Union contracts compound city woes

11/21/2004

In the summer of 1996, negotiations between the city of Toledo's largest union and then-Mayor Carty Finkbeiner were getting hot.

Local 7 of the American Federation of State, County, and Municipal Employees wanted more money and was fighting a proposal to give the city more flexibility in scheduling.

But before an amicable deal could be reached, negotiations broke off, forcing the issue to an outside fact-finder.

What happened next surprised most and stunned some: The fact-finder agreed to give the union something even it didn't expect for its 970 blue-collar and clerical workers - elimination of the 6.9 percent pension contribution required of every employee.

Over Mr. Finkbeiner's objections, City Council ratified the fact-finder report. Within a year, the city's other six unions won similar concessions.

Back in 1996, Mr. Finkbeiner predicted it would cause the city to commit up to $30 million over three years and lay off hundreds. It didn't happen then, but over the years, the city's costs have risen and the unions have lost positions.

"I wasn't kind of right," Mr. Finkbeiner said last week. "I was right."

On the impact of the 1996 pension increase, Mayor Jack Ford and his predecessor agree.

"That was a huge one. That's going to cost for a long time," said Mr. Ford, who is threatening layoffs and seeking labor concessions to help avert a $16.8 million deficit in 2005.

As city leaders struggle to balance the budget and consider tax increases to avoid layoffs, they are forced to look at trimming their biggest expense: personnel. And looming large in the city's personnel budget are the excellent employee benefits that City Council has provided in contracts with city unions over the decades.

Those benefits include 15 paid holidays - more than most local public employees and far more than most private employers. A survey of local companies shows that most workers get fewer than 10 paid holidays.

Most city employees also get at least a dozen sick days a year and can earn up to six additional days if they use three or fewer sick days, depending on the union involved. By comparison, more than a third of local private employees get no paid sick time; nationally, about half of the country's full-time workers do not get paid sick leave.

But to blame the budget mess on the unions and their contracts, however, would be simplistic. The economy has stumbled as few expected, costing the city jobs and the tax revenue they produce.

And it takes two to tango: Every extra holiday, every additional pension contribution, and every incentive not to take sick days was approved by city leaders.

In fact, few current or former politicians will blame the unions for the city's current problems. Even Mr. Finkbeiner, who railed against the fact-finder's report, talks about the city work force with a measure of pride.

"We ask our workers to, as a general rule, work harder and get more work done than other municipalities in the state of Ohio," he said.

Mayor Ford is well aware of the unions' contracts and their impact on the city's budget. He knows it got started about 30 years ago, when public service employees were paid less than the private sector. Other benefits, like additional holiday time, made the jobs more appealing.

About 20 years ago, he said, the pay in many cases had increased to the point where it matched or exceeded the private sector. "And yet the very lucrative benefit packages continued almost the same," he said.

Because of the cost of the benefits - every holiday requires thousands of dollars in overtime - he said his administration will look at pushing for "two-tier" contracts next year that will extend fewer benefits to new employees.

"I think it's something you have to consider at some time," he said.

Toledo's municipal workers are not the only public employees in the area to win excellent benefits at the bargaining table. Lucas County employees have gained similar awards, as have those with some municipalities in the region.

County employees get fewer paid holidays than Toledo workers, receiving only 12 or 13 days off, depending on the bargaining unit. But some groups have negotiated additional benefits.

For instance, while many public employees get "bonus days" - days off for taking a minimum amount of sick time in a year - employees with the county Jobs and Family Services Department have an additional incentive. Every six months, if they take one day or less of sick time, they can get either three days off - or $1,000.

Gwen Moore-Browne, human resources director for the county commissioners, said most take the cash.

Public employees get other benefits as well.

Most Sylvania Township employees, for instance, get "longevity" pay after five years. It's an annual bonus that starts at 1 percent a year and is capped at 5 percent after 25 years. Toledo pays out longevity pay only to those employees hired before July, 1982.

Some township employees also get a "holiday stipend" - 16 hours of pay in the paycheck that precedes Memorial Day.

Many of these benefits are rooted in history, said Don Czerniak, president of AFSCME Local 7, the city's largest union. For example, he said the holidays the unions enjoy were often awarded in contracts through which they got minimal raises.

"It's not like we're making a killing," Mr. Czerniak said. His union represents some of the lowest paid on the city's work force. "This is stuff that happened way back."

As wages have risen, most of the days off, pension contributions, and other benefits have remained.

But at most negotiating sessions, additional requests are made. What public employees win in Cleveland or Akron, for example, will likely make its way here, union and city officials say. Columbus, in fact, was one of the first cities to pay all of its employee's pension contributions.

"There's always something new on the table," said Toledo Councilman Rob Ludeman. "And they see if it sticks."

In August, 1996, Mr. Ludeman was on City Council when the AFSCME contract went to fact-finding. He sat in on the meeting at which Mr. Finkbeiner and AFSCME representative George Tucker made their cases.

The union had rejected a preliminary agreement, which called for a 9 percent wage increase over three years and a 1 percent increase in the city's pension contribution, in part because of the administration's demand for more scheduling control.

Randy McElfresh, who was the AFSCME staff representative at the time, said the union may have backed the economic package if the work rules weren't changed.

But when Mr. Finkbeiner insisted on them, the issue went to fact-finder Dennis Minni of Strongsville, Ohio.

It was a move that Mr. Ludeman called the "poorest decision" of the negotiations. Former Councilman Gene Zmuda, now a Toledo Municipal Court judge, said it took negotiations into a realm that gave the city little control.

When Mr. Minni's report came back, it put City Council in the position of making a tough decision: Approve a costly contract or reject it and face a strike. And with Mr. Minni's report, the city would have had little chance to argue for less.

"It cut the legs out from under the city to justify less than that," Mr. Zmuda said.

Mr. Zmuda and Mr. Ludeman were joined by nine others, including current Councilmen Pete Gerken and Betty Shultz, in approving the contract. The late Gene Cook, then council president, voted against it.

"It was the best choice for the city of Toledo at the time," Mr. Zmuda said.

When AFSCME or other local unions want to talk with city leaders, they're often talking with friends. They often have supported them politically as candidates and at times have helped their campaigns with financial contributions and grass-root political efforts.

Nationally, AFSCME encourages its members to be politically active and to push members to get elected themselves. And if they work for a candidate, members are instructed to "make sure the candidate or manager knows you're doing it. Then do it well," the union's Web site states. If the candidate is not told, the union's work "will go unrecognized and unrewarded."

When he ran for mayor in 2001, Mr. Ford did so without the endorsement of any of the city workers' unions. At first, it was considered a hindrance, he said. Today, he calls it liberating: He wasn't beholden to any of the unions. It was easier to ask for concessions and wage freezes.

If you have the unions' support, he said, they expect something in return.

"It worked out because I had not given away the farm before I was elected," he said.

The city's other unions also are politically active, and some rank-and-file have grumbled that if the layoffs proposed in Mayor Ford's 2005 budget are approved by council, they'll actively work against the council members involved at the next election.

But Mr. Czerniak and other union leaders say the relationship between the unions and City Council does not require a quid pro quo.

"I don't call it a political favor," Mr. Czerniak said. "I call it working together as a family."

Contact Mike Wilkinson at: mwilkinson@theblade.com or 419-724-6104.