VERO BEACH — Teamsters members have rejected a proposed contract designed to resolve impasse negotiations with more than 275 of the City of Vero Beach’s 400 employees, but according to state law, they still get to keep the 3 percent raises approved on March 4 by the Vero Beach City Council.
The Council awarded an across-the-board raise, plus some hourly rate differentials for shifts and training, effective March 1, to compensate employees for major contract concessions in pension, health, sick and vacation time teetering in the balance.
Those benefit changes would have saved the City some cash in the long run, but now management and labor will have to go back to the drawing board to try to accomplish those changes in the next fiscal year, which starts Oct. 1.
Though the Teamsters Local 769 attempted to get consecutive 5 percent increases in both the 2013-14 and 2014-15 fiscal years, the Council only agreed to a 3 percent increase in the current year, with a re-opener on wages and salaries over the summer for next fiscal year, which begins Oct. 1.
The estimated budget impact of the 3 percent raises would be $234,000 for Teamster employees and nearly $57,000 for other city employees to which the same raise would be extended. The cost is spread among the general fund and the city’s various enterprise funds, including $108,000 to the electric utility and $53,000 to the water-sewer utility.
City Manager Jim O’Connor said the Council has been informed of the Teamsters vote.
“We are setting up meetings in the very near future” to work toward resolution of the contract issues, he said.
The increases were approved by a 4-1 vote, with Councilwoman Pilar Turner being the lone dissenter. Turner had proposed a 2.5 percent increase, a motion that died for lack of a second.
In November’s election, the Teamsters supported and campaigned for Mayor Dick Winger and Councilwoman Amelia Graves, yet Winger and Graves ultimately joined their colleagues in holding to what the City’s management recommended instead of advocating for the full menu of wage and salary increases the Teamsters had asked for.
Vice Mayor Jay Kramer expressed his reasoning for only wanting to commit to a one-year increase.
“Before I make a long-term decision on this, I would like to see what our tax base is going to do in the budget,” Kramer said.
In exchange for the hope of salary and wage increases, the Teamsters had made several concessions with regard to sick time and holiday pay – concessions that O’Connor confirmed cannot be implemented in light of the “no” vote.
The union had also tentatively agreed to work with the City to freeze its defined-benefit retirement plan and to supplant it with a defined-contribution plan. The defined-contribution plan would not necessarily reduce costs in the short-term, but in the long-term would shift the market risk of the pension plan investments from the city to the employee, similar to an individual 401(k)-type plan in the private sector.
The Teamsters had also agreed to allow the City to eliminate its top-tier health insurance plan, sometimes called the “Cadillac plan” because the costs amounted to much more than projected by the City’s former insurance agent and actuary. Remaining would be the base plan, which the City funds 100 percent for the employee, and the “middle” plan, which the city funds the same dollar amount as the base plan would cost.
Wages for City employees had been frozen since 2009 when the city instituted furloughs to deal with decreased property tax revenue after the real estate market tanked in the fall of 2008. The Police Benevolent Association union earlier this year was given a 2.5 percent increase plus some restoration of step increases for officers with tenure with the city.
Teamsters Business Agent Steve Myers urged the Council to also award step or longevity increases to Teamsters who have not had such annual raises since 2008.
“What the City fails to do is to address any of the inequities that exist in the step plan or longevity pay,” Myers said.
Turner pointed out that the combination of the consecutive 5 percent increases the Teamsters asked for, plus the step increases, would have amounted to a nearly 12 percent increase over the two-year period, when stacked upon each other.
O’Connor explained that, since the economic downturn, he is reticent about reinstating step raises that award employees simply for being on the job another year, not necessarily for taking on greater job responsibilities or obtaining advanced training.
Graves echoed a concern that she expressed on the campaign trail last fall.
“We need to look at how we can attract and retain quality employees,” she said.
Myers explained that employees are serving in job classifications and not getting paid for the job they’re actually doing, but the plea did not prompt the council to approve the step raises, which would have cost $44,000 this year for the blue-collar unit alone.
In the current budget climate, however, attention to the bottom line won out over worries that employees would go elsewhere if the City refused to give in to the union’s requests.
The Council did, however, vote to give a $1 per hour raise to utility workers who had been required to complete a City-funded training and certification program to be dual-qualified to operate both the water treatment plant and the wastewater treatment plant. The dual certification was part of the city’s water-sewer “optimization plan” to reduce staffing and expenses. The $1 per hour was only half of the $2 the Teamsters had requested for these dual-certified employees.
Labor attorney Jason Odom of the Gould Cooksey Fennell law firm represented the City and presented management’s positions and recommendations to the Council. Winger praised Odom and O’Connor for the plan as presented.
“Personally, I think it’s well thought out and it’s been well-negotiated,” Winger said.
The final vote with regard to the contract provisions was to make shift differential the same for employees in both the blue-collar and the clerical/technical bargaining units of the Teamsters. Swing-shift workers would receive $1 per hour extra instead of 50 cents. Midnight shift workers would receive $1.25 extra instead of $1. On the flip-side, the vote would reduce daytime weekend workers’ differential from $1 to 85 cents per hour.
The budget impact of the $1 for dual-certified utility workers and the shift-differential adjustments was not calculated by City staff at the time of the Council vote. This change effects three workers who are currently dual-certified and potentially four more who have not yet taken the test, said Water-sewer Utility Director Rob Bolton. So based strictly on a normal 37.5-hour week with no overtime, the cost for those seven people would be less than $14,000.