The city and one of its largest employee groups could be nearing a labor contract agreement.
A report authored by a third-party fact-finding panel was released to the public last week containing recommendations on the specific terms of the contract that is under negotiation between the city and the Davis City Employees Association.
The main provisions include capping DCEA’s cafeteria cash-out benefit — where employees who don’t subscribe to the city’s health insurance plan can take what they would have received in insurance, in cash — at $500 per month, phased in by 2017.
DCEA employees with the full benefit can receive up to more than $1,800 monthly now.
Further, the panel recommended that DCEA employees pick up their full 8 percent shares of payments toward their retirement plans, which the city has been paying in full.
The panel also agreed with the city’s plan to restructure and lower the retiree medical benefit for most employees, which would help the city put away funds for future costs of the program.
Boiled down, if the average DCEA employee earns $56,700 in salary, per city numbers, should these recommended terms be agreed upon, an employee who receives the full cash-out benefit would take a 23 percent hit, or almost $17,000, to overall annual pay.
However, even with that large concession in yearly income, Dave Owen, DCEA union president, says the union membership still ultimately would agree to a contract under these conditions.
“I think it was an attempt to split the baby,” Owen said of the report. “So I guess it comes back down to how serious is the city of Davis about having a negotiated agreement? You’ve got this (report), which, we don’t like it — I’m not going to lie to you — we don’t like it. But as we’ve said earlier, we could probably live with it. Anything more than this? There’s just no way.”
DCEA represents 78 employees in jobs such as public works maintenance worker, electrician and mechanic.
However, there are some potential advantages for the union that are included in this recommended deal, at least compared to what’s been offered by the city.
The panel suggests stretching DCEA’s contract over four years, rather than the traditional three, in order to spread out the cuts over a longer period of time and ease the financial burden on the employees.
Also, in exchange for the concessions, the panel recommended offsetting some of the new costs to the employees by awarding them a 12 percent raise over the four-year term of the contract, which would bump up the average salary for a DCEA employee to $63,500, plus benefits and the $500-per-month cash out by 2017.
The problem is, Owen says the union already has deferred raises for more than a decade and the 12 percent would provide only about a 1 percent raise per year since the last time DCEA employees received a true pay increase in 2006.
When the labor group’s contract expired in 2006, according to Owen, the MOU stated they were supposed to be awarded pay raises commensurate with market rates for like employees. Those raises, which the union received in installments after the contract expired, are essentially the last pay increases DCEA has seen from the city.
“Even though we do show some raises after ’06, they were to make up for what was supposed to happen (at the end of 2006),” Owen said.
“So with the fact-finder’s 12 percent, since this is a four-year deal, … over the course of 11 years from ’06 to 2017, we would get a 12 percent raise over that time.”
For city management, meanwhile, it appears the recommendations by the fact-finding panel affirm some of the concessions they’ve been asking DCEA employees to make.
But in a news release on the city’s website, management essentially says it’s not yet sure the recommendations reach far enough.
“Whether these additional recommendations are feasible must be evaluated in light of the city’s fiscal condition,” the release said.
City Manager Steve Pinkerton told The Enterprise on Wednesday regarding the four-year component of the agreement that the “fact-finder was concerned about payment shock” and that “(we will) have to look at equity between the groups and see what we can afford.”
One reason why the city may not be able to afford the terms is because of the “me, too” clauses that were included in contracts signed by its other labor groups. Those clauses require all employee associations to receive equitable deals.
If the city agreed to the recommendations made by the panel, Pinkerton said it would trigger those clauses and likely would force the city to pay back some of the concessions it received from other labor unions.
Pinkerton said he and the finance staff will have the costs related to an agreement based on the fact-finder’s recommendations for the City Council at its meeting Nov. 12.
The full report will be presented then and the council can take action on whether to proceed with the terms recommended by the panel or continue pressing for further concessions.
Fact-finding is the last step of impasse, the process often declared once negotiations between two parties have broken down. The city entered impasse with DCEA in November and the Davis Professional Firefighters Association Local 3494 in April. Pinkerton expects a similar report pertaining to the fire union contract to be released within a few weeks.
— Reach Tom Sakash at [email protected] or 530-747-8057. Follow him on Twitter at @TomSakash