Opinions vary on wisdom of using arbitration in Wallingford Unions’ dispute

As published in the Record Journal on Thursday March 28, 2013

By Andrew Ragali
Record-Journal staff
aragali@record-journal.com
(203) 317-2224
Twitter:@AndyRagz

WALLINGFORD – Mayor William W. Dickinson Jr. said Wednesday that he’d rather resort to arbitration than deal with the ongoing cost of paying town employees every time Town Hall closes due to inclement weather.

Town Hall was closed on Feb. 14 as the cleanup effort began after the blizzard, and two days later Dickinson filed a memo stating that town employees who didn’t report to work that day must take a vacation day in order to be paid. Nonessential town employees had been told not to report to work that day, and Gov. Dannel P. Malloy closed the state.

Personnel Director Terrence Sullivan said in early March that six of the town’s seven employee unions filed a grievance in opposition to Dickinson’s ruling. The police union did not file a grievance. Sullivan, who could not be reached Wednesday, said earlier this month that he had heard the arguments of several unions, but could not reach any compromise. He said he expected several unions to resort to arbitration,which Dickinson referred to Wednesday as “a one-time cost.”

“If every time Town Hall closes there’s a cost associated with that, that’s an ongoing cost,” Dickinson said.

Earlier this month, Sullivan said he still had to hear from two unions.

On Wednesday, Dickinson said, “I think it’s still in the grievance process,” so there’s no indication that any town employee union will decide to go to arbitration. Shelby Jackson, president of United Public Service Employees Union Local 424-14, which represents municipal managers, and Chuck Ballard, president of Local 1183 of the American Federation of State, County and Municipal Employees, the union representing public works, clerical and sewer workers, could not be reached for comment on Wednesday.

Sullivan explained in February that there are two options when settling a dispute through arbitration. Either the Connecticut State Board of Mediation & Arbitration or the American Arbitration Association can settle the grievance as a neutral party. Sullivan said settling a dispute through the state board is cheaper, but can take more time.

“The state board is flooded with grievances“ from both municipalities and private companies, he said. “It can take a year to a year and a half to get an initial hearing.”

There is a $25 filing fee when dealing with the state board, while the association charges between $250 and $300 to file a complaint, Sullivan said. Going through the association is much faster, he said, with an initial hearing usually held within 90 days, and a conclusion reached 30 days after the final hearing. But there could be arbitration fees of$1,500 per hearing when working with the association.

Town Councilor Craig Fishbein said there are two schools of thought when settling union complaints. The town can either “run and hide in the corner and agree” to what the union gives as their last offer, or “fight on behalf of the taxpayers,” a method Fishbein would agree with “more often than not.”

Fishbein said he’s been hearing in council chambers that “we’re just going to lose in arbitration,” but the councilor feels if the town doesn’t fight unions through arbitration, there’s no chance of winning.

Town Councilor John LeTourneau said fighting town employee unions through arbitration is a “huge mistake.”

LeTourneau said the cost of arbitration and personnel hours dealing with the grievance and arbitration process is wasteful and will end up costing the town more money than if Dickinson decided to change his mind and pay employees for the day Town Hall was closed.

“This is going to open up such a large can of worms that it will be years until it gets unwound,” LeTourneau said. “We’re paying (employees) to take time to file grievances. They’re on the clock.”

LeTourneau also said the town doesn’t do well in arbitration battles with town unions.

“It sounds good on the surface ... take a stand, don’t pay your employees,” he said. “But if you get into the weeds of this thing, it’s going to cost the town a lot of money. There’s a reason why unions are strong in this town, and this is an example.”

Arbitration may cost jobs in Wallingford

As published in the Record Journal Friday September 9, 2011

By Robert Cyr

Record-Journal staff
rcyr@record-journal.com
(203) 317-2224

WALLINGFORD — In most of the town’s labor negotiations in the past year, unions have emerged the winners in costly arbitration, which has some blaming the mayor’s demand for pay freezes.

Last week, a payment of $230,000 was awarded to the 55 members of United Public Service Employees Union Local 424, a management union with positions that include town planner, public works superintendent and tax collector. The town won’t be able to cover that solely by leaving vacant positions unfilled, so officials have pointed to layoffs as a potential solution.

Mediating attorney J. Larry Foy billed both the town and the union $10,812 each for his arbitration services. But in reality, other costs associated with arbitration pushed that figure to $17,338, said Terrence Sullivan, personnel director.

In every case the town is involved with binding arbitration, each side hires its own lawyer and pays half the fee for a third-party, neutral arbitrator. Along with court reporting fees and document copying, the arbitrators account for a large portion of the process, win or lose, he said.

“It’s a small price to pay to avoid wage increases; it isn’t wasteful and isn’t wrong,” Sullivan said. “Many times the union brings the town into the process, but now the town is driving arbitration and we’re being vilified for wasting the town’s resources. Sometimes it takes a fight to get the savings and language that we need.”

In the past 12 months the town has spent $42,300 on arbitration proceedings, including processes that awarded pay raises and other contract details to three unions, including the manager’s union. Arbitration with Local 1183 of the Association of Federal, State, County and Municipal Employees cost the town $12,346 last year, and International Association of Fire Fighters Local 1326 cost taxpayers $12,566, Sullivan said. Those arbitration awards totaled more than $100,000.

The town avoided arbitration costs with school unions in February, when three chapters of the United Public Service Employees Union representing more than 60 workers in the school district were awarded four-year contracts by the Town Council.

Pay raises for the three unions amounted to $133,240.80, far less than the cost of arbitration, according to School Superintendent Salvatore Menzo. Menzo estimated the cost to arbitrate all three contracts between $42,000 and $45,000.

In late November, the council approved several internal transfers for the Public Utilities Department to cover an arbitration award for Local 1183 of the American Federation of State, County and Municipal Employees, which represents about 130 employees in the sewer, public works, clerical and emergency dispatch departments. Public Utilities Director George Adair has said there is no money to cover possible pay raises for one union still negotiating a contract with the mayor.

With the highest bond rating possible and millions of dollars in its reserve account, the town’s financial success and the conservative approach of its mayor, William W. Dickinson Jr., may make it an easy target for unions wanting more, some town officials have said. Dickinson’s $141.5 million budget for the 2010-11 fiscal year, however, did not contain funding for wage increases in any department.

He stressed that the town is facing a decrease in its Grand List for the first time in more than 25 years, resulting in a revenue loss of more than $3 million.

“I don’t know how you tell the public that you’re agreeing to increases with the economy the way it is — with 9 percent unemployment,” he said. “Given the very challenging distress in the economy, there’s got to be recognition that government can’t continue as it did in the good times.”

Dickinson’s stance in union negotiations has been publicly challenged by his mayoral opponent, Democratic Town Councilor Vincent Testa Jr. Testa said the town takes a one-size-fits-all approach with collective bargaining, and that just hasn’t worked well so far.

“None of us want to see large raises when the economy is tough and we’re struggling with the tax dollars we have — but the simple fact is that, if you’re going into negotiations and you offer no pay raises for three years, you’re going to lose,” he said.

Local UPSEU Director Wayne Gilbert said the town’s stance is far too rigid with unions and more than half the negotiations end up in arbitration. He said the process put a strain on professional relationships and made it hard for things to get back to normal after the binding arbitration is finished and the awards announced.

“It’s absolutely ludicrous. It means you have to work extremely hard to present the case,” he said. “That kind of litigious nature doesn’t foster good relations between the parties. These are the employees who get water to your house, bring electricity to your house, plow your streets. They take care of the education of your children and grandchildren.”

Town must pay managers union $230,000

As published in the Record Journal, Saturday September 3, 2011

By Robert Cyr
Record-Journal staff
rcyr@record-journal.com
(203) 317-2224

WALLINGFORD

— The town will have to come up with more than $200,000 after the Town Council decided this week it would not contest an arbitration award in favor of a local managers’ union asking for retroactive pay increases.

A payment of $230,000 was awarded to the 55 members of United Public Service Employees Union Local 424, a management union with positions that include town planner, public works superintendent and tax collector, said Mayor William W. Dickinson Jr.

The amount reflects a 2.5 percent annual salary increase for 2011, he said. The first two years of the contract starting in 2009 involved a wage increase. A 2 percent increase is set for 2012, according to award documents.

Dickinson said he was not pleased with the decision, but the amount has to be found somewhere — and town officials will be meeting soon to examine municipal finances to meet the award.

“I certainly don’t agree with the philosophy that goes into it; I don’t think it recognizes in any way that our primary source of revenue is taxes,” he said. “It ignores the fact that taxes have to go up for increased costs, and that never seems to be included in the decision making. Clearly vacant positions wouldn’t be filled, unless there’s other money available.”

Dickinson said it was too soon to say whether layoffs were imminent. In a controversial move late last year, he laid off paramedic staff to meet arbitration awards with another town union. Mediating attorney J. Larry Foy billed both the Town of Wallingford and the union $10,812 each for his arbitration services.

Personnel Director Terrence Sullivan said the first area of savings that is looked at is vacant positions, and the salaries and other benefits associated with those positions are added up. But leaving those positions vacant will not be enough to pay the award.

“Then we get into the tougher area — whether or not there has to be reduction in staff because we have to pay that money no matter what,” he said.

Local UPSEU Director Wayne Gilbert was not available for comment.

FROM WALLINGFORD - Leave the ‘zero’ offer behind

As published in the Record Journal, Sunday February 27, 2011

The discussion has come around again with respect to union contracts, pay raises and the possibility of binding arbitration.

As we have already seen here in Wallingford, we never win a binding arbitration case. When you take something to arbitration you can say that the outcome is an unknown but not here in Wallingford; we always lose.

This is mainly because arbitrators review the case and consider the union position and the town’s “last, best offer” and compare the two.
Our last, best offer lately has been “zero.”

Salaries are compared with other union contracts in town, and pay rates for similar positions in towns with a comparable financial picture. Wallingford’s finances are assessed and it’s reviewed whether the town is able to afford pay hikes. Because of years of frugal spending habits and tight money management, Wallingford is so fiscally responsible that in this small circumstance success works against us. All of these factors end up making it impossible for the town to win an arbitration case.

This is best addressed by agreeing that the arbitration process is broken. When a negotiation reaches the point at which it goes to arbitration, arbitrators cannot properly consider objectively and simultaneously what is best for both the town and the union. When a town such as Wallingford ends up in this situation, it’s “rainy day fund” is often looked at like a solid resource available to fund the arbiters’ decision. In fact, that rainy day fund is really the fruit of responsible spending set aside for real costs and emergencies.

Wallingford and other towns should be proactive to work with lawmakers to address the arbitration process to make it fairer and more balanced in future situations. In the meantime Wallingford needs to understand what “bargaining in good faith” really means. It does not mean “zero percent raises regardless for the entire X year agreement” or “let’s set this now at zero and possibly re-negotiate it as needed later.” Unions would not be stupid enough to accept this. They know full well that no town would come back to the table merely because conditions have changed for the better. Most municipal employers — or any other kind for that matter — are not set up to respond that way.

We all understand that 16 percent of the workforce is unemployed or underemployed and that 9 percent of them are collecting unemployment. What needs to be understood as well is that the remaining 84 percent are working. We are dealing with rising fuel costs, food costs, insurance costs, local, state and federal taxes, and so forth. These things are not all sitting idly at zero percent inflation. It should not be assumed that pay should remain at the zero point either.

I am keenly aware that pay raises for municipal employees is one catalyst which causes taxes to go up. I am also keenly aware that going to arbitration generally leads to the cost of the arbitration itself and very often more in actual judgments than what was asked / negotiated for in the first place. That raises taxes even higher.

Wallingford needs to find a better understanding of what the actual work climate is for those still working and to obtain a proper understanding of what competing salaries are for given jobs. Then it must work to provide the best and fairest deal for all.

Otherwise the decision gets taken out of Wallingford’s hands and is made by others. Historically that has amounted to a win for the unions only. Good for them for winning those arbitrations, too, if the town is not being smart about playing the game under the current rules.

As I have said before, Wallingford does many smart things and they have worked well for years. I wouldn’t suggest changing anything that still works. But there are clearly some things that no longer work the way they used to. This is another perfect example of where we need to change up our game.

Citizen Mike Returns – Episode 6 – Recent Arbitration story

The Citizen Mike Show is on each night at 9PM except Sundays on Comcast channel 18 and on U-Verse channel 99.

Episode 6 is now available on demand. I have it cross posted here and it is available on the WPAA VideoAlive page on demand.

The episode covers, in layman’s terms, the recent arbitration award that has handed down regarding Local 1326 of the International Association of Fire Fighters and Local 1183 of AFSCME and the process by which all of this was handled.

It is a MUST watch for anyone that would like more information on all of the details on how we have arrived to where we are today and the simple way that this award can easily be paid for and handled within the current budget and without raising any immediate taxes.

As far as the future award for next year and years going forward – that will require planning and forethought and we as a town should get started on that now while we are still a year and a half out.

Again – I HIGHLY recommend the Citizen Mike Show as “must see TV”

FROM WALLINGFORD - Managing ability to pay

As published in the Record Journal on Sunday November 21, 2010

Jason Zandri

In last week’s From Wallingford, my counterpart, Steve Knight, reviewed recent election outcomes. He said across the nation’s “free-spending pols were shown the door,” but that here in Connecticut, the “Land of Steady Habits,” it would be more of the same with respect to spending money we don’t have.

I am willing to give the newly elected officials an opportunity to put their best effort forward before I assert that same conclusion.

As long as we’re on this subject — the “Land of Steady Habits” — I’d like to focus on Wallingford, because to claim that only Hartford and Washington are guilty is like the pot calling the kettle black.

Mayor Dickinson, true to his word, carried out his administrative decision to cut services if unions won their arbitration case. He is the Mayor and that is his prerogative.

Judgment in arbitration cases against the town comes as no surprise to most. One factor, for better or worse, when it comes to rendering a decision in these instances is a town’s ability to pay. Wallingford has solid ability to pay with (as of the end of the 2008-09 fiscal year) $20.4 million in its fund balance plus $11.8 million in undesignated funds that are not allocated to any one time capital purchases or expenditures. That doesn’t include an additional $7.2 million payment received from the Connecticut Resources Recovery Authority when Covanta took over the trash plant.

Having ability to pay is a double edged sword. It means our reserves are bountiful and we only have gotten there through conservative management which I do appreciate. One consideration of this of course is that in order to build up a reserve like that you need to be overtaxing. Municipalities can build up reserves when they have excess tax dollars remaining at the end of an annual budget cycle. Taxes and mill rates are set to correspond so that money coming in matches money going out to pay for these services. If you overspend you go into an operating deficit which generally becomes a debt that is mortgaged into future tax payments.

Not a good thing.

Building up some reserve makes sense. If there is a small gap from something unexpected it can be covered with savings. If enough money can be put aside then tax payers reap the benefit of excellent interest rates like Wallingford has when it does need to go out and borrow money.

Once you cross a certain threshold of money in the bank all that additional excess is not going to further improve your bond rating. If your largest single contingency without bonding can be covered by the difference then all monies saved past that combined point are of minimal additional positive impact.

When met with a situation of funding a critical service like EMTs I think the last choice which a town with a surplus should be taking is cutting that service back. One percent interest on $20 million dollars is $200,000.00 — twice what is needed to fund the arbitration award. With interest only and as a stop gap measure we could solve this problem; that would keep present levels of EMT service in place and leave the principal balance untouched. When the economy recovers and the grand list grows you can cut that stop gap measure.

If we don’t want to do that for whatever reason then I suggest the choice of cutting other non-critical services back before cutting EMTs.

Coming in as last choice is a resort to raising taxes. The median household tax bill would go up about three dollars to fund the arbitration award. Any of these choices are better than cutting any critical service that could put people at unnecessary risk in times of dire need.

Certain scenarios could place Wallingford at a higher risk of possible liability if it can be shown the reduction of this critical service was directly responsible for additional injury or loss of life.

Juries will find Wallingford has ability to pay out in a lawsuit just as easily.

Labor board rules against Wallingford

As posted online at MyRecordJournal.com

By: Jesse Buchanan | Posted: Thursday, August 5, 2010

No big surprise here. According to the story online at MyRecordJournal.com the state labor board determined that Wallingford committed a prohibited practice when it voted down a contract with the custodial workers union in September 2009.

The story written by Jesse Buchanan goes on to indicate that the “decision was made in late July by the Connecticut State Board of Labor Relations, which ordered that the town put into effect the agreement of last year.”

The end result of this was that the three-year contract was effectively reinstated and it awards a one percent wage increase for the first year and a 1.95 percent wage increase for the subsequent two.

That wage increase cost is on top of the costs that the town needed to spend, in both time and money, to defend itself in arbitration. Those additional monetary costs were in the neighborhood of $12,000.00.

Again, this is in addition of the costs of people time spent doing work related to the arbitration effort.