Council Communication

Title:	Ratification of labor contract between the City and IBEW Electrical Local 659
Dept:	Administration
Date:	October 15, 2002
Submitted By:	Tina Gray, Administrative Services/HR Manager
Reviewed By: ........................	Greg Scoles, City Administrator

Synopsis:	The City began negotiating a new labor contract with the IBEW 659, in May 2002. The City has reached tentative agreement with the union and is recommending final ratification of the agreement by the City Council.
Recommendation:	Staff recommends the Council authorize the Interim City Administrator to sign the labor contract, ratifying the tentative agreement reached in negotiations.
Fiscal Impact:	The three-year contract calls for a 5% employee contribution for health insurance premiums beginning January 1, 2003. The agreement calls for retroactive pay increases of 3% to be applied to the current wage schedule, a cost that has already been factored into the current budget process. Contract provisions also include an additional .5% increase will be implemented on January 1, 2003 to help offset the premium contribution from the employee. The .5% approximates the additional cost to the city of $355/month over the July 1, 2002 base wage rates. This increase will not create any fiscal impact, in fact, the city will see a cost savings generated by employee contributions to health insurance.
Background:	As anticipated, rising health insurance rates were a central factor in negotiations. Additionally, contract wages and subsequent Cost of Living Adjustments (COLA's) played a significant role in the overall economic package. Minor procedural or language changes were addressed early in the bargaining process, but negotiations were delayed until a satisfactory solution was obtained for wages and health benefits. The City eventually enlisted the help of a mediator to reach a tentative agreement. The mediator was able to bring both sides to a satisfactory solution on wages and benefits, and all other items fell into place. The City will implement a pre-tax premium contribution plan on January 1, 2003, to help ease the impact of the employee cost share. The .5% increase will be applied to wages at the same time, which results in very little out-of-pocket cost to the IBEW employees during the first contract year, depending on their coverage level. Management employees will be required to pay 5% of their heath insurance premiums beginning on January 1, 2003. For the remaining years of the contract, the City will not require the IBEW union to pay any larger share of their monthly health premiums than it requires of Management employees. The COLA's for subsequent contract years will be based on the CPI with a minimum of 2% and a maximum of 4.5%.

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