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HomeMy WebLinkAboutREP FC 038 2019/05/20 2018-2020 REPORT OF THE COMMITTEE ON FINANCE DATE: May 20, 2019 Re: Comm. No. 277/Res.No. 169-19 PLACE: Council Chambers Hilo, Hawai`i TIME: 1:45 p.m. Council Chair and Members Hawai`i County Council Hilo, Hawai`i 96720 Your Committee on Finance, to which was referred Resolution No. 169-19, reports as follows: Resolution No. 169-19, transmitted by Mayor Harry Kim, via Communication No. 277 dated April 18, 2019, commits to funding the cost items awarded by Arbitration to Hawai`i Fire Fighters Association(HFFA) Unit 11 and employees excluded from Bargaining Unit 11 for the contract period - July 1, 2019 through June 30, 2021. This resolution authorizes the appropriation in future fiscal years which would include across-the-board increases, step movements, within range progressions, and one-time lump sum bonuses. The estimated cost over the two years of the contract would be$6,970,788. Council Member Valerie T. Poindexter asked for clarification on the one time lump sum bonuses and what they are actually for. She commented that for Bargaining Unit 11, it specifically says the bonuses are for SR 17-27,but for Bargaining Unit 34, it does not specify. She agrees with the two percent increase every year because that is like a cost-of-living increase but questioned the catch-up step movements. Ms. Poindexter stated there is no question that the Fire Department works hard,but the fact is the County is struggling by having to raise taxes and there is a lot being put onto the taxpayers. Another issue that came up is that of spiking, where workers are advanced prior to retiring, so they will be placed in a higher bracket. Finance Director Deanna Sako responded by saying that the catch-up step movement is to make sure that everyone is on their appropriate step, given the current salary schedule and the current steps. She stated that bonuses are based on the specific step the worker is on, and a specific dollar amount is assigned for each level, whereas with spiking, significant amounts go towards the Fire Department, relating to overtime and non-base pay amounts, This is a concern which is being monitored by the Finance Department. Council Member Matt Kaneali`i-Kleinfelder asked who does the bargaining on behalf of the County. Human Resources Director William Brilhante responded that in this case, the State and bargaining units were in discussion trying to come to a settlement agreement. During this time, the Fire Association determined there was an impasse, so they filed a Notice of Impasse, then this matter went to binding arbitration. All the jurisdictions met on O`ahu. There was a three member panel, a neutral arbitrator, Mr. Brilhante, representative for employers, and a representative of the union. The pay scale is based on all of the jurisdictions in the State. FC Report No. 38 FC-38 Page 2 May 20, 2019 Mr. Brilhante stated that although it is a binding arbitration and the arbitrator makes a final determination, any item that relates to cost or the funding mandate, has to be approved by each of the independent County jurisdictions; if this measure is not approved by any one of the jurisdictions, the process starts all over and the current contract will carry over. Also, while going through negotiations, what was brought to the employer's group was that Fire was asking for nothing more or nothing less. than what SHOPO (State of Hawaii Organization of Police Officers) received two years ago, and that is where the arbitrator got the numbers from for the decision. In regards to retirement, Council Member Herbert "Tim"Richards, III, questioned the difference between general versus first responders. Ms. Sako responded that part of it is the first responders' participation in social security programs across the nation. Fire does pay the Medicare tax but does not pay the FICA (Federal Insurance Contributions Act)tax portion. Each Fire employee pays a higher percentage contribution into the Employee Retirement System as well,higher than a typical employee. Council Member Ashley Kierkiewicz asked, and Mr. Brilhante confirmed, that Hawai`i County is the only County where the fire fighters serve asfire fighters, EMT's (Emergency,Medical Technicians) and paramedics. Mr. Brilhante stated that this County is unique, in that Hawaii County runs the Emergency Medical Service through the Fire Department. Committee Chair Maile David asked Mr. Brilhante what options would be available to the Council, given the fact that Mayor Kim expressed his negative position. Would this go back to arbitration? Mr. Brilhante said whether there is a positive or negative recommendation, this item moves forward for discussion at full Council, at which time the Council can approve or deny this resolution. Ms. Poindexter asked Ms. Sako to explain the reason for the bonus provision. Ms. Sako explained that because Police and SHOPO had the bonuses, the arbitrator felt it was okay to put a bonus provision in the Fire contract. Ms. Sako stated she believed the reason SHOPO was approved at that time_was because Police had retention issues but did not have rank-for-rank. Director Sako further explained that at the time SHOPO was going through arbitration, there were jurisdictional issues, being able to recruit . officers and also retaining the longer employed officers. Ms. Poindexter commented SHOPO had justification,but Fire does not, and stated she is unable to support the resolution at this time. Council Member Susan Lee Loy asked, if it is known, where any of the other jurisdictions stand on this issue. Ms. Sako responded it is unknown at this time,but would be able to provide an update at Council. She noted that all jurisdictions are considered as one. It is her understanding.that if one jurisdiction says no, everyone goes back to arbitration. Ms. Lee Loy stated she did not mind moving the resolution forward to the next level. Council Member Rebecca Villegas agrees with the two percent (cost of living), however, expressed concern with the bonuses due to the County's budget issues at this time. Committee Chair Maile David asked Director Brilhante, given concerns regarding specific items in the contract, whether there is an option to negotiate, or is it all or nothing? In other words, if the Council decides it cannot support one or two components of this contract, is there an option to negotiate those FC Report No. 38 FC-38 - Page 2 May 20, 2019 specific components? Mr. Brilhante responded that the Council has to consider all of the cost items in its totality. It is all or nothing because this is a decision from binding arbitration. Ms. David asked Director Sako about the County's total yearly overtime,to which Ms. Sako replied that this past year was higher than normal because of the emergencies. She also stated that half of the County's annual overtime has been for the Fire Department. She noted the Fire Department has the rank-for-rank provision; if a Captain is out, they have to call another Captain from anywhere on the island, and whoever covers the position is paid overtime. Ms. David commented it appears the County is costing things out in advance and if the council approves, this cost becomes part of the County's unfunded liabilities. Ms. Sako stated that if the County says this is okay, then it means the County will have sufficient funds in the budget to cover these increases. Mr. Brilhante explained that the contract is good until the end of June 2019. When July 1st comes and there is not a new contract in place, then the old contract continues. At the time a new contract is approved and becomes effective, the County would calculate applicable retro pay. Council Member Karen Eoff wanted to confirm that if any one of the jurisdictions rejects the contract, even if it is only one aspect of the contract, then that ends the process. Mr. Brilhante explained that, according to his belief, once one jurisdiction rejects the proposed cost increase, the contract in its entirety is rejected. Then the process would start anew. Your Committee on Finance is in accord with the purpose and intent of Resolution No. 169-19, and recommends its adoption. dmm AYES NOES ABS EX Respectfully submitted, CHUNG X DAVID X COMMITTEE ON FINANCE EOFF X KANEALI`I-KLEINFELDER X AAV KIERKIEWICZ Xdikipw-- / ?lifp - LEE LOY X POINDEXTER x MAILE MEDEIROS DAVID, CHAIR RICHARDS X FC REPORT NO.: 38 VILLEGAS X ADOPTED: JUN 0 4 2019