Agenda Item 6
July 26, 2011
Action
MEMORANDUM
July 22, 2011
TO:
FROM:
SUBJECT:
County Council
//G
Robert H. Drummer, Senior Legislative Attorney
/tlUlJ
V
Collective Bargaining
Public Accountability­
/"
Action: Bill 20-11, Personnel
Impasse Arbitration
Government Operations and Fiscal Policy Committee recommendation (3-0): disapprove
the Bill.
Bill 20-11, Personnel - Collective Bargaining - Public Accountability
Impasse
Arbitration, sponsored by the Council President on recommendation of the Organizational
Reform Commission, was introduced on June 14, 2011. A public hearing was held on July 12
and a Government Operations and Fiscal Policy Committee worksession was held on July 18.
Bill 20-11 would establish an interest arbitration panel to resolve an impasse, require an
impasse arbitration hearing to be open to the public, and modify the criteria for the impasse panel
to apply. The Council delayed introducing this Bill until after finalizing the FY12 Budget
because these process changes, if enacted, could not take effect until collective bargaining for
FY 13 begins in the fall.
Background
In its report to the Council dated January 31, 2011, the Organizational Reform
Commission (ORC), in
Recommendations
#19
and #20,
recommended amending the County
collective bargaining laws to establish an interest arbitration panel to resolve an impasse, require
an impasse arbitration hearing to be open to the public, and modify the criteria for the impasse
panel to apply.
The full text of the recommendation is below.
Public Accountability in Interest Arbitration
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1.
Change the criteria for the arbitrator to use to resolve a collective bargaining
impasse.
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 §51 OA requires the same for firefighters. 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), firefighters (Chapter 33, Article
X), and other County employees (Chapter 33, Article VII).
All three 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 one of the
parties. The arbitrator is a private-sector labor professional jointly selected by the Executive and
the union. Since 1983, there have been 17 impasses resolved by interest arbitration. One of the
impasses involved firefighters, one involved general County employees, and the other 15
involved the police.
The arbitrator selected the final offer of the International Association of Fire Fighters (IAFF) in
the one impasse with the firefighters and selected the County offer in the one impasse with
general County employees represented by the Municipal and County Government Employees
Organization (MCGEO). The arbitrator selected the FOP offer in 11 of the 15 impasses with the
police. The arbitrator selected the County offer over the FOP offer three times,
I
and the County
agreed to the FOP offer after the arbitration hearing one time. 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.
One of the arguments often raised in challenges to interest arbitration laws is the lack of
accountability to the public. Legislatures enacting interest arbitration laws have responded to
this criticism in a variety of ways. An Oklahoma law authorizes a city council to call a special
election and submit the two proposals to the voters for a final decision, if the arbitrator selects
the union's final package. The Oklahoma Supreme Court upheld this unusual provision in
FOP
Lodge No.
165
v.
City
of Choctaw,
933 P. 2d 261 (Okla. 1996). Some laws provide for political
accountability in the method of choosing the arbitrator. The Colorado Supreme Court upheld an
interest arbitration law, in part, because it required the city council to unilaterally select the list of
arbitrators in
FOP Colorado Lodge No.
19
v.
City
of Commerce City,
996 P. 2d 133 (Colo.
2000). Finally, many interest arbitration laws provide for accountability by adopting guidelines
that the arbitrator must consider, require a written decision with findings of fact, and subject the
decision to judicial review for abuse of discretion, fraud, or misconduct. See,
Anchorage
v.
Anchorage Dep
'f
ofEmployees Ass 'n,
839 P. 2d 1080 (Alaska 1992).
The FOP appealed two of the three 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.
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We note that the Council enacted Expedited Bill 57-10, which modifies the criteria used by the
arbitrator in resolving collective bargaining impasses with each County employee union. We
support this legislation as a first step in the process of increasing public accountability in the
arbitration process used to resolve impasses, but we recommend an additional amendment.
Under the County collective bargaining laws before the enactment of Bill 57-10, an arbitrator
could 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;
b. 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. Comparison of wages, hours, benefits and conditions of employment of other
Montgomery County personnel;
d. Wages, benefits, hours and other working conditions of similar employees of private
employers in Montgomery County;
e. The interest and welfare of the public; and
f. 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.
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 ofthe 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 2010 Police arbitration decision, Arbitrator Herbert Fishgold, applying these criteria,
found that the FOP's last offer for a 3.5% step increase, at a cost of$1.2 million, 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 found that the FOP had already given up a
previously negotiated 4.5% cost-of-living increase each of the past two 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.
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The arbitrator should consider the funds available to pay personnel costs before considering
comparative salaries and past collective bargaining agreements. The bill, as enacted, requires the
arbitrator to evaluate and give the highest priority to the County's ability to pay before
considering the other five factors. The amendment that the Council ultimately rejected would
have gone further by requiring the arbitrator to determine first if the final offers were affordable
without raising taxes or lowering the existing level of public services. Although we support the
bill as enacted without this amendment, the amendment would have added important guidance to
the arbitrator to determine affordability based upon existing resources only.
>-
We recommend new legislation that would include the amendment that was originally
supported by the Council's Government Operations and Fiscal Policy Committee on
December 7.
2. Change the method of selecting the arbitrator.
All three of the County's collective bargaining laws require the appointment of a professional
labor arbitrator who is mutually selected by the Executive and the union. Professional labor
arbitrators must avoid the appearance of favoring one side or the other in order to continue to be
selected.
It
is especially important for a professional labor arbitrator to avoid a veto by a national
union with affiliates representing public employees throughout the nation. The labor arbitrator is
accountable to the parties but not to the taxpayers.
The Baltimore County Code has a different system for resolving disputes with unions
representing non-public safety employees. The Code requires the appointment of a permanent
arbitration panel consisting of five members serving four-year terms. Three members are
appointed by the Council, one by the Executive, and one by the certified employee organizations.
The members serve without compensation. The law provides for mediation before a professional
mediator provided by the Federal Mediation and Conciliation Service, and fact-finding by a
neutral selected from a panel of experts provided by an impartial third-party agency. If the
parties are still unable to resolve the dispute, the arbitration panel conducts a hearing and issues
an advisory decision. The decision of the arbitrator is a non-binding recommendation to the
Executive, who makes the final decision.
Although this system has been in place for more than 10 years, only one dispute has been
submitted to the Board. In 2008, a jointly selected professional labor arbitrator serving as a fact­
finder recommended the employees receive a 3% pay increase after mediation. After reviewing
the fact-finder's report and meeting with each party, the Arbitration Board issued a non-binding
recommendation of no pay increase. The Executive accepted the Board's recommendation.
However, the Baltimore County voters approved
it
charter amendment in the 2010 general
election authorizing, but not requiring, the Baltimore County Council to enact a law requiring
interest arbitration for general county employees similar to the law governing public safety
employees.
The Baltimore Sun
recently reported that the Baltimore County Council is likely to enact an
interest arbitration law for general county employees. Although it is likely that Baltimore
County will move away from this system, the Colorado Supreme Court, in
FOP
v.
City
of
Commerce City,
996 P.2d 133 (Colo. 2000), held that an interest arbitration statute must require
the arbitrator to be accountable to the public. The Court held that the statute did not violate a
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provision in the Colorado Constitution requiring political accountability for a person exercising
governmental power
only
because
it
required Commerce City to appoint unilaterally a
permanent panel of arbitrators that could be selected by the parties to resolve an impasse.
In New York, the Public Employees' Fair Employment Act, §209, establishes a three-person
arbitration board to resolve an impasse between a state or local government employer and a
union representing public safety employees. Each side chooses one arbitrator and the two
arbitrators select a third neutral party. If the parties are unable to agree, the State Public
Employee Relations Board (PERB) provides a list of neutral arbitrators that the parties must
choose from by alternate strikes. The list is created by the PERB without input from either party.
Section 806 of the Pennsylvania Public Employee Relations Act has a similar provision for a
three-person arbitration board, with the third member selected from a list provided by the State
PERB if the parties are unable to agree.
Maryland, however, does not' have a comprehensive State law governing collective bargaining
with State and local government employees and does not have a State PERB with jurisdiction
over County government labor relations.
2
Montgomery County collective bargaining laws
establish a single labor relations administrator for each bargaining unit to serve as the PERB.
The labor relations administrator is jointly selected by the Executive and the union.
Montgomery County collective bargaining laws require the labor professional jointly selected by
the parties to serve as both a mediator and the arbitrator. This dual role has the advantage of
granting the mediator/arbitrator greater authority during the mediation process. A party must
seriously consider any statement about a weakness in a party's position by a mediator who
. ultimately will resolve an impasse as the arbitrator. Traditional mediation promotes the free flow
• of ideas between the parties, in part, because the mediator has no authority to impose a
resolution. This free flow of ideas is diminished when the mediator will also serve as the
arbitrator. A major advantage of the dual role is that the mediator/arbitrator can issue a quicker
decision because he or she is already familiar with the issues at impasse. This speed is useful
due to the compressed schedule for bargaining, impasse resolution, and budget decisions.
However, we believe the better alternative for both mediation and arbitration would be to use a
jointly selected mediator and a separate arbitration board.
~
We
recommend establishment of a three-person arbitration board, with each party
selecting one member and the two parties selecting a third neutral party.
If the parties are unable to agree on a third party, we recommend following the N ew York and
Pennsylvania model of requiring the parties to select a third party from a pre-selected list of
neutrals appointed by the Council. The persons on the list would be appointed for a four-year
term of office without requiring the concurrence of either the union or the Executive. If the
parties are unable to agree on a person from the Council's list, they would be required to select.
an arbitrator through alternate strikes from the list.
.
2
Maryland does have a comprehensive labor relations law governing public school employees and recently
established a Maryland Public School Employee Relations Board, However, the members of this Board are jointly
selected by the employee unions and public school management
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Executive's Response
In a memorandum to the Council President dated February 21, 2011, the Executive
responded to each of the 28 recommendations in the ORC report. The Executive did not take a
position on this recommendation.
3
He stated:
19. Modify the criteria for arbitrators to use in addressing a collective
bargaining impasse.
The ORC report includes several recommendations concerning the collective
bargaining process. Since we are in the midst of bargaining with all three of our
employee unions, I do not
think
it is appropriate to comment on the Commission's
recommendations at this time.
20. Change the method for selecting the arbitrator for collective bargaining.
The ORC report includes several recommendations concerning the collective
bargaining process. Since we are in the midst ofbargairung withall three of our
employee unions, I do not think it is appropriate to comment on the Commission's
recommendations at this time.
Bill 20-11, sponsored by the Council President on recommendation of the ORC would
implement ORC Recommendations #19 and #20.
Public Hearing
All 7 witnesses at the July 12 public hearing opposed the Bill. Gino Renne, MCGEO
President (©36-40), John Sparks, IAFF Local 1664 President (©41-43), and Marc Zifcak, FOP
Lodge 35 President (©44-46) each opposed the changes to the criteria for the impasse arbitrator
and the creation of a new 3-person arbitration panel. Jean Athey, Peace Action Montgomery
(©47-48), Joslyn Williams, President of the Metropolitan Washington Council, AFL-CIO (©49),
Elbridge James, Maryland NAACP, and Ryan Dennis, Progressive Maryland also opposed the
Bill as an attack on collective bargaining rights.
3
The Executive has still not taken a position on this Bill since the collective bargaining negotiations with each of
the employee unions finished in May.
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July 18 Worksession
The Committee reviewed the Bill. Stuart Weisberg, Office of Labor Relations,
represented the Executive Branch, and reported that the Executive does not have a position on
the Bill. Gino Renne, President of MCGEO answered questions from the Committee. The
Committee recommended (3-0) disapproval ofthe Bill.
Issues
1. Should the criteria for the impasse arbitrator be modified?
Expedited Bill 57-10, enacted by the Council on December 14, 2010, modified the
criteria for an impasse arbitrator to consider. After the enactment of Bill 57-10, the Executive
was unable to negotiate an agreement with any of the 3 County employee unions. The parties
submitted each impasse to an arbitrator who applied the new criteria established by Bill 57-10.
In each case, the arbitrator selected the union's last best offer as the most reasonable package.
The February 18, 2011 decision of impasse arbitrator Jerome T. Barrett selecting the last best
offer of the FOP illustrates how the arbitrator viewed the new criteria. See ©20-31. Mr. Barrett
determined that the County could afford to pay a service increment to FOP unit members in
FY12 by relying on the FOP's identification of additional available resources. The FOP had
identified a waiver of the State maintenance of effort requirement for public school funding,
which would be a reduction in services, and raising the utility and recordation taxes. See p. 10 of
the decision at ©29. Bill 20-11 would require the arbitrator to assume no increase in taxes and a
continuation of the current level of services when determining the County's ability to pay.
During the Council debate on Bill 57-10, 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 ©32-35. 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.
It
appears that the County Attorney
correctly predicted a problem with Bill 57-10. Bill 20-11 would implement the County
Attorney's suggested language. The Committee was reluctant to revisit the criteria for the
arbitrator so soon after the enactment of Bill 57-10 last year.
Committee recommendation (3­
0): do not approve the changes to the criteria for the impasse arbitrator.
2. Should the single mediator/arbitrator be changed to a mediator and a separate 3-person
arbitration panel?
Bill 20-11 would make 2 significant changes to the impasse resolution process. First, the
Bill would split the job of mediator and arbitrator. As IAFF President John Sparks argued at the
public hearing, an arbitrator who served as the mediator has the advantage of understanding the
disputed issues before the arbitration hearing and may be able to issue a decision quicker. In
addition, a mediator-arbitrator carries the additional weight of being the person who would
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ultimately resolve an impasse during the mediation process. However, these advantages come
with a big disadvantage. The mediator is a facilitator to help the parties resolve the dispute by
agreement. Mediation works best when the parties are free to express themselves without fear of
retribution or future litigation before the mediator when he or she dons the arbitrator's hat.
The judicial system recognizes this problem. The trial judge is rarely asked to serve as a
settlement judge in order to permit the parties to speak freely without a fear of poisoning their
case. A party must approach mediation before the arbitrator with caution. The mediation
becomes part of the ultimate litigation. A party must be careful not to prejudice their case by an
admission or concession in mediation because the mediator could become the arbitrator. One of
the fundamental principles of successful mediation is an agreement between the parties that
statements made at mediation will never be used as evidence in litigation if there is no
settlement. A single mediator-arbitrator promotes a quicker process, but hinders a negotiated
settlement at mediation.
Bill 20-11 would also create a 3-person arbitration panel instead of a single arbitrator.
Each party would select an arbitrator and the third arbitrator would either be jointly agreed upon
or selected from a permanent list of neutral arbitrators appointed by the Council. Several of the
speakers at the public hearing correctly pointed out that the arbitrator selected by each party
would likely support that party's position. This is expected. The party representative is
appointed to ensure that the neutral third party arbitrator understands the position of each party.
Most decisions would be rendered by the neutral third party. This type of 3-person arbitration
panel is already used by the County to resolve appeals filed by an applicant for a disability
retirement pension. See Code §33-43 (m). Under current law, the impasse mediator-arbitrator
must be approved by each party. The Bill would permit the parties to jointly appoint a neutral
third party arbitrator, but would require them to select a neutral by alternating strikes from a list
of permanent arbitrators appointed by the Council. The Bill would, therefore, give the Council a
greater role in selecting the impasse arbitrator. The Committee concluded that the additional
time required by the proposed changes to the arbitration process was not likely to result in more
negotiated agreements. Committee recommendation (3-0): do not approve the separate 3­
person arbitration panel created by the Bill.
3.
Should
the arbitration hearing be open to the public?
The Bill would also require that the arbitration hearing be open to the public. This will
not affect the free exchange of ideas during the negotiations. Public trials are the rule in our
legal system. Direct public access and press coverage, except in the rare case where a closed
trial is necessary to protect the participants, promotes greater public confidence and acceptance
of the result. The Committee did not agree that an open arbitration hearing would improve the
impasse resolution process. Committee recommendation (3-0): do not require arbitration
hearings to be open to the public.
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This packet contains:
Bill 20-11
Legislative Request Report
Fiscal Impact Statement
FOP Impasse Decision dated February 18, 2011
County Attorney Memo dated December 3,2010
Testimony
Gino Renne
John Sparks
Marc Zifcak (without attachments)
Jean Athey
Joslyn Williams
Circle #
1
16
17
20
32
36
41
44
47
49
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Bill No.
20-11
Concerning: Personnel
Collective
Bargaining - Public Accountability­
Impasse Arbitration
Revised: July
13. 2011
Draft No.2
Introduced:
June
14. 2011
Expires:
December
14. 2012
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -'N!...!.o:::.:n.!::e:..-_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President on the recommendation ofthe Organizational Refonn Commission
AN
ACT to:
(1)
(2)
(3)
establish an interest arbitration panel to resolve an impasse;
modify the criteria for the impasse panel to consider in arbitration; and
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
By adding
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-1 03A
Boldface
Underlining
[Single boldface brackets]
DOYRle 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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BILL No.
20-11
1
2
3
4
5
Sec. 1. Sections 33-81,33-108, and 33-153 are amended as follows:
33-81.
Impasse procedure.
*
(b)
(1)
*
*
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 exists.
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7
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10
*
*
*
(3) If the impasse neutral, in the impasse neutral's sole discretion,
finds that the parties are at a bona fide impasse, the impasse
neutral [shall] must certify the impasse for arbitration before an
impasse panel selected pursuant to Section 33-103A.
The
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impasse panel must require each party to submit a final offer
which shall consist either of a complete draft of a proposed
collective bargaining agreement or a complete package proposal,
as the impasse [neutral shall choose] panel chooses.
If only
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complete package proposals are required, the impasse [neutral
shall] panel must require the parties to submit jointly a
memorandum of all items previously agreed upon.
(4) The impasse [neutral] panel may, in the impasse [neutral's]
panel's discretion, require the parties to submit evidence or make
oral or written argument in support of their proposals.
The
impasse [neutral may] panel must hold a hearing open to the
public for this purpose at a time, date and place selected by the
impasse [neutral] panel. [Said hearing shall not be open to the
public.]
.(i)
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BILL
No. 20-11
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(5)
On or before February 1, the impasse [neutral] panel must select,
as a whole, the more reasonable, in the impasse [neutral's] panel's
judgment, of the final offers submitted by the parties.
(A)
The impasse [neutral] panel must first [evaluate and give
the highest priority to] determine the ability of the County
to [pay for additional] afford any short-term and long-term
expenditures required by [considering] the final offers:
(i)
[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;
(ii)
[the added burden on County taxpayers, if any,
resulting from increases in revenues needed to fund
a final offer] assuming no increase in revenue from
an ad valorem tax on real property above the limit in
County charter Section 305; and
(iii)
considering the County's ability to continue to
provide the current [standard] level of all public
servIces.
(B)
[After evaluating the ability of the County to pay]
If
the
impasse panel finds under subparagraph (A) that the
County can afford both final offers, the impasse [neutral]
panel [may only] must consider:
(i)
the interest and welfare of County taxpayers and
service recipients;
o
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BILL
NO. 20-11
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(ii)
past collective bargaining contracts between the
parties, including the bargaining history that led to
each contract;
(iii) a companson of wages, hours, benefits.1 and
conditions of employment of similar employees of
other
public
employers
in
the
Washington
Metropolitan Area and in Maryland;
(iv) a comparison of wages, hours, benefits, and
conditions of employment of other Montgomery
County employees; and
(v)
wages, benefits, hours and other working conditions
of similar employees of private employers in
Montgomery County.
(6)
The impasse [neutral1 panel must:
(A)
not compromise or alter the final offer that [he or she
selects1 they select;
(B)
(C)
select an offer based on the contents ofthat offer;
not consider or receive any evidence or argument
concerning the history of collective bargaining in this
immediate dispute, including offers of settlement not
contained in the offers submitted to the impasse [neutral1
panel; and
(D)
consider all previously agreed on items integrated with the
specific disputed items to determine the single most
reasonable offer.
(7)
The offer selected by the impasse [neutral1 panel, integrated with
the previously agreed upon items, [shall1 must be [deemed to
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represent] the final agreement between the employer and the
certified representative, without the necessity of ratification by
the parties, and [shall have] has the force and effect of a contract
voluntarily entered into and ratified as set forth
in
subsection 33­
80(g) above. The parties [shall] must execute such agreement.
(c)
An impasse over a reopener matter or the effects on employees of an
exercise of an employer's right must be resolved under the procedures
in this subsection. Any other impasse over a matter subject to collective
bargaining must be resolved under the impasse procedure in subsections
(a) and (b).
(1)
Reopener matters.
*
(D)
*
*
If an impasse is declared under subparagraph (C), the
dispute must be submitted to the impasse neutral for
mediation no later than 10 days after impasse is declared.
If the impasse neutral certifies that an impasse exists after
mediation, the dispute must be resolved
Qy
an impasse
panel selected under Section 33-103A.
(E)
The impasse [neutral] panel must resolve the dispute under
the impasse procedure in subsection (b), except that:
(i)
the dates in that subsection do not apply;
each party must submit to the impasse [neutral]
panel a final offer on only the reopener matter; and
(ii)
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(iii)
the impasse [neutral] panel must select the most
reasonable of the parties' final offers no later than 10
days after the impasse [neutral] panel receives the
final offers.
(})
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BILL
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*
(2)
*
*
Bargaining over the effects of the exercise of an employer right.
(A)
If the employer notifies the employee organization that it
intends to exercise a right listed in Section 33-80(b), the
exercise of which will have an effect on members of the
bargaining unit, the parties must choose by agreement or
through the process of the
American Arbitration
Association an impasse neutral who agrees to be available
for impasse resolution within 30 days.
(B)
The parties must engage in good faith bargaining on the
effects of the exercise of the employer right. If the parties,
after good faith bargaining, are unable to agree on the
effect on bargaining unit employees of the employer's
exercise of its right, either party may declare an impasse.
(C)
If the parties bargain to impasse over the effects on
employees of an exercise of an employer right that has a
demonstrated, significant effect on the safety of the public,
the employer may implement its last offer before engaging
in the impasse procedure. A party must not exceed a time
requirement of the impasse procedure. A party must not
use the procedure in this paragraph for a matter that is a
mandatory subject of bargaining other than the effects of
the exercise of an employer right.
(D)
The parties must submit the dispute to the impasse neutral
for mediation no later than 10 days after either party
declares an impasse under subparagraph (B).
If the
Impasse neutral certifies that an impasse exists after
@
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No. 20-11
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mediation, the dispute must be resolved
Qy
an impasse
panel selected under Section 33-1 03A.
(E) The impasse [neutral] panel must resolve the dispute under
the impasse procedures in subsection (b), except that:
(i)
the dates in that subsection do not apply;
(ii) each party must submit to the impasse [neutral]
panel a final offer only on the effect on employees
of the employer's exercise of its right; and
(iii)
the impasse [neutral] panel must select the most
reasonable of the parties' final offers no later than 10
days after the impasse [neutral] panel receives the
final offers and, if appropriate, must provide
retroactive relief.
(F)
If the impasse [neutral] panel has not issued a decision
within 20 days after the impasse [neutral] panel receives
the parties' final offers, the employer may implement its
final offer until the impasse [neutral] panel issues a final
decision.
33-108.
Bargaining, impasse, and legislative procedures.
*
(d)
*
In
*
which the employer and the
Before September 10 of any year
certified representative bargain collectively, the Labor Relations
Administrator must appoint a [mediator/arbitrator] mediator, who may
be a person recommended by both parties. The [mediator/arbitrator]
mediator must be available from January 2 to June 30.
Fees and
expenses of the [mediator/arbitrator] mediator must be shared equally
by the employer and the certified representative.
(2)
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No. 20-11
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(e)
(1)
During the course of collective bargaining, either party may
declare
an
Impasse
and
request
the
servIces
of the
[mediator/arbitrator] mediator, or the parties may jointly request
those services before an impasse is declared. If the parties do not
reach an agreement by February 1, an impasse exists. Any issue
regarding the negotiability of any bargaining proposal must be
referred to the Labor Relations Administrator for an expedited
determination.
(2)
Any dispute, except a dispute involving the negotiability of a
bargaining
proposal,
must
be
submitted
to
the
[mediator/arbitrator] mediator whenever an impasse has been
reached,
or
as
provided
III
subsection
(e)( 1).
III
The
[mediator/arbitrator] mediator must [engage
mediation]
173
174
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183
184
185
mediate by bringing the parties together voluntarily under such
favorable circumstances as
.will
encourage settlement of the
dispute.
(3)
If
the
[mediator/arbitrator]
mediator
finds,
III
the
[mediator/arbitrator's] mediator's sole discretion, that the parties
are at a bona fide impasse, or as of February 1 when an impasse
is automatically reached, whichever occurs earlier, the dispute
must be submitted to binding arbitration before an impasse panel
selected under Section 33-1 03A.
(f)
(1)
If binding arbitration is invoked, the [mediator/arbitrator]
impasse panel 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
@
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BILL
No.
20-11
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187
188
189
proposal, as the [mediator/arbitrator] impasse panel directs.
If
only
complete
package
proposals
are
required,
the
[mediator/arbitrator] impasse panel must require the parties to
submit jointly a memorandum of all items previously agreed on.
191
192
193
194
195
196
197
198
199
200
(2)
The [mediator/arbitrator] impasse panel may require the parties
to submit oral or written evidence and arguments in support of
their proposals. The [mediator/arbitrator may] impasse panel
must hold a hearing open to the public for this purpose at a
time, date, and place selected by the [mediator/arbitrator]
impasse panel. [This hearing must not be open to the public.]
(3)
On or before February 15, the [mediator/arbitrator] impasse
panel must select, as a whole, the more reasonable of the final
offers submitted by the parties.
The [mediator/arbitrator]
impasse panel must not compromise or alter a final offer. The
[mediator/arbitrator] impasse panel must not consider or receive
any argument or evidence related to the history of collective
bargaining in the immediate dispute, including any previous
settlement offer not contained in the final offers. However, the
[mediator/arbitrator] impasse panel must consider all previously
agreed-on items, integrated with the disputed items, to decide
which offer is the most reasonable.
(4)
201
202
203
204
205
206
207
208
209
In
making a determination under this
subsection,
the
[mediator/arbitrator] impasse panel must first [evaluate and give
the highest priority to] determine the ability of the County to [pay
210
®
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BILL
No. 20-11
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for additional] afford any short-term and long-term expenditures
[by considering] required
l2Y
the final offers:
(A)
[the limits on the County's ability to raise taxes under State
law and the County Charter1 assuming no increase in any
existing tax rate or the adoption of any new tax;
(B)
[the added burden on County taxpayers, if any, resulting
from increases in revenues needed to fund a final offer]
assuming no increase in revenue from an ad valorem tax
on real property above the limit in County Charter Section
305; and
(C)
considering the County's ability to continue to provide the
current [standard] level of all public services.
(5)
[After evaluating the ability of the County to pay] lfthe impasse
panel finds that under paragraph (4) the County can afford both
final offers, the [mediator/arbitrator] impasse panel [may only1
must consider:
(A)
the interest and welfare of County taxpayers and service
recipients;
(B)
past collective bargaining agreements between the
parties, including the past bargaining history that led to
each agreement;
(C)
a comparison of wages, hours, benefits, and conditions of
employment of similar employees of other public
employers in the Washington Metropolitan Area and in
Maryland;
@
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BILL No. 20-11
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(D) a comparison of wages, hours, benefits, and conditions of
employment of other Montgomery County employees;
and
(E)
wages, benefits, hours, and other working conditions of
similar employees of private employers in Montgomery
County.
(6)
The offer selected by the [mediator/arbitrator] impasse panel,
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 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
*
33-153.
*
*
*
*
Bargaining, impasse, and legislative procedures.
*
(g)
If
the impasse neutral, in the impasse neutral's sole discretion, finds that
the parties are at a bona fide impasse, the impasse neutral must refer the
dispute to an impasse panel selected under Section 33-103A.
The
impasse panel must require the parties to jointly submit all items
previously agreed on, and each party to submit a final offer consisting of
proposals not agreed upon. Neither party may change any proposal after
it is submitted to the impasse [neutral] panel as a final offer, except to
withdraw a proposal on which the parties have agreed.
(h)
The impasse [neutral] panel may require the parties to submit
evidence or present oral or written arguments in support of their
@-
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No.
20-11
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286
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288
(i)
proposals. The impasse [neutral may] panel must hold a hearing open
to the public at a time, date, and place selected by the Impasse
[neutral] panel. [The hearing must not be open to the public.]
On or before February 1, unless that date is extended by written
agreement of the parties, the impasse [neutral] panel must select the
final offer that, as a whole, the impasse [neutral] panel judges to be
the more reasonable.
(1)
In determining which final offer is the more reasonable, the
impasse [neutral] panel must first [evaluate and give the highest
priority to] determine the ability of the County to [pay for
additional] afford any short-term and long-term expenditures [by
considering] required
Qy
the final offers:
(A)
[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;
(B)
[the added burden on County taxpayers, if any, resulting
from increases in revenues needed to fund a final offer]
assuming no increase in revenue from an ad valorem tax
on real property above the limit in county charter Section
305; and
(C)
considering the County's ability to continue to provide the
current [standard] level of all public services.
(2)
[After evaluating the ability of the County to pay]
If
the impasse
neutral finds under paragraph
(1)
that the County can afford both
final offers, the impasse [neutral] panel [may only] must
consider:
-@
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No.
20-11
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304
305
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313
(A)
the interest and welfare of County taxpayers and service
recipients;
(B)
past collective bargaining agreements between the
parties, including the past bargaining history that led to
each agreement;
(C)
wages, hours, benefits and conditions of employment of
similar employees of other public employers in the
Washington Metropolitan Area and in Maryland;
(D)
wages, hours, benefits, and conditions of employment of
other Montgomery County employees; and
(E)
wages, benefits, hours, and other working conditions of
similar employees of private employers in Montgomery
County.
(j)
The impasse [neutral] panel must base the selection of the most
reasonable offer on the contents of the offer and the integration of any
previously agreed-on items with the disputed items. In making a
decision, the impasse [neutral] panel must not consider or receive any
evidence or argument concerning offers of settlement not contained in
the offers submitted to the impasse [neutral] panel, or any other
information concerning the collective bargaining leading to impasse.
The impasse [neutral] panel must neither compromise nor alter the
final offer that [he or she selects] they select.
(k)
The final offer selected by the impasse [neutral] panel, integrated with
any items previously agreed on, is the final agreement between the
parties, need not be ratified by any party, and has the force and effect
@
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BILL
No. 20-11
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333
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of an agreement voluntarily entered into and ratified under subsection
(c). The parties must execute that agreement.
*
33-103A.
Impasse Panel.
Purpose.
*
*
Sec. 2. Section 33-103A is added as follows:
W
An
impasse panel may conduct
~
hearing and resolve an
~
Impasse in collective bargaining between
certified employee
representative and the employer under Sections 33-81, 33-108, and 33­
153.
(hl
Neutral member.
The Council must appoint
.2.
neutral impasse panel
members for staggered 3-year terms.
To implement the staggered
~
terms, the Council must appoint the first and second members to
year term, the third member to
~
one-year term, and the fourth and fifth
members to
~
2-year term. After these initial appointments, the Council
must appoint all members to 3-year terms, except for any member
appointed to fill
~
vacancy.
If
~
vacancy is created
Qy
~
neutral
or
member's death, disability, resignation, non-performance of
~
other cause, the Council must appoint
~
neutral member to complete the
member's term. Each neutral member must be
f!
resident of the County
experienced in conducting an adjudicatory hearing.
1£1
Composition.
An
impasse panel contains
1
members. One member
must be selected
Qy
the certified employee representative involved in
the impasse. One member must be selected
Qy
the employer. The
employee representative member and the employer representative
member may jointly select the neutral member. If they are unable to
agree, they must select
f!
neutral member from the
~
neutral impasse
members appointed
Qy
the Council
Qy
alternating strikes with the
@
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No. 20-11
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353
354
employee representative making the first strike until only
1
neutral
member remains.
@
Term.
An
impasse panel selected under subsection
(£l
serves until the
Council takes final action on the collective bargaining agreement at
impasse.
ill
Procedure.
The neutral member is the panel chair and must preside at
any hearing. A majority of the impasse panel must vote for
resolving an impasse.
~
decision
ill
Compensation.
The employer and the certified representative must
~
any fees and expenses for their own representative. Fees and expenses
of the neutral member must be shared equally
Qy
the employer and the
certified representative.
Approved:
355
Valerie Ervin, President, County Council
356
Date
Approved:
357
Isiah Leggett, County Executive
358
Date
This is a correct copy o/Council action.
359
Linda M. Lauer, Clerk of the Council
Date
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LEGISLATIVE REQUEST REPORT
Bill 20-11
Personnel
DESCRIPTION:
Collective Bargaining Public Accountability
­
Impasse Arbitration
Bill 20-11 would establish an interest arbitration panel to resolve an
impasse, require an impasse arbitration hearing to be open to the
public, and modify the criteria for the impasse panel to apply.
The Organizational Reform Commission recommended these
changes to the County collective bargaining laws.
To increase public accountability in the impasse arbitration process.
County Executive, County Attorney, Human Resources
To be requested.
To be requested.
To be requested.
To be researched.
Organizational Reform Commission Report.
Robert H. Drummer, Senior Legislative Attorney
Not applicable.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
None.
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/6
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"
'. I2l1L-1...
20-11
lOP
cc
ser:
\~:,-
063857
OFFICE OF MA.NAGEMENT AN"D BUDGET
lsiah Leggett
County Executive
.:"
.~
Joseph
F, Beach
Director
MEMORANDUM
.
,
-"
:1
,;
.....
'
,/
July 8,2011
Valerie Ervin, President, County Council
Joseph
F.
Beach,
TO:
FROM:
SUBJECT:
D~k
--
,
Council Bill 20-11,
Arbitration
~1-
Collective Bargaining - Public Accountability - Impasse
The purpose of this memorandum is to transmit a fiscal and economic impact statement
to the
Co~nci1
on the subject legislation.
LEGISLATION SUMMARY
Council Bi1120-11 would establish an interest arbitration panel
to
resolve an impasse at
arbitration, require an impasse arbitration
to
be open to
the
public, and modify the criteria used by an
arbitrator to evaluate competing final offers before issuing an arbitration award.
It
requires the arbitrator
to give highest priority to the County's ability to afford economic provisions
in
a collective bargaining
agreement.
FISCAL SUMMARY
The bill requires that both parties pay for the services of a mediator, similar to the way
both parties pay for the services of a mediator/arbitrator under current legislation. If the mediator'
determines that impasse has been reached, the proposed legislation requires that arbitration in front of a
three-person impasse panel takes place. Each party selects a member to the panel and may jointly select
the third neutral member from a list of five Council-appointed impasse panel members_
If
the parties
cannot agree, the third panel member is chosen by alternating strikes
until
one neutral member remains,
Assessing the fiscal impact of this legislation
is
dependent on a number of variables
including:
• The number of labor mediations that may occur each year and how long the period of mediation lasts;
• The number oflabar arbitrations that may occur each year and the duration ofeach arbitration;
• Whether the management representative on the impasse panel may be a County employee or must be an
outside contractor;
• The rates charged by the mediator and the County paid members ofthe impasse pane1.
Office of the Director
101 MOlioe
Street,
14th
Floor' Rockville,
Maryland 20850 • 240-777-2800
www,montgomerycollntymd.gov
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Valet'ie Ervin, President, County Council
July 8, 2011
Page
2
The County currently has $46,000 budgeted for mediation and arbitration and related
costs for FY12. Based on the County's experience with the market, the cost of an arbitrator ranges from
$1,500 to $3,000 per eight-hour day or part thereof.
Potential Range
of
MediationlArbitration
Costs
Number
of
Mediations
Arbitrations
3
3
Total Cost For 6 Year Period
Days of
Duration
3
Average
Daily
Cost
$
1,500
Total
Cost
$ 27,000
$
162,000
3
$
3,000
$
54,000
$
324,000
3
3
Total Cost For 6 Year Period
Projections above assume:
I) All 3 union contract awards go through mediation and arbitration
2) County is responsible for half of the cost of the mediator, the management
selection to the impasse panel, and half the cost of the neutral selected
through alternating strikes
3) Mediation and Arbitration occur each year
The part of the legislation that would give the highest priority to the County's ability
to
afford the economic provisions of the final offers without raising taxes or lowering the existing level of
public services is identical to previously offered amendment to Expedited Bill 57-10. The fiscal impact
ofthis aspect ofthe bill also will depend on a number of variables which cannot
be
reliably predicted or
quantified at this point including:
• the fiscal magnitude of the labor issues subject to mediation and arbitration; and
• the impact ofthe subject legislation on changing the outcome of arbitrator rulings',
It is common for the final offer packages of the County and the unions to differ by
substantial amounts. Since these awards can set a settlement pattern with other employee groups, the
ultimate fmal potential cost of arbitration awards could differ by tens of millions of dollars depending on
which offer is selected by an arbitrator. For example,
in
the 20 I 0 arbitration case with the Fraternal Order
of Police in which service increments was the primary economic matter in dispute, the difference between
the County's fmal ofter and the FOP's was approximately $1.6 million. However, the cost of extending
service increments to all employees across all County agencies was nearly $35 million.
According to the Office of Human Resources, of the 19 Labor Arbitration rulings since 1988, the Arbitrator has
ruled against the County Government 15 times.
I
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Valerie Ervin, President, County Council
July 8, 2011
Page 3
ECONOMIC SUMMARY
The DepartU1ent of Finance does not believe that
the
subject legislation has
a
quantifiable
economic impact on Montgomery County because the size ofthe workforce it affects is small in relation
to the total County resident workforce and the impact of the legislation on the outcome ofmediation and
arbitration can not be reliably determined or quantified.
The following contributed to and concurred with this analysis: Stuart Weisberg, Office of
Human Resources, Michael Coveyou, DepartU1ent of Finance, and Lori O'Brien, Office ofManagement
and Budget.
JFB:lob
c: Kathleen Boucher, Assistant Chief Administrative Officer
Lisa AuStin, Offices of the County Executive
Joseph Adler, Director, Office ofHuman Resources
Karen Hawkins, Acting Director, Department of Finance
Michael Coveyou, DepartnIent of Finance
Stuart Weisberg, Office ofHuman Resources
Lori O'Brien, Office ofManagement and Budget
John Cuff. Office ofManagement and Budget
Amy
Wilson, Office ofManagement and Budget
@)
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In the Matter of Interest Arbitration
Between:
Montgomery County Maryland
(Employer)
And
FOP Lodge 35
(Union)
APPEARANCES:
For the Employer: William Snoddy, Esq.
Associate County Attorney
101 Monroe Street, 3
rd
Floor
Rockville, MD. 20850
For the Union:
Margo Pave, Esq.
Zwerdling, Paul, Kahn
&
Wolly, P.C.
1025 Connecticut Avenue, Suite 712
Washington 'D.C. 20036
Introduction
The Montgomery County Police Labor Relations Act, Chapter 33, Section 33-81 of the
Montgomery County Code (herein after referred to as PLRA) provides that when an
impasse has been reached in negotiations, the parties are to submit their final offer, and an
Impasse Neutral is to select, as a whole, the "most reasonable" of the two Final Offers.
The parties reached impasse on January 20, 2011, and based on a prior arrangement, the
undersigned Impasse Neutral conducted a day of mediation and two days of arbitration
during the week of January 23, 2011. Following the County statute, the parties presented
testimony, evidence, exhibits and argument. Counsel for each party presented closing
arguments in place of briefs on January 28. A transcript made at the hearing was received
by the undersigned on February 9,2011.
A review of Herbert Fishgold's Opinion and Award (FOP Exh. 4) involving a similar process
last year with the same parties shows a clear parallel to this Impasse Neutral's experience
in the instant case. A portion of his thinking is quoted here:
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"Much of the hearing was taken up with economic presentations by both sides with
regard to the FY 2011 budget deficit, the long range CIP projection, the breakdown
of cost, programs, services, and purchases under the tax-supported Operations
Budget which funds compensation, and Capital Budget for facilities, which is largely
funded by borrowing, with each party seeking to support their respective positions,
with FOP pointing to "priorities", and County pointing to balancing public interest with
a deficit budget.
"While these presentations obviously are the type of economic data useful in the
context of complete collective bargaining or multi-year considerations of proposed
general wage increases, they have a much more limited application in this narrow
reopener ---."
The impasse procedure of the PLRA, amended last year, places a complex series of
requirements for the Impasse Neutral to follow in selecting the more reasonable Final Offer.
The amended copy of PLRA presented to the Impasse Neutral was extremely edited with
single and double underlining, and single and double parentheses, which denoted language
added at various times and the language deleted. Thus making it very difficult to read
intelligently. To over come that difficulty, the text is set out below in 12 sequential steps
without harming the intent of PLRA:
The Impasse Neutral must first evaluate and give the highest priority to the ability of
the County to pay for additional short-term and long-term expenditures by
considering:
1) the limits on the County's ability to raise taxes under State law and the County
Charter:
2) the added burden on County taxpayers, if any, resulting from increases in
revenues needed to fund a Final Offer; and
3) the County's ability to continue to provide all public service.
After evaluating the County's ability to pay based on the 1, 2 and 3 above, the
impasse neutral may only consider the following in making a decision:
4) the interest and welfare of County taxpayers and service recipients:
5) past collective bargaining contracts between the parties, including the bargaining
history that lead to each contract;
6) a comparison of wages, hours, benefits, and conditions of employment of similar
employees of other public employers in the Washington Metropolitan Area and in
Maryland;
7) a comparison of wages, hours, benefits and conditions of employment of other
Montgomery County employees;
8) wages, benefits, hours and other working conditions of similar employees of
private employers in Montgomery County_
2
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The Impasse Neutral must:
9) not compromise or alter the final offer that he or she selects:
10) select an offer based on the contents of that offer;
11) not consider or receive any evidence or argument concerning the history of
collective bargaining in this immediate dispute, including offers of settlement not
contained in the offers submitted to the impasse neutral;
12) consider all previously agreed on items integrated with the specific dispute items
to determine the single most reasonable offer.
The 12 items listed above are the PLRA language in the sequence as it appears in the
PLRA. The numbering will facilitate easy referencing.
The Issue
The parties have placed before the Impasse Neutral a single issue, which is described as
Cash Compensation for police offices covered by the FOP collective bargaining agreement,
pursuant to the limited re-opener provision of the MOA that the parties mutually agreed
upon in June 2010.
The Parties' Final Offers
The parties' Final Offers are provided below exactly as submitted, including strike-outs and
emphasis bolding.
County Final Offer
Article 5 Tech Pay
Section C. Multilingual Pay Differential
3. Compensation. Compensation is determined by the officer's certified language
level. Compensation is paid for all hours actually worked during a pay period. Officers
certified at the basic skill level will receive one dollar per hour for all hours actually
worked. Officers certified at the advanced skill level will receive two dollars per hour
for all hours actually worked.
Certified Officers will indicate on their time sheets the multilingual skill code ML 1 for
Basic Skill certification, and ML2 for Advanced Skill certification.
4. Overtime. Certified officers will be paid overtime on the multilingual differential only
for use of the skill during hours subject to overtime pay, ie. in excess of the regular
workday or workweek.
5. Transfer. It is recognized that once an employee is designated in a skill level,
he/she may be transferred to an assignment where the skill is needed.
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6. For the duration of this agreement, no new officers will be tested for
entrance into the multilingual program. In the event that a bargaining unit
member leaves the multilingual program during the term of this agreement, the
Employer, based upon operational need, may elect to allow a new bargaining
unit member into the program to fill the vacant skill set.
Article 28 Service Increments
Section H. Longevity. Effective July 1, 1999, a longevity step will be added to the pay plan at
the beginning of year 21 (after 20 years of completed service) equal to a three and one-half
percent increase. Effective July 1, 2011, there will be no new movement to the
longevity step of the duration of this agreement.
Add as new Section
1-
Effective July 1, 2011, service increments will be suspended
for the duration of this agreement for all qualified bargaining unit members.
Article 31 Reopener
Section F. Reopener Matters
Second Year. Reopen for bargaining in the first year of the agreement for 2
nd
year of the
contract on or before November 1, 2010 with timetable and impasse procedures set forth in
PLRA, Section 33-81 on the following subjects:
1. Cash Compensation for FY 12
2. Whether a third year with a reopener on cash compensation will be added.
The County proposes not to extend the current agreement for a third year. This
effectively ends the current agreement on June 30, 2012 as noted in the County
proposal for contract duration in Article 47.
Article 36 Wages
Section A, Wages. Effective July 1,2007, the salary schedule shall be increased by adding
$3,151 at Step 0, year 1 with increments and promotions for all other steps and pay grades
calculated from the new Step 0, Year 1 basis. Increments and longevity shall continue to be
calculated as required by Article 28. The percentage increases upon promotion shall
continue (up to the maximum for each rank) to be: 5% between PO I and PO II; 5% between
PO II and PO III; 5% between PO III and MPO; 10% between MPO and Sergeant; and,
subject to Section
0,
infra, 5%between POC and POI. (Appendix T)
Effective the first full pay period follmving July 1, 2008, each unit member shall receive a
wage increase of four (4) percent. Effective the first full pay period following July 1,2009,
each unit member shall receive a 'Il8ge increase of four and one quarter
(4.25)
percent.
Effective the first full pay period following July 1, 2011, each unit member shall
receive a wage reduction of five and one half (5.5) percent. Any previously postponed
GWA will not be paid in FY12 or any future fiscal year.
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Article 47 Duration of Contract
This agreement shall become effective on July 1,2010 and terminate on June 30, 2012
unless extended
to
June 30, 2013 pursuant to Article 31 Reopener.
FOP Final Offer
Article 5 Tech Pay
Section C. Multilingual Pay Differential.
Add a new sub-section:
6. For FY12, at the County's option, no new officers will be tested for
entry in to the Multilingual program.
Article 28 Service Increments
Add a new section to Article 28:
Section I. FY12 Increment and Longevity Step Increases. For FY 12 only, qualified unit
members shall continue to defer one (1) 3.5% step. Qualified unit members shall
receive one (1) 3.5% step on their service increment date. Increment and Longevity
steps will not be paid if not funded by the County Council.
Article 31 Reopener
Section F. Reopener Matters.
Second Year. Reopen for bargaining in the first year of the agreement 2
nd
year of the
contract on or before November 1, 2010 with timetable and impasse procedures set forth in
PLRA, Section 33-81 on the following subjects:
1. Cash Compensation for FY 12
2. Whether a third year with a reopener on cash compensation will be added.
Third Year. Reopen for bargaining in the second year of the agreement for 3
m
year of the
contract on or before November 1, 2011 with timetable and impasse procedures set forth in
PLRA, Section 33 81 on the subject of Cash Compensation for FY 13.
If the parties have not reached agreement by January 20 2011, an impasse shall be
deemed to exist, and the impasse procedure provided in PLRA Section 33 81 shall be
implemented.
Article 36 Wages
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Section
A.
Wages. Effective July 1, 2007, the. salary schedule shall be increased by adding
$3,151 at Step 0, Year 1 with increments and promotions for all other steps and pay grades
calculated from the new Step 0, Year 1 basis. Increments and longevity shall continue to be
calculated as required by Article 28. The percentage increase upon promotion shall
continue(up to the maximum for each rank) to be: 5% between P01 and P011; 5% P011
and P0111; 5% between P0111 and MPO; 10% between MPO and Sergeant; and, subject
to Section
0,
infra, 5% between POC and P01. The four and one quarter (4.25) percent
wage increase scheduled to take effect in the first full pay period following July 1, 2009 shall
be postponed, and shall not be effective during fiscal years 2010,2011
and
2012.
Article 47 Duration of Contract
This agreement shall become effective on July 1, 2010 and terminate on June 30,2012,
unless extem:ied to June 39, 2913 pursuant to Article 31 Reopener.
Although not part of this Final Offer, FOP Lodge 35 offers the Employer the following:
Article 36 Wages
Section F. Lateral Entry
3. Notwithstanding the provisions of Section F, for employees hired during
Fiscal Years 2011 and 2012, the County at its option may suspend in
Fiscal Years 2011 and 2012 only, the requirement that within-grade
advancement will be based on one additional 3.5 percent step for each
year of qualifying experience.
Discussion and Evaluation of Parties Positions
As cited above, the Impasse Neutral must first evaluate and give the highest priority to the
County's ability to pay for additional short and long term expenditures by considering three
topics. The parties did not agree on which short and long term expenditures the Impasse
Neutral must consider in making a decision. The FOP believes that only expenditures
related to the parties' Final Offers are to be considered. The County believes that the
Impasse Neutral must consider all expenses of the County.
The PLRA language is not clear on which interpretation is correct. However. of the three
topics to consider in assessing expenditures (ability to raise taxes, burden on tax payers,
and ability to continue public services) none mentions all County expenditures. One topic
(burden on taxpayers) refers to "revenues needed to fund a final offer". Since there is no
reference to all County expenditures, this Impasse Neutral will focus only on the
expenditures caused by Final Offers.
The FOP suggested that if the Impasse Neutral concludes that only last offer expenditures
need be taken into account, the Impasse Neutral might move beyond these first three
requirements of the PLRA. because the FOP Final Offer involves no cost increase. In
testimony and exhibits, the County reported on their effort to cost-out both final offers. They
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found that the County Final Offer had a negative cost, or savings of $6,729,690, and the
FOP Final Offer cost $1,438,560, and with an annualized cost of $2,124,430.
County Ability to Pay Additional Costs (Items 1,
2,
3)
The Impasse Neutral must first evaluate and give the highest priority to the ability of the
County to pay for additional short-term and long-term expenditures by considering:
1. the limits on the County's ability to raise taxes under State law and the County
Charter:
2. the added burden on County taxpayers, if any, resulting from increases in
revenues needed to fund a final offer; and
3. the County's ability to continue to provide all public service.
The County's first witness, David Platt, Chief of Commerce in the Department of Finance
testified that the County's ability to raise real property tax is limited to the cost of living in the
previous year. Since the 2010 the cost of living was 1.70%, the County revenue from real
property tax may not exceed 1.70%. The cost of living in 2009 was 0.23%, and in 2008 it
was 4.52%.
In FOP cross examination, the witness agreed that the outlook for inflation is positive and
that it will impact real property tax revenue positively. Also on cross, the witness admitted
the stock market is on the rise, another positive factor.
The FOP argued that Montgomery County's economic data picture is better than the
national data presented in County Exhibit 1. For example County unemployment at 5.5% is
just over half National unemployment rate. Therefore, the County rate could almost be
considered full employment.
Also based on data in County Exhibit 1, the FOP pointed out that County estimates of
income taxes and real property taxes show an increase in tax income of $122 million in
2012 over 2011 or a 3.3% increase. These numbers are a clear sign of the beginning of a
recovery from recession.
The County pointed out that the initial estimates the County made on 2011 and 2012 tax
income were made when the 2010 budget was approved. Then nine months later in
December 2010, new estimate were made for 2011 and 2012. The December 2010
estimates lowered the expected tax income by $85 million for 2011, and $73.8 million for
2012.
Therefore, the new tax income estimate for those two years (2011 and 2012) was lowered
by nearly $160. million. These new, greatly lower, tax income estimates, following a nine
month period during which signs were pointing to economic recovery, seem inconsistent
with County data offered in Co. Exh. NO.1. at p. 13. In an Economic Indicator Dashboard on
page 13, the County presents eight indicators with four indicating upward movement, three
indicators holding steady, and only one moving down.
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The County explanation that "draw downs" justify the December 2010 new lower tax income
estimates is unconvincing.
The next County witness, Joseph Beach, was the Director of the Office of Management and
Budget. He explained that a budget gap of 300 million dollars presented an over whelming
challenge to the County, its citizens, and services. The budget gap is the difference between
total projected resources and the total projected uses.
FOP argued that the budget gap is exaggerated by the County confusing wants and needs,
and its failure to set priorities based on real needs. Some building programs are ill adviced
in the face of budget gaps. Money should be shifted to needs, while wants should be
deferred. The counter to that was the operating budget is "not a list of what we would like to
do or a wish list. It's what we feel by law or a policy we're obligated to do as well."
The witness explained that the capital budget is not available to supplement the operating
budget, since expenditures from the former can only be used to create assets such as
buildings and other real property.
In cross examination, the FOP elicited the confirmation that Operating Budget and the
Capital Budget, while separate, have movement of money between them. They are not
wholly discrete, they interact and affect one another. The example discussed was 73.4
million dollars taken from the Operating Budget and placed in the Capital Budget for capital
expenditures, on debt service for example.
Also in cross examination, the FOP elicited the fact that new revenues in 2012 are
anticipated to be 5.13% higher than they were in 2008, a significant increase by next year
compared with the year the recession started.
The witness testified that the FOP assumption that the County Government can control the
school board in terms of teacher wages and other specifics is simply wrong. State law limits
County Government influence with concepts such "maintenance of effort." The Government
can seek wavers from the State Board of Education to save some costs, but that path is
never assured.
When the County does not fund the MCPS at the "maintenance of effort" level, the State will
penalize the County by withholding funds that would otherwise be provided to the County.
To avoid that the County can seek a waiver from the State and avoid the penalty. While
getting a waiver is not a sure thing, it can provides significant savings to the County. It could
be as much as 100 million dollars. The County plans to request a waiver for 2012 once they
fail to meet the "maintenance of effort." If the waiver is granted for 2012, the County would
not need to spend $82 million on "maintenance of effort."
The burden on tax payers is already very heavy and the property tax constitutes 38% of the
County's tax revenue. There is a legal limit on tax increases, as well as a practical
reluctance to raising the property tax rate under present circumstances, in light of tight
family and business budgets, which add to taxpayers stress.
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The level of State aid to local government is questionable given the 1.5 billion dollar State
shortfall anticipated. The budget problem the County faces is not a cyclical problem; it is a
structural budget problem, which requires bringing down long term continuing cost
increases, such as labor and staffing costs. So wage and benefit reductions are part of the
County's strategy to get the budget under control. The problem is that over the past ten
years labor costs have gotten excessive and must be reduced. While labor cost are the
primary problem because they constitute 80% of the operating budget, other cost such as
debt service also must be brought under control.
The County has done and will do other things to bring down spending, none of which is
easy. Hiring freeze of past years, and wage freezes, furloughs, shortened hours in libraries
and recreation centers, cut back on maintenance for facilities, roads and transit have been
instituted. And there are more to come.
The FOP believes they have done their part to help the County by repeatedly deferring
negotiated pay increases.
Reductions made in 2011 will not be restored, they are the new base, which will be cut
farther in 2012. Uncontrollable costs are another problem that makes the County's job of
balancing the budget that much harder. For example, K-12 and community college
enrollment increases, energy/fuel costs and State shifting costs to local government.
On the latter point of the State shifting costs to local government, the FOP pOinted out that
no such idea was in the Governor's budget
Increasing real property tax would requires a unanimous vote of the County Council, which
seems very unlikely.
The FOP raised questions about the reserve fund in which the County was placing 106.8
million dollars. The witness explained that the County was following its reserve policy, which
is to cover costs that are not provided for in other sections of the budget. There are serious
risks in not having sufficient reserves set aside. A strong reserve is a good management
practice.
The third County Witness, Alexander Espinoza, from the office of management and budget,
is the person who testified on the costing of the two Final Offers, discussed above. In cross
examining the witness's costing of the FOP Final Offer, the FOP attempted to establish that
pay increases provided in the labor agreement, which were deferred by the FOP, and
therefore not paid to police officers will be a savings for the County. The witness answered
that it would be a cost to the County, but suggesting it wasn't a saving. Cross examination
focused on whether lower costs were reflected in the costing process by the fact that retiring
police officers are replaced by new officers who are paid lower salaries than the retiree they
replaced. A series of witness responses were inconclusive.
The fifth witness for the FOP, Amy McCarthy, is a private economist. During her testimony,
she used FOP Exhibit 3 to illustrate her testimony. The chart on page 19 shows the County
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projection of huge budget gaps for the years 2007 through 2011. Then as each budget
years ends, the County achieves a balanced budget. She testified that the County uses
these exaggerated budget gap projections to suggest that a particular year will end in a
huge debt, but it never does. Her chart suggests that 2011 and 2012 are likely to end the
same way. The County has year after year managed to convert what appears to be a huge
budget gap into a balanced budget. Repeatedly, the County has exaggerated future
expenditures to create the impression of a huge budget gap. This year, they are using the
exaggerated budget gap to cut six million dollars from police officers pay.
The chart on page 16 shows various tax rates of all the counties in Maryland. Montgomery
County's property rate is substantially below the other jurisdictions, 25% below the average
rate. This is caused by the cap on the County's tax rate. The chart also shows that the
County's utilities tax and recordation tax are below other jurisdictions' tax rates.
Observations on the County's Ability to Pay (Items 1,2, 3)
Is the huge prOjected budget gap based on too little tax income or too large anticipated
expenditures? The cap on taxes is real, but the size of anticipated expenditures is likely to
be smaller, based on FOP exhibit 3.
The County is relatively better off economically than the national economy.
FOP has highlighted some sources of available funds for police compensation. For example
a waiver of the maintenance of effort in 2012, raising the utility and recordation taxes.
The County has already made a number of service reductions, which probably has made
taxpaying citizens unhappy. But more cuts may be necessary. The County's AAA Bond
rating shows the County numbers are sound.
Wage Comparisons (Items 6, 7, 8)
The County's fourth witness, Michael Nodol, is a consultant on finance and management for
government organizations. The witness conducted a 79 page study on the bargaining unit,
area police compensation, wage trends, economic downturn, recruiting and retention, and
the County Final Offer.
FOP cross examination focus only on recruiting and retention. Nothing else in the report
was challenged. A brief summary of some key findings:
• Police compensation is among the highest in the region.
• County ranks relatively lower in the region, near mid point on
per capita income, median family income, employment level,
job creating in past 3 years, owner housing cost, recent home
sale price.
• Big wage gains since 2007, move County from 5
th
place to 1
st ,
• More than 3% of local job base eroded.
• 5.5% wage reduction needed in FY 2012 to return to a new normal.
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With wage reduction police will still rank number 2 in region.
Wage reduction will reduce the need for layoffs and service cuts.
Observations on Wage Comparisons:
Compared with other nearby jurisdictions, the County police enjoys high compensation,
while the community they serve has lost some of it prosperous status.
Comparison of Two Final Offers (Items 9, 10, 12)
Below is a side by side comparison of the five articles addressed in the Final Offers:
Article 5 Tech Pay:
Both Offers recognize the need for limiting the expansion of the multilingual program during
the term of this agreement.
Article 28 Service Increments:
The County proposes that effective July 1, 2011, for the duration of the agreement, service
increments will be suspended and no new movement to the longevity steps will occur.
The FOP proposes to continue to defer one 3.5% step during FY12, and qualified members
to get 3.5% on their service increment date.
Article 31 Reopener
The two Offers are identical, except that the County proposes the current agreement end
June 30, 2012. This does not represent a disagreement since the parties in Article 47 below
agree on date as the end of their current agreement.
Article 36 Wages:
The County proposes a 5.5% wage reduction beginning in July 2011. The County proposes
that "any previously postpone GWA will not be paid in FY12 or any future fiscal year."
The FOP proposes to continue to defer the previously deferred 4.25% through 2012.
The FOP included an offer to the County that they labeled "not part of the Final Offer". It will
be ignored by the Impasse Neutral.
­
Article 47 Duration of Contract:
The two Offers propose that their current agreement terminate on June 30,2012.
Observations on the Final Offers ( items 9 and 10):
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The offers are close to agreement or in agreement on 3 of the 5 issues. On the remaining
two, the offers are far a part. The FOP offer shows flexibility and is consistent with FOP
behavior during the last two years as it continued to defer benefits provided in the parties'
agreement. Consistent with its cost cutting efforts and its claim of a seriously out-of balance­
budget, the County proposes a significant reduction in wages. Either final Offer will
constitute a significant cost to the County. The FOP has argued that either offer will have a
negative impact on police officers.
Award
Based on the above discussion, analysis and observations, the Impasse Neutral finds the
FOP Final Offer, on the whole, the more reasonable of the two offers.
Jerome
T.
Barrett, Impasse Neutral'
February 18, 2011
Falls Church, Virginia
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Isiah Leggett
County
LtltCillive
Marc P. Hansen
Acting CountyAttorney
MEMORANDUM
TO:
Steve Farber
Council Staff Director
I
Marc P. Hansen
ActingCounty Attorney
VIA:
FROM:
Edward B. Lattner, Chief
Division of Human Resources
&
Appeals
December 3,
2010
Bill
57-1 OE
(Personnel - Collective Bargaining - Impasse Procedures)
f~' f~
DATE:
RE:
You have asked us to determine if Bill
57-10E
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 "of the severe short-term and long-term
budget pressures the County faces, " You have
a] So
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 plivate sector labor professional jointly selected by the
Executive and the union. Bill 57-10 would modify the criteria used by the 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's final offers.
Council Vice President Ervin's November
19,201 O.
memorandum Inakes cleat that the bill is
designed to ensure that the arbitrator's assessment of final competing offers is grounded in the
reality "ofthe severe short-term and long-term budget pressures the County faces:'
Mr. Drummer's. November 23,2010, memorandum to the Council correctly states the
The FOP and
lAPF
collective bargaining laws refer to an "impasse neutral" while Ihe MCGEO law refers
to a "medil.ltor!aroitralOr."
By
whatever deSIgnation. the person's role is the same.
I
101 Monroe Street. Rockville. Maryland 20850·2580
(240) 777"6735. TrD (240)777.2545 • FAX (240) 771·6705 •
Edward.Lattner@ montgornerycountymd.g()v
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Steve Farber
December
3,2010
Page 2
present state of
the
1aw 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 all
6
of the 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.
The
Bill
Sill 57-IDE
combines two ofthe
six factors
currently considered by
the
arbitrator
«1)
the
interest and welfare of the public and
(2)
the ability of the employer to finance economic
adjustments and the effect ofthe adjustments upon the normal standard of public services by the
employer) into the following predominant factor:
The impasse neutral must first evaluate and give the highest priority to
the
ability
of the County to pay
for
additional short-tenn and
long~term
expenditures by
considering:
(i)
the limits on the County's ability to raise taxes under State law and the
County Charter;
(ii)
the added burden on County taxpayers,
if
any, resulting from increases in
revenues needed to fund aflnat offer;
and
(iii)
the County's ability to continue to provide the current standard of all
public services.
While this language
is
legal1y sufficient, alternative language would strengthen the bill's
stated goal of requiring the arbitrator to consider, first and toremost, the County's ability to pay
for
a
labor contract in
light
"of the severe short-tenn and long-tenn 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 County Charter" is somewhat mercurial. While State law does
impose an absolute cap on the County's ability to tax residt.'11ts' income, and the County Charter
requires that all nine Councilmembt.'rs approve certain increases in the property tax,
the
County
enjoys ex.traordinarily broad authority to impose other taxes under
§
52-11 of the 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
t',
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Steve Farbt.'t
December 3; 2010
Page 3
Montgomery County.
337 Md. 15, 25, 650 A.2d 712
(1
994)? Presently, County taxes include
fuel
energy, carbonetnissions, cell phone usage, and hotel/motelusage. The language in the bill
leaves ample room for the arbitrator to conclude that
the
Council could or should increase those
taxes (or impose new taxes). The langUage in the bilI 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 no increasein the then-current tax rates. The setting of
tax
rates should be the
exclusive province of the County's elected officiais,not
a
private sector labor professional.
Second, although the bill
is
borne of the current fiscal shortfall, it could 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 ofthe County
to
pay" is not limited to fallow
economic times. Thus,
if
and when (hopefully when) the County's coffers are full,consideration
of ''the ability ofthe County to pay" would militate in favor of the proposal calling for a
corresponding increase in spending on a labor contract. If the purpose of the bill
is
to require the
arbitrator to consider the County's ability to pay when times are tough, then the bill should
pro\-ide some objective trigger for mandatory consideration
0
f
that 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 "for
additional
short-term and long-term expenditures" (emphasis added). PresumablY1 consideration
of the County's fiscal health
is
therefore limited
to
those final offers that propose expenditures
above and beyond those previously provided to hargaining unit members.
3
TI1US,
the arbitrator
would not consider the County's fiscal health at all if the union's proposal held costs constant
and the Executive's proposal reduced those costs. Ifthe purpose of this bill is 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 proposal.
The word "additional" should be stricken.
Finally,although the bill gives predominance
to
aflordability,
it
does not preciudcan
arbitrator from detenl1ining 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 arc atTordable.
cbI
:2
Some items arc beyond the County's taxing power (e.g., akoholicbeverages, gasoline) .
is unclear whether chis would be limited to expenditures provided for in the prior labor agreement or
expenditures actually authorized
by
the Couned in the most recent annual operating budget.
.1
It
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Steve Farb<.."T
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
A10·02083
ivt'Cycom\
Wpdocs\OOO
I
',po
IO'{)OI72JMJ)OC
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:ill
GINO RENNE PRESIDENT
li1
YVETTE CUFFlE SECRETARy-TREASURER
iii
NELVIN RANSOME RECORDER
:I
WWW.MCGEO.ORG
M
o
Testimony of Gino Renne
Bill Nos. 18-11, 19-11, 20-11
I am here today in opposition to the unrelenting attack on the rights of
working people-employees of this County-to bargain collectively.
Each of these bills would weaken that right and turn the collective
bargaining process into a 3 ring circus.
The purpose of these bills is to maintain an empty fac;ade for a process
that has been hollowed out from within. These proposals are nothing
more than political theater, hypocritical and cynical attempts to dodge
responsibility for governing and to play to the media's anti-union
bigotry. It is galling, too, that when you follow the logic string to the
source of these ideas, you find that they germinated in places with no
economic or cultural link to our County-one small Maryland County or
in small, rural states where right-to-work attitudes are nurtured by
right-wing politicians.
Think about what you are doing here:
• Proposing {(public" bargaining is just another ploy for shedding your
responsibility to County residents. Our recent experience informs us
that the public was thoroughly involved in the last round of bargaining .
Certainly, one of the major impediments to an equitable agreement
was the incessant effort on the part of the County Executive to run to
the press with details of negotiations at every possible opportunity.
Moreover, real bargaining requires parties to engage in serious and
frank discussion, and to put forth proposals that may not always
completely satisfy their respective constituents. When bargaining is
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VICE PRESIDENTS:
FRANK BECKHAM
JERRY BONAPARTE
CRAIG LONGCOR
. JAMES MAXWELL
TERRI MILLER
..~..
SEAN COLLINS . PAULETTE KEE-DUDLEY' GREGORY GOEBEL' ROBERT LEHMAN
'SUSAN SMITHERS] TONY THOMAS
SEDEARIA WILSON-JACKSON
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made open to public scrutiny, there is no incentive for parties to
engage in such real bargaining. Instead, parties are rewarded for public
posturing and coming up with sound bites to defend their respective
positions. This degrades the real collective bargaining process, which is
already subject to public scrutiny at the point at which parties reach
agreement and that agreement is rigorously examined and voted upon
by this Council. That process, as currently constituted, makes this sort
of law unnecessary and reveals it as the cynical political ploy that it is.
• Plans to reformulate the arbitration system is at best superficial and
inconsequential, at worst a more expensive provision, that would not
improve the bargaining process.
• Eliminating "effects" bargaining for County police officers would
enable the Police Department to evade responsibility for incompetent
management and add a layer of fog to management decisions.
It is a waste of the County's resources and an affront to taxpayers and
County workers to once again devote more time and money to nibble
around the edges trying to devise new ways to hobble the collective
bargaining law.
Last year, we criticized proposals to weaken the law's arbitration
provisions as nothing more than an effort by the Council and the
Executive to dodge responsibility for management failures and the
outcome in bargaining. That legislation was nevertheless enacted, yet
we saw the union positions prevail in each case within that weakened
arbitration process.
This council has zero credibility with our union right now. Madam
president, you sat across the table from us at the Woodside Deli this
Spring and personally assured us that the council had no intention of
taking action on the ORC recommendations concerning collective
MUNICIPAL & COUNTY GOVERNMENT EMPLOYEES ORGANIZATION
60e
FFEJERU
SUiTt
""0
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bargaining- claiming that these recommendations were not only
outside of the Commission's purview, but were inappropriate and
ridiculous. Yet here we are today. Ms. Ervin, legislation motivated by
retribution and fragile egos, does not make good policy.
Collective bargaining for Montgomery County workers has been
evolving since the early 1970s when the County adopted a thoroughly
ineffective "meet and confer" process. The system that we have today
was put into effect in 1986 with legislation that ended meet and confer
and adopted full-scale negotiations on economics and working
conditions. It was the product of very hard work by a highly motivated
group of political, community, labor, and business leaders. I was proud
to be among them.
The County Council was "authorized" to develop collective bargaining in
1984 under the terms of a ballot proposition adopted by County voters.
The conditions for all three units were deplorable because there was no
legal compulsion on the part of the County to deal honorably with its
workforce. Our memory of the pre-bargaining era drives us to fight
hard against any proposals that would redirect us toward those bad old
days.
The Council's current forays into "amending" collective bargaining are
largely prompted by a misreading of the political winds-a belief that
they can distract attention from management failures and a lack of
political leadership by flogging the County's workforce and blaming us
for the County's fiscal woes.
We also see a "herd mentality" within the Council, responding like deer
in the headlights to the editorial opinions of the Washington Post
where anti union sentiment is rife. We would caution Council members
that the Washington Post's editorial page never appears on a ballot.
MUNICIPAL
&
COUNTY GOVERNMENT EMPLOYEES ORGANIZATION
600
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Voters cast their votes with the expectation that individuals who are
elected to the Council will demonstrate leadership.
Economics, of course, is the core of our disagreement with the Council
and the Executive. Our mission is to advocate for our members within
the legally established framework of collective bargaining.
Management's job is to craft the choices and marshal the resources of
the County to, first and foremost, govern prudently by providing
residents with taxpayer services: public safety, education, recreation,
health and a social safety net. Our members are the keystone of the
County's resources.
We remind you that the current collective bargaining system has
yielded voluntary acceptance of wage freezes and major sacrifices by
the workforce that saved taxpayers tens of millions of dollars over the
past three years in return for the County's assurances of employment
security and with the full expectation that we will recover these losses
over time as the economy is restored.
As difficult as the past three years have been for all working families,
and especially our members, one can only imagine what would have
been the fate of Ride On bus operators, nurses and health
professionals, drivers and laborers in DPW, corrections officers, deputy
sheriffs, librarians and other general government workers in this era of
retrenchment if they had to endure this recession without union
representation. One can only imagine the deterioration in services that
County residents would have had to endure if the County's elected
officials had been left to their own devices to deal with the effects of
this national recession.
We do not speak for the County's police officers or firefighters, but we
are closely aligned with them in the defense of collective bargaining.
MUNICIPAL & COUNTY GOVERNMENT EMPLOYEES ORGANIZATION
600
FR;:D;:RICK
l'NE~UE
SUTE 200
GAITHERSBURG. MD 20877
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We note that the County Council has proposed legislation that would
alter the effects bargaining procedures for the County police force. I
would like to convey MCGEO's strong opposition to this legislation for
the same reason that we oppose the other bills: this is a cynical attempt
to place blame on County workers (in this case the police officers who
protect our CountyL who did not create this mess and should not be
used as political pawns for Council members who seek to advance their
own agendas. This police legislation is particularly shameful, since it
alters workers right to bargain at a time when workers need strong
representation the most-when jobs are lost due to economic
conditions outside the workers' control.
I
submit that there is no need for these changes and there is still time
and opportunity for the Council to redirect your efforts toward building
a sustainable model of County government where all the stakeholders
who work and live here-residents, business interests and the
workforce-can collaborate and thrive in an environment that puts
people above politics.
Thank you.
MUNICIPAL & COUNTY GOVERNMENT EMPLOYEES ORGANIZATION
FREDE R.I CK
200
C.t,THERSBURG,
i"C)
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Montgomery
Cotlnty Career
Fire Fighters Ass'no,
Inc.
LOCAL 1664
I
Testimony by John J. Sparks
~5
President, IAFF Local 1664
Public Hearing - Bills 18-11, 19-11
&
20-11
July 12,2011
I am John Sparks, President of the Montgomery County Career Fire Fighters Association, lAFF
Local 1664.' I am here today to speak in opposition to the three bills that, if adopted, would
adversely impact collective bargaining for County employees, while at the same time produce
little or no savings for County Government. vVhile the three bills address different aspects of the
collective bargaining process, and Bill 18-11 does not directly impact collective bargaining for
fire
and paramedics, all three bills suffer from a common set of deficiencies,
First, we believe that. the Organizational Reform Commission, whose recommendations form the
basis of these bills, overstepped its bounds. The original charge given to the ORC did not
include consideration of changes to the County's collective bargaining laws; and for good·
reason.
It
is our understanding that most members of
ORC had little or no experience in
matters pertaining to labor relations and collective bargaining, and the results oftheir work that
are incorporated in these bills demonstrate this lack of experience. Most of the recommended
changes to the collective bargaining process contained in these bills are not well thOUght out and
contain serious flaws,
For instance, Bill 19-11, if adopted, would move the date for completing the term bargaining and
impasse resolution procedures up two weeks, Yet at the same time, it doesn't move up the start
of term bargaining by a similar period of time. More importantly, experience has shown that the
County is unable to provide complete and meaningful responses to the Unions' request for
financial data until mid-December and perhaps even into January any given fiscal year. Thus,
substantive bargaining over economic proposals cannot occur until that point in time, which
would be close to or beyond the early January date that
bill would establish as the point in
time that statutory impasse occurs.
Second, Bil119-11 would require.
the Unions' initial proposals on economic
and the
County Executive's counter-proposals on those items be made available for public review.
This proposed amendment would add no value at all to the collective bargaining process, and in
fact, could actually harm the process. \Ve
with the observation ofORC Commissioner
Susan Heltemes that the integrity of the collective bargaining process relies on all persons
involved
iTl
the negotiations to maintain confidentiality until a fmal agreement is reached; and
that if irjtial proposals were made public, outside pressures would more often than not lead to
brea..\downs and stalemates in the bargaining process.
Further, to
that requiring proposals to be made public will infuence the parties to moderate
myone
has participated
offers is .
In
932 Hungeriord Drive, Suite 33A, Rockville,
:vi
D 20850-1713 • Telephone: (301) 762-6611 • FAX; (301) 762-7390 • Website: www.iafflocaI1664.com
"~"'I2
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collective bargaining knows full well that the final outcome in collective bargaining usually
bears little resemblance to the initial proposals. This proposed law change would
U'-'.LCUI;;<J.
generate any savings for the County, nor would it create any improvements to the collective
bargaining process.
vVe do, however, agree with the proposed amendment in Bi1l19-11 that would require the
County Executive to submit to the Council by March 15 any term of a labor contract which
requires an appropriation of:fi.mds or change to County law. Such notification should occur at
the same time the County
submits his proposed operating budget, not two weeks later.
Turning to Bill 20-11, we note, with objection, that the impasse resolution procedure would be
changed to prohibit the same individual from serving as both the mediator and impasse
arbitrator, as is the case now.
making this recommendation, the ORC commented its report
that the free flo\v of ideas during mediation is diminished when the mediator also serves as the
arbitrator. Speaking from years of experience, I can tell you that just the opposite is true.
Having the same individual appointed as both mediator and arbitrator facilitates rather than
inhibits the discussion that occurs during mediation, and creates a greater chance of reaching a
full or partial agreement prior to arbitration.
Also, there is no doubt that requiring different individuals to serve as mediator and
arbitrator would significantly
the time needed to complete the impasse resolution
process. Under the current
the impasse neutral gains valuable insight as to the purpose,
intent and practical application of the parties' contract proposals during mediation. Significant
time is saved in a subsequent arbitration proceeding by the impasse neutral having previously
gained this understanding. Time
is already at a premium would have to be spent educating a
different person serving as the arbitrator as to the context and parameters of the parties'
proposals.
Further, the provision ofBil120-11 that would create a tripartite arbitration board, with the
Union and the Employer each appointing a partisan representative, can be summed up best as
being nonsensical.
1'1
every case, without exception, each partisan member of the arbitration
Offer of the pa."1:y that appointed
or her. Any
board will vote to select the
information that the neutral arbitrator needs about the Last Best Final Offers is
during
the arbitration hearing. vVe view
tripartite board proposal as being mere "window
rather than serving any useful purpose.
1'1
addition, the five-member
panel that Bill 20-11 would create for
of
selecting a neutral arbitrator in
absence of a joint selection by the parties is actually
counterproductive. The language the bill restricts panel eligibility to individuals who are
County residents. All affected parties, including County taxpayers, are best served by having
arbitrators who have considerable experience in interest arbitration deciding cases of such critical
importance. There is simply not a
(i.e., adequate) pool of candidates with the desired
qualifications living in Montgomery County. Moreover, it is wrong to think that arbitrators who
live in the County are, for that
best qualified to understand and resolve issues involving
the allocation of County funds.
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Finally, Bill 20-11 would amend the County collective bargaining laws by changing the criteria
that guide an arbitrator in selecting one of the two competing Last Best Final Offers. More
specifically, the bill would add criteria that the Council considered and rejected just six or seven
months ago. The criteria that were not adopted were rejected for good reason. They would
unfairly tip the impasse resolution scale far in the direction of the County Executive.
Nothing has occurred in the last few months from which to conclude that those rejected criteria
should now be adopted. vvrule interest arbitrators selected the Last Best Final Offer of the
employee representative in all three cases occurring this past winter, it was not because the
existing criteria are deficient or slanted in a way to produce results that are favorable to the
employees; it was because,
as the Council quickly recognized,
the Last Best Final Offer that the
County Executive submitted in each case contained
extreme
proposals that went far beyond what
was necessary to address the County's fiscal problems. The existing criteria in the collective
bargaining laws have been written to achieve the desired end result: the selection ofthe Last Best
Final Offer that contains the most fair and balanced resolution to a collective bargaining impasse.
Moreover, the Council still serves as the final arbiter on whether the economic provisions of a
collective bargaining agreement are put into effect.
vVe urge the Council to rej ect the objectionable elements of the bills that have been highlighted
herein.
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I\lontgomery County Lodge 35, Inc.
18512 Office Park Drive
Montgomery Village, MD 20886
Phone: (301) 948-4286
Fax: (301)590-0317
Statement of Fraternal Order of Police,
.Montgomery County Lodge 35
Tuesday, July 12,2011
We are here again because the County clearly wants the priority of County police officers to be
fighting for their rights rather than providing services to the pUblic. For shame, because despite
years of VOLUNTARY concessions by police officers made during the County's tight fiscal
situation, and as the County budget increases, we have to be here to spend our time defending a
process that has worked for nearly three decades.
It
worked up until the day politicians found
process under law inconvenient to their purpose.
The County Council has several bills before it. These bills arise from a very questionable
set of recommendations in the January
2011
report of the Organizational Review Commission.
The most questionable is based on a recommendation on so called "effects bargaining."
The capital budget is in the billions of dollars, yet the commission had some special
interest in the collective bargaining process which has worked well for over 28 years. The
commission showed no interest in either the very high salaries of non-represented, non-union
employees or the means which their salaries and benefits are established. Clearly the
commission was carrying water for political interests. This recommendation is outside the scope
of the commission's charge and should be dismissed.
Employee contract negotiations are no different than any other negotiations the County
engages in for services. The County employs both represented and non-represented employees.
It
seems odd that the Commission focused on employee contracts for a minority of county­
compensated employees. There are 15,000 county employees and 22,000 MCPS employees.
There are but 1200 police officers.
The minutes ofthe commission do not show any detailed discussion of what is called
"effects bargaining". Apparently, they did some of their work in secret while maintaining a
misperception of openness and transparency. Their work seems more political, and devised in
secret without scrutiny or accountability.
In
its final report, the commission makes conclusions
based on either secret conversations that are not documented or were documented and are now
withheld from public view. We have filed a complaint with the police department to have them
investigate. This is a matter of management's integrity and accountability. [Attached]
Their conclusions are based upon a false premise. Either the commission made up what
it
asserts to be facts, or someone gave false and misleading information. [See PLA. records
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FOP Statement
July 12,2011
Page 2 of 3
request and response, attached] In any event, we met with the commission and were never
afforded any opportunity to respond to any allegations or assertions concerning "effects
fl
that
were ultimately presented
in
the final report.
Since there are only two parties to "effects bargaining",
it
is patently unfair that the
commission heard from only one party and never afforded FOP Lodge 35 any opportunity to
respond. The commission called its credibility into question through this one-sided
approach. Also, clearly, as noted by one commission member, effects bargaining was not within
the charge of the commission. For whatever reason, the co-chairs of the commission and a
majority of that commission allowed it to be used for political purposes with little or no
consideration to fairness, balance, perspective or veracity. We have responded to portions of the
commission's report. [Attached]
"Effects bargaining" comes out of a case that was decided by the United States Supreme
Court.
It
is a complex topic, rarely understood by its critics.
Effects bargaining has never had
any adverse impact upon our ability to respond to caUs for service or to protect the public.
Indeed, we estimate that about 95% of the police department's business is not subject to
bargaining and we have no interest in requiring such bargaining. Penultimately, under our law,
issues subject to "effects bargaining" are subject to an expedited resolution process. In 2004 we
agreed to a law change that sets a very short period to go to impasse and resolve effects matters.
Management has rarely, if ever used that process and has no right to complain.
Some, notably Councilmember Phil Andrews, have consistently distorted the facts and
been less than candid about effects bargaining.
Mr.
Andrews uses the in-car video program as an
example that he claims makes his point. Assuming,
arguendo,
that in-car video involves effects
bargaining, the fact is that the county proposed a
pilot
program. The County began bargaining
cameras, and bought them. They were installed in vehicles and operating. Several legal issues
arose during discussions as several cameras were field tested. Our chief concern was the wiretap
laws and public and officer privacy rights.
The County, not FOP Lodge 35, sought to discontinue discussions. Then Chief Charles
Moose contacted us and asked to call off negotiations because the County wanted to return the
cameras and use the money for something else. In any bargaining, once a party abandons or
withdraws its proposal, the proposal is offthe table. Thereafter, we went through several rounds
of term negotiations and the County never raised the subject, nor did they pursue it in any other
manner until very late in term bargaining in December 2007. The issue was resolved and an
agreement signed in 2008. We have testified under oath to the history of this subject.
Mr.
Andrews' uninformed statements have not been under oath.
We have little interest in most operational policies, such as processing prisoners, opening
facilities, determining functions like school resource officers, determining enforcement priorities
and the like. To our knowledge we have only been to impasse on one issue, and that was
successfully mediated prior to a hearing. Other issues that have successfully bargained and
agreements reached include technology changes affecting the way work is done, increasing the
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FOP Statement
July 12, 2011
Page 3 of 3
number of supervisors on the midnight shift, and reducing the number of master police officers.
There are others.
It
is far more likely that inept management and ineffectual leadership hinder police
operations. We meet with police management quarterly in a labor relations meeting, we resolve
issues in the workplace daily and we have solicited regularly for any outstanding items the
County wishes to discuss. [Attached] In fact, most issues arising from operational changes are
resolved without controversy. But the issue must be brought to our attention.
If
there is a
problem with police officers checking email, we were not made aware of it until today's
newspaper was delivered to our office.
Again, contract negotiation with employees is no different than contract negotiation with
any other service provider. Public access to proposals during bargaining harms the ability to
openly discuss all options. The County does not make public negotiations with Live Nation,
Costco, Westfield or other corporations with which
it
deals. Additionally, the premise that the
public has no input in the collective bargaining process is false. The public is at the table. We
serve and live in the County.
The commission fails to show that the fair and level playing field established under the
Police Labor Relations Article for impasse arbitration is in any way deficient. In recommending
a change to the impasse procedure the commission fails to cite one arbitration decision that was
unsound. The only fact cited is the number of arbitrations and who prevailed. This is analogous
to determining that the rules of baseball must be changed based on the number oftime the New
York Yankees make it to the World Series. No one has identified any deficiency in the impasse
arbitration process other than the FOP. has been found to be more reasonable than the County
more often than not. Weare not surprised by that statistic.
The police officers in Montgomery County want to return to work. Instead, we are called
here to address baseless attacks on our rights under law a process that has kept police officers
doing what they should be doing: protecting and addressing the public safety concerns of the
community.
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Peace Action Montgomery
Montgomery Co,
MD
H
Power for Peace
Testimony in Opposition to Bill 19-11
Personnel-Collective Bargaining -Public Access
July 12,2011
My name is Jean Athey and I am coordinator of Peace Action Montgomery. On behalf of
our organization and in support of Montgomery County workers, I offer these
observations regarding Bill 19-11 dealing with collective bargaining for County
workers.
Given the sharp decline in union membership in the private sector, it is understandable
that the public is generally unaware of how collective bargaining works and what it is
intended to accomplish. It is not merely -as some would suggest-an arrangement
that caters to unions and workers. Rather, as you know, collective bargaining provides a
mechanism that enhances the roles of both management and workers. That is, it is a
means to accommodate the needs of each side as expressed by their representatives.
We fear that piecemeal changes to address aspects of public policy, such as this, without
a broader effort to put the policy in context generally result in unintended and often
negative consequences.
That is how we view this current proposal for so-called "open" bargaining sessions.
First of all, if the Executive and his designated negotiators are not representing the
public, who are they representing when they negotiate with employee organizations?
As taxpayers, we expect our elected representatives to do exactly that: represent us.
Opening these sessions in the way that is proposed will hamper open and frank
discussion and encourage both sides to play to real or perceived audiences. Bargaining
of any type is most effective when the parties feel free to exchange views candidly.
And please note: Open negotiations would, by definition, be open to union members as
well as those who are opposed to bargaining. That could be a combustible mix that
could produce lots of heat, but not very much light and precious little progress toward
an equitable and productive workplace.
P.O. Box 1653, Olney, MD 20830
Phone: 301-570-0923 www.PeaceActionMC.org
An Organization of2,600 Dues-Paying Members in lllontgomery County
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Page 2
We agree with the comments of Organizational Reform Commissioner Susan Heltemes
who said:
"Initial disclosures of proposals would likely establish unrealistic expectations not only
for management, but also for employees since initial proposals are usually not where
the negotiations come down at the conclusion of bargaining. If opening proffers were
open to the public, it is likely that outside input could obstruct the bargaining process
and interfere with tight timelines and strategy. Such obstruction could alter the
negotiating process and ultimately end in more arbitration and deterioration of what
has become a respected form of negotiation for our public sector employees."
We strongly recommend that the Council and the Executive restrain the urge to enact
these or any other changes to the labor laws unless and until the public interest is
clearly identified, which we don't think it has been in this case.
And finally, as concerned citizens, we would like to express our disappointment with the
recent actions in the County relating to union negotiations. For example, as you surely know,
the arbitrator for the MCGEO impasse stated that the union's proposal met the county's goals
for saving money but in a way that was fairer to employees. But this arbitration was totally
ignored. This appeared to us to be bad-faith negotiating on the part of the County, at best.
So now there is a new version of labor relations law before the Council. We wonder why the
County didn't follow its own rules previously in its negotiations with its workforce and we
ask why the workers should expect the County to follow new rules when it has shown such
disrespect for the current ones.
Thank you.
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TESTIMONY OF JOSLYN N. WILLIAMS
PRESIDENT METROPOLITAN WASHINGTON COUNCIL, AFL-CIO
ON BILLS 19-11 AND 20-11
July 12, 2011
Good afternoon. My name is Joslyn Williams and J'm President ofthe Metropolitan Washington
Council, AFL-CIO, the umbrella organization for nearly 200 area unions representing over
150,000 area union members and their families.
Brother Renne has done his usual superb job of laying out a convincing case against the bills
before you, so I won't belabor the points he's already touched on. What I'd like to do instead is
to say just how disappointing and deeply frustrating it's been this year to find these sorts of
attacks on public workers occurring here in Montgomery County.
The local labor movement has rallied and marched in the streets of the nation's capitol this
year against the ongoing attacks on Wisconsin's public workers - indeed at one point we took
over a building where lobbyists were holding a fund raiser for Wisconsin republican leaders. In
the district, we played a vital role in firing DC Mayor Adrian Fenty, who had scapegoated public
workers as well, most notably hardworking teachers in the city's schools.
As we watched such attacks spread to other states like Ohio and New Jersey, we
congratulated ourselves that in Montgomery County we were fortunate to enjoy a collaborative
relationship with county political leaders who not only appreciated workers and the union
movement, but celebrated and were proud of that relationship.
That relationship extends beyond legislation, politics and negotiations: we're proud that the
DC Labor FilmFest, one of the biggest and most successful such film festivals in the country, is
held every year at the American Film Institute, where, i might add, the workers are all union
members as well.
So I don't mind telling you that it's been terribly disappointing to find myself at
demonstrations in recent months against some of our friends sitting here on the dais before
me. Political leaders we've been proud to work with and call friends. Visionaries who
understood that we all sink or swim together in this community.
Yet somehow, whatever it is that's infected the body politic in Wisconsin, in Ohio and in
New Jersey seems to have seeped into Montgomery County as well. Maybe it's a virus in the
water.
Let me suggest to you that the people who work for you - county employees and indeed all
public workers - are not the enemy. They're taxpayers and consumers and they're voters, too.
We need to work together to solve the common economic problems we face. If we do not, the
county will suffer, as will the workers and ultimately, you too will have to face the political
consequences.