda – the new AFSCME contract. In mayor John Hieftje’s absence, the meeting was chaired by Marcia Higgins (Ward 4). The council’s attendance at the meeting exceeded the minimum number required for a quorum. Besides Hieftje, absent were Mike Anglin (Ward 5), Carsten Hohnke (Ward 5) and Margie Teall (Ward 4).

AFSCME Contract: Council Deliberations

Stephen Rapundalo (Ward 2) began the deliberations on the contract. [Rapundalo chairs the council's labor and administration committee, but was not part of the city's bargaining team. According to Robyn Wilkerson, head of the city's human resources department, the bargaining team consisted of Wilkerson and Aimee Carroll in the city's human resources department, and Nancy Niemela in the city attorney's office. They had support from human resources staff Richard Martonchik and Sharie Sell.]

Rapundalo said it was a pleasure to bring the contract forward. He said credit has to be given to the AFSCME  leadership and the two negotiating teams. He noted the short time period since the expiration of the previous contract on June 30. The negotiations entailed very earnest discussions that were beneficial to city, he said.

Ticking through the key features of the contract, Rapundalo noted that for its duration, there would be no wage increase. Union employees would increase their contribution to the pension plan by 1%. Eliminated is the 457 match – a 457 plan is roughly a public sector equivalent of a 401(k) plan.

Health care, Rapundalo continued, will be based on a high-low plan through the remainder of the contract period. [Under the old contract, AFSCME union employees did not make a monthly contribution for health care costs and paid a $225 deductible. Under the new contract, they can continue to pay no monthly contribution (low design), but incur a higher deductible – $1,000 per individual. On the high design, an employee would make a $44 monthly contribution, but pay only a $300 deductible. ]

The union was adamant, Rapundalo said, about retaining a full-time union official, and the city had agreed to continue that city-paid position through the current contract. But the city had put the union on notice that the city would ask it to eliminate that position at the conclusion of the ratified contract period, Rapundalo said. The city had asked for a daily activity report of the union official to get a sense of what that person did.

Rapundalo said there’d been “a lot of give” on the use of temporary employees and restrictions on their use. The union had also agreed to the new-hire program in which employees will take 10 years be vested in the retirement program instead of five.

The total savings to the city, Rapundalo said, was just shy of $700,000, 25% of which is savings in the general fund. That amounted to a reduction of  just over 3%, which had been the target, he said.

Marcia Higgins (Ward 4) stressed a contract feature under which new employees will have the same retiree health care as non-union employees. Asked for any additional details he wanted to add, interim city administrator Tom Crawford replied, “It sounds like you guys covered it.”

Sabra Briere (Ward 1) questioned the relative brevity of the contract. Assistant city attorney Nancy Nimela explained that it goes through Dec. 31, 2013. The council had requested that the city keep the contracts as short as possible, given the economic times, Nimela said. The contract was ending in December, in part because the city is changing AFSCME’s health care to a calendar year period.

Briere asked if the agreement conformed to the requirements of the new state legislation that was passed but still awaiting the governor’s signature – which limits the amount that public employers can contribute to employee health care. Nimela described it as “closer” to meeting the constraints of that legislation, but it’s not quite there.

Briere wanted to know if the city would need to open up contracts and revise them in light of the new state legislation. Nimela explained that it would not be necessary, and the contract could last through its entire period under the new state legislation. However, when the contract expires, the new contract will need to conform.

Open Meetings Act: Public Notice of Aug. 29 Meeting

During deliberations at the council’s meeting, Sabra Briere (Ward 1) noted that she’d seen correspondence on email over the weekend and through the day about the proper noticing of the meeting, and had dealt with multiple questions from constituents about the meeting – what was the meeting supposed to be about?

Briere drew out the city’s contention that the paper posting of the meeting was put in a glass display case in the lobby of city hall on Friday, Aug. 26. From Tom Crawford, interim city administrator, she elicited the fact that the posting was not placed in the glass display case designated by a label for the city council’s business, but rather in an adjacent, unlabeled window.

The unlabeled case contained three other postings, unrelated to council business – a medical marijuana licensing board notice, a board of canvassers notice and an election commission notice. The three non-council related notices were poster-like inasmuch as they appeared designed for posting on a wall, with bold headlines containing the name of the entity that was meeting in what appeared to be roughly half-inch high letters. The city council special session notice was simply the same memo, in ordinary typeface, that was sent by the clerk to councilmembers to satisfy the city charter requirement that the members of the council be notified of the special meeting.

The four notices in the glass case adjacent to the one labeled for the city council were arranged in a 2 x 2 matrix, with the city council special session notice in the lower left corner, separated from the city council glass case by a column of two non-council-related notices and the window divider.

At the council’s meeting, city attorney Stephen Postema was unperturbed by the placement of the meeting notice, saying that the labels on the glass display cases are there as a courtesy, not as a requirement. [On previous occasions, the city has also defended placement of meeting notices in locations not in the glass cases at all, but in a different part of the building.] He explained that the labels aren’t required to be there at all.

Also at issue was the public accessibility of the meeting notice. The glass cases where the meeting notice was placed are not visible from outside the city hall. The city hall lobby was locked through the weekend. In an email to The Chronicle, Postema admitted that the city hall building was not unlocked until 6 a.m. on Aug. 29, leaving the city well short of the 18-hour time window set forth in a Michigan attorney general opinion issued by Frank Kelley in 1980. The state’s Open Meetings Act statute explicitly requires that notice of a special city council meeting be posted at least 18 hours in advance of the meeting. And Kelley’s opinion interprets that part of the statute to require that the notice be accessible to the public continuously for the 18 hours preceding the meeting.

However, in advising councilmembers that they could hold their meeting without violating the Open Meetings Act, Postema relied on a recent court of appeals decision that rejected the reasoning in Kelley’s opinion. In the May 26, 2011 decision, (Citizens For Public Accountability & Responsible Development v. Northville Charter Township Board Of Trustees) two out of the three judges on the panel found that “In short, there is no time requirement inherent in the definition of ‘public notice,’ …”

However, the court did not choose to create a precedentially binding decision for other courts, which it could have done by publishing its decision. In dissenting from her colleagues on the panel, Judge Elizabeth Gleicher echoed the attorney general’s approach to statutory interpretation, which addresses the purpose of the legislation. She wrote in her dissent:

Construing the OMA as a whole and harmonizing its terms, I conclude that the Legislature intended that the public have access to a “public notice” for the entire designated 18-hour period. In my estimation, “public notice” means exactly that—notice made available to the public, not dark, deserted building corridors. The majority construes the OMA’s notice provision in a manner that would permit a public body to notify the public of a special meeting commencing at 9:00 a.m. on a Monday by posting a notice at closing time on a Friday afternoon. Indisputably, this “notice” would frustrate the legislative purpose expressed in the statute. But with its analysis, the majority sanctions precisely such “public notice.” Rather than interpreting MCL 15.265(4) expansively, the majority reads the term “public notice” out of the sentence requiring 18 hours’ notice.

At the council’s meeting, Briere also drew out the fact that the city’s press release sent out on Aug. 25, about the new AFSCME contract, mentioned that the council would be considering the contract at its next meeting, on Aug. 29, but did not mention the unusual 5:15 p.m. starting time. The press release also did not mention the fact that the Aug. 29 meeting was a special meeting that had been called.

By way of additional background, The Chronicle inquired with the city’s communication unit, which sent out the press release to The Chronicle among other news organizations, whether a special meeting had been called. City of Ann Arbor communication director Lisa Wondrash confirmed the intent of the council to convene a special meeting, but did not provide the time of the meeting. The Chronicle has a standing request made under the OMA statute, that the city notify The Chronicle of any special meetings at the same time they are posted; however, the city clerk’s office did not send out a notification that included the time of the meeting, until The Chronicle notified the city attorney about the city’s failure to notice the meeting properly.

At the council meeting, Stephen Rapundalo (Ward 2), responded to Briere’s description of receiving questions from her constituents about the topic of the meeting. He contended that the agenda for the meeting was posted in the city’s online Legistar system on Friday, Aug. 26.

Based on a conversation with AnnArbor.com’s regular city council beat reporter, Ryan Stanton, who was arriving at city hall around 6:55 p.m. as The Chronicle was departing, the unusual 5:15 p.m. start for the meeting was not well-publicized. AnnArbor.com’s reporter expressed surprise that the meeting had already concluded and stated that he thought the original posting had specified 7 p.m.

Reason for Urgency

The special meeting called for Aug. 29, 2011 came just a week before the next regularly scheduled council meeting, on Sept. 6 – which falls on a Tuesday due to the Labor Day holiday.

The state legislation mentioned by Sabra Briere (Ward 1) during the council meeting – which includes provisions with which the new AFSCME contract does not conform – is the “Publicly Funded Health Insurance Contribution Act” given approval by the legislature on Aug. 24, 2011. It has not yet been signed by Gov. Rick Snyder, but is scheduled for signing on Sept. 15.

So why did the Ann Arbor city council have sense of urgency about ratifying its AFSCME contract?

Reason for Urgency: What the Legislation Says

The guts of the legislation is in Sections 3 and 4 [.pdf of the bill]. Section 3 describes 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.

Section 4 describes an option which 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.

On a 2/3 majority vote, which must be repeated each year, a governing body of a public employer can opt out of the requirements in both Section 3 and Section 4.

When does the legislation go into effect? The legislation states that [emphasis added]:

Sec. 5 (1) If a collective bargaining agreement or other contract that is inconsistent with sections 3 and 4 is in effect for a group of employees of a public employer on the effective date of this act, the requirements of section 3 or 4 do not apply to that group of employees until the contract expires. …

So what is the effective date? Based on Chronicle conversations with legislative staff members in the offices of Rep. Jeff Irwin, whose District 53 covers Ann Arbor, and Sen. Mark Jansen, who sponsored the bill, the working understanding is that the effective date is Sept. 15, when Gov. Rick Snyder is scheduled to sign the legislation into law. Based on remarks made at the Aug. 29 city council meeting, there appears to be some perception that if Snyder were to sign the law earlier than Sept. 15, this would have an impact.

The legislation itself is straightforward about when collective bargaining agreements must comply with the new law [emphasis added]:

Sec. 5 (2) A collective bargaining agreement or other contract that is executed on or after September 15, 2011 shall not include terms that are inconsistent with the requirements of sections 3 and 4.

So it’s clear why the council might have wanted to make sure to act before Sept. 15 – the AFSCME contract included terms inconsistent with sections 3 and 4.

But the council has a regularly scheduled meeting on Sept. 6. So why did it need to convene a special session on Aug. 29?

Reason for Urgency: An Early Draft Memo

Queried about the urgency of the council in convening a special meeting, interim city administrator Tom Crawford emailed The Chronicle that the city had received the following guidance from the state [emphasis added]:

Q: When does this law take place?

A: The act applies to medical benefit plan coverage years beginning on or after January 1, 2012. However, contracts settled between Sept. 1, 2011 and January 1, 2012 must not contain terms that are contrary to the act, and will go into effect upon the expiration of the medical benefit plan year.

The Chronicle traced the language cited by Crawford to an FAQ document developed by the state legislature’s conference committee for the bill. Authorship of that document was then traced to a legislative staffer with Sen. Mark Jensen’s office, Debbie Drick. She indicated in phone conversation with The Chronicle that the Sept. 1 date was in fact simply a typo – it should have been Sept. 15. But she continued, saying that almost immediately upon distribution of that version to the conference committee, she’d collected the errant copies and swapped in a corrected version.

Apparently enough copies survived in the wild for Ann Arbor city staff to use that initial, uncorrected version without questioning the accuracy of the Sept. 1 date – which is not referenced anywhere in the actual text of the legislation.

Present: Stephen Rapundalo, Sabra Briere, Sandi Smith, Stephen Kunselman, Marcia Higgins, Christopher Taylor, Tony Derezinski

Absent: Mike Anglin, Margie Teall,  John Hieftje, Carsten Hohnke

Next regular council meeting: Tues. Sept. 6, 2011 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]