Though the Avon Lake Board of Municipal Utilities has approved a new one-and-a-half-year contract with its union, City Council must approve it first before it can go into effect.
City Council’s HR Committee met in executive session Monday night with ALMU Chief Utilities Executive Todd Danielson and board member Ian Hessel to discuss the details of the contract. Even though the contract is considered a public record because of its public approval by the utilities board, HR Committee members and Danielson felt it would be better to meet in executive session because it would allow them to go into details over personnel matters.
When the committee reconvened in open session, the committee members unanimously agreed to forward the contract favorably for City Council’s consideration. There was no public discussion prior to the vote.
Councilman at Large and HR Committee Chairman Dan Bucci later said he believed there would be a public discussion during Monday’s Collective Committee meeting. He added it’s likely that council will hold a special meeting immediately after Monday’s CCM to vote on the contract.
“By and large, the committee is pleased with the work the utilities put into it,” he said about the contract.
The contract is only for a year and a half because it aligns the utilities’ union contract schedule to match up with the expiration of the city’s union contracts, Danielson said in an interview. Having all of the contracts expire at the same time is necessary because of the “me, too” clause in the city’s contracts, as well as for syncing up health insurance coverage.
There are no pay raises or step increases included in this contract out of concern they would trigger the “me, too” clause in the city’s union contracts. Instead, there is a swap, ending the utilities’ Public Employee Retirement System (PERS) pickup in exchange for a 10 percent increase in pay. In past contracts, ALMU has picked up the employees’ contributions to PERS in lieu of a raise, Danielson said.
Because of concerns the state will end this practice, the union and utilities board agreed to this exchange which is almost expenditure-neutral, he said. The city took the same action in recent years. The exchange will actually reduce take-home pay for union employees because that extra 10 percent is now taxable, he said.
The contract also adds an incentive for holders of a Class B driver’s license, which allows for driving vehicles with trailers.
Overall, these would likely increase costs to the utilities by about $30,000, he said, but in a budget of about $4 million for personnel, it accounts for less than 1 percent.
The utilities is on the same health insurance plan as the city, he said, and has used the same language in its union contract as the city’s. The proposed ALMU contract formally adds the secondary health plan that the city added to its union contracts in 2010 when the unions offered to waive raises for three years in light of the Senate Bill 5 discussions. ALMU already offers this plan, he said, but this would officially adopt it into the contract.
The city and ALMU benefit each other by sharing a health plan, he said, because individually, they are each too small for a cost-efficient plan.
“Riding on the city’s contract, it’s now 150 to 180 people on the contract,” he said. “It helps to keep their cost and our cost down.”
In comparing the extra costs in the PERS pickup exchange and incentives and the savings from the compensatory time offers and health care plan, Danielson said he believed the two areas would be close to canceling each other out.
“I don’t have the specific numbers, but it’s based on the estimates of compensatory time we think employees might take or the overtime it might be able to avert,” he said. “We’re still talking about less than 1 percent of the total charge of the contract. It’s a small enough number that I have a gut feeling it’s almost neutral.”