HomeMy WebLinkAboutMOU settlement for 2003,closed session
CLOSED SESSION MATERIAL
March 27, 2003
Memo to: Board of Directors
From: Peter Holzmeister
Subject: Tentative settlement with union
You may recall that our Memorandum of Understanding (MOU) with the employee union, IBEW
Local 1245, expired on December 31, 2002. Steve Hollabaugh and I have been the management
committee meeting with the union committee to negotiate a new MOU. We have now reached
tentative agreement with the Union on the terms of a new MOU. The tentative agreement is not
final until ratified by the union membership and by a vote of the District’s board of directors.
The two bid issues put on the table by the union were wages and time off
Wages: The MOU that just expired was for a three-year period with a wage increase of 1% per
year. As a result, during the past three years the wages of our employees fell behind the wages
paid by comparable employers. Thus, a big issue in negotiating this new MOU was to implement
a program whereby our employees’ wage rates could catch up over the three-year term of the
new MOU.
Steve and I conducted wage surveys for Sierra Pacific Power Company, Plumas Sierra Rural
Electric Coop, Lassen Municipal Utility District, South Tahoe PUD, Tahoe City PUD, Truckee
Sanitary District, Tahoe Truckee Sanitation District, and Truckee Meadows Water Agency and
Incline Village General Improvement District. We took the position that we do not intend to be the
highest paid employer among those comparable employers, but we would move to a point where
we were at the seventy-fifth percentile.
Time off: Another big issue for the union was to gain additional time off for its members. We took
the position that we would not agree to any additional vacation time nor any additional paid
holidays. We said that we would only agree to additional time off in exchange for additional hours
worked.
The big issue put on the table by me and Steve was to reduce the cost of medical
insurance.
Our medical insurance premiums have been increasing dramatically each year. This most recent
renewal witnessed an increase of 36% for employees and 30% for dependents. We have the
Cadillac of medical insurance programs, and it is getting very expensive.
The union and the District each expressed interest in reviewing the District’s pension plan
issues.
The union’s current pension plan has a normal retirement age of 65. The outside crews are
having a hard time working to that age. We are experiencing back problems, bad knees and
other problems related to the physical difficulty of the job. Our union pension plan is small,
covering only our employees. It is not part of a larger group. The fluctuations in market value of
the asset that we have experienced lead us to see the advantage of being part of a much larger
group. That has a better distribution of age and term of service. A larger group also has better
opportunities to invest funds. We frequently hear from people that we recruit that our pension
plan is weak compared to PERS. Virtually all neighboring utilities and special districts are in
PERS. The employees have asked to convert the plan to PERS.
Following is how we have tentatively settled these issues, and some other lesser issues.
Wages: Three percent per year across the board. The cost of this in year one of the MOU is
$80,500.
Wage equity adjustment to close the gap between our wages and the wages of comparable
employers:
Department or staff Year 1 Year 2 Year 3
Electric Department 3.5% 3.5% 2.5%
Mechanic 3.0% 3.0%
Water Department 3.5% 3.5% 1.5%
Meter readers 3.0% 3.0%
Admin Department 2.0% 2.0%
Contract Admin Clerk 2.0% 2.0%
Mapping Tech 3.5% 3.5%
Buyer Clerk 3.5% 3.5%
Warehouse and Grounds 2.0% 2.0%
Wage equity adjustment for year one is $83,000
Time off for time worked: The new MOU provides two ways an employee can earn time off by
working extra hours. (1) An employee can take off up to three days per year at straight time as
compensatory time in lieu of receiving pay for overtime worked. (2) An employee can, with
management permission, work a schedule of ten-hour days or nine-hour days to get a day off.
(There is no added cost to the District. There may be a reduction in cost)
Medical insurance: The new MOU calls for implementation of a Preferred Provider Plan (PPO)
under the administration of our current insurance provider, NRECA. (Savings to the District of
$47,000 per year)
PERS Pension plan: The new MOU calls for an opener to discuss PERS when we get more
information.
Other issues that are in the settlement:
Agency shop; no change, no fiscal impact
Temporary upgrades: negligible fiscal impact
Double time after 12 hours (it was after 16 hours): Negligible fiscal impact
Meals: Approximate cost is $1,000 per year
Telephone expense: Approximate cost is $3,200 in rear one
Clothing allowance for back-up meter reader: Cost is $162.50 per year
Employee development program: No change, no fiscal impact
Vision insurance
Monthly cap on employee medical on retirement: negligible fiscal impact
Longevity: A cost of approximately $3,000 per year
Incentive plan for water staff professional certification: Approximate cost of $1,000 per year