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Firefighters, city make arguments on wage issue

Posted: August 3, 2011 - 9:25pm
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Assistant City Attorney Jane Sebens, left, and Mila Cosgrove, human resources and risk management director for the city, read over an exhibit offered by the firefighters’ union during a fact-finding session Wednesday in the Assembly Chamber. City Manager Rod Swope and Deputy City Manager Kim Kiefer watch in the background.   Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
Assistant City Attorney Jane Sebens, left, and Mila Cosgrove, human resources and risk management director for the city, read over an exhibit offered by the firefighters’ union during a fact-finding session Wednesday in the Assembly Chamber. City Manager Rod Swope and Deputy City Manager Kim Kiefer watch in the background.

The International Association of Fire Fighters (IAFF) and the City and Borough of Juneau presented their cases in a wage dispute to a fact-finder on Wednesday.

The city and union are at an impasse over one point in contract negotiations — wages. IAFF wants an increase while the city is standing firm on zero-percent increases for all employees for the upcoming year. IAFF, however, maintains their increase is to catch firefighters up with non-represented and Marine Engineers Beneficial Association employees — which, when combined, account for roughly 500 of the city’s 700 direct employees (not including hospital, school district and other similar employees).

Roy Johnston, president of IAFF Local 4303, said the city completed a wage study in 2003 that recommended a 6 percent wage increase to all employees. Johnston said the rest of the city was given 5 percent, and that amount was never fully given to the fire department. That amount is what IAFF is pursuing in this year’s wage increase.

Johnston also said the department wants to remain on-par with the way other employees are compensated.

He said since 2003, when IAFF branched out from MEBA (the city’s main union), MEBA employees have had wages increased 19.5 percent, non-represented employees are up 19 percent and fire personnel 14 percent. Public safety employees were lower, but had variables within that grouping.

Johnston said the city has maintained a pattern of keeping relatively even wage increases, except for times when the police department had difficulty recruiting. Even then, Johnston said, wage increases for that kind of compensation were small.

“We’re asking for $175,000-$180,000 depending on the most recent study and increase,” Johnston said. “That and the numbers, if you look at the city manager’s budget message, says everything’s in good shape. We were in balanced budget years. It’s not our job to be a burden on the city, it’s our job to negotiate fair wages.”

Johnston pointed to budget messages from City Manager Rod Swope in 2008, 2009 and 2010. The union began its bargaining with the city in December 2009. One message showed the city had reached its goal of attaining $10 million in budget reserves and another $4 million in emergency reserves. Emergency reserves are for true emergencies — natural disaster related damages. The budget reserve is intended to serve as a transition between budget shortfalls and the tightening of the budget when the reason for those shortfalls is expected to be a long-term issue.

Johnston said the wage talks this time have been clear — the city wanted revenue-neutral proposals and it would not give increases because it had no money to do so. Juneau is facing an $8.8 million combined budget shortfall in fiscal years 2011 and 2012.

Johnston said the city does have money, if it wanted to spend it. He pointed out city manager memos and end-balance budgets show the city consistently spends less than it brings in and often brings in more than it expects. He said that the city saves more than 5 percent of its budget for reserves, more than double the recommendation by Moody’s, a credit rating service.

Johnston acknowledged there are negatives to balancing the city budget, like decreased sales tax revenues and the general fund balance decreased. He said Swope’s message in April was “more gloomy than we’ve seen before, but it still says we have a balanced budget.”

The city’s argument focused largely on policy and balancing the budget. Swope said it’s his directive from the Assembly to do so and while the city does have reserves and a balanced budget, there also isn’t room to be increasing wages. He said in order for reserve monies to be spent, the Assembly would have to approve it.

Swope also pointed to the city’s guiding principles, which outlined the need for the two reserve accounts and how they are to be spent.

“In the case of CBJ, a significant amount of our operating budget relies on state support,” Swope said. “It’s no secret the trans-Alaska line and oil revenues are declining at a fairly rapid rate. We’re at about 605,000 barrels per day. I’ve seen various projections of when the pipeline will cease to carry oil, I’ve heard seven years. I think the state and our reliance on the state for revenues, if they run into problems, could be very serious. It would be fiscally responsible and prudent to have that financial reserve available.”

Swope also pointed to several areas the state funds — such as school projects and PERS — and said if the state gets into financial woes it could easily take them away. He added there are a lot of state jobs in town as well, and if those were to go away the city revenue base would flop because it would impact property and sales taxes — 87 percent of the city’s revenue.

“We’re not making a case for inability to pay,” Swope said. “(What) we’re making a case for is fiscal responsibility. We want to make sure we can take care of our responsibilities not only now, but in years to come. We believe we will be facing a $7.5 million deficit over (fiscal years 2013-14).”

Swope also added sales tax revenues are still down, investments are poor and property values are static.

Craig Duncan, finance director, spoke of how the city forms its budget every two years and how it amends it. He also explained that employees under MEBA are paid out of the general fund, whereas some employees are in a category called rotary. Those employees are paid out of a separate fund and those include IAFF employees.

“Funding sources we use to pay for these services are primarily property and sales taxes,” he said. “They support all areas of funds.”

Mila Cosgrove, the city’s Human Resources and Risk Management director, addressed more of the concerns that related IAFF’s desire for fairness and matching wages.

Cosgrove said the reason MEBA got the 3 percent increase is because it was in their contract and had been negotiated before the city knew it would face an $8.8 million deficit. Since MEBA declined to hold off on its increase, the city felt it couldn’t single out non-represented employees.

Cosgrove explained the situation with IAFF from the city perspective, saying the city could only offer a 2 percent economic increase, but not in the form of a wage increase. It offered what would amount to a 2 percent increase for the fire department’s wellness plan. The city already has a wellness plan, but the firefighters want to take it above and beyond. Cosgrove said since insurance premiums weren’t as high as anticipated, they could take some of those extra funds and put it into a wellness program. She said that wellness piece went back and forth.

“During the course of those contract negotiations, I was very clear that the 2 percent we were talking about was a one-time payment,” she said.

Cosgrove also felt IAFF shouldn’t coming back and try to match wages with other unions, as it has negotiated its own contract and the unions differ on some of the details they seek for their employees.

“The contract is the contract, you shouldn’t be looking backward for what you did or did not get,” she said. “... As a bargaining agent, at the end of the day, each bargaining unit is responsible for their position and their agreement.”

She maintained that increases to their contracts have been equal to the other unions this year. MEBA won’t have an increase, non-represented employees won’t and neither will public safety.

Cosgrove also differed on the calculations of wage disparity, showing her own chart calculated in dollar earnings. Her document showed each sector had nearly identical actual dollar figure increases.

“The city has generally done a good job of increasing pay to meet cost of living,” she said. “It’s an uncommon year when there isn’t a pay increase.

Cosgrove also made the argument that the fire department was indeed included in that across-the-board wage study increase. She also said the implementation was odd, because it started after the approval date and in the middle of a pay period. Generally, it’s done on time and at the first of the month or beginning of a pay period.

“It was the first year of their (IAFF) contract, why would they walk away with what they think was 0 percent?” Cosgrove asked. “They agreed to it.”

The fact-finding hearing was heard by Anchorage attorney Robert Landau, who served as a mediator. He will write up recommendations on the issue and if the two sides still can’t come to an agreement it goes to the Assembly.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.

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