Wednesday, April 17, 2013

City and Union Agree on Overhaul of Wage System

Posted By on Wed, Apr 17, 2013 at 9:12 PM

A new contract between the city of Bend and its employee union marks a significant victory for the city, but also generates higher wages for staff.

The Bend City Council unanimously approved the three-year contract at its Wednesday night meeting. The contract had already been approved by the City of Bend Employees Association, or COBEA.

In total, the city expects the agreement to cost an additional $715,000 over the next two years beyond the $29.6 million it had already budgeted for personnel. However, some health insurance costs could be lower than budgeted, helping to offset that amount.

Of particular note, this new agreement creates an “exceptional pay for performance” program, which would provide a 10 percent increase in pay for employees going above and beyond.

The shift marks a major change in the way employees will be compensated going forward. A compensation model based on performance, rather than built-in raises, has been a somewhat controversial program in other markets around the nation.

This contract, though, also significantly increases wages for workers because it re-classifies many of the city’s employees. In the past there had been 32 different salary ranges for staff. That system was collapsed to just 10 ranges, and in the process increased the base pay of employees.

Many of the city of Bend’s salary ranges had been quite a bit lower than other comparably sized cities in Oregon for similar jobs. The changes bring COBEA employee wages in line with the rest of the state, according to a city of Bend summary document of the new contract.

On balance, the contract offers the city greater control of the workplace, but also offers several new assurances and benefits to employees.

Pro-city elements to the new contract:

• Creates a pay for performance system that city officials hope will create a “results-oriented work culture,” in which people must work hard to receive temporary bonuses and when they do, the bonus is substantial.
• No new employees will receive an OPEB benefit, cutting out post-employment benefits like health care and reducing the city’s PERS costs by millions over the years.
• Temporary employees must work for the city for twelve months now before becoming eligible to be a member of the union. It had been a six-month waiting period before.
• Now most employees will be considered probationary for twelve months. It’s a six-month probationary period before.
• Demotion has been added to the list of options managers have for disciplining employees.
• Now, when employees bank vacation time and then their employment with the city ends, the city must only pay out six weeks of banked time, rather than the previous 10 weeks of banked time.
• The city will now have the option of denying employees comp time in lieu of overtime. Employees have been able to control that decision in the past.
• Employees may now be terminated due to a disabling injury after one year. It has been two years in the past.

Pro-union elements to the new contract:

• Wages for staff will be increased. These increases will be based on the classification of their position. All employees not at the top step of their pay range will receive a step increase.
• Staff will also receive a cost of living wage increases. These increases will be no less than 1.5 percent of pay and no more than 3.25 percent of pay.
• Four hours of “eve pay” have been granted to allow staff to leave work early on either Christmas or New Year’s Eve.
• If layoffs must occur, temporary employees will be removed first and staff with the greatest seniority may “bump back” to lower status positions, effectively bumping less senior staff out
• An additional day of paid leave has been added for employees traveling more than 250 miles due to a death in the family.

The agreement will go into effect July 1.

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