CR 2003-048 2003 Local 49 Contract
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March 4, 2003
Council Report 2003-048
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APPROVE 2003 LOCAL 49 CONTRACT
Proposed Action
Staff recommends that the Council approve the following motion: Move approval of the 2003 Contract for
Local 49.
This action will ratify the 2003 contract for the Public Works' employees.
Overview
The contract calls for a 1.5% wage increase effective January 1, 2003 and a 1.5% wage increase effective
June 29, 2003. There is an increase of $50.00 per year for uniforms. In addition the wage rate for
Maintenance Worker II employees has been increased in exchange for deleting contract language that
required Maintenance Worker II employees to be paid at a higher level when they operated certain
equipment. The additional cost of the higher wage rate for Maintenance Worker II employees will be
largely offset by the savings the City will realize by the elimination of the premium pay for operating heavy
equipment. The total cost of the proposed settlement is approximately $10,000 less than was budgeted.
Primary Issues to Consider
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. How does this agreement fit in with the 2003 budget?
. How does this agreement compare to other contract settlements for 2003 in terms of wage and benefit
increases?
. Should wage increases be given when the City is facing possible cuts in state aid?
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Supportin2 Information
. A copy of the contract is available from the Assistant City Manager.
Financial Impact: $ $28,500 Budgeted: Y/N Yes
Related Documents (CIP, ERP, etc.):
Notes:
Source: General & Utility Funds
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Counci] Report 2003-048
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Analysis of the Issues
How does this agreement fit in with the 2003 budget?
The City budgeted 3% for cost of living adjustments and $10.00 per month for benefit increases. The
total cost of the proposed settlement is approximately $10,000 less than was budgeted.
How does this agreement compare to other contract settlements for 2003 in terms of wage and benefit
increases?
Sett1ements for other cities have genera11y been in the range of 3 to 3.5%.
Should wage increases be given when the City is facing possible cuts in state aid?
It appears certain the State of Minnesota will cut the City's ]ocal govemment aid. At this time, however,
the extent of the cut is unknown. Should the City attempt to impose a wage freeze in anticipation of
these cuts?
If the City were successful in imposing a wage freeze on all employees, there would be a savings of
approximately $185,000 in the 2003 budget. A wage freeze, however, is difficult to obtajn and has
consequences on morale, as well as recruitment and retention of employees.
Three of the City's five bargaining units have the ability to request binding arbitration in the event that a
wage settlement cannot be arrived at. An arbitrator has the authority to grant any increase that he or she
thinks is appropriate. Arbitrators tend to look at the market as we11 as the ability of the city to afford the
settlement. The other two bargaining units have the ability to strike.
Even if the arbitrators were to grant no increase to the unions, and the City was therefore sLlccessful in
freezing the wages of 1110st or all of the employees for 2003, the City could find itself at a competitive
disadvantage when trying to hire new employees and retain cLlrrent employees.