Ann Arbor OKs AFSCME Deal

The Ann Arbor city council has approved a new contract with its major labor union, Local 369 of the International Union of the American Federation of State, County, and Municipal Employees, AFL-CIO (AFSCME). The slightly less than five-year deal would go through 2017, and includes a wage increase of at least 1% each year starting in 2014.

The council took its vote at a special meeting held on March 25, 2013. The AFSCME union voted to approve the contract on March 21, according to Robyn Wilkerson, the city’s human resources director.

A staff memo accompanying the council’s resolution indicates the city’s intention by July 2014 to offer an alternative retirement plan to employees. It would be different from the current plan, which is essentially a defined benefit plan. New AFSCME hires would automatically be included in that alternative retirement plan.

The negotiated contract is effective immediately and runs through Dec. 31, 2017. The current contract, which the new contract replaces, had been set to expire on Dec. 31, 2013. Michigan’s right-to-work legislation – passed in the December 2012 lame duck session – takes effect on March 28, 2013, which is 91 days after the conclusion of the legislative session. [.pdf of enrolled House Bill 4003] The right-to-work legislation prohibits making financial support of a union a condition of employment. So some local entities – including the Ann Arbor Transportation Authority [on Jan. 13, 2013] and Washtenaw County [on March 20, 2013] – have come to new agreements that would preserve agency-fee type arrangements for the duration of the contract.

Comparatively, the city’s slightly less than five-year agreement with AFSCME is shorter than those ratified by the AATA and by Washtenaw County with several of its unions. The longer-term contracts for those organizations were for as long at 10 years.

According to the staff memo accompanying the resolution approved by the city council, the overall wage increase in the AFSCME city contract is 1% in January 2014, 0.5% in July 2014, 1.5% in January 2015, 1% in January 2016 and 1% in January 2017. This contract also includes a revised wage table with lower step increases for new hires effective Jan. 1, 2015.

The new city contract includes AFSCME’s acceptance of a change in pension board composition – which was approved by the voters in November 2011. Under the charter amendment approved by voters, the composition of the 9-member pension board is: (1) the city controller; (2) five citizens; (3) one from the general city employees; and (4) one each from police and fire. According to the agreement, the AFSCME bargaining unit will have the ability to provide candidates and input to the mayor on citizen representatives.

New hires would participate in any alternate retirement plan that might be approved by the council – an action that is planned for July 2014. AFSCME new hires would move to the alternate pension plan at the same time that non-union new hires move to such a plan. Wilkerson described a future plan at the council’s March 25 meeting as possibly a hybrid between a defined contribution and defined benefit plan.

An alternative retirement plan of some kind has been mooted publicly before. Most recently, on Nov. 8, 2012, the council had an item on its agenda, sponsored by Jane Lumm (Ward 2), that would have directed the city administrator to develop a defined contribution retirement plan to offer non-union employees hired after July 1, 2013. After a closed session held during that meeting, Lumm was persuaded to withdraw that resolution from the agenda.

At the council’s March 25 special meeting, Lumm called the AFSCME contract a significant step forward in that respect. She would not have supported this contract without a provision specifying the alternative pension plan, she said.

The contract approved by the council on March 25 also includes a decrease in personal time for employees on alternate shifts, and full participation in the city’s wellness incentive program.

The roughly 270 members of AFSCME make up about 40% of the total city work force. Members include front-line employees in utilities, solid waste, administrative support, forestry, inspection, streets, facility maintenance, snow plowing, signs and signals.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.