Agenda Item 9
GO Item
2
December 7,2010
Public HearingIWorksession
Councilmembers and others should retain this packet for this afternoon's Government
Operations Committee worksession.
MEMORANDUM
TO:
County Council
Government Operations Committee
FROM:
SUBJECT:
Robert
H.
Drummer. Senior Legislative Attomeyjfij
Public HearingIWorksession:
Expedited Bil157-1O, Personnel
Bargaining Impasse Procedures
Collective
Expedited Bill 57-10, Collective Bargaining - Impasse Procedures, sponsored by Council
Vice President Ervin, Council President Floreen, and Councilmembers Andrews, Berliner,
EIrich, Knapp, Navarro, Trachtenberg, and Leventhal, was introduced on November 23,2010. A
Government Operations Committee worksession is scheduled for later this afternoon.
Background
Interest arbitration is a method of resolving disputes over the terms and conditions of a
new collective bargaining agreement. Grievance arbitration is a method of resolving disputes
over the interpretation or application of an existing collective bargaining contract. County
Charter §510 requires the Council to enact a collective bargaining law for police officers that
includes interest arbitration. Charter §510A requires the same for fire fighters. Charter §511
authorizes, but does not require, the Council to enact a collective bargaining law for other
County employees that may include interest arbitration or other impasse procedures. All of these
Charter provisions require any collective bargaining law enacted by the Council to prohibit
strikes or work stoppages by County employees. The Council has enacted comprehensive
collective bargaining laws with interest arbitration for police (Chapter 33, Article V), fire
fighters (Chapter 33, Article X), and other County employees (Chapter 33, Article VII).
All 3 County collective bargaining laws require final offer by package arbitration
requiring the arbitrator to select the entire final offer covering all disputed issues submitted by
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one of the parties.' The arbitrator is a private sector labor professional jointly selected by the
Executive and the union. The arbitration award becomes the final agreement between the
Executive and the union, but economic issues and provisions that would require the enactment of
legislation or the adoption of a regulation remain subject to Council approval.
There have been 17 impasses with County employee unions resolved by interest
arbitration since 1988. One involved fire fighters, 1 involved general County employees, and the
other 15 involved police officers.
2
The arbitrator selected the final offer of the International
Association of Fire Fighters (IAFF) in the one impasse with the fire fighters and selected the
County offer in the one impasse with the Municipal and County Government Employees
Organization (MCGEO). The arbitrator selected the Fraternal Order of Police (FOP) offer in 11
of the impasses with the police. The arbitrator selected the County offer over the FOP offer 3
times,3 and the County agreed to the FOP offer after the arbitration hearing one time. A chart
describing the issues resolved in each of the 17 arbitrations is at © 11-12. One explanation for
these one-sided results is a lack of public accountability in the interest arbitration system used to
resolve impasses with County unions.
Under current County law, the arbitrator makes an award after considering 6 factors,
including the County's ability to pay as only one of the 6 factors. The law does not require the
arbitrator to place greater weight on anyone of the 6 factors and does not require the arbitrator to
consider all 6 of the factors. For example, an arbitrator is free to value a union's comparison
with higher wages and benefits paid by another public employer greater than the County's
financial ability to match them. Bill 57-10 would require the arbitrator to evaluate and give the
highest priority to the County's ability to pay for economic provisions before considering the
other 5 factors. A copy of Council Vice President Ervin's memorandum explaining the need for
this Bill is at © 10.
Issues
1.
Should the criteria for the arbitrator be changed?
The County collective bargaining laws state that the arbitrator
may only
consider:
a.
Past collective bargaining contracts between the parties, including the past
bargaining history that led to such contracts, or the pre-collective
bargaining history of employee wages, hours, benefits and working
conditions;
Comparison of wages, hours, benefits and conditions of employment of
similar employees of other public employers in the Washington
Metropolitan Area and in Maryland;
b.
Under standard arbitration, the arbitrator is free to create a final package based upon the evidence introduced by
the parties at the hearing, including a compromise between the positions of the parties on each disputed issue. Final
offer by issue arbitration requires the arbitrator to select the final offer of one party on each disputed issue.
2
Arbitrator Richard Bloch, in his 1994 decision, called the unusually frequent arbitration hearings to resolve
impasses with the FOP a "veritable conga line of impasse procedures."
3
The FOP appealed 2 of the 3 decisions in favor of the County to the Circuit Court. The Circuit Court reversed a
portion of the arbitrator's award in 2003 and affirmed the arbitrator's award for the County in 2008.
1
2
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c.
Comparison of wages, hours, benefits and conditions of employment of
other Montgomery County personnel;
Wages, benefits, hours and other working conditions of similar employees
of private employers in Montgomery County;
The interest and welfare of the public;
The ability of the employer to finance economic adjustments and the
effect of the adjustments upon the normal standard of public services by
the employer.
d.
e.
f.
The problem with these criteria can be seen in the most recent arbitration awards under
the County collective bargaining laws. For example, Arbitrator David Vaughn described his
understanding of the statutory criteria as follows:
This provision does not require that any particular factor be considered or that all
of them be considered.
It
simply identifies the factors that I
may
consider. Thus,
I am free to determine whether any particular factor or factors weigh more heavily
than others ... (MCGEO Arbitration Decision of March 22,2010)
In the 20 I 0 Police Arbitration Decision, Arbitrator Herbert Fishgold, applying these
criteria, found that the FOP last offer for a 3.5% step increase at a cost of $1.2 million in FYIl
and a reinstated tuition assistance program at a cost of $455,000 was more reasonable than the
County's offer of no pay increase or tuition assistance. Mr. Fishgold reasoned that the FOP had
already given up a previously negotiated 4.5% cost-of-living increase each of the past 2 years
and had, therefore, done enough to help balance the County's budget. The Council subsequently
rejected both of these economic provisions and required all County employees to take furloughs,
including police officers, in order to close an unprecedented budget deficit.
The arbitrator should consider the funds available to pay personnel costs before
considering comparative salaries and past collective bargaining agreements.
Council staff
recommendation:
require the arbitrator to evaluate and give the highest priority to the County's
ability to pay before considering the other factors.
2. Should the Bill be amended to clarify the weight to be given to the ability to pay?
The County Attorney, at the request of the Council Staff Director, provided several
recommendations to clarify the guidance to an arbitrator that would further the purpose of the
Bill in a December 3, 2010 memorandum at ©13-16. The County Attorney pointed out that the
Bill would still permit an arbitrator to conclude that the Council could or should raise new or
existing taxes, including overriding the property tax limit in Charter §305. The decision to raise
taxes should be reserved to the elected County Council and not a private labor arbitrator. The
County Attorney recommended amending the Bill to require the arbitrator to first determine the
affordability of both final offers assuming no new or increased taxes before considering the other
factors. Council staff drafted an amendment that would address the points made by the County
3
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Attorney in Staff Amendment 1 at ©17-19.
Council staff recommendation:
amend the Bill
with Staff Amendment 1.
This packet contains:
Expedited Bill 57-10
Legislative Request Report
Council Vice President Memorandum
Chart of Arbitration Decisions since 1988
County Attorney Memorandum December 3, 2010
Staff Amendment 1
Circle
#
1
9
10
11
13
17
F;\LAW\BILLS\I057 Coli Barg -Impasse Procedures\PH-Worksession MemoDoc
4
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Expedited Bill No.
----:5::.!7_-1~O'__
_ __
Concerning: Personnel
Collective
Bargaining - Impasse Procedures
Revised: November 22, 2010
Draft No. -=.9_ _ _ _-:-:----::-:--::-_ _
Introduced:
November 23,2010
Expires:
May 23,2010
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
--'N~o:::!n.!.!:::e:..._.
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Cotmcil Vice President Ervin, Cotmcil President Floreen, and Cotmcilrnembers Andrews,
Berliner, EIrich, Knapp, Navarro, Trachtenberg, and Leventhal
AN EXPEDITED ACT
to:
(1)
modifY the criteria for an impasse neutral and a mediator/arbitrator to evaluate
before issuing an arbitration award; and
(2)
generally amend County collective bargaining laws.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-81, 33-108, and 33-153
Boldface
Underlining
[Single boldface brackets]
Double underlining
[(Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law
by
original
bill.
Deletedfrom eXisting law
by
original
bill.
Added
by
amendment.
Deletedfrom existing law or the
bill by
amendment.
Existing law unaffected
by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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exPEDITED BILL
No.S7-1Q
1
2
3
4
5
6
7
8
Sec.
1.
Sections 33-81,33-108, and 33-153 are amended as follows:
33-81.
1m
passe procedure.
*
(b)
(l)
*
*
During the course of collective bargaining, either party may
declare an impasse and request the services of the impasse
neutral. If the parties have not reached agreement by January 20,
an impasse [shall be deemed to exist] exists.
*
(5)
*
*
9
10
11
On or before February 1 [or prior thereto], the impasse neutral
[shall] must select, as a whole, the more reasonable, in the
impasse neutral's judgment, of the fmal offers submitted by the
parties.
CA)
The Impasse neutral [may take into account only the
following factors] must first evaluate and give the highest
priority to the ability of the County to
~
12
13
14
15
16
17
18
for additional
short-term and long-term expenditures
Qy
considering:
ill
the limits on the County's ability to raise taxes
under State law and the County Charter;
19
20
21
22
23
24
25
26
27
(ii) the added burden on County taxpayers, if any,
resulting from increases in revenues needed to fund
~
final offer; and
(iii) the County's ability to continue to provide the
current standard of all public services.
ill)
After evaluating the ability of the County to
~
under
subparagraph
®
the impasse neutral may only consider:
ill
the interest and welfare of County taxpayers and
service recipients;
&
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EXPEDITED BILL NO.S7-1 0
28
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[a.] (ii) [past] past collective bargaining contracts between
the parties, including the [past] bargaining history
that led to [such contracts, or the pre-collective
bargaining history of employee wages, hours,
benefits and working conditions] each contract;
[b.] (iii) [Comparison1
~
comparison of wages, hours,
benefits.1 and conditions of employment of similar
employees of other public employers
in
the
Washington Metropolitan Area and in Maryland;
[c.] (iv) [Comparison]
~
comparison of wages, hours,
benefits.1 and conditions of employment of other
Montgomery County [personnel] employees; and
[d.] (y) [Wages1 wages, benefits, hours and other working
conditions
of similar
employees
of private
employers in Montgomery County[;]
[e.
[f.
The interest and welfare ofthe public;]
The ability of the employer to finance econormc
adjustments and the effect of the adjustments upon the
normal standard ofpublic services by the employer].
(6)
The impasse neutral [shall] must:
(A)
not compromise or alter the [mal offer that he or she
selects~
[. Selection of)
ill)
select an offer [shall be] based on the contents of that
offer~
[. No consideration shall be given to, nor]
ad
not consider or receive [shall] any evidence or argument
[be received]
concerning the history of collective
bargaining in this immediate dispute, including offers of
@
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ExPEDITED BILL
No,57-10
55
56
57
58
59
settlement not contained in the offers submitted to the
impasse neutral; and [.
shall]
However, the impasse neutral
CD)
consider all previously agreed [upon] on items integrated
with the specific disputed items to determine the single
most reasonable offer.
60
61
62
63
64
*
33-108.
*
*
*
*
Bargaining, impasse, and legislative procedures.
*
(f)
(l)
If binding arbitration is invoked, the mediator/arbitrator must
require each party to submit a final offer, which must consist
either of a complete draft of a proposed collective bargaining
agreement
or
a
complete
package
proposal,
as
the
65
66
67
68
mediator/arbitrator directs.
If
only complete package proposals
are required, the mediator/arbitrator must require the parties 'to
submit jointly a memorandum of all items previously agreed
on.
69
70
71
72
73
74
*
(4)
In
making
*
a determination
*
under
this
subsection,
the
mediator/arbitrator [may consider only the following factors]
must first evaluate and give the highest priority to the ability of
the County to
!mY
for additional short-term and long-term
expenditures
hi:
considering:
75
76
77
78
79
CA)
the limits on the County's ability to raise taxes under State
law and the County Charter;
o
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EXPEDITED BILL
NO.S7-10
80
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ill}
the added burden on County taxpayers, if any, resulting
from increases in revenues needed to fund
and
~
final offer;
(C)
the County's ability to continue to provide the current
standard of all public services.
(5)
After evaluating the ability of the County to
~
under paragraph
~
the
mediator/arbitrator may only consider:
CA)
the interest and welfare of County taxpayers and service
recipients;
[(A)]
ill}
[Past] past collective bargaining agreements between
the parties, including the past bargaining history that led
to [the agreements, or the pre-collective bargaining
history of employee wages, hours, benefits, and working
conditions] each agreement[.];
[(B)]
(C)
[Comparison]
~
comparison of wages, hours, benefits,
and conditions of employment of similar employees of
other public employers in the Washington Metropolitan
Area and in Maryland[.];
[(C)]
.em
[Comparison]
~
comparison of wages, hours, benefits,
and conditions of employment of other Montgomery
County [personnel] employees[.] ; and
[(D)]
ili2
[Wages] wages, benefits, hours, and other working
conditions of similar employees of private employers in
Montgomery County.
[(E)
(F)
The interest and welfare of the public.
The ability of the employer to finance economIC
adjustments, and the effect of the adjustments upon the
o
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coli
barg - impasse procedures\bill9.doc
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EXPEDITED BILL NO.S7-10
107
108
109
110
111
normal standard of public services provided by the
employer.]
®
The offer selected by the mediator/arbitrator, integrated with all
previously agreed on items, is the final agreement between the
employer and the certified representative, need not be ratified
by any party, and has the effect of a contract ratified by the
parties under subsection (c).
The parties must execute the
112
113
114
agreement, and any provision which requires action in the
County budget must be included in the budget which the
employer submits to the County CounciL
115
116
117
118
119
*
33-153.
*
*
*
Bargaining, impasse, and legislative procedures.
*
(i)
*
120
121
122
123
124
125
126
127
128
129
130
On or before February 1, unless that date is extended by written
agreement of the parties, the impasse neutral must select the final
offer that, as a whole, the impasse neutral judges to be the more
reasonable.
ill
In determining which final offer is the more reasonable, the
impasse neutral [may consider only the following factors] must
first evaluate and give the highest priority to the ability of the
County to 00 for additional short-term and long-term
expenditures
Qy
considering:
CA)
the limits on the County's ability to raise taxes under State
law and the County Charter;
131
132
133
.an
the added burden on County taxpayers, if any, resulting
from increases in revenues needed to fund
and
~
final offer;
®
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EXPEDITED BILL NO.57-10
134
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(g
the County's ability to continue to provide the current
standard of all public services.
ill
After evaluating the ability of the County to
~
under paragraph
ill
the impasse neutral may only consider:
®
the interest and welfare of County taxpayers and service
recipients;
[( 1)]
ill)
past collective bargaining agreements between the
parties, including the past bargaining history that led to
[the agreements, or the pre-collective bargaining history
of employee wages, hours, benefits, and working
conditions] each agreement;
[(2)]
(Q
wages, hours, benefits and conditions of employment
of similar employees of other public employers in the
Washington Metropolitan Area and in Maryland;
[(3)]
(ill
wages, hours, benefits, and conditions of employment
of other Montgomery County employees; and
[(4)] ill.) wages, benefits, hours, and other working conditions
of
similar
employees
of
private
employers
m
Montgomery County[;
(5)
(6)
the interest and welfare of the public; and
the ability of the employer to finance economic adjustments, and
the effect of those adjustments upon the nonnal standard of
public services provided by the employer].
*
Sec. 2.
Effective Date.
*
IS
*
necessary for the immediate
The Council declares that this legislation
protection of the public interest.
This Act takes effect on the date on which it
(j)
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EXPEDITED BILL NO.57-10
161
162
163
becomes law.
Approved:
164
Nancy Floreen, President, County Council
165
Date
Approved:
166
Isiah Leggett, County Executive
167
Date
This is a correct copy ofCouncil action.
168
Linda M. Lauer, Clerk of the Council
Date
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1057
call barg - impasse procedures\bill 9.doc
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LEGISLATIVE REQUEST REPORT
Expedited Bill 57-10
Personnel
-
Collective Bargaining
-
Impasse Procedures
DESCRIPTION:
The Bill would modify the criteria that must be evaluated by the
impasse neutral or mediator/arbitrator before issuing an award
resolving a collective bargaining impasse.
Current law lists 6 factors for the impasse neutral to consider without
giving greater weight to any of them. The County's ability to pay is
not given enough emphasis in these factors.
To clarify that an impasse neutral or mediator/arbitrator should give
the highest priority to the County's ability to pay for economic
provisions in a collective bargaining agreement when issuing an
arbitration award. The goal is to encourage the parties to resolve
impasses through negotiation rather than arbitration.
Office of Human Resources
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, 240-777-7895
Not applicable.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
None.
F:\LAW\BILLS\1057 Coli Barg - Impasse Procedures\LRRDoc
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MONTGOMERY COUNTY COUNCIL
ROCKV1Lt_E. MARYLANr.:>
VALERIE
ERVIN
COUNC1L.MEMBER
DISTRICT 5
MEMORANDUM
November 19, 2010
TO:
FROM:
SUBJECT:
Council members
\!~
Valerie Ervin, CouncifVice President
Bill to Prioritize Collective Bargaining Impasse Factors
There are three separate laws
that
govern the County's collective bargaining
vvith
the
unions representing police, firefighters, and general government employees.
All
resolve an
impasse through arbitration where the arbitrator selects the entire final offer submitted by
either
the County or the union.
Under current law, the arbitrator makes an award after considering six factors. These
include: past contracts and bargaining history; the wages, hours, benefits, and conditions of
employment of other County employees, public employees
in
the region
and
the State, and the
County's private sector: and the County's ability to pay for any changes. The current law gives
none of these factors greater \veight than any other.
'I11eFYIl budget we approved in May, and the
six~year
balanced fiscal plan \ve
approved in June, are stark reminders of
the
severe short-tenn
and
long-term budget pressures
the County faces. An arbitrator's assessment of
final
competing offers should
be
grounded in
this reality. I will introduce the attached biU to require an arbitrator to give the highest priority to
the County's ability to pay.
Tbe
arbitrator
then
must evaluate other factors such
as
the interest
and welfare of County taxpayers and service recipients.
As one with more than a quarter century on the front lines of the labor movement, I am
deeply committed to fairness for County employees_ But fairness
also
requires that the County
can afford to honor its labor contracts. It also requires equitable treatment for taxpayers and
service
recipients. This bill will help achieve these goals.
r
welcome
all
my colleagues
as
co­
sponsors.
Attachment
STELLA B. WERNER OFFICE BUILDING •
100 MARYLAND AVENUE, ROCKVILLE, MARYLANO 208!:lQ
240/777-7960 OR 240/777-7900 • TTY 240/777-79
j
4
:!~
PR!NTED ON RE::CYCLeD
FAX
2401777-7989
WWW.MONTGOMERYCOUNTYMD.GOv/COUNeIL
PAPER
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Interest Arbitration Decisions Since 1988
#
1
Date
2/1911988
Union
FOP
Arbitrator
Issues
Fishgold
1.
Indemnification of County for dues
checkoff.
2. 1 day of leave for occupational stress.
3. County - narrow non-discrimination
clause.
4. FOP - add traffic officers to PPV
program.
reopener for disability
5.
FOP
retirement.
6. Differential pay for specialized officers.
• 7. Clothing allowance.
8. Shift differential pay.
9. COLA (5.5% v. 3%)
. Bloch
1. Maintenance of standards provision.
2. Alcohol/drug policy.
3. COLA (6.2% v. 0%)
4. Retirement Incentive Program (RIP)
Kennelly
1.
FOP add 1 additional step
2. COLA (me-too up to 2% v. 0%)
Bloch
1. Furlough procedures.
2. FOP - 4 days of compensatory leave for
furlough.
3. Reduce pay, 32 hours of annual leave to
be used in 2 years.
1.
COLA (3% v. 1.5%)
Porter
2. FOP - RIP.
3. Increase clothing allowance .
• 4. Increase pay differential.
Bloch
1.
Health insurance policy.
2. COLA (2.7% v. 2.5%).
3. Disability leave - donations of sick
leave.
i
Fasser
1. Eligibility for RIP enacted by CounciL
i
S. Strongin
1.
COLA (2.9% v. 1.5%).
2. Partial SCDR (662/3% v. variable).
Oldham
1.
FOP change disability procedures.
2. FOP - County option - DROP.
3. FOP - increase COLA for retirees.
4. FOP - increase multiplier for over 65.
5. FOP - increase employee retirement
contribution.
!
Award
FOP
I
2
2/25/1991
I
FOP
County
I
I
3
1
2/12/1992
2/1911992
FOP
FOP
FOP
FOP
4
5
2/2311993
FOP
FOP
6
3/23/1994
i
FOP
FOP
i
7
8
9
i
4/25/1994
2/14/1995
6/12/1998
FOP
FOP
FOP
FOP
FOP
FOP
i
I
l
I
@
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10
2126/2001
!
FOP
FOP
S. Strongin
Sharnoff
1.
COLA ($2800
+
$600 v. $2500).
FOP
County
I
11
2/24/2003
112
3119/2004
13
3115/2007
I
IAFF
LaRue
FOP
Bloch
Bloch
Bloch
Fishgold
14
11129/2007
FOP
15
5/812008
I
FOP
16
3/2010
FOP
17
3/2212010
MCGEO Vaughn
2. FOP - shift differential re-opener.
1. FOP - 1 additional persona11eave day.
2. FOP - compressed schedule for special
assignment.
3. FOP - increase PPV for canine officers.
4. COLA (3.5% v. 2%).
5. Selection of attorneys for criminal
offense.
6. County - single issue arbitration for
changes to directives.
1.
IAFF
Increase the multiplier for
calculating pension for integrated plan after
reaching Social Security age.
1. FOP - Police Hearing Board decision to
bind Chief on discipline.
County agreed to FOP offer.
1. Implementation of mobile video
~tem.
1. FYII service and longevity increments
(3.5% v. 0%).
2. Reinstitute tuition assistance for FYII.
1. RIF procedures and limits.
2.
RIP savings to reduce RIFs
m
bargaining unit.
IAFF
FOP
Settled
County2
FOp
J
County
The FOP appealed decision and Circuit Court held that item 6 was invalid under Police Collective Bargaining Law.
2
The FOP appealed the decision and Circuit Court upheld the arbitrator's decision.
3
The Council rejected the arbitrator's award.
I
2@
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OFFICE OF THE COUNTY ATTORNEY
Isiah Leggett
County Executive
Marc P.
Ha.nsen
Acting COllfltyAttorney
MEMORANDUM
TO:
Steve Farber
Council Staff
Dire~or
Marc
P.
Hansen
Acting County Attorney
Edward
B.
Lattner, Chief
Division of Human Resources
&
Appeals
December
3, 2010
Bill 57-10E
(Personnel- Collective
~argaining
- hnpas$e Proct.'<iures)
VIA:
FROM:
t'~
DATE:
RE:
You have asked us to determine if
Bill 57-lOE
provides sufficient guidance to an
arbitrator in light of
its
stated goal-requiring the arbitrator to consider. first and toremost, the
County's ability to pay for a labor contract in light "ofthe severe short-term and
long~terrn
budget pressures the County faces. " You have also asked us to suggest amendments that wouLd
help the legislation achieve that goal.
Background
All three collective bargaining laws provide that an arbitrator
I
resolves an impasse during
collective bargaining by selecting either the union's or the Executive'S final offer covering all of
the disputed issues. The arbitrator is a private sector labor professional jointly selected by the
Ex.ecutive and the union.
Bill57~10
would modify the criteria used bytbe arbitrator to evaluate
the parties' proposals before issuing an award by requiring him or her to give highest priority to
the County's ability to pay when deciding between the union's and the Executive'sfil1a1 offers.
Council Vice President Ervin's November 19,
2010,
memorandum makes clear that the bilI
is
designed to ensure that the arbitrator's assessment of final competing offers is grounded in the
reality "ofthe severe short-tenn and long-tenn budget pressures the County faces."
Mr. Drummer's November 23, 2010, memorandwn to the Council correctly states the
l
The FOP and
IAf'FcoUective bargaining
lawl' refer to an "impasse
neutral"
wh.ile the
MCGEO law
refers
to a "tnediator!arbitrator." By whatever designation, the person's role
is
me same.
Monroe
Rockville, Maryland 208511·2580
(24{)) 777-6735 • TTD (240) 777-2545 • FAX (240) 777-6 70,5
.Edward.Lallner(~!
montgomcrycountymd.gov
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Steve Farber
December 3, 2010
Page
2
present state ofthe law and the effect of the proposed amendment.
Under current law, the arbitrator makes an award after considering
6
factors,
including the County's ability to pay as only one
of
the
6
factors. The law does
not require the arbitrator to place greater weight on anyone of the
6
factors and
does not require the arbitrator to consider alI 6 ofthe factors. For example, an
arbitrator
1S
free to value a union's comparison with higher wages and benefits
paid by another public employer greater than the County's financial ability to
match them.
Bill 57-10
would require the arbitrator to evaluate and give the
highest priority to the County's ability to pay for economic provisions before
considering the other 5 factors.
TbeBiII
Bill 57-1 OE
combines two of the
six
factors {,:urrently considered by the arbitrator
«(
1)
the
interest and welfare of the public and
(2)
the ability afthe employer to finance economic
adjustments and the dIect of the adjustments upon the normal standard ofpublic services by the
employer) into the following predominant factor:
Thejmpasse neutral must
.fin.i
evaluate and give the highest priority to the ability
of the County to pay
for
additional short-terri1 and
long~tenn
expenditures by
considering:
(i)
tile limits on
the
County'sability to raise taxesundet State law and the
County Charter;
(ii)
the added burden on County taxpayers,
if
any.
resulting from increases in
revenues needed to fund
a
final offer; and
(iii)
the County's ability to continue to provide the current standard of all
public services.
While this language is legally sufttcient, alternative language would strengthen the bill's
stated goal of requiring the arbitrator to consider, first and foremost, the County's ability to pay
for
a
labor contract in light
"of
the severe short-tenn and
long~term
budget pressures the County
faces.·~
First, as a standard to be applied by the arbitrator, "the limits on the County's ability to
raise taxes under State law and the Courtty Charter" is somewhat mercuriaL While State law does
impose an absolute cap on the Courtty's ability to tax residents' income, and the County Charter
requires that all nine Councilmembers approve certain increases in the property tax, the COUJ:1ty
enjoys extraordinarily broad authority to impose other taxes under
§
52-17 ofthe County Code;
In
construing the scope of
§
52-17,
the Court of Appeals has held that if the State had the power
to impose a tax, the County has the same power.
Waters Landing Limited Partnership
v.
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Steve Farber
December J,
2010
Page 3
Montgomery County,
337 Md. 15, 25, 650 A.2d 712 (1 994)} Presently, County taxes include
fuel energy, carbon emissions, cell phone usage,
and
hoteVmotel usage. The language in thebiU
leaves urnplc room for the arbitrator to conclude that the Council could or should increase those
taxes
(or impose new taxes).
TIle
language in the bill also permits the arbitrator to conclude that
all nine Council members could or should increase the property tax beyond the Charter-imposed
tax limitation. Accordingly, we recommend that this provision be amended to require that the
arbitrator evaluate the County's ability to pay for short-term and long-term expenditures by
assuming ho increase in the then-current tax rates. The setting of tax rates should
be
the
exclusive province of the County's elected officials, not a private sectorlabor professional.
Second. although the bill isbome ofthe current fiscal shortfall, itcould have the effect of
requiring the arbitrator to select a proposal requiring significant spending increases in times of
fiscal largess because consideration of "the ability of the County to pay" is not limited to fallow
economic times. Thus,
if
and when (hopefully when) the County's cofTers are full, consideration
of "the abi Iity of the County to pay" would mil itate in favor of the· proposal. calling for a
corresponding increase in spending on a labor contract.
If
the purpose of the bi1l1s to require the
arbitrator to consider the County's ability topsy when tinles arc tough. then the bill should
provide some objective trigger for mandatory consideration ofthat factor (e.g., this factor applies
only when revenues drop by X%).
Third, the bill requires the arbitrator to consider the County's ability to pay
·<tor
additional
short-term and long-term expenditures" (emphasis added). Presumably,. consideration
of the County's fiscal health is therefore Hmitt..'d to those final offers that propose expenditures
above and beyond those previously provided to bargaining unitmembers.
3
Thus, the arbitrator
would not consider the County's fIscal health at all ifthe union's proposal held costs constant
and the Executive's proposal reduced those costs. If the purpose of this bill
i~
to make
affordability the arbitrator's predominant
factor~
then
it
should not be limited to those proposals
that would increase spending;
it
should. be the predominant factor in reviewing every propos'!L
The word "additional" should be stricken.
Finally, although the bill gives predominance to afiordability,
it
does not preclude an
arbitrator from determining that the other factors overcome that predominance. We suggest an
amendment that would limit the arbitrator's ability to consider the other factors to situations
where the arbitrator finds that both proposals are affordable.
chI
!
J
Some items are beyond the County's
taxing
power (e,g., alcoholic beverages, gasoline).
It
is
um:l.ear whether
!his
would be limited to expenditures
provided
for in
the
prior
labor agreement
or
expenditures actually authorized
by
the Council
futhe
most recent annual operating budget.
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Steve Farber
December 3, 2010
Page 4
cc;
Kathleen Boucher, Assistant Chief Administrative Officer
Joseph Adler, Director, OHR
Stuart Weisberg, Office of Human
Resources
Robert H. Drummer, Senior Legislative Attorney
Al0·0208J
M:\Cycom\Wpd(lCii\OOO I \POlO\()() I T.!364.DOC
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Staff Amendment 1
Amend lines
13-25
asfollows:
(A)
The impasse neutral [may take into account only the following
factors] must first [[evaluate and
the highest priority to]]
determine the ability of the County to
[[m!y
for additionaUJ afford
any short-term and long-term expenditures required by the final
offers
[[hy
considering]]~
ill
[[the limits on the County's ability to raise taxes under State
law and the County Charter]] assuming no increase in any
existing
tax
rate or the adoption of any new tax;
ill)
[[the added burden on County taxpayers,
from increases in
if
any, resulting
~
needed to fund
[mal offer]]
assuming no increase in revenue from an ad valorem
tax
on
real propertv above the limit in Qounty Charter Section
305;
and
(iii)
considering the County's ability to continue to provide the
current [[standard]]
of all public services.
the County to
~]]
an
[[After evaluating the ability
If the impasse
neutral [mds under subparagraph (A) that the County can afford both
final offers, the impasse neutral [[may only]] must consider:
Amend lines
73-86
asfollows:
ill
In making
~
determination under this subsection, the mediator/arbitrator
[may consider only the following factor's] must first [[evaluate and give the
highest priority to]] determine the ability of the County to
[[m!y
for
additional]] afford any short-term and long-term expenditures required by
the final offers [[bv
considering]]~
@
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®
[[the limits on the County's ability to
the County Charter]] <!§§llming no increase in any existing tax rate or
the adootion of any new tax;
an
[[the added burden on County taxpayers,
if
any, resulting from
increases in revenues needed to fund
f!
final offer]] assuming no
increase in revenue from an ad valorem tax on real propertY above
the limit in County Charter Section 305; and
.chl
ill
considering the County's ability to continue to provide the current
[[standard]] level of all public services.
[[After evaluating the ability of the County to
PflY]]
lithe mediator/arbitrator
finds that under paragraph
(il
th~
County can afford both final offers, the
mediator/arbitrator [[may only]] must consider:
Amend lines
124-137
as/allows:
ill
In determining which final offer is the more reasonable, the impasse neutral
[may consider only the following factors] must first [[evaluate and give the
highest priority to]] determine the ability of the County to
[[PflY
for
additional]] afford any short-term and long-term expenditures required by
the final offers
[[lIT'
considering]]~
®
[[the limits on the County's ability to raise taxes under State law and
the County Charter]] assuming no increase in any existing tax rate or
the adoption of any new
tax~
an
[[the added burden on County taxpayers,
if
any, resulting from
ass~ng
increases in revenues needed to fund
f!
final offer))
no
increase in revenue from an ad valorem tax on real property above
the limit in County Charter Section 305; and
.chl
[[standard]]
the County's ability to continue to provide the current
of all public services.
2
@
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ill
[[After evaluating the ability of the County to
lli!Y]]
If the impasse neutral
finds under paragraph
ill
that the
County can afford both final offers; the
impasse neutral [[may only]]
consider:
3
®