November 22, 2009

City Hall’s largest union will give up half of its promised 2010 pay raise to prevent layoffs, if the Spokane City Council signs off on a new agreement.

Officials last week released details of the city’s concession deal with Local 270 of the American Federation of State, County and Municipal Employees. That deal, which affects more than 1,000 city workers, won more than 90 percent support from membership in a vote earlier this month.

The new contract represents the most significant reduction in wages that a city union agreed to as part of Mayor Mary Verner’s attempt to balance the budget. But to win the support of the union to break the four-year contract city officials agreed to last year, the city added an extra year to the agreement – 2012 – during which members with four years or more on the job will get a 5 percent pay increase.

The agreement will save about 20 jobs.

Local 270 President Joe Cavanaugh said the deal was crafted with enough concessions that layoffs in the union should be unnecessary in 2010 or 2011.

“We understood the situation,” Cavanaugh said. “Our major effort was to negotiate to preserve these positions.”

The city estimates that the new agreement will increase the cost of employee compensation, including wages and benefits, by about 3.5 percent each of the next three years. It replaced a contract that would have run two more years and was estimated to increase compensation costs about 5 percent annually.

Although the city expects to collect about $4 million more in revenue in 2010 than was collected in 2009, officials estimated earlier this year that the city would be $7 million short of what it would cost to provide the same level of service with the same number of employees. That’s largely because of the poor economy coupled with pay and benefit increases promised in employee contracts.

To balance the budget, Verner told unions she would make up half the deficit through union concessions or job cuts. That effort largely has succeeded. All of the city’s bargaining groups met Verner’s goals except the Spokane Police Guild, which is expected to lose about 10 jobs next year as a result.

Besides pay changes, Local 270 agreed to negotiate next year to create new medical plans. If the union doesn’t work “in good faith” on medical benefits, the deal says the union’s prescription co-pays will increase from $10 to $20 or to $30, depending on the plan selected by each worker. The group agreed to give up the $16 members receive every two weeks for one of their retirement plans. Members also would give up their right to trade up to 40 hours vacation for pay.

Most of the union’s members work in departments financed through city fees such as utility bills.

Savings in the deal from water, sewer and garbage workers, however, will not affect the city’s bottom line. That’s because officials agreed to divert their savings to a fund that helps cover retirees’ medical expenses.

Dave Chandler, Spokane’s human resources director, said the city has focused its efforts on fixing its deficit, which doesn’t affect its utility departments. The concept of transferring the savings earned through concessions made by utility employees to a retiree medical fund was aimed, in part, at winning support from utility workers, who did not face layoffs.

Verner has requested raising sewer rates by 15 percent, water rates by 3.5 percent and garbage rates by 1.5 percent in 2010. City leaders attribute most of the proposed increase in sewer prices to required projects aimed at environmental protection.

The new Local 270 agreement also would change the union’s planned 2011 pay increase to 5 percent for members with four years or more on the job. That replaces a raise that would have been between 2 and 4 percent, depending on inflation, for all members.

Verner said the deal will preserve city “service to the citizens.”

“The 270 membership agreement meets their share,” she said.