Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
Aug. 02--CLINTON -- In the case of the city of Clinton versus Local 609 firefighters, there was no true indication which way arbitrator Sharon Gallagher was going to lean. Across the board, the city gave its employees a 0.5-percent wage increase, which the union rejected. Across the board, employees were required to pay 3-percent out-of-pocket health insurance premiums, the first time they'd ever had to cover a portion of their premium costs.
Gallagher hinged the recent arbitration award on the wage increase -- a difference of $18,992, according to City Administrator Jessica Kinser. Although the union was awarded its proposal, the new insurance designs are still costing employees.
Firefighters will make $25,000 in insurance payments as a whole this year. A single person, 3-percent premium is a new $271.80 annual cost; the family premium costs $728.28.
Those premiums are still low, according to city Finance Director Anita Dalton.
"When I came here, it was unusual that I wasn't asked to contribute," Dalton said. "I was quite amazed by that actually."
However, the ruling is costing the city -- slightly for now; who knows how much down the road.
Clinton budgeted the 0.5-percent wage increases after cutting its emergency levy -- a $260,000 reduction in expenses. The union bargained for four times the 0.5-percent increase. Thus, payroll will increase $37,984 as a result of arbitration.
Dalton said netting the union's increase versus what employees are paying back is a $10,000 net loss for the city. She didn't call this too "threatening," making note of the contingency fund built into this year's budget and the fact that a long-time firefighter, high on the pay scale, has recently retired.
Both help avoid personnel and services cuts in a general fund that is mostly payroll.
But uncertainty continues. AFSCME Council 61 is next to the bargaining table with an Aug. 26 arbitration hearing date. And Local 609's new contract will expire again next year, meaning more ongoing negotiations.
If other unions negotiate similar pay increases and maintain lowly 3-percent premiums across the board, the net costs could begin to add up, Dalton said.
"With a lower budget, there's not as much room for negotiation," Dalton said. "We were asked during the budget sessions to cut the emergency levy for Fiscal Year 15. Having to work within those parameters, that's where the 0.5-percent pay increases came in."
During 609's arbitration hearing, the city went "above budget" offering a 1-percent wage increase.
The city council has longer-term collective bargaining agreements in mind, Dalton said. She didn't speculate what those agreements could look like. Like anything budget-related, success is tied to Clinton's tax base.
"If the tax base grows, funding to the city grows, and then the city can increase services," Dalton said. "Whether that means hiring additional firemen or having more police officers. It all really comes back to that."
So, while the latest award is considered palatable, arbitration is creating unease within the city.
"If the city and the union can't come to an agreement, and an arbitrator gets involved, there's just uncertainty about it," Dalton said. "Not just for us as the city department, but for the employees that are involved. They put their fate in the hands of an arbitrator who normally is probably a fair person, but you never know what kind of person you're going to get."
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