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CITY COUNCIL AGENDA REPORT
MEETING DATE: MARCH 9, 2015
AGENDA M 6G
PREPARED BY: FRANK BOYLES, CITY MANAGER
PRESENTED FRANK BOYLES
BY:
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION REATIFYING THE 2015-2017
COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY OF PRIOR
LAKE AND LAW ENFORCEMENT LABOR SERVICES INC. (LELS) LOCAL
NO. 100 REPRESENTING PATROL OFFICERS
DISCUSSION: Introduction
The purpose of this agenda item is to request city council approval of a labor
agreement with LELS for 2015 to 2017 in accordance with guidelines previously
directed by the city council.
History
The Law Enforcement Labor Services, Inc. (LELS) bargaining unit representing
18 employees (patrol officers) has been in existence at the City for over 30 years.
The existing labor agreement was a three-year contract expiring December 31,
2014. The negotiation process for 2015 began in the end of September 2014.
The bargaining team representing LELS included Jon McHaney, Dan Olson, and
Business Agent Denny Arons. Negotiating on behalf of the City was Asst. City
Manager Kelly Meyer with the direction from the City Council and City Manager.
We held three meetings and a mediation session to outline demands and
negotiate the proposed collective bargaining agreement that addresses wages
and conditions of employment in accordance with the Public Employee Labor
Relations Act (PELRA).
Current Circumstances
From the City's perspective, the primary objectives in the negotiations were to
(1) provide reasonable cost of living adjustments consistent with a recovering
economy and rate of inflation over a 3 year period; (2) eliminate health
insurance incentives to achieve the projected savings by converting to a high-
deductible health plan that helps to manage, as much as possible, long-term
health care costs, (3) achieve a 3 year period of labor peace; (4) eliminate long-
term liability where possible; and (5) implement retention tools where
reasonable.
(1) Objective 1: Reasonable cost of living adjustments This is a primary
objective in every negotiation. The City strives to recognize employees with
reasonable cost of living adjustments annually, and considers market
comparisons as well as the Consumer Price Index for All Users in the
Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com
Minneapolis/St. Paul metro area. The current contract for LELS provided a
6.5% increase over the three years of 2012-2014.
(2) Objective 2: Eliminate health insurance incentives: As all businesses are
aware, the costs for providing health insurance coverage continue to rise, and
is even more complex with the implementation of the Affordable Health Care
Act. Like the private sector, the public sector must address the challenges of
how to manage health insurance and other benefit costs from both the
employer and employee perspective. The City's goal is to give employees as
many options as possible, but more importantly, to assure that the employer
and employee are getting the best value for their dollar, and that the benefit
packages provided by the City are consistent with other public and private
sector employers.
The City currently offers two insurance plans —traditional 80/20 co-pay plan
(Passport 300), and a high-deductible health reimbursement plan with a
health savings account (Passport 5250). The City offers three rate plans —
Family, Employee +1, and Employee Only. The majority of the City's
employees elect the Passport 5250 plan.
The Passport 5250 insurance plan was implemented through Blue Cross Blue
Shield in 2012 as a "pilot" program. In 2013, the City converted to the
Passport 5250 high-deductible plan as its primary health insurance plan,
basing the City's contribution to family health premiums off of the new plan
rates and offering incentives for employees to convert. The overall objectives
were to put the City in a position to better control the rate of premium
increases, make insurance more affordable for the employee, and assure the
City's health plans were in compliance with the Affordable Health Care Act.
(3) Objective 3: Labor Peace: With few exceptions, the City consistently settles
contracts for the maximum term of 3 years. Such settlements provide
predictability for budgeting purposes, as well as allow staff time to be focused
on services to the residents rather than negotiations.
(4) Objective 4: Long-term liability: Where possible, the City looks to minimize
the long-term liability it must carry on the books in the form of earned but
unused leave time.
(5) Obiective 5: Implement retention tools where reasonable: Establishing wage
and benefit packages that are competitive or better than the market helps the
City to retain valuable experience in its work force, as well as recruit new
employees when needed. This will be particularly important as baby-boomers
retire from public service. At the same time, the cost of retention tools also
must be considered.
Lastly, staff reviews any legislative changes and housekeeping items that may
affect contract language, and identifies where existing provisions may need
clarification, or where additional language is needed in anticipation of future
trends or programs.
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Conclusion
Staff believes that LELS and the City have negotiated the terms of this contract
in good faith, and that the proposed labor agreement meets the primary
objectives listed above.
ISSUES: Shown below is a summary of the tentative agreement reached between the
parties and the proposed contract amendments. A complete copy of the Labor
Agreement is available in my office for review.
Duration: Three year term(Jan. 1, 2015- Dec.31,2017).
Wage 2015—2.5%adjustment to base salary range effective 1/1/2015.
Adjustments: 2016—3%adjustment to base salary range effective 1/1/2016.
2017—0.5%adjustment to base salary range effective 1/1/2017.
Health Insurance 2015 — Zero increase in City contribution for EE+1 or Family
coverage. Eliminate incentive language.
2016 — Zero increase in City contribution for EE+1 and Family
coverage. No incentives.
2017—$830 contribution toward family coverage
Probationary Language was amended in the contract to allow probationary
Employees employees to use accrued vacation at the discretion of the supervisor.
Language was eliminated that permitted employees in the first three
years of service to carry over 2x their vacation accrual.Rather the rate
will now be 1.5x.
Sick Leave Reduced the amount of sick leave that can be accrued from 960 hours
Accrual to 720 hours.
Housekeeping 1. Clarified some language related to overtime provisions that are
Changes no longer applicable.
Duration: A three year duration is proposed. A three year agreement gives the
City a longer period of labor peace, as well as the ability to budget for actual costs
rather than estimates.
Wages: The current LELS contract provided for 6.5% increase over its 3 year
term. The increase proposed for the 2015-2017 contract period is 6%.
Although the increases for 2015 and 2016 may exceed the projected CPI-U for
the Minneapolis-St. Paul metro region for 2014, the difference should be
recovered in the 3rd year of the contract (2017) when the increase proposed will
likely be under the CPI-U. The City does use the CPI-U as a gauge to remain
consistent with the market over time.
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Year Unrepresented AFSCME LELS Teamsters CPI-U
(Managers) (Maint., (Patrol) (Sgts) (Mpls/StP)
Prof., Annual
Clerical)
2007 3.0 3.0 3.0 3.0 2.6
2008 3.0 3.0 3.0 3.0 3.8
2009 2.5 2.5 3.0 3.0 -0.5
2010 0 2.5 0 0 1.8
2011 2.0 0 2.5 2.5 3.6
2012 2.0 2.0 2.0 2.0 2.3
2013 2.0 2.0 2.0 2.0 1.9
2014 2.5 2.5 2.5 2.5
Average 2.125 2.1875 2.25 2.25 2.2
The City of Prior Lake's pay philosophy is to have wage ranges within +/- 5% of
the market for similar positions. The City reviewed positions in January of this
year for the purpose of pay equity reporting. The pay equity report was found in
compliance. Staff also reviewed position market comparisons for each position
as part of the budget process. Positions appear within the+/-5%target. Further,
we have not experienced an inability to hire qualified candidates. The union did
not propose any market adjustments to the pay ranges for 2015-2017.
Health Insurance:
Although we only have two years of experience to draw from, the high-deductible
health plan has met our overall objectives.
• Premium rates have been flat since January of 2013 and will remain
unchanged through December 2015.
• In 2012, the City's contribution per employee enrolled in family insurance
was $11,280/yr. There were increased costs to the City in 2013 and 2014
due to incentives, but in 2015, absent incentives, the City's contribution per
employee enrolled in family insurance will go down to $10,660/yr. The City
and employee will pay less for health insurance in 2015 than they did in
2012
• The employee's contribution for family health premiums has gone from
$7062/yr. in 2012 to $1902/yr. in 2014/2015.
The contract proposed no increases for City contribution to family health
insurance premiums for 2015 or 2016, and $40 per month increase for 2017. This
rate is consistent with the settlement with AFSCME. The agreement also
eliminates incentives. The City has a long history of maintaining the same
contribution across all employee groups.
Sick Leave Accrual: Currently AFSCME employees who have reached 720
hours of accrued sick leave may elected to either be paid out annually for hours
unused over 720, or continue to accrue up to 960. The City would pay 50% of
the 960 hours at the employee's rate of pay at separation of employment. By
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reducing the max accrual from 960 to 720,the City reduces the liability it will carry
long-term for this benefit.
Conclusion
Labor agreements typically do not provide complete satisfaction to either party.
There were additional provisions proposed by both parties where we did not
reach agreement. This agreement represents an equitable conclusion of
bargaining to meet the needs of both parties. Perhaps, most significant, the
settlement allows both parties to focus on delivering services to our customers
rather than on labor negotiations.
FINANCIAL The 2015 adopted budget has adequate funds to administer the labor agreement.
IMPACT: We believe that the proposed agreement is within the guidelines set forth by the
city council earlier this year. We will budget for future years consistent with the
adopted agreement.
ALTERNATIVES: 1. Approve the Resolution ratifying the Labor Agreement for January 1, 2015 —
December 31, 2017.
2. Deny the Resolution
3. Adjourn into closed session.
RECOMMENDED Alternative#1
MOTION:
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RESOLUTION 15-XXX
A RESOLUTION RATIFYING THE 2015-2017 LABOR AGREEMENT WITH
LAW ENFORCEMENT LABOR SERVICES INC., LOCAL 100.
Motion By: Second By:
WHEREAS, the Public Employees Labor Relations Act as amended requires that the City negotiate
with the exclusive bargaining representative for groups of essential and non-essential
employees; and
WHEREAS, the Law Enforcement Labor Services union represents the Prior Lake patrol officers; and
WHEREAS, negotiations have taken place which have resulted in wage and benefit settlements for
January 1, 2015 through December 31, 2017; and
WHEREAS, the employees who make up the this bargaining unit have ratified said Agreement; and
WHEREAS, the Agreement becomes effective January 1, 2015 upon approval and acceptance by the
City Council.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The Agreement between the City of Prior Lake and Law Enforcement Labor Services, Local 100
effective January 1, 2015 through December 31, 2017 is hereby ratified.
3. The Mayor and City Manager are hereby authorized to execute the above referenced Agreement.
PASSED AND ADOPTED THIS 9TH DAY OF MARCH, 2015.
VOTE Hedberg Keeney McGuire Morton Thompson
Aye ❑ ❑ ❑ ❑ ❑
Nay ❑ ❑ ❑ ❑ ❑
Abstain ❑ ❑ ❑ ❑ ❑
Absent ❑ ❑ ❑ ❑ ❑
Frank Boyles, City Manager