Overtime issue, two-tier pay system part of new agreements
LOUISVILLE, Ky. (May 16, 2012) – Keeping his commitment to transparency with union contracts, Mayor Greg Fischer’s administration today presented two new collective bargaining agreements that are fair to employees but also begin to help the city address its structural budget deficit.
The five-year contracts cover 230 emergency medical services employees and 403 corrections employees. Both contracts change provisions for overtime so that employees must now work more than 40 hours a week before receiving overtime pay. Under the new language, sick and vacation time no longer counts as time worked.
The contracts also have language that reduces longevity pay raises, known as step increases, for newly hired employees. Those are increases above and beyond any negotiated cost-of-living increases.
Those new provisions will help slow the growth in future city budgets and save the city $3.4 million over the life of the contracts — $1.5 million saved in EMS and $1.9 million saved in corrections.
“I appreciate the good faith of all parties in these negotiations,” Fischer said. “Although we still have much work to do, these contracts are steps in the right direction to help our government control future personnel costs while being fair to employees.”
The overtime language is important, Fischer said, because it’s his goal to reduce overtime by 10 percent in the new fiscal year budget and 30 percent in the next three years. That long-term goal could only be accomplished with changes to union contracts.
Last December, the mayor ordered a citywide review of overtime because of concerns that overtime pay is unnecessarily costing taxpayers millions of dollars each year. His action followed information that 550 employees — or 10 percent of the city workforce — have earned more than $15,000 in overtime this year.
The city spends $23 million on overtime each year. Scheduled overtime — that which is either contained in collective bargaining agreements or through state laws — accounts for about 32 percent of overtime, or $7.2 million, while $14 million is unscheduled.
Chief Financial Officer Steve Rowland presented the new contracts to a Metro Council committee this afternoon.
The Teamsters EMS agreement is a five-year contract that includes no cost-of-living raises in the first year, followed by 2-percent raise in the second year and 1 percent for each of the last three years.
The contract also includes a two-tier step increase program for future employees. Current employees receive a 3-percent step pay increase, but future employees will receive a 50-cents-per-hour increase per step. The starting wage for an EMT is $13.53 an hour and for a paramedic is $16.37.
The Fraternal Order of Police-Corrections contract for officers and sergeants includes no cost-of-living raises in the first year, followed by 2 percent in the second year and 1 percent in years three and four. In the fifth year, there is a zero increase with a wage re-opener.
Upon ratification of the contract by Metro Council, all corrections officers and sergeants will receive a one-time lump sum payment of $2,000. The contract also reduces the number of step increases from 10 over the life of the contract to eight. The starting hourly wage for a corrections officer is $15.31 and for a sergeant is $19.10.
The total cost to taxpayers for both contracts is $149 million over five years – $60.4 million for EMS and $88.6 million for corrections.
“Our goal is to more closely match government expenses, 70 percent of which are personnel costs, with actual revenues,” Fischer said. “These contracts help us begin to achieve that.”
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