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July 11, 2007
What a Bargain
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| I've been reviewing the collective bargaining agreements for the police (CPOA), safety employees (CPSA), fire (IAFF), and clerical (SEIU) unions in Chico, because that's the kind of thing I do for fun. Actually, I was looking around the city web site and ran across the SEIU MOU (memorandum of understanding), and read a little bit of it. This is basically the contract between the city and the union. All city / labor agreements can be found here. For some reason the pay increase formula for the SEIU caught my attention. Every year the SEIU union members employed by the city receive a raise of...well it's complicated. You take the annual increase in worker productivity and divide it by the normalized statistical value of customer happiness. This is then multiplied by the ratio of city projects finished under-budget versus those that are completed late or at higher than budgeted expense. Well... maybe that's not how it's done. In fact the SEIU city employee pay raise has nothing to do with worker productivity, customer satisfaction, or completed projects. For the SEIU you take the percentage increase in net city revenue over last year - 5% and compare it to the Consumer Price Index for all Urban Consumers + 1%. The lower of the two numbers is the annual raise. For 2006 the number was 5.7%. However, even if the city loses money SEIU employees are guaranteed a 1% raise. Each union has a slightly different formula for their annual raise. I think the IAFF has a minimum 2% increase and omits the CPI-U connection. The CPSA on the other hand does not get a raise if the General and Park funds decrease. But otherwise the union negotiated annual pay raise formulas are pretty similar. Connecting salary increases to revenue increases at the City produces an interesting result. For example, it's widely known that previous union benefit and salary increases (that are much larger than private sector numbers) are a major component of Chico's budget problem. In order to ensure we keep our service levels up where citizen's need them we've been told we may need to increase our taxes. Increasing our taxes will increase city revenue. Increasing city revenue will increase union employee annual salary increases and benefits based on the formulas previously discussed. Increasing union salaries and benefits are how we got to the point of needing increased taxes. Sounds like a never-ending circle. |
Posted by Lon at July 11, 2007 04:53 PM
Comments
well, here's where we are in agreement - city employees get paid too much. If we paid them less, we could afford to hire more people. These auto-raise mechanisms need to be dumped in favor of performance pay, with maybe a cost of living adjustment every few years.
Unions, like freely elected governments, are okay, as long as they don't get too much power.
Posted by: juanita at July 12, 2007 06:41 AM
You're kind of a jerk, you know that Lon?
Posted by: juanita at July 13, 2007 06:34 AM
I'll leave my ratio of "jerk-ness" to informational blogging up to the reader to determine. Thanks for your opinion.
I'm not sure I'd characterize union workers at the city as either over-paid or under-paid. That's not something I'm qualified to decide. But as far as I can tell union pay and benefit increases at the city do exceed increases in the private sector for similar jobs.
That being said it is interesting and important for people to know increases in salary and benefits for union workers are related to city revenue. Attempts to increase revenue to offset increases in human resources cost should act to increase human resources cost. Increasing revenue through a tax increase (or any other method) will probably result in an increase in salary and benefits for these workers.
Some of the MOU's appear to be at a point of renegotiation, so it's possible to modify the formulae, although I think that's an unlikely scenario.
Lon
Posted by: Lon at July 13, 2007 09:18 AM