The county of Marin has completed four new tentative labor agreements that would add $1.8 million to its incremental costs in fiscal 2016-17.
County Assistant Administrator Angela Nicholson told supervisors Tuesday that she was presenting the agreements to them even though they won’t be asked to approve them until their next meeting on July 19.
Nicholson said this new procedure has been implemented in response to the 2015 grand jury report “The Need for Labor Negotiation Transparency.” In that report, the jury recommended that labor agreements and accompanying fiscal analysis be made public seven days prior to board or council meetings.
The agreements presented to the board included raises for 244 non-union county employees, a three-year contract with the Marin County Firefighters’ Association, a three-year contract with the Marin County Battalion Chiefs’ Association and raises for Service Employees’ International Union (SEIU) 1021 nurses.
The biggest increase in incremental costs, $1.14 million, would result due to the raises provided to the non-union employees for fiscal 2016-17. Most of these employees would receive a 3 percent wage adjustment.
The firefighters’ contract would result in incremental cost increases of $532,366 in fiscal 2016-17. The association represents the equivalent of 79 full-time employees.
The contract calls for a 9 percent pay increase spread over three years. Over the course of the contract, the county would stop contributing toward the employees’ share of pension costs. Over three years, this would save the county $218,364.
The contract, however, also calls for the county to contribute more to cover firefighters’ health care costs. Over three years, this would amount to $163,065.
The battalion chiefs’ contract, which covers the equivalent of six full-time employees, would result in $43,992 in incremental costs in fiscal 2016-17; it is very similar to the firefighters’ contract.
The chiefs contract also calls for a 9 percent pay increase spread over three years, and would phase out pension contributions while increasing health care benefits. The contract would save the county $28,217 in pension contributions over three years while costing it an additional $17,689 in health care benefits.
The agreement with the SEIU nurses, which will result in an incremental cost of $123,513 in fiscal 2016-17, constitutes a limited wage reopener provided for in the nurses’ 2014-2017 contract. All 43 nurses covered by the contract will receive no less than a 1 percent wage hike. As a result of the existing contract the nurses were already on track to receive a 3.7 percent cost of living adjustment, effective this month.
During public open time, Paul Premo of Mill Valley, a member of Citizens for Sustainable Pension Plans, said the analysis of the agreement provided by the county failed to clearly state the effect the salary increases would have on pension costs.
Premo estimated that the wage hike contained in the firefighters contract alone would require that an additional $2 million to $2.5 million be invested in the county’s pension fund. He said that estimate was optimistic since it assumes the fund will earn a 7.25 percent average rate of return.
Premo said that in fiscal 2015-16 the fund earned only a 5 percent return and as a result the county’s unfunded liability grew by $33.5 million to today’s total of $240 million.
Bret Uppendahl, the county’s budget manager, said, “The pension formulas that we have now and the unfunded liability that we currently show already assumes a 3 percent wage growth.”
Uppendahl said since the firefighters’ contract is 9 percent over three years, it shouldn’t affect the county’s unfunded liability “all things being the same.”
Rollie Katz, executive director of the Marin Association of Public Employees, said the firefighters’ contract is similar to the three-year contract that his association signed with the county last year. MAPE represents about 1,300 of the county’s 2,266 employees.
