Ann Arbor officials announce new labor contract with AFSCME that includes major concessions
Ann Arbor officials announced today they've reached a deal on a new labor contract with AFSCME Local 369, the city's largest labor union.
Eight weeks after the expiration of the union's previous contract, AFSCME and the city successfully negotiated a new contract that was ratified by the union's membership on Tuesday. The City Council is expected to approve the terms on Aug. 29.
With 230 members, AFSCME is the largest among the city’s eight unions.
Council Member Stephen Rapundalo, D-2nd Ward and chair of the council's labor committee, called the agreement noteworthy.
He said it's projected to provide savings over not only the life of the agreement, but also into the future through structural pension and retiree healthcare reforms for new hires. The union also agreed to major concessions on health care for active employees.
Stephen Rapundalo
Tom Crawford, the city's chief financial officer, said the concessions are expected to save the city about $660,000 annually, including $140,000 in the general fund.
"It's pretty significant," Rapundalo said. "It really sets a solid foundation for the future and how we want to deal with new hires — that was a big thing. We were very pleased."
The contract runs through Dec. 31, 2013 and includes the following highlights:
- No across-the-board pay increases for the duration of the agreement.
- Employees will pay an additional 1 percent into their pension plan to equal 6 percent of pay.
- Effective Jan. 1, 2012, all AFSCME employees will be on the updated city health care plan, which has a significantly higher employee cost share than their current plan.
- For fiscal year 2012-13, which begins next July, the projected savings from the agreement is equal to about 3 percent of total compensation for AFSCME employees.
- All new AFSCME hires will become vested in the city pension plan after 10 years (up from 5 years) and have an access-only style plan for retiree health care benefits in accordance with a resolution recently passed by City Council.
Rapundalo said he thinks the agreement was reached quickly in part because of a new state law setting hard caps on public employee health care coverage.
The union ratified the contract on Tuesday, one day before the Legislature approved the new legislation limiting the amount a public employer can pay toward workers' health coverage at $5,500 annually for individual employees and $15,000 for family plans.
The legislation gives schools and local municipalities the alternate option of paying 80 percent of employee health care costs, while employees would pay 20 percent.
An analysis by AnnArbor.com last year showed the average Ann Arbor city employee paid only 6 percent of the $11,772 annual cost of his or her health benefits.
AFSCME Local 369 President Gary Wilson acknowledged the fact that a new state mandate on health care was coming down was an incentive to reach a deal with the city quickly.
"In all honesty, we are very pleased with what we've gotten on behalf of the negotiating team," Wilson said, noting that the union membership's vote of support was overwhelming.
"I really appreciate the bargaining team that sat at the table and the struggles and the fight that they went through," he said. "The city understood what our position was and I think that's why we came to the agreement that we did, because both sides were wiling to work to get it done."
Rapundalo said he had to give a lot of credit to AFSCME's leadership, including Wilson, for coming to the table with a willingness to negotiate in good faith. He said the city was pleased to offer a health care package that's better than what AFSCME would have gotten if it waited until after the new state law took effect to finalize the contract.
"To go from what they were used to getting, to go to the state-imposed requirements, really would have been a drastic change," Rapundalo said.
Rapundalo noted the city still hasn't been able to strike a deal on health care concessions with the city's police and fire unions and there's a real likelihood now that they may have to accept the consequences of the state's mandate on health care in their next contracts.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
gladtolivenorth
Sat, Aug 27, 2011 : 12:38 a.m.
Ryan - how much does the average AFSCME worker make when compared to the average Police and Fire employee? Doesn't it seem telling that the only unions left without contracts are ones that fall under 312 arbitration. Coincidence?
bluecollar
Fri, Aug 26, 2011 : 10:41 p.m.
It appears everyone thinks that public and private sector jobs should be on the exact playing field when it comes to health care. Why don't we bump the public employees base pay up to make it even on all ends. Lets bump the police and fire pay up $100,000 and then ask them to pay 20%. I guarantee they would all be more then willing to do so. Certain benefits come with certain jobs. Thing to consider are job functions, education, pay and benefits. Why bash our police, fire fighters, and school teachers. All of which are under payed and under appreciated in our society. Whens the last time you heard of a wealthy/rich fire fighter, cop, or school teacher. Last I looked you can't find any of their houses featured on an episode of Cribs.
gladtolivenorth
Sat, Aug 27, 2011 : 12:40 a.m.
If you refer back to a previous article by Ryan Stanton, I think you will find that there are police employees who make $100k. I think the average Fire employee was over $80k....is that really blue collar?
Really?
Fri, Aug 26, 2011 : 6:51 p.m.
The over intelligence of the comments here amazes me. You all assume that police and fire refuse to negotiate. Did you ever ask one of them? Have you ever heard them say we won't negotiate? Nope. The city sure likes to pound that drum though. Yet, you are still against the workers. Ever think part of what they're trying to negotiate includes having more than just 3 officers on the road at a time? How about only having 5 fire trucks for a city over 100k residents. More with students and games. You all ASSUME that workers just want more money. But no one ever asks. Just keep drinking the kool-aid. How do I know these things? Because I'm there living it. We try to keep the city protected and fight against the city spending millions on pet projects while reducing YOUR city safety services. But yet you're still bashing us. Fortunately we're not going to stop. We know what's right. There's national statistics to prove how pathetic Ann Arbor is when it comes to safety. For those small few that continually bash the workers no matter what we say... to you there's really no point in engaging in conversation. You'll hate just for the sake of hate. To those of you that understand that the city plays a continual smoke and mirror game... you are the minority in this city that can see the forest through the trees. Thank you.
Alfie
Fri, Aug 26, 2011 : 10:02 p.m.
Okay, if its not about money, then why not agree to the same Health Care plan as AFSCME and the majority of City employees? Its the same insurance and treatment plan, just higher costs to the employee. That would go a long way to helping reduce costs and preserve jobs in your department. Is it tough to do? Absolutely, but these are tough times for everyone. Its not like the new AFSCME contract won't put a dent in my financial situation.
Alfie
Fri, Aug 26, 2011 : 1:56 p.m.
There is no 'hidden deal' here for the AFSCME workers. It never ceases to amaze how quick to criticize everything some people are. The AFSCME members worked with the City and looked at the reality of the situation and negotiated a contract, while much worse than the existing contract, is still fair and reasonable compared to what many workers in the private sector have. It could always be much worse. I think AFSCME should be applauded for taking a realistic approach, having a willingness to negotiate in good faith and truly looking out for its members AND the City as whole. Maybe this helps save jobs in the future, but the bottom line is that AFSCME members are still lucky to be employed and the vast majority realize this. Perhaps the firefighters should be listening to this example instead of continually forcing the hand of managment. They now have by far the most generous contract of any city employees. AFSCME has endured many many layoffs over the years, but understands much better the reality of the the current times.
Alfie
Fri, Aug 26, 2011 : 9:53 p.m.
@Steve, Shockingly its true. I speak from the point of having voted on the contract AND examined what we were getting. You doubt it, read the contract yourself, its public. AFSCME got nothing but cuts, but its still way better than co-workers losing jobs or getting stuck with a plan from the state which is way worse. Its as simple as that, no conspiracy. Sorry to let you down.
Steve Sommers
Fri, Aug 26, 2011 : 4:19 p.m.
Are you speaking based on factual information or just your gut feeling. Cause it sounds to me like you are drinking the Crawford Kool aid too. The union just said "hey, you are right. You can have back all those things we have earned over the years in negotiations. Even though I have kids to feed and you are bleeding money out to art. You can have some of my money to buy more." Nope. Still not buying it. They got something in return for all that.
clownfish
Fri, Aug 26, 2011 : 12:49 p.m.
Once again union members concede, and people still whine and moan! I would like to read some specific concessions/sacrifice all of the anti-union poster have made for their community! What have you given up for the benefit of the state of MI? Anything? Have any of you you agreed to and accepted a tax increase to help balance the budget?
DonBee
Sun, Aug 28, 2011 : 2:48 a.m.
Tax increases clownfish - Let's see (in the last 12 months): Franchise fee for trash collection up from $2.50 a month to $5.00 a month Franchise fee for Cable up from $1.99 a month to $3.99 a month Franchise fee for electricity up from $2 a month to $5 a month Gasoline Sales tax - $0.06 per dollar of the cost of gasoline - given that gasoline is up $1.50 from last summer at this time - that is $0.09 per gallon or about $1.80 for an average tank full. License Plate fees up on average 7% 1% increase in the tax on health care insurance ... And the list could go on and on. There are now so many hidden taxes, you never really realize how much you actually pay.
Stephen Landes
Fri, Aug 26, 2011 : 1:57 p.m.
Twice a year we pay taxes for fewer city services at a higher price than we should have to. That is sacrifice enough.
nekm1
Fri, Aug 26, 2011 : 12:16 p.m.
The legislation gives schools and local municipalities the alternate option of paying 80 percent of employee health care costs, while employees would pay 20 percent. An analysis by AnnArbor.com last year showed the average Ann Arbor city employee paid only 6 percent of the $11,772 annual cost of his or her health benefits. AFSCME Local 369 President Gary Wilson acknowledged the fact that a new state mandate on health care was coming down was an incentive to reach a deal with the city quickly. Thank you and God bless you Gov. Snyder and the Republican led legislature. It is about time that our government quit passing out taxpayer money like it was candy.
Stephen Landes
Fri, Aug 26, 2011 : 1:55 p.m.
Mr. Blue -- your grasp of basic economics is astounding.
Mr Blue
Fri, Aug 26, 2011 : 12:39 p.m.
You do realize that the "government candy" are actually EARNED wages and PAID into retirement accounts by the employees. AND that a major portion of those wages (to working class pubic servants) are returned to the local economy in the form of food, rents and retail sales at local businesses. So when Snyder and the rest of the highly public administrators cut wages and benefits of working class public employees, there is a lot less money going into the Michigan economy. What you call "government candy" is actually money that goes right back into the Michigan economy.
Stephen Lange Ranzini
Fri, Aug 26, 2011 : 10:51 a.m.
Hopefully, this will put a dent in the $215.5 million deficit hole in the city's retirement funds. See <a href="http://www.annarbor.com/news/ann-arbor-voters-will-be-asked-in-november-to-vote-on-removal-of-city-administrator-from-pension-boa/?plckFindCommentKey=CommentKey:4762d34e-a9c4-49b7-b779-0a818437f9d0">http://www.annarbor.com/news/ann-arbor-voters-will-be-asked-in-november-to-vote-on-removal-of-city-administrator-from-pension-boa/?plckFindCommentKey=CommentKey:4762d34e-a9c4-49b7-b779-0a818437f9d0</a>
Alan Goldsmith
Fri, Aug 26, 2011 : 10:46 a.m.
"Rapundalo said he thinks the agreement was reached quickly in part because of a new state law setting hard caps on public employee health care coverage." So when is Rapundalo going to come out of the closet and admit, as when he's run for political office in the past and with his contributions to Republican candidates, he's not a Democrat and only put on that false masked to run for office in Ann Arbor? Why doesn't he have the courage to be honest about who he is?
Mr Blue
Fri, Aug 26, 2011 : 1:48 p.m.
Because he fears that he might be revealed as a two faced hypocrite. Oh wait, he's already made that public.
Ignatz
Fri, Aug 26, 2011 : 8:45 a.m.
AFSCME should start representing artwork. There's always money for that!
Snarf Oscar Boondoggle
Fri, Aug 26, 2011 : 3:03 a.m.
in general (with the rariryt of an exception) employers wnat to minimie their costs and unions wnat to increase employer's costs. sow what else is new? al those nasty profiterring employers need to be put in their place ....oops .. this employer -the gummint- (taxpayer funded) is not profiteering! oh, my!
Tony Livingston
Fri, Aug 26, 2011 : 2:19 a.m.
They still have not addressed the retirement issue. Why are we tax payers funding retirements for people in their 50s? Way too much money given away on this and things will not even out until retirement age is 62.
DonBee
Sun, Aug 28, 2011 : 2:42 a.m.
Oh, and sh1 - Pension payouts in Michigan for people under the age of 62 total more than $7,500,000,000.00 according to the IRS (2010 number). While they do not break out how much is public sector and how much is private sector, few workers have had a defined pension since the 1980s in the private sector in Michigan.
DonBee
Sun, Aug 28, 2011 : 2:40 a.m.
sh1 - The rules seem to be get to 85 and you get full benefits on most existing contracts for public sector unions in Michigan (and surrounding states). How do you get to 85? Age + Years of Service So Age 55 + 30 years of service = 85 --> Full Benefits. Many city workers started before they were 25, so they can retire even earlier, AND in some of the early retirement offers, they could buy a couple of years. I have a friend who worked for Ann Arbor, he got is 30 years in by the time he was 49, at 51 he was able to retire with full benefits with the offer of 2 years of additional credit. He is now working for a different city in a different state on a similar deal. He just turned 62 and has 11 years in the new gig, that give him a 73, so he needs 12 more to get full retirement a second time. By the time he is 66 he will have two defined benefit pensions and two life-time health care programs. In total he will make well more than $100,000 a year in pensions. Now, this is not the usual thing, but it is common enough that it makes a lot of tax payers unhappy!
sh1
Fri, Aug 26, 2011 : 3:24 a.m.
What is the percentage of workers retiring with full benefits who are still in their 50's? I keep hearing this line but have seen no evidence of it.
microtini
Fri, Aug 26, 2011 : 1:25 a.m.
Concession contracts are never good for workers, even when employers blackmail them with the threat of unemployment. Multi-tier contracts are especially bad because they split the workforce and set the stage for the dismantling of the union. Working people are not responsible for this financial crisis and should not be made to pay for it.
AAFish
Sun, Aug 28, 2011 : 12:07 a.m.
Sorry -- aa.com is my former employer (American Airlines). I meant to say -- annarbor.com
AAFish
Sat, Aug 27, 2011 : 1:19 a.m.
@2Wheels -- So -- in order for workers to keep their jobs, they must give up more and more? Just exactly why? There is plenty of money in this society. YOUR attitude is why inequality is becoming worse and worse. Which is to the detriment of us all, even though you and your ilk are seemingly unable to perceive that.
2WheelsGood
Fri, Aug 26, 2011 : 1:45 a.m.
"Concession contracts are never good for workers" Not even if it means they keep their jobs? Wow! Some day perhaps you'll realize that your attitude is why manufacturing has moved overseas.
Mr Blue
Fri, Aug 26, 2011 : 12:31 a.m.
Eight weeks to settle a labor contract with the city is a record. Most labor negotiations with the city and its unions usually took two years and often longer to get an agreement. More than once negotiations broke down resulting in lawsuits which the city usually lost. In Fraser's tenure negotiations normally took at least one year and often resulted in lawsuits. I truly hope that this is a new day between labor and management at the city, with fair negotiations, open communications reasonable long term contracts and mutual respect.
Steve Sommers
Thu, Aug 25, 2011 : 11:53 p.m.
I think there is more to this story. The "highlights" only list what the union gave up. This was a negotiation, so where are the list of the Cities concessions? I can't imagine the union gave that all up because of an 80/20 law. They pretty much got the same if not worse insurance out of the deal. I am not buying what Crawford and Rapundalo are selling. The real story needs to come out. Nice try pulling the wool over our eyes. It didn't work here.
Steve Sommers
Fri, Aug 26, 2011 : 11:44 a.m.
I am not drinking the kool-aid. Ok the insurance I can maybe see. If they compared the 2 plans and the cities plan was better then understood. But all the other stuff...no way! Unions do not sell out their new members for nothing. They do not increase vesting or add more to their pensions for nothing! There was something given in return. If you remember the firefighters took paycuts and pension contribution increases but in return they got a short term no-layoff clause. There is another half of this story that we aren't getting. What are they hiding?
Youwhine
Fri, Aug 26, 2011 : 12:48 a.m.
Crawford and Rapundalo are both pretty anti-union. I doubt that they are covering up any great concessions the city made to the union. Given all the legislation passed in the last year, there really is little to nothing left for the unions to negotiate. They probably agreed to this so quickly because there is no incentive for the city to offer anything else or settle a contract. In fact, some legislation actually ENCOURAGES the city NOT to settle a contract... Any union who is on an expired contract is no longer allowed to get any scheduled raises and is REQUIRED to pay any additional costs the city sees in providing health care. You better believe that the city will discover great increases in health care costs if you don't settle quick (see what they have done to police and fire since the law was passed). The union probably realized that there was no likelihood of any other offer and they might as well agree before things got worse.