Unionized public employees may soon strike as negotiations on a new collective bargaining agreement with the city reaches an impasse.
The escalation follows the City and Borough Assembly’s effective rejection on June 8 of a last best offer made by the International Brotherhood of Electrical Works Local #1547, which represents 24 employees of various departments and utilities.
The proposal directly to the Assembly was a unique break from traditional collective bargaining negotiations, a provision that had been agreed to when the two parties reached a legal settlement in December. The extensive negotiations have been ongoing since the summer of 2014, when the last collective bargaining agreement (CBA) expired.
In the latest exchange, the union had conceded to the city’s position that public employees contribute 15 percent of health insurance costs for themselves, and 30 percent for their families. The city had likewise agreed to the union’s request that the bottom six steps of the 16-step wage table be dropped, with three additional steps added to the top, with two-percent increments between steps across the board.
A point of contention remained over wages, with IBEW arguing that the employees it represents be compensated for the additional cost of their share in health insurance premiums. Pointing to other municipalities, its position is that Wrangell’s public employees tend to be underpaid, something their benefits make more acceptable. In the package it put forward on June 8 then, the union suggested a $2.50 hourly wage increase across the wage table to make up for the additional costs.
Following the Assembly’s rejection of that offer, on June 9 the city’s bargaining team submitted a package that included a $0.75 across-the-board wage increase, an amount it argues would cover the added cost of insurance for its employees. In a table prepared by its finance department, the city calculated that over the next three years of a new CBA IBEW-represented workers’ share of insurance would amount to around $175,000. This rough projection comes with a number of assumptions, but it projects a $0.75 raise would cover this, at $189,394 over the same period.
The union’s bargaining unit rejected this offer as inadequate the day it was presented, standing bxy its June 8 offer as its last and best. Mark Armstrong, an electrical department line foreman who also serves as one of the bargaining unit’s three shop stewards, explained there were problems with the city’s calculations.
Under the current insurance model, city employees are assigned into tiers, depending on whether they began working for the city before or after July 1, 2011. For those starting beforehand employees and their families are fully covered, while those hired after pay 30 percent of their families’ premium costs. With the prospective CBA that distinction would be removed, with all employees paying in to the 15 percent for themselves, plus the share for their spouses and dependents.
Armstrong pointed out the city’s proposed hourly wage increase would not cover the new cost for higher-tier employees’ families, which for them would effectively mean a pay cut.
Additionally, he noted there were a number of problems with the wage table as proposed. For one, even with the shift in scale he noted employees who had been working for the city eight or nine years would remain locked in place on their steps, albeit in a lower position then on the ladder. New hires would start at the bottom of the scale, in some cases only a step or two below longer serving staff.
Since 2010 the table has only seen two adjustments, each by 0.6 percent. Subsequent CBAs have included lump sum arrangements made to employees, while the bulk of the table has remained largely locked in place. As a result, starting staff begin at a wage which should have been raised since it was first adopted. In other cases, when the wage table was adopted workers had been assigned to steps arbitrarily, to their closest current pay rather than by their time served.
“Unless someone addresses the wage grade table, they won’t address it,” Armstrong said. “We have felt very strongly about the dollar per hour. Whatever happens, we want to see the wage grade table affected, because that’s a permanent change.”
Hearing no further offers from the borough after its exchange the previous week, on June 16 members of the bargaining unit voted to strike.
“For us it’s a question of fairness,” Armstrong explained of the decision. “What we wanted was an equal compensation so we aren’t going backwards.”
The decision to strike would only be acted upon if workers felt negotiations had reached an impasse, he went on, and then only “to get the city to the negotiating table.” As such, no immediate action had been taken as they waited for the Assembly’s response, to be taken at a special session Tuesday evening.
On Monday City Hall already began cautioning residents about the possibility of a strike on the part of its workers, with accompanying disruptions to service expected. A prolonged power outage for line maintenance scheduled to begin this week by Southeast Alaska Power Agency was postponed in light of the situation, as it was uncertain whether Wrangell Municipal Light and Power would be able to run its generators for a two-week stretch.
At its special meeting, members of the Assembly decided to implement the CBA it had offered on June 9. Questioning finance director Lee Burgess, Julie Decker wanted to know how employees covered under the contract would be impacted by the changes being proposed. By Burgess’ estimation, three currently on the lower six steps of the wage ladder would be bumped up, while three employees locked at the top of the scale would be able to climb three additional steps.
Among members’ list of considerations was the projected cost of an increase in wages and corresponding benefits. As proposed at a $0.75 increase, the net cost to the city for its IBEW-represented staff would with assumptions amount to $76,834 over a three-year period. Burgess explained that historically changes to the CBA also influenced non-unionized workers’ compensation, and so estimated the cost of a raise to all employees would come to $126,009 per year. As a point of reference, the mill equivalent for property taxes of this figure would be 0.92.
With the union’s offer of a $2.50 increase, Burgess pointed out additional costs to the borough would be $151,762 per year for unionized employees, or $410,046 in all. An increase of 2.99 mills to the tax rate would be needed to offset this, he reported.
During the Assembly’s discussions, several problems were identified with the city’s financial situation. For one, it was unclear to members how well Wrangell’s wages and benefits compared to other communities. Comparing its scale to Petersburg’s for example, some positions were paid considerably less, while others came higher in the topmost brackets. For a number of positions the scales appeared comparable in the later steps, but a Wrangell employee might have to work eight or nine years to get to that point.
Burgess explained the comparisons between the two communities were not “apples to apples” in any case, and recommended that an independent wage study be undertaken. Asked by Decker when the last such study had been implemented, Burgess was uncertain.
“I think it was in the 2000s,” he said. “It’s been long enough that I don’t think it would be trusted by anybody.”
Burgess made the case that an independent study would provide the most accurate assessment of the city’s wages, with a greater degree of objectivity and honesty than an in-house study could do.
Member Patty Gilbert noted the majority of IBEW-represented employees work in enterprise-funded departments such as the water and harbor departments. These departments are similar to businesses, in that they operate separately from the city’s general fund and are supposed to be self-financing. Increases in overhead could subsequently translate into increases in rates, she said.
“This brings up a sticky wicket,” Gilbert commented.
In a larger issue, Decker pointed out a downward trend in revenue to the general fund over the past decade, while personnel costs have been on the rise. While some effort has belatedly been made to increase fees for utilities and facilities in recent years to offset this, with the state becoming a decreasing source of funding she felt the city might need to look toward other avenues.
“What we’ve seen is we’ve had very tight infrastructure budgets, and we’re starting to see some failings,” she remarked. “Really the wiggle room is in property mill rates.”
But these problems would take time to solve. For the present, Assembly member Dave Powell felt the negotiations over wages had reached a roadblock. He pointed out that the last offer, raising wages by $0.75, had been put forward by the city. He put it to IBEW to come forward with a new counterproposal.
“The way I look at it is, if you’re not going to come back with a counteroffer it puts us at an impasse as an assembly,” Powell said.
Assembly members voted 6-0 to implement their offer, with only Mark Mitchell absent on business.
Afterward, Armstrong was unclear what would happen next. Only one of Wrangell employees’ three shop stewards, next steps would need to be discussed with fellow bargain unit members. The decision coming late on Tuesday’s press time, a call to the IBEW local’s business manager in Ketchikan was unanswered.
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